The Share Centre Self-select Stocks & Shares ISA

Great for: Tax-free investing in funds and shares
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The bad news is that The Share Centre’s Self-select Stocks & Shares ISA account charges a higher platform charge than competitors (after accounting for the ‘frequent dealing option’). But in exchange, investors get an attractive £7.50 trading fee and avoid back-end fees like those on fund custody and dealing in overseas shares. The fee structure does make the account less attractive for investors that trade very infrequently.

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HIGHLIGHTS

  • Invest up to £20,000 in a tax free account
  • No extra charges for trading non-UK shares
  • Feature-rich platform that offers research and data

DISCLAIMER

The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks. Remember that taxes can be complicated and the tax benefits of this product depends on your personal circumstances. Tax rules are subject to change.

*Reflects mandatory £5 monthly platform fee and optional £24 per quarter frequent dealing option. **Reflects frequent dealing option.

what we like

  • Invest up to £20,000 in a tax free account
  • No extra charges for trading non-UK shares
  • Feature-rich platform that offers research and data
  • PLATFORM FEE:

    £13*
  • Share dealing charge:

    £7.50**

HIGHLIGHTS

  • Invest up to £20,000 in a tax free account
  • No extra charges for trading non-UK shares
  • Feature-rich platform that offers research and data

DISCLAIMER

The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks. Remember that taxes can be complicated and the tax benefits of this, or any, product depends on your personal circumstances. Tax rules are subject to change.

The bad news is that The Share Centre’s Self-select Stocks & Shares ISA account charges a higher platform charge than competitors (after accounting for the ‘frequent dealing option’). But in exchange, investors get an attractive £7.50 trading fee and avoid back-end fees like those on fund custody and dealing in overseas shares. The fee structure does make the account less attractive for investors that trade very infrequently.

Self-select Stocks & Shares ISA OVERVIEW

What we like about The Share Centre’s standard share dealing service, we like even more about its Self-select Stocks & Shares ISA account. The reason is simple: You get all of the benefits of The Share Centre’s platform and the bump-up in fees for the ISA account is minimal.

If you aren’t familiar with The Share Centre’s share dealing services, then our review of the broker’s Share Account offering is a good place to start, since we go over all of the ins and outs of the service.

In brief, the platform from The Share Centre is simple and streamlined, so it’s easy to get started quickly. It also offers a good amount of straightforward news and research that I found helped me get a quick overview of shares. The trade pricing at The Share Centre won’t fit every investor, but it’s clear and should fit very many investors.

Here’s a summary of what that pricing scheme looks like:

  • Standard dealing – You pay £7.50 per trade for trades of less than £750. You pay 1% of the transaction value for trades of more than £750. So, for example, you’d pay £7.50 if you bought £500 in shares, £7.50 if you sold shares for £700, and £15 if you purchased £1,500 in shares.
  • Frequent Dealing – Here you pay a quarterly fee of £24, but then pay just £7.50 for all trades. So whether you’re trading £400, £4,000 or £40,000, you’re shelling out the same £7.50 to transact.

This means you do have to put a bit of thought into whether the Standard or Frequent Dealing will be right for you, in order to avoid paying more than necessary. It’s worth noting that for investors who trade infrequently (less than once per month on average), but trade larger sums, The Share Centre may not be a great fit.

In addition to the trading fees — and the Frequent Dealing option fee, if you opt for that — the Self-select Stocks & Shares ISA charges a £5-per-month administration fee.

Investing tax free

Standard caveats apply here: namely, that tax situations differ, and so you’ll want to consult with a tax advisor if you’re unsure about the tax implications of a stocks and shares ISA for your situation.

That said, there can be significant advantages from investing within a stocks and shares ISA, since capital gains and dividends from shares in an ISA are not taxed. That’s nice for your tax bill next year, but it’s even more advantageous when you look further out.

