Charles Stanley Direct, one of the more popular execution only on-line trading platforms for retail investors, have announced they are revising their charges. This follows on from a similar announcement by AJ Bell Youinvest a few weeks ago.
For share dealing, the transaction charge will rise from £10 to £11.50. In addition there will be a “platform” charge of 0.25% per annum on the value of the portfolio holdings, charged monthly although these will be capped at £240 per annum. In addition, the monthly charge will be waived so long as you make one trade in the month. There are no wrapper charges otherwise for ISAs and for anything but small SIPP portfolios.
However this does mean that for some clients there will be significant platform charges applied, and of course the increased transaction charge is a 15% rise.
There is a clear encouragement to trade more frequently also – indeed for larger portfolios one could save the £20 monthly platform charge by doing one trade at a cost of £11.50 (ignoring stamp duty). Or to put it another way, they are discouraging non-active traders from being customers at all perhaps. This is no doubt a symptom of the current market difficulties for stockbrokers where low interest rates have wiped out a lot of their profits and increasing regulatory burdens have added to costs. Charles Stanley is of course a listed company and has been reporting losses in the last couple of years.
For customers with small portfolios, who rarely trade, it may be worth considering alternative stockbrokers.
The company has also changed its web site to make it more mobile friendly although desk-top users won’t notice a lot of difference. In addition they are bringing out a new mobile App for iPhone users in November (no mention of other operating systems).
Another positive change is that Charles Stanley Direct clients will in future get access to all Charles Stanley Premium Client Research – full company notes, trader’s bulletin, In Focus magazine etc. With independent broker research becoming less common, and being restricted to institutional investors, retail investors are having to rely more on their brokers to provide much in the way of analysis of companies and the market although there are still lots of independent publications providing some coverage as does ShareSoc to some extent also of course.
Roger Lawson
For me, the issue is the trading test to avoid the portfolio charge being moved from 6 in a 6 month period to one trade a month. I have maintained a discipline about thinking seriously about the contents of my portfolios twice a year. I believe this is a better discipline than random trades spread throughout the year. One of the reasons I self-invest is that I believe most professional managers over trade to the cost of the investor. CSD are not likely to find this change actually generates more trades from me. Just 6 times a year, a single selling on the last trading day of the month followed by a purchase trade on the first trading day of the next month.
However, I will one of their customers as long as crest individual membership is supported and any monthly platform charges I accidently incur remain reasonable in the context of the overall size of my portfolios isa, and non isa monies.