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Strawberry, Clubfinance and Close Bros to the diary room

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Nothing stands still for long in the platform market, and if you’ve read our ramblings here and in the national meejah then you’ll remember that we said we thought there would be some changes from the published charge sheet. We’ve seen HL do a reverse ferret on the investment trust thing, and we’re also playing our part in trying to get the exit fees lifted – see Nick Britton’s excellent piece in What Investment today for more details.

Another mover today is AXA Self Investor, who has reduced its 0.5% flat charge down to 0.35% with a step-down to 0.2% for funds above £250k (by which we mean that the whole fund is charged at 0.2%, so it’s a cliff-edge type deal). The free offer till May 2015 stands, and AXA guarantees no exit penalties.

We also expect to see a move soon from Alliance Trust Savings, though this time it’s nothing to do with commercials and everything to do with Her Madge’s Revenue and Customs, who have helpfully published some guidance on when VAT should be chargeable on platform services. Most of what ATS does looks, smells and acts like a platform, so we expect the VAT to be knocked off; a welcome 20% price drop for investors after their price hike late last year. The company says it’s reviewing the position just now, which is code for getting the OK from some high-hat tax lawyers before they pull the trigger. Our tables still show the VAT until we get confirmation.

We’ve also been challenged on whether we should show VAT for Interactive Investor’s quarterly £20 charge. The answer is no, according to their own stuff. II does charge VAT on some transactional charges, and on SIPP admin charges, but not on the core platform charge. We got your back on this, people.

We’ve also included some platformz for the first time. So please welcome…

  • Strawberry! I like strawberries. Pretty much everyone does. So this new platform is off to a winner straight away with its handle. Underneath it’s a system called Investment Funds Direct Limited (IFDL) which powers Ascentric, the advised platform, and is owned by Royal London, the mutual insurer. I used to work there. Nice people. IFDL has quite a powerful system called Sonata from Bravura, and Strawberry is one of the first to market using it. Initial impressions are that the UI is quite clean and quite nice.  IFDL also provides the ISA and SIPP tax wrappers. I’ve had a wee rummage and Strawberry looks fine, but we don’t know until folk start using it what the service will be like. It was started by an IFA called James Priday, of Prydis Wealth Management in the slighly soggy South West of Englandshire. Many IFAs are looking at launching this kind of service to deal with the ‘long tail’ of smaller investors they have on their books, who won’t be able or willing to pay fees for advice now that commission has gone for a burton. Strawberry is also aimed at young professionals (as are the advances of many financial industry stalwarts after a bottle or two of Pinot) and James hopes that it will be an easy access into the investing arena for first-timers. See also IC Direct from Informed Choice (which uses Fidelity as its back end) and a few others. Anyway, Strawberry is 0.4% for the first £50k, then 0.35% to £250k and carries on tiering down thereafter. There’s a £30pa minimum charge (so equal to 0.4% of £7,500) and a £10 fixed platform charge (not per wrapper). SIPPs cost £120 a year on top. Equity trading is £12.50. So not all that cheap, but not too bad for small-ish fund-only pots.
  • Clubfinance‘s PR agency has been mithering us about not including them, so well done Dan and here you are. It recently acquired Ivan Massow’s ill-fated commission recapture business (paymemy.com) and there is some of that change of agent stuff going on here too. It offers a 75% commission rebate model (for existing investors) or an annual charge option; we’re ignoring the first as it stinks and concentrating on the second. It’s 0.24% a year (a whole! basis! point! cheaper!) with a minimum of £120pa, which means that if you have under £50k, you’ll be paying more than 0.24%. Fund dealing is free; share trading is mucho cheapo at £2.50 a pop, which reduces as you hold more on the platform. Under the hood this is the James Brearley system, which is venerable if not exciting.
  • Close Brothers (which always reminds me of Grace Brothers, there’s nothing I can do about it) has also announced. Dead simple – 0.35% up to £50k, 0.25% above that. There’s a special offer of 0.25% on everything until 31/3/2015.

OK, so it’s what you’d expect by now. Close looks OK pretty much throughout the normal spectrum, until you’re a very fat lang cat indeed. SIPP is a bit better, mainly because of no extra wrapper charges. Strawberry is expensive for SIPP (the fixed charge) and decent for ISA up to £50k, but then falls away. Worth mentioning that they intend to cut charges as they gain scale, though. Clubfinance has a sweet spot from £50k to £100k on ISA, but the fixed charge means they’re no good below that. SIPP again is a bit better because of no fixed charges.

So that’s us at 19 players; Chelsea has still to announce and there are a couple we still haven’t covered (JP Morgan and Willis Owen to name but 2). We’ll get there. Keep checking back. Or don’t. It’s entirely your call.

Update: we originally had AXA SI as a tiered structure when it’s stepped. We updated the tables and text to reflect this on 20/2.

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About Mark Polson

lang cat founder and boss. Expert on all things platforms, pensions and investments. Prolific writer and public speaker, even when people ask him not to be. Knows more about Scandinavian black metal than you, and isn't afraid to prove it.