Choosing your Stocks and Shares ISA provider
Choosing a Stocks and Shares ISA is a simpler task in many respects than choosing a managed ISA. With a Stocks and Shares ISA you are responsible for choosing the shares and funds that go in the ISA, so the performance at the end of the day is down to you.
However, fees can be a drag on the performance of your ISA so make sure that you are aware of all the costs associated with a Self Select ISA.
Providers will not charge uniformly – costs are structured in a number of ways. Most important is the fee charged for every trade you make. If you plan on being a frequent trader you should be aware of this, as it can quickly eat into your profits. Some providers have lower fees in place for frequent traders, but before selecting your provider have a good idea about how often you will transact.
Fees may also vary according to the type of investment you want to buy and sell. Not all Self Select ISA providers offer all the investments you might be interested in and those that do will charge different fees depending on whether you want to transact shares, bonds or Exchange Traded Funds.
Your provider will either act as custodian of your shares itself or outsource this to a bank. This is an important role, as this is the company charged with looking after your assets while they are in your name. In the old days these would have been physical share certificates. There is always a fee associated with this as there is an element of record keeping involved, but competition and technology are both driving these fees downwards.
Minimum investments can be a consideration for some investors, but these days most ISA providers ask for very low minimum investments.
There can be considerable fees associated with migrating your ISA to another provider. Most investors are happy to keep the same provider year on year, but occasionally a reason may arise to transfer to another firm. Make sure you are aware of what the fees are, as they can run into hundreds of pounds.
Remember, regardless of your Stocks and Shares ISA provider, your allowance will be the same, as this is dictated by the government.