What the Account Fee Misses: A UK DIY Investor’s Cost Audit for 2026
Photo: Number 10, CC BY 2.0, via Wikimedia Commons
Platform charges have become easier to compare at the headline level. The advertised account fee is usually clear: a percentage of assets, sometimes tiered, sometimes capped. But for UK investors using an ISA, SIPP or general investment account, the headline rate is only the first line of a longer bill. A disciplined cost audit in 2026 needs to look at dealing, foreign exchange, exit and transfer charges, the interest retained on cash, and the transaction costs inside funds. The difference between a cheap-looking platform and a genuinely low-cost one often sits in those secondary lines.
The headline fee is a starting point, not the answer
A platform charging 0.25% a year on a £20,000 ISA is collecting £50 before any dealing or fund costs. That sounds modest. But an investor who trades regularly, holds overseas shares or keeps a cash buffer may pay considerably more through other charges. The FCA’s Consumer Duty regime has pushed firms to improve disclosure, yet disclosure is not the same as comparability. Two platforms can both publish a clear fee schedule and still produce very different total costs for the same investor.
The practical response is to build a total-cost audit. Start with the account fee, then add expected dealing charges, foreign exchange costs, cash-retention drag, fund costs and any exit or transfer fee spread over the expected holding period. That last point matters: a £50 exit fee is trivial over twenty years and material over two.
Five costs that sit outside the account fee
Dealing charges. Frequency is the swing factor. A buy-and-hold investor may pay two or four dealing fees a year; an active investor may pay twenty or more. Some platforms include a number of free trades, but the inclusive allowance is only valuable if it matches actual behaviour.
Foreign exchange spreads. UK investors increasingly hold US, European or global funds and shares. The FX spread is often embedded in the exchange rate rather than shown as a separate line. For frequent overseas dealing, a wide spread can overwhelm a small difference in the account fee.
Exit and transfer fees. These are easy to ignore until an investor wants to move. A platform that is cheap to enter but expensive to leave is not cheap over a full investment lifecycle. Transfer fees, account closure charges and re-registration costs should be part of the comparison.
Cash-interest retention. Many platforms hold client cash and retain part of the interest earned. In a higher-rate environment, the opportunity cost can be meaningful. An investor holding a 5% cash buffer on a £100,000 SIPP is not just paying the account fee; they may also be giving up interest that could have been earned elsewhere.
Fund transaction costs. The ongoing charge figure is not the whole cost of a fund. Portfolio turnover, transaction taxes and dealing spreads inside the fund can add to the drag. These costs are disclosed in fund documentation, but they are rarely visible on a platform’s comparison page.
Stamp duty on UK share purchases is a transaction tax rather than a platform fee, but it belongs in the audit. So does the bid-offer spread on shares and exchange-traded funds, which is a cost of dealing even when no commission is charged.
A simple total-cost audit
The formula is straightforward: annual platform fee plus expected dealing charges plus FX costs plus cash-retention cost plus fund costs plus any exit or transfer fee amortised over the expected holding period. The aim is not perfect precision. It is to avoid comparing a headline fee with a total cost.
The table below uses illustrative assumptions, not a recommendation. It assumes a platform fee of 0.25% for ISA and general accounts and 0.35% for a SIPP, dealing at £10 a trade, an FX spread of 0.75% on overseas turnover, cash retention of 0.75% on average cash, and fund costs of 0.20% for passive funds and 0.45% for active funds.
| Cost line | £20,000 ISA, passive, 2 trades | £100,000 SIPP, active, 20 trades, 30% overseas | £250,000 GIA, passive ETFs, 4 trades, 10% overseas |
|---|---|---|---|
| Platform fee | £50 | £350 | £500 |
| Dealing | £20 | £200 | £40 |
| FX spread | £0 | £225 | £187.50 |
| Cash retention | £3 | £22.50 | £18.75 |
| Fund costs | £40 | £450 | £250 |
| Indicative annual total | £113 | £1,247.50 | £996.25 |
| As % of portfolio | 0.57% | 1.25% | 0.40% |
The small ISA is dominated by fixed dealing and fund costs. The larger SIPP is more sensitive to trading frequency and overseas exposure. The general account looks cheap on a percentage basis because the portfolio is large and turnover is low, but the cash-retention and FX lines still matter.
What changes the answer
Portfolio size changes the balance between percentage fees and fixed charges. A capped platform fee can be valuable for a large SIPP, while a low percentage fee with high dealing charges can suit a buy-and-hold ISA. Trading habits change the maths again: an investor who deals monthly should weigh inclusive dealing allowances heavily, while an annual rebalancer should focus on the account fee and fund costs.
Cash policy is another variable. A platform that pays little on cash can be expensive for investors who hold a permanent buffer. A platform with a low headline fee but a wide FX spread can be expensive for global investors. The audit should reflect the portfolio that will actually be held, not a generic model portfolio.
The audit checklist
Before choosing or switching a platform, collect the key facts in one place: the account fee and any tiering or cap; dealing charges and inclusive allowances; FX spread; cash interest terms; exit and transfer fees; fund ongoing charges and transaction costs; and any regular investment or withdrawal charges. Then estimate annual dealing frequency and cash balance. For a SIPP, include the cost of any income drawdown or beneficiary features that may be charged separately.
A final point on switching: the cheapest platform today may not be the cheapest after a transfer. Exit fees, time out of the market and dealing costs to rebuild a portfolio can erase a small annual saving. The audit should compare the total cost of staying with the total cost of moving, not just the new headline rate.
For Derwent Capital Markets readers, the lesson is not that one platform wins for everyone. It is that the account fee is a starting point. The true cost of DIY investing in 2026 is the sum of the visible and the less visible, and it rewards investors who audit their own behaviour rather than the advertisement.