Our parent company, The Motley Fool, has long cheered the idea of long-term investing. The reason long-term investing works so well is because of compounding returns. In short, compounding returns means that over time, you end up earning returns on your returns, which can accelerate your gains drastically. Why bring that up here? Because paying taxes slows down the compounding of returns, so sheltering your investments from taxes could allow them to grow even faster.

As of this writing (so, for the 2019/2020 period), you can invest up to £20,000 in ISAs. You certainly don’t have to max out the £20,000 to take advantage of the tax savings from a stocks and shares ISA, so if that sounds like a lot of money to set aside, don’t fret! But if you’re thinking about building your long-term savings, this tax-friendly account should definitely be on your radar.

Let’s talk fees

We’ve already covered the key fees of The Share Centre’s Self-select Stocks & Shares ISA, but let’s recap.

  • Every month, the account is assessed a £5 administration fee.
  • Those who stick with the Standard dealing option will pay £7.50 for trades below £750 and 1% of the transaction for deals above £750.
  • The Frequent Dealing option costs £24 per quarter, but the trading fee drops to £7.50 for all trades.

Beyond that, the fees remain the same as in the standard Share Account. Of note among those fees, you’ll be charged 0.5% (minimum £1) for regular investing and 0.5% for automatic re-investment of dividends. Cash withdrawals are free if you’re willing to wait three to five days, and cost £25 for same-day transfers. Transferring shares in is free, but transferring to another broker is £25. And closing out an account is free.

Also of note on the topic of fees is dealing in foreign shares. There are no extra fees that are levied by The Share Centre for foreign exchange. At other brokers, this can often be 1% to 1.5% of the transaction, which is significant. So this makes The Share Centre an option especially attractive to investors who want to deal in international shares.

Is The Share Centre’s Self-select Stocks & Shares ISA right for you?

This is obviously a determination that you’ll have to make for yourself, but there are a few considerations that may help with that decision.

Setting up a stocks and shares ISA — whether with The Share Centre or another broker — can be a really smart choice for many investors. Again, it’ll depend on your specific tax situation, but a stocks and shares ISA allows you to invest up to £20,000 in shares that will then be sheltered from taxes.

Most brokers end up charging a platform or administration fee for a stocks and shares ISA, so it’s no surprise that The Share Centre has such a fee. The Share Centre’s fee (£5 per month) is competitive with other brokers. So I don’t think the administration fee makes a great deal of difference.

The trading fees are another story. For certain types of investor, The Share Centre’s fee structure will work quite well. For instance, if you have a small amount of capital and make smaller transactions (less than £750 per trade), then you’ll typically end up trading for £7.50, even with The Share Centre’s no-added-cost Standard dealing option. On the other side of that coin, if you trade more frequently, and make larger transactions — for example, trading a couple of times per month on average, and trading £1,000 at a time or more — then paying for The Share Centre’s Frequent Dealing option and securing £7.50 trades across the board could work out quite well too.

However, if you’re caught somewhere in the middle, that is, you trade very infrequently, but transact in large amounts when you do trade, there are other brokers that will probably work out better for you in terms of trading fees.

Finally, when it comes to the broker’s platform, I personally wouldn’t ask for much more than what The Share Centre offers. I tend to look for an easy-to-navigate site that allows me to quickly find the shares I’m looking for, make my transaction, and get on with my day. The Share Centre definitely checks that box. While I don’t need research provided from my broker — as I like to do research on my own — I do appreciate the research on The Share Centre’s platform. It’s simple and to the point. As an investor, it’d allow me to get a quick overview of a company and the pros and cons of its shares, so that I could figure whether I wanted to spend the time to research further.

Of course, you may not share my view on the ideal online broker. If what you’re looking for is a very state-of-the-art site with a lot going on, many charting options, etc., then The Share Centre probably isn’t for you. Likewise, if you want a broker that provides extensive, deep research, then you will likely find the research at The Share Centre a bit lacking.

See the Best Stocks and Shares ISA Accounts


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