Q. I bought Barclays and RBS shares in my Isa through Barclays Stockbrokers. Now the name of the service has been changed to Smart Investor and I have to pay a monthly fee of £4. The shares have also dropped in value. What should I do?
Name and address supplied.
A. Investing your money online, without the help of a financial advisers, is a massive business. According to data released this week by a consultancy firm Boring Money, do-it-yourself investors have a staggering £192bn invested online, on platforms, or fund supermarkets.
These websites allow you to buy funds, such as unit trusts and Oeics, shares, bonds and other types of investment, and let you trade as an when you want, as well as monitor their performance in real time.
You can invest through a stocks and shares Isa, where the profits you make are tax free, a personal pension, where each contribution is topped up with tax relief from the government, and through a general investment account, which are subject to income tax but come with no limits on how much you can can invest.
How fund supermarkets charge
There tend to be two camps in the fund supermarket sector when it comes to the fees you pay.
You’re either charged a percentage of the assets you’ve invested – ranging from around 0.2% per annum to more than 0.5%; or you’re charged monthly or annual administration pounds and pence charges and fees for every trade you make.
The best value fund supermarket will depend on how much you have invested. Percentage fees tend to be cheaper for those with smaller portfolios, while those with flat fees work out better for larger investors.
This is where your issue with Barclays comes in. It has recently relaunched and rebranded its fund supermarket business from Barclays Stockbrokers to Barclays Smart Investor.
Where the old service charged £35 a year plus VAT to hold shares in an Isa, the Smart Investor services investment service charges 0.2% a year for funds, and 0.1% for shares, but there’s a minimum annual charge of £48.
Which? carries out a big analysis of fund supermarket charges. Which? members can log in to see our full pricing analysis for 16 fund supermarkets, and how much it would cost to invest for portfolios between £100 and £500,000.
If you’re not a Which? member, take a trial for just £1 for two months today
The chart shows how much someone holding shares and making 12 trades a year could expect to pay with a variety of fund supermarkets. Smaller investors (those with £10,000), are better off with the new Smart Investor service, despite the £48 annual charge, because trading fees are much lower.
In fact, in this scenario, Barclays Smart Investor is the cheapest platform, along with Interactive Investor.
However, those with larger portfolios will be worse off, as the combination of the annual flat fees and the percentage fees kick in.
If you’re not happy with the charges you’re paying, or the service you’re getting, you can transfer your stocks and shares Isa, much like you can with cash Isas.
We’ve explained how to do this in our guide to transferring a stocks and shares Isa.
As for the share prices going down, unfortunately that’s one of the risks of investing.