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money supermarket Stocks & Shares ISA

Discount Broker
Published 16 February 2011
Helpful? 15
Open Quote A straightforward fund supermarket stocks & shares ISA, but expensive versus some discount brokers.End Quote
Thumbs Up
  • Good choice of funds.
  • Low or zero fund initial charges.
Thumbs Down
  • Relatively expensive as no trail commission rebates.
  • No fund research or advice.
  • Not possible to hold shares.
Candid Rating
2.8
Candid Charges
Initial/Setup

Funds generally 0%.

Annual/Ongoing

Standard underlying fund annual charges

Exit/Redemption

N/A

Other

None

Price comparison websites appear to be moving into the realms of investment discount broker land. Last week saw Fair Investment launching an ISA/SIPP service via the Nucleus Financial investment platform and now moneysupermarket has launched a stocks & shares ISA fund service via the Cofunds fund supermarket.

Moneysupermarket's new offering is very straight forward as it basically plumbs you straight into the Cofunds fund supermarket system. This gives a choice of over 1,500 funds from around 90 fund providers, which should be sufficient for most ISA needs. However, there's no option for buying shares, investment trusts or exchange traded funds and moneysupermarket doesn't provide any meaningful investment fund research.

I've no reason to suspect moneysupermarket won't be efficient at processing applications and handling queries, but compared to some discount brokers they're offering very little in return for pocketing all the annual trail commission.

Take a look at our ISA discount broker comparison and you'll see a number of brokers that potentially offer much better value.

For example, Cavendish Online provides a similar service to moneysupermarket in this instance but refunds all commissions in return for a one-off £25 fee (using either the Cofunds or FundsNetwork fund supermarkets). This should save you around 0.5% a year versus monesupermarket for a typical fund.

And Hargreaves Lansdown typically around a third to a half of the annual commission (typically 0.15% - 0.25%) while providing potentially useful research and information.

The savings due to trail commission rebates might not sound like much, but they could add up to hundreds or even thousands of pounds over time. Take a look at the 'Buying Route Cost Comparison' on our unit trust page.

In summary, while the moneysupermarket ISA is a respectable generic fund supermarket service, it looks poor value versus the competition. And ultimately that leads me to question why you would ever want to buy your ISA via this route when you can get near identical or better offerings for less money? I can't think of a sensible answer...

Web Link: http://www.moneysupermarket.com/investments/stocks-shares-isas/

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