Being part of the financial community on Reddit and Facebook groups I hear this question almost every week. Which is the best Stocks and Shares ISA provider? Or which one is the cheapest?
There are plenty of articles comparing different platforms including the famous Monevator one. But they’re complex. This post has one and only purpose:
To show you the best Stocks and Shares ISA provider at Any given point in time.
Wow.. what a promise Michael. I will update this post frequently to make sure it’s up-to-date.
The Best Stocks and Shares ISA
Well, what does best mean?
To me, best stocks and shares ISA means 4 things:
- A provider that you can trust it won’t go soon out of business
- It comes with very low fees
- You can easily invest and withdraw
- Provides a decent customer service
With all these in mind, the current winner is…..
Halifax Stocks and Shares ISA
I believe Halifax is a decent name in the Lloyds banking group and it’s here to stay.
The annual platform fee is a flat £12.50. This means that they won’t charge me percentage-wise like other platforms do. It doesn’t matter if I hold £1,000 or £1m in there, I will still pay £12.50 which is great.
Beware if you’re with a platform that charges percentages. For example, Hargreaves Lansdown (one of the most famous) charges 0.45% platform fee when investing in funds.
Investing £100,000 with them will cost you the ridiculous amount of….. £450!
Buying and selling shares with Halifax costs £12.00 and there are some sales periods where you can buy shares for £3.95. If you invest regularly, like I do, you can set up a regular trading plan which costs only £2.00 per trade. Pretty good deal.
The only thing that bothers me a little is the 1.5% foreign exchange fee when both buying and selling international shares. I mean.. that’s a 3% roundtrip reduction to my initial investment and it’s another reason I don’t own many individual shares. I invest in global passive index funds.
The user interface is not so straightforward and not as intuitive as my old TD Investing account. However, after a few times, you get used to it or ask for help from the live chat.
Speaking of which, the live chat is a great tool and usually the support is very knowledgeable. Although it’s not available 24/7, they respond quickly during working hours. I also remember calling me once because my standing order failed to deposit the scheduled amount I had set up.
You can use the Halifax Marketwatch tool to check out fund details like fees, asset allocation, etc. It’s quite a nice tool that looks like Morningstar.
What if I want to leave?
The other important thing when selecting a platform is the exit fees. Some platforms charge really high exit fees because they want to lock you in. Halifax is average.
You can transfer funds out for £25 per fund up to a maximum £125. So basically, you’ll get charged for the first 5 funds and the rest are free.
It’s so easy to switch; I just completed a Halifax switch form and let Halifax do the talking with my old provider (TD Direct). The brokers are forced to comply with the switching regulations, no questions asked. The same applies when you want to switch from Halifax to another provider.
Transferring funds into Halifax is free, by the way.
How do Halifax charges compare to other platforms?
For the sake of simplicity, I will assume you hold a fixed amount over a year and perform 4 trades a year.
Have a look at the table below and see how different platforms charge depending on the amount invested.
| Amount | Hargreaves Lansdown | Interactive Investor (TD Direct) | Fidelity* | Halifax Sharedealing |
|---|---|---|---|---|
| £10,000 | £92 | £90 | £35 | £63 |
| £50,000 | £272 | £90 | £175 | £63 |
| £100,000 | £497 | £90 | £350 | £63 |
| £500,000 | £1797 | £90 | £1,000 | £63 |
| £1m | £3,047 | £90 | £2,000 | £63 |
How did I come up with these numbers? See the resources links below. Here’s an example calculation of £10,000 invested in a fund for a year.
Hargreaves Lansdown: 0.45% annual charge * £10,000 + 4 trades * £11.95 = £92.8
Interactive Investor (TD Direct): £22.50 * 4 times per year includes trading fees = £90
Fidelity Investments: 0.35% annual charge * £10,000, free trades = £35
Halifax Sharedealing: £12.50 annual charge + 4 trades * £12.50 = £62.50
You can actually drop the Halifax costs even lower if you invest monthly for £2 per trade.
*Fidelity charges a percentage-wise fee when investing in funds, but a fixed capped £45 fee when investing in ETFs. So if your fund is provided also as an ETF you can just pay £45 instead of £1,000 which feels kind of a strange setup to me, but whatever.
If you want to be really geeky with your ISA research, then have a look at Monevator’s awesome ISA comparison article. It’s an excellent piece of information.
Resources:
- Halifax S&S ISA charges
- Hargreaves Lansdown S&S ISA charges
- Interactive Investor (TD Direct) S&S ISA charges
- Fidelity S&S ISA charges
How to open a Halifax S&S account or transfer your ISA
ISAs run from April to April. When you hear someone saying “this tax year” they mean the period between April 5th to next year’s April 4th. Then your limit resets and you can invest more up to the new year’s limit.
For April 17-18, you can invest up to £20,000 to a Stocks and Shares ISA, assuming you don’t have any other ISAs. If you have other ISAs (like a Cash ISA) they all share your total limit.
So if you haven’t subscribed to an ISA this tax year and want to sign up with Halifax, go to the Halifax Share Dealing website and hit Apply Now.
If you want to transfer an existing S&S ISA then follow the instructions here. You’ll need to open a Halifax account and complete a 1-page transfer form. I just transferred my TD Direct ISA and the whole application process took me 15 minutes.
