Exchange Traded Funds (ETFs) are typically cheaper than OEICs and, therefore, are often used to keep down portfolio costs, as well as total cost of ownership, for clients.
But, if a platform charges for ETF trading, then costs can start to build back up again, potentially diminishing the intended savings of using ETFs.
Let’s look at a £100k SIPP wrapper as an example, which consists of both funds and ETFs and where rebalances occur quarterly*. Ascentric’s all-in pricing means that there are no trading charges for ETFs (or fund charges but most platforms don’t charge for this). So, the cost to the client stays at 0.30%, or in the case of this £100k portfolio, £300. But, this cost could rise to as much as £432 for the same portfolio, if using another platform which charges for ETF trading.
Some third party products and wrappers will also charge for trading but if you choose to hold these on the Ascentric platform then dealing charges will not apply.
*This scenario is based on a £ 100k portfolio, invested 100% into a SIPP wrapper. The 10 vehicle portfolio consists of six ETFs and four funds, and is rebalanced quarterly. A 5% portfolio drift is assumed where necessary. The custody and trading charges used to calculate the £432 cost are based on real competitor charges.