Choosing where to hold your investments matters almost as much as choosing what to invest in. UK investment platforms — sometimes called "fund supermarkets" or "brokers" — charge in different ways, and small percentage differences compound into meaningful sums over decades. Here's what the fees actually mean and how to compare them sensibly.
The three layers of cost
- Platform fee. What the platform itself charges to hold your investments, usually either a percentage of your portfolio value per year, or a flat fee, or a mix depending on account type and balance.
- Fund or investment charge. The ongoing charge taken by the fund manager (often shown as an Ongoing Charges Figure, or OCF) — this applies regardless of which platform holds the fund.
- Dealing or transaction charges. A cost per trade when you buy or sell shares, investment trusts or some funds — often free or very cheap for regular fund dealing, but can add up if you trade shares frequently.
Percentage fees vs. flat fees
This is the single biggest factor in choosing a platform, and it depends heavily on your portfolio size.
| Portfolio size | Percentage-fee platform | Flat-fee platform |
|---|---|---|
| £5,000 | Often cheaper — a small percentage of a small pot is a small amount | Can feel expensive relative to pot size |
| £50,000 | Fee grows with the pot | Often much cheaper, since the fee doesn't scale up |
| £250,000 | Can become very expensive | Usually the cheapest option by far |
As a rough rule of thumb, percentage-fee platforms tend to suit smaller portfolios and people who want to invest small regular amounts, while flat-fee platforms increasingly win out as balances grow into tens of thousands of pounds and beyond.
What actually matters for your situation
- How you invest. If you buy individual shares or investment trusts and trade fairly often, dealing charges matter more. If you invest in a handful of funds and rarely trade, the platform fee and fund OCF dominate.
- Account types offered. Check the platform supports the accounts you need — Stocks & Shares ISA, Self-Invested Personal Pension (SIPP), Lifetime ISA, general investment account — as fees can differ between them.
- Fee caps. Some platforms cap the percentage fee at a maximum pound amount for certain account types (common for SIPPs holding shares), which changes the maths significantly for larger pots.
- Extra charges. Watch for exit fees, inactivity fees, paper statement charges and fees for transferring out — these rarely appear in headline comparisons but can matter when you eventually move or close an account.
Worked example
On a £100,000 portfolio held in funds, a platform charging 0.45% a year costs £450 annually, compared with a flat-fee platform charging, say, £120 a year regardless of size — a difference of £330 a year, or roughly £3,300 over a decade before even accounting for the effect of compounding on the money not paid in fees.
Common mistakes
- Comparing only the headline platform fee and ignoring fund OCFs, which can vary by more than a full percentage point between actively managed and passive index funds covering similar markets.
- Picking a platform for a small pot and never reviewing it as the balance grows into a range where a different fee structure would now be cheaper.
- Underestimating the hassle and potential cost of switching — while switching is usually possible and often free on the receiving end, some transfers-out attract exit or transfer fees, and cash transfers can mean time out of the market.
What to do next
List your likely portfolio size, how often you expect to trade, and which account types you need, then use an independent platform comparison tool to model the total annual cost — platform fee plus a representative fund OCF plus expected dealing charges — for your specific numbers rather than relying on a generic "cheapest platform" ranking.