This is a single place where all your investments (be it ISAs, SIPPs, stocks and shares) can be held. Rather than having separate investments in lots of different places, they can all be kept under one roof (like a financial supermarket), which can make things simpler to manage and more cost-effective.
Investing in funds through a platform has significant advantages and can work out cheaper than other routes.
With a platform, you have a wide choice of funds from different managers. Access to other investments may also be available, such as investment trusts, shares, ETFs, corporate and government bonds.
You can split your investment between different funds run by different managers but hold them together in one place and it is quicker to switch between funds when you want to make changes to your investments.
You can transfer existing investments into your platform account.
This means you have a better overview of your finances and can monitor the progress of all your investments in one place.
The service is free for all consumers and platforms. We don’t ask platforms to pay to play or anything like that, so what you see is impartial and independent. At the moment we don’t actually make any money, but eventually, we expect to gain a large enough following to be attractive to advertisers and sponsorships. Don’t worry, they will always be clearly signposted as such, so there’s no confusion about why they’re there.
The charges levied by different platforms can vary greatly, and our calculator helps unravel these costs. Typically, a platform will charge you an annual fee, and dealing fees if you choose to buy and sell stocks and shares. Occasionally, some charge a set-up fee. And most will have exit fees if you want to cash in or move your investments elsewhere. These fees could be a flat £ fee, or a percentage of your investment value, the former being preferable if you have a large amount to invest.
For more information on platform costs, take a look at our guide ‘PLATFORM FEES EXPLAINED’.
Any costs charged by the funds themselves are not shown in the comparetheplatform.com calculator, as these will depend on which specific funds you choose to invest in once you’ve chosen your platform. Typically you would be charged an annual fund management fee, which could be a flat fee or percentage of your investment value. If you use an adviser to help with your investments, they will also charge a fee. And there will generally be costs for leaving a fund or platform.
The types of investment offered by platforms vary greatly. Some only offer funds, whilst others give you access to investment trusts, UK and overseas shares, ETFs, corporate bonds and government securities. Most will offer ISA and SIPP wrappers.
Most platforms will charge you a fee if you want to move your investments elsewhere. Not all will charge you for cashing in your investments. If you have a pension drawdown, whilst you will pay an annual fee, you will not always be charged to withdraw.
Saving is a very personal thing and there are no hard and fast rules. You should always try to pay short-term debts such as loans and credit cards off as quickly as you can because the charges will be higher than the interest you can earn on your savings and investments. Sometimes that’s not easy to do or it will take a long time, so you might want to set aside some savings at the same time.
Your disposable income is the money you have left once you have met your living expenses. A basic rule of thumb is to divide your disposable income into the things that matter. That might be going out, saving for a holiday, or saving for a house deposit.
It doesn’t matter how small the amount is, what matters is that you’re saving. It’s all about balance — if you spend too much on life’s luxuries or your savings plan is unrealistic, you’ll quickly fall off the wagon.
We’ve tried to give you as much flexibility as possible.
The first option lets you see platform fees based on your investments today. That’s the easiest option and is particularly good for people who have already built up substantial savings.
But if, for example, you don’t have much in the way of savings today, but you expect to build a considerable pot quickly, looking at costs at a set point in the future might be the best option for you. For example, if you know that you’re going to save £50,000 in the next five years, then it might be in your interest to be on the right platform straight away.
Finally, some people like to know how much the service will cost over a set number of years. They may have a 10-year savings plan and want to know how the costs might make a difference to their returns over that period.
No, adviser fees are not included. Only the cost of using the adviser platform. How fees are paid can be discussed with your adviser, whether it is an up-front cost, or for example paid out of your investments.
No they don’t, as these will be dependent on the specific funds you choose to invest in. On average, equity funds will charge an annual fee of 0.75%, whilst a passive fund has an average fee of 0.15%.
We do not currently have one, but we are currently in the development phase of our pension drawdown calculator.
There are two types of platform. Adviser platforms are used by financial advisers to manage and plan your financial affairs. There’s a host of tools and functionality available to make the adviser’s job much easier, freeing him up to spend time with clients rather than on administrative tasks. Sometimes, you as the client will be given a login that lets you see your portfolio, but in general, your adviser will provide regular reports and updates.
DIY platforms are sometimes called D2C or B2C are investment platforms that come with lots of tools, research and guidance but are designed specifically with consumers in mind.
The difference between Do It Yourself, Direct to Consumer and Business to Consumer is relatively minimal.
DIY means do it yourself and we’ve chosen to use that term on here because most people understand the concept of doing it themselves. These investment platforms are managed by the client themselves, most DIY platforms charge a smaller fee as there is a minimum interactive between platform and consumer.
D2C means Direct to Consumer while B2C means Business to Consumer. They’re both business terms that mean that the provider is providing a service to you, the consumer. The business, in this case, is the platform that may be relaying advice for which funds to pick on the platforms. This is seen to add value and therefore a larger fee is allocated to your platform account.