The Daily Telegraph - Saturday - Money
Beware steep stockbroker ‘exit fees’
Brokers can charge thousands to move your money, finds Laura Suter
Investors ditching online fund shops for better services are being stung by high “exit fees” to move their money. Telegraph Money regularly extols the virtues of hunting around for a cheaper, or better, deal when buying and selling funds. This has been seen in action this week, as Hargreaves Lansdown, Britain’s largest broker, said it had benefited from disgruntled customers moving from another platform – Barclays. Hargreaves revealed 30,000 new clients had moved to the platform, taking £1.5bn of investment money in the past three months. Barclays has had ongoing problems since it moved customers from its Stockbrokers service to its Smart Investor offering.
However, it is not always easy for those switching platforms to compare costs. Brokers have different charging structures – some with flat fees and others a percentage – meaning the cheapest platform for you can change as your wealth increases or decreases. Picking the wrong option could cost you thousands.
The Barclays Stockbrokers case also shows how some value service over cost. Many investors will find that moving to a new platform comes with a hefty price tag or, bizarrely, incentivises them to cash in all their investments before moving.
Here we look at the biggest platforms and what they charge to leave. All information is provided by the Lang Cat, the platform comparison service. Before you switch, try haggling: readers often report how threatening to leave has magically resulted in cheaper deals.
Those leaving AJ Bell will be charged £75 plus VAT if their money is held in a Self Invested Personal Pension (Sipp). They will then be charged £25 per stock they own.
Alliance Trust charges £100 plus VAT per Isa and £150 plus VAT per Sipp transferred. Those who opened their account within the past two years will be charged £75, or £250 otherwise. They also face a £30 charge per stock owned – higher than most.
Bestinvest charges £75 plus VAT to transfer a Sipp if the money is in cash, or £125 plus VAT if it remains invested. Another £175 is charged if the Sipp has been held for less than two years, or £75 if it’s been held longer. There is also a £25 charge per line of stock.
Closing an Isa costs £125 plus VAT, with an additional £200 plus VAT if you opened it in the past two years. It charges £10 per line of stock transferred – lower than some rivals.
A rare find – this platform charges nothing for those transferring.
There’s a £25 plus VAT fee for closing an Isa or Sipp, and another £295 plus VAT if the Sipp is closed within one year of opening. It also charges £25 per line of stock transferred.
Customers pay only £15 per line of stock, but those with the broker for less than a year can transfer up to 10 stock holdings for free.
Picking the wrong option could cost you thousands
There is no charge for either Isa or Sipp transfers.