How to pay less for your Stocks and Shares ISA

Ensure you're not one of the many investors paying almost £3,000 more in fees over five years

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Thousands of investors are still paying sky-high fees on Stocks and Shares ISAs – and this will cost them a fortune over the long-term.

Some providers are charging a massive 2 per cent – four times as much as cheaper rivals – according to research by evestor, the online financial advice platform. And it means their investors are paying almost £3,000 more in fees over five years than they would with more cost-effective products*.

Anthony Morrow, CEO at evestor, warns returns are being eaten away by investment companies hiding behind complex charging structures.

“The different layers of costs and fees is a headache for experts to understand, let alone consumers,” he says.

Charges overlooked

Investment companies levy various fees for managing your Stocks and Shares ISA and making changes to the holdings. These charges are regularly overlooked when people take out an ISA but they can make a huge difference to the returns generated.

And it’s not just those taking out new ISAs that can be affected by fees. In many cases, the charges associated with older ISAs can be substantially higher.

However, there is a solution. The evestor Stocks & Shares ISA has no initial charge and total annual fees of less than 0.53 per cent. It’s also really simple to set up online. In fact, you can open it within 10 minutes, while a special app allows you to track your investments 24/7. There is also the added bonus of having access to a webchat team available every weekday between 9am and 8pm to answer any questions.

In addition, investors are provided with advice from qualified financial advisers and you can speak with them at times to suit your lifestyle – including in the evenings and at weekends.

(Getty Images (Getty Images)

Consider costs

Morrow hopes such products can become a blueprint for the future as the current environment is proving to be a minefield for would-be investors. However, for the time being he urges people to factor a providers’ various costs into their decision-making process before committing themselves.

“While savers are paying a premium, this doesn’t always equate to a premium level of service,” he says. “Sometimes the investor isn’t even provided with advice.”

He also believes the best way to create clarity around charges is to ban complex fee structures – and make everything simpler.

“There should be one all-in cost disclosed immediately,” Morrow adds. “This should include the cost of everything from the advice platform to underlying fund transaction costs.”

For more information, and to open an ISA, go to evestor.co.uk

*Based on a £20,000 lump sum and 5 per cent growth rate