Service fees
Halifax charges a flat fee of just £36 as an annual customer admin fee, which covers ISA and Share Dealing Accounts. That's potentially a bargain, particularly if you have a large portfolio that would incur large fees from a percentage-fee provider. On a £20,000 portfolio, for example, the annual flat £36 account fee works out at a low 0.18%. And on £500,000, it's practically nothing (0.0072%). Having said that, Vanguard, Dodl and NatWest Invest only charge 0.15% to invest, whatever your portfolio value although you won't get to invest in shares here, just funds.
If you want to add a SIPP on, however, there's an additional quarterly fee of £22.50 for account values of £50,000 or less, £45 for values over £50,000. This charge is paid to AJ Bell, who administer the SIPP. That third party element means that this isn't the cheapest way to open a SIPP. Explore this page for our top recommendations for personal pensions and SIPPs.
One additional really nice touch I like about the Halifax Share Dealing account – service fees are waived altogether for 18-25 year olds. That's a helpful reduction for those just starting out and a welcome initiative to encourage young people to get in the investing habit.
Dealing fees
This is where Halifax doesn't do so well.
For trades on GBP assets, you'll be charged dealing commission of £9.50 per online trade, which is definitely at the higher end of the scale. (Charles Stanley's £10 per trade and Hargreaves Lansdown's £11.95 are more expensive, but there are not many providers charging this much.)
There is a way to avoid the commission however, by setting up a regular trading plan. With the regular investment service, you agree to set up an automated transfer of at least £20 per month into your trading account. Doing it this way means you can avoid the dealing fees altogether and may also be a more manageable way to get started if the £500 lump sum that Halifax otherwise requires to set you up with an investment account is too much. There are other benefits to setting up a regular investment plan, too. Drip-feeding your portfolio means you may be better able to smooth out peaks and troughs in the market
If you trade international assets, then Halifax is more generous as there are no dealing fees here. HOWEVER, before you jump into US or rest of the world stocks, beware: Halifax still makes you pay. A foreign exchange (FX) fee is added to all trades involving foreign currencies. If you buy a stock that trades in US dollars, for example, and your home account is in GB pounds, you'll need to pay an FX fee.FX fees of 1.25% are scandalously high. If you don't believe me, take a look at this comparison:
If you want to get a sense of how much different those FX fees can make to trading costs, especially if you're a large portfolio-holder, visit this page.
Interest on uninvested cash
Unlike most other investment platforms, Halifax doesn't pay you interest on any uninvested cash sitting in your investment account. You could be missing out here. Here's what other platforms are paying:
A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.Ready-made portfolios Fees for a ready-made solution are £3 per month plus ongoing fund fees and transactions costs that range from 0.32% for a Cautious portfolio, to 0.37% for a Progressive portfolio. That's fair but you could also find cheaper elsewhere as this chart shows:
How Halifax compares to other high street banks
In the following three scenarios, we've imagined a customer has £20,000 invested in a stocks and shares ISA, in (1) US stocks, (2) UK stocks, and (3) funds, and that they trade 12 times in the space of a year.
The verdict?
Those low, flat service fees could make Halifax an exceptional bargain if you have a large portfolio. Here's an example of what I mean:
However, if you plan to trade stocks, watch out for the exceptionally high FX and dealing fees that sting, as you can see from the below fee example:
Alongside large portfolio-holders, twhe other group who could still find this a cheap option are 18-25 year olds. With waived service fees for this age group, Halifax is an option worth considering as long as you don't plan to buy and sell often. So, if you're a young ‘buy and hold' investor (and there's a lot to be said for that approach), then it could be worth a look.
If you don't fall into that category, there is one other possible way to make Halifax a cheap option, and that's to invest through their regular investor plan and stick to UK assets. But that's a rather limiting approach that won't work for everyone.