Investor Event

Investors Chronicle, 14 May 2020, Watch what you’re being charged

This article quotes Cliff Weight and ShareSoc extensively.

Cliff Weight, director at investor campaign group ShareSoc, says that although £195 sounds like a reasonable price for the administration of transferring stocks and closing an account, if a firm has good systems it doesn’t seem fair if this level of fee is charged for every account held by one person. “A client could notionally have five accounts, but it’s the same press of a button,” he argues.

Lack of awareness

Although Redmayne Bentley’s fees are not more punitive than those of their competitors, the situation highlights that investors may not be aware of what fees they are subject to, especially if they have been with a broker for many years. Last year ShareSoc conducted a survey of 747 members asking them to report what their current platform would charge to switch to another platform. But 70 per cent of respondents did not know what their platform would charge to do this. Of those who were aware, 35 per cent said it would cost them over £500 to switch provider.

……Mr Weight adds that the share ownership system on investment platforms means that the process of transferring out is cumbersome and therefore quite expensive. When you invest via a platform or broker the securities you purchase are usually held in a nominee account, meaning that their legal owner is the platform or broker rather than yourself. ShareSoc is campaigning for changes in share ownership so that investors are the legal owners of the securities they buy rather than platforms or brokers. If this was the case, transferring out of a platform or broker would be more straightforward and could be less costly because there would not be a change in the owner of the securities.