Investing
New DIY investing fund platform launches
Individual investors now have even more choice of fund platforms following the launch today of new player Trustnet Direct.
The service will offer clients access to more than 8,000 shares, funds, ETFs and investment trusts.
It will charge a platform fee of 0.25%, which will be capped annually at £200. That means an investor with £80,000 will pay a platform charge of £200 and nothing above that. Trustnet Direct has guaranteed that the platform fee will not rise and may fall before 2017.
There will also be a fixed charge of £10 per trade, which will drop to £6 for regular investors who carry out more than 10 transactions a month.
The platform will only offer ‘clean’ or commission-free funds and will convert investors’ holdings to these lower cost funds if they choose to transfer in from another provider.
The site also features financial planning and research tools to help clients understand what they are investing in.
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Holly Mackay, managing director of The Platforum, a research company, said: “The site shows us how much direct platforms have evolved over the last few years from a more basic shopping list of funds and tax wrappers. Trustnet’s fund research and ratings is helpful and will assist those looking for guidance rather than regulated advice.”
Price competition among investment platforms has been hotting up recently ahead of new regulation coming into force on 1 April banning them from accepting commission from fund groups.
In response to the new rules, fund houses have launched lower-cost ‘clean’ share prices and platforms have started to charge customers ‘unbundled fees’, which explicitly outline the service charge to the platform and the annual fee on any funds held.
How does Trustnet Direct stack up against its rivals?
The following table compares Trustnet Direct against other platforms for various portfolio sizes (the underlying funds’ annual management charges are included since they differ between platforms).
These costs are illustrative only and will depend on the funds held, the number of trades made, levels of cash held and other specific activity-related charges a platform may levy. The three lowest cost for each portfolio are highlighted:
| £10,000 | £50,000 | £150,000 | £500,000 | |
|---|---|---|---|---|
| AJ Bell Youinvest | £121 | £654 | £1,662 | £2,695 |
| Alliance Trust Savings | £221 | £805 | £1,614 | £2,422 |
| Barclays Stockbrokers | £116 | £579 | £1,737 | £3,178 |
| Bestinvest | £121 | £579 | £1,738 | £3,608 |
| Charles Stanley Direct | £104 | £642 | £1,685 | £2,928 |
| Fidelity Personal Investing | £116 | £579 | £1,737 | N/A |
| Halifax Share Dealing | £143 | £632 | £1,530 | £2,338 |
| Hargreaves Lansdown | £121 | £605 | £1,815 | £3,285 |
| Interactive Investor | £161 | £648 | £1,456 | £2,265 |
| TD Direct Investing | £118 | £738 | £2,003 | £3,240 |
| The Share Centre | £218 | £902 | £1,710 | £2,518 |
| Trustnet Direct | £146 | £773 | £1,656 | £2,465 |
Source: The Platforum