Final thoughts
I recently learned that we, humans, don’t like to have more than 3-4 choices when making selections. This is the reason some very successful restaurants like Chipotle, ask you only a few questions. Large wrap -> White rice -> Chicken -> Guacamole, Cheese 🙂
With so many providers around, the competition is fierce. This is a good thing which only benefits us, consumers.
But it’s also very confusing! Which is why I wrote this article.
Common sense applies here too. A very cheap platform, a solid business name behind it and good customer service. Common sense also led me to avoid Halifax for my pension fund for now. That’ll soon come in another article.
I hope this guide helped you understand what matters when choosing an ISA, regardless of which provider you’ll go with. Please let me know in the comments!
P.S. I was not paid by Halifax to write this post and I’ll receive no money if you sign up.
Disclaimer: This article offers no advice. You should do your own research before investing. Also, I cannot be held liable or accountable for any errors, omissions or damages arising from its display or its use.
18 thoughts on “The Best Stocks & Shares ISA provider”
Hey!
So I’ve been looking to getting a Stocks and Shares ISA and I’m thinking of opening one at MoneyFarm. I’m a university student so the fees and the minimum amounts are very convenient. Any thoughts on MoneyFarm?
Thanks 🙂
Hey Araminta,
I don’t know much about MoneyFarm but it looks like a Robo-advisor similar to Nutmeg. They will build a profile based on your risk appetite and they will do the investing for you. It’s a good place to start until you learn more about asset allocation, choosing index funds, the psychology of investing etc.
I believe once you’re confident enough then you can DIY without the management fees in the future. From what I see the fees are 0.7% for the management plus whatever the fund fee is. In total, 1% is slightly high but it’s a trade-off so it’s ok. Let me know how you find it if you go with MoneyFarm!
Nice blog btw, I like your side-hustle mentality. I also studied in Scotland 😉
Cheers
Hi Michael,
Yes that’s what I thought, MoneyFarm is great to just learn the ropes of investing. I have a call today with one of the advisers to see how I can get started (quite excited). I’ll be writing a post about it so others can see if it really works!
Thanks for your kind words and I look forward to reading more of your posts!
(Also Scotland? Dare I say… Edinburgh Uni? :o)
Hey Araminta,
Edinburgh uni you guessed it right! I had such a great time there and liked smoky whiskey more than I should 😉
Let me know when your MoneyFarm post is out so I can check it / share it.
Haha I knew it! I’m not too far at Edinburgh Napier (and yes, we’ve seen all the memes about us)
Called MoneyFarm and they told me the recommended amount to get started with is £500, so going to have to work on that. But I’ll let you know when I get started!
Hi Michael,
What are your thoughts on iWeb? It looks like they have a one off £25 charge to open an account, and then £5 per trade.
I’m in the situation of investing into a Vanguard Lifestrategy fund only a very small number of times (probably 3-4) per year, so iWeb seems to be cheapest.
Also thanks for your blog! It’s been really informative and helpful.
Hey Stephen, iWeb is indeed a good deal and probably the cheapest. What put me off was the really old web interface, it looks 90s’ish. It’s, however, operated by Halifax Share Dealing, therefore, it should be trustworthy.
If you decide to go with them please let me know how you find it!
I’m glad you find the blog useful. Thanks for commenting.
I’ve been with iWeb for over a year now and so far it’s worked well. It’s true that the interface isn’t great, and I’ve also had to send forms by post for a few things (such as setting up an account). However the prices are good and the interface does work, and I’ve now also set up a SIPP with them.
Thanks for coming back and sharing after a year, Stephen! I really appreciate that. I believe iWeb belong in the same group as Halifax so they must be trustworthy too. I really don’t understand how they make money from ISAs though. Their operational costs must be higher than what we pay them.
Lloyds Investment Direct belongs to Halifax and offers ISA account for flat £40/yr but with fund dealing for £1.5. Worth checking out. Platform is exactly the same as in Halifax, just green.
Thanks for the input, Brtosz.
Hi Michael, is Halifax still the cheapest platform in your opinion or has it changed in the last 16 months? Thanks.
Hey Achyut, Halifax is still the go-to platform for me. Cheap and reliable if you can bear the not-so-great user interface!
I’m eagerly waiting for the Vanguard SIPP this year, but for ISAs Halifax is still a no-brainer.
Hi Michael,
I followed your recommendation on using a 2nd company to invest the 1st company’s profits.
When investing in the Stock Market with ISA accounts, do you have to pay dividend tax on the amount you invest? If so, any way around that?
Thanks.
Not sure what you mean by that, Giovanni. You cannot invest in an ISA if you’re investing as a limited company. ISA is only for individuals and all profits (dividends included) are tax-free!
I guess that what I was trying to ask is, do you invest in stock shares through your business?
ISA investment accounts are for individuals only and not fit for companies, as you said.
If you have to take money out of your company to invest as an individual, and supposing that in order to take out more money from your company to invest in a ISA shares account it would require you to pay the 32.5% dividend tax on the amount your withdrawing to invest, which might take several years of investing to get the dividend tax value back.
If you do use your business two invest in shares/funds, which platform do you use?
Or do you think that, despite of amount you have to pay as dividend tax, it is still worth it to invest as an individual in an ISA investment account?
Thanks.
I invest in stocks & shares through my business. In fact, I did the math and it’s more profitable to invest through my limited company than withdraw dividends at the highest tax rate and then invest.
I use Vanguard directly (min £100,000 per fund though) and Interactive Investors. You will find a lot of info in the post I just linked. Hope that helps!