ISA fees and charges

As with all investing, there are fees and charges associated with having a stocks and shares ISA. It’s essential you know what they are, and how they affect your investments, as they can potentially make a big difference to any returns you may get.

The costs of investing within a stocks and shares ISA will vary depending on which type of financial product you invest in and which provider you use. No matter which investment manager or provider you choose, make sure you know about and understand all the fees and charges involved before you commit.

Here are the key fees and charges you need to be aware of.

Annual management fee

The annual management fee, which is also called the fund manager fee, is what an investment firm or investment manager will charge to look after your stocks and shares ISA. It relates to the ongoing cost of managing your investments on your behalf. This fee can vary considerably between investment managers.

Platform charge

The platform charge is the administration fee you’ll pay if you open a stocks and shares ISA with a platform provider. The platform fee can vary considerably from provider to provider. Platform fees can be charged at a flat rate or on a percentage value of your funds.

Cost of selling and buying funds

A key part of investing is about buying and selling different funds. Whether you buy or sell funds on a platform yourself, or an investment manager does this while managing your stocks and shares ISA for you, the funds themselves have a price. This is known as the investment fund cost and is sometimes referred to as the trading charge.

Another cost linked to the buying and selling of funds is what’s known as the market spread. Whenever funds are bought and sold, there’s going to be a buying price, and a selling price – the difference between these two prices is the market spread.

Transfer out fee

Some providers may charge a ‘transfer out’ or exit fee if you decide you want to move to a different investment manager or platform provider. This is often charged per fund.

Advice fees

Some people like to use a financial adviser to help decide how to invest their money. If you do so, you’ll most likely pay a fee for these services. A financial adviser could help you manage your money and investments to fit with your personal circumstances, needs and financial goals.

John Lewis Investments ISA fees and charges

John Lewis Investments is a discretionary investment manager, so we make the investment decisions on your behalf. If you have a stocks and shares ISA with us, the costs will include an annual management fee, the fund costs, and the effect of market spread. We do our best to keep these fees and charges as low as possible.

Annual management fee

Like other investment managers, we charge a fee for managing your investments – the annual management fee. We charge this as a percentage of your portfolio value, and it includes VAT. We calculate the fee daily based on your portfolio value at the close of business, and then collect the fee automatically from your account once a month.

Investment fund cost

When you invest with us, as with any other investment manager, we use your money to buy investments on your behalf. These funds carry their own charges that impact your portfolio performance. We primarily use exchange-traded funds (ETFs) as these help to keep your costs as low as possible.

Effect of market spread

When you invest with us, we buy and sell assets on your behalf. Like all trading activity, during this process we're subject to market spread. This is defined as the difference between the price to buy, and the price to sell. We work hard to choose ETFs with smaller spreads, and we combine clients’ money when trading to minimise this cost.