We look at the 4 largest platform providers and compare what the annual charges would be on a £20,000 investment into an ISA in a leading FTSE 100 Tracker fund.
Investing In A FTSE 100 Tracker Fund ISA
If you are looking to invest the maximum current ISA allowance of £20,000 into a FTSE 100 tracker fund using an independent investment platform then it is worth comparing the total annual platform admin charge adding on the fund ongoing charges figure (OCF).
We have selected 4 of the UK’s largest and most popular platforms. Taking a low cost tracker fund such as the Vanguard FTSE 100 UCITS ETF which has a low 0.09% ongoing charge based on a £20,000 investment you can see the difference in the total annual charge you will pay for each platform.
AJ Bell come out top, Fidelity second, HL third and Interactive Investor who operate a flat fee platform come out the most expensive.
| Investment Platform | Annual Platform Fee | Vanguard FTSE 100 UCITS ETF Ongoing Fund Charge | Annual Charge on £20,000 |
Fidelity | £45 up to £7,500 a year or 0.35% if you have a monthly regular saving plan of £50 or more. £7,500 – £250k: 0.35% £250k – £1m: 0.2% £1m +: free | 0.09% | £88 |
Hargreaves Lansdown | £0 – £250k: 0.45% £250k – £1m: 0.25% £1m – £2m: 0.10% Over £2m: FREE | 0.09% | £108 |
| Interactive Investor | Investor Plan: £9.99 per month Funds Fan Plan: £13.99 per month Super Investor Plan: £19.99 per month | 0.09% | £137.88 |
AJ Bell | £0 – £250k: 0.25% £250k – £1m: 0.1% £1m – £2m: 0.05% Over £2m: FREE | 0.09% | £68 |
The tiered charging structures of each platform mean that depending on your longer term objectives what may be the cheapest now may not be the cheapest in the future.
E.g. Assuming the ISA allowance was £20,000 for the next 5 years, and you put in this contribution every year and your fund was worth £125,000 by this time then applying the same charging structure above Interactive Investor with their flat fee structure would be the cheapest option.
All platforms make ISA transfer relatively straightforward so in the future if you wish to move to another provider this is an option open to you.