Using A ISA Platform
In choosing a ISA platform there are many things to consider other than price. It can range from, your investment needs, whther you need other account types such as a SIPP account, the need to be able to trade individual securities and how often, a cash account that pays interest as well as mobile app functionality.
Some providers are more flexible than others. Additionally, keep an eye out for account fees, high currency conversion costs or commission rates.
What is on Offer?
A good ISA fund platform provider will offer:
- Index-Tracker funds- An easy and popular way to invest that follows the performance of a particular stock market
- Actively Managed funds - A good way to invest in a particular sector or region
- Multi Asset funds- A range of funds that invest in other funds (a fund-of-funds) or funds where assets are made up of a portfolio of company shares, bonds and cash (a mixed investment range)
- Income funds - Invest in funds lending money to a government or company, in return for an agreed level of interest over a set period
- Property fund – Funds that invest in commercial property
- Other tax wrapper options
- Share dealing account options
- Mobile app functionality
- Research and expert analysis
1 Don’t just look at the cost
Costs are important: this isn’t a decision you’re going to revisit every year.
For a modest portfolio managed on the most popular platforms, the costs can include:
- Annual account charges ranging from zero to £100 a year.
- Annual fund charges from zero to 0.45% of portfolio value.
- Plus charges each time you make a trade, which could be from £1 to £12.50 per transaction.
BUT… some of the more expensive fund supermarket platforms are rated highly by investors for ease of use and good customer support.
2 What do you want to invest in?
You don’t have to choose exactly which ISAs you want, before you choose your ISA platform.
But not all platforms offer complete investment choice. If you already know your priorities, or you may want to invest in a particular type of fund in the future, you’ll need to check that the platforms you’re considering offer those options.
3 What kind of tools and research does the investment platform offer?
These are often the criteria that count most highly with users, so do some research and read the reviews.
Many investors are prepared to pay a bit more in fees for a platform that offers really useful apps and background research on fund performance.
4 How much are you investing?
You’ll want to look at the fee structures, and the thresholds for reduced fee charges for investors with more sizable portfolios.
For large investors, say with £50K or more in their pot, platforms that charge flat-rate fees work better.
5 The additional costs (and savings) to look out for
In addition to annual platform management charges…
- You’ll need to work out the dealing charges for the level of trading you'll be doing
- Also look out for dividend reinvestment fees, transfer charges, and exit fees.
- Can you take advantage of the regular monthly investing discounts?