Cost of top three non-advised platforms ‘on a par’

Barclays Stockbrokers has become the latest to undercut rivals with pricing for its direct-to-consumer platform as pricing pressure grows ahead of the ban on cash rebates, but consultancy The Platforum has said the different models are “on a par” and that pricing “confusion” remains.

The top three platforms in the UK for non-advised investors all have similar charges and have all competitive with for investors with around £29,000 to invest, The Platform’s research has revealed.

Barclays Stockbrokers, Hargreaves Lansdown and Fidelity, who together account for 52 per cent of the direct platform market, have all announced their new pricing models in January this year.

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Barclays’ has announced pricing that matches the headline administration charge for smaller investors introduced by Fidelity last week of 35 basis points, the same as that levied by TD Direct.

It will charge this fee on all funds market investments, with a minimum of £35 and a maximum of £1,750 per account per year. There are no charges for fund transactions, however clients holding investments other than funds there are annual Isa and self-invested personal pension account fees of £30 +VAT and £200 +VAT respectively.

The Platform said given the average direct account on platforms is £28,700 and “at this level these platforms are all competitive for investors with funds”.

Clients in ‘non clean’ funds will be converted to clean funds from 1 March, where the total cost to the client is lower, said the Platforum. Fidelity will charge those using the platform a single, tiered fee of 0.35 per cent for investments up to £250,000 tiering down after this to 0.2 per cent.

Hargreaves Lansdown costs 45bps but claim that investors in their Wealth 150 preferred fund range will get on average a 0.11 per cent better deal in funds – “so the net price for investors in these funds is broadly speaking on par”, said the Platforum.

Holly Mackay, managing director at the Platforum, said: “Although some have referenced a price war, this looks like a somewhat less epic price pub brawl to us.

“The good news for investors is that there has been a general reduction in charges across the market. The bad news is that there is still confusion pricing out there - especially for platforms supporting shares, funds and Sipps - and it’s still very hard for investors to work out what any platform will actually cost to use.”

Last week an FTAdviser investigation revealed fresh confusions over pricing transparency on advised platforms, in the wake of revelations over the level of interest that is retained on client cash accounts.