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Deal of the Week

June 3, 2011 6:08 pm

Deal of the Week: Bestinvest’s Select service and Best Sipp

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What’s the deal?

A new online platform for execution-only investors who want to trade shares at low costs. Customers pay no trading costs on funds bought through the Select service, while those with at least £50,000 in assets pay £7.50 for deals in shares, including exchange-traded funds (ETFs) and investment trusts. A Best Sipp option is available for those saving for retirement through the Select platform.

Is it good?

Bestinvest claims its service is “market-beating”, with lower transaction costs than competitors. People with less than £50,000 to invest are being offered a special launch deal until September of a £7.50 trading fee.

Dennis Hall of Yellowtail, the financial advisers, says the product is “extremely competitively priced”.

Those with at least £50,000 will receive a loyalty bonus of up to 0.5 per cent a year on certain funds through both the Select and Best Sipp service. Any exit fees incurred in transferring existing Sipps will be paid up to a value of £500.

What’s the catch?

Dealing costs for those with less than £50,000 revert to £12.50 after September. Those who trade frequently can find cheaper dealing costs elsewhere – Barclays Stockbrokers charges £6.95 per trade if at least 25 are made a month, while TD Waterhouse charges £8.95 if 15 or more deals are made each quarter.

Annual charges are a flat rate of £100 for the Sipp and £50 for an individual savings account (Isa). This compares with 0.5 per cent (up to £200) at Hargreaves Lansdown and TD Waterhouse (which also has a £40 fee for inactivity). This means those with less than £20,000 in their Sipp or £10,000 in their Isa will pay lower annual fees at Hargreaves Lansdown.

What’s the alternative?

Hargreaves Lansdown, Barclays Stockbrokers and TD Waterhouse all offer similar services, though costs vary according to trading habits.

How do I find out more?

www.bestinvest.co.uk

www.hl.co.uk

www.tdwaterhouse.co.uk

www.stockbrokers.barclays.co.uk

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