Platform and fund fees: reading the small print that eats returns

Fees are the only part of investing you can control with certainty. Returns are uncertain; costs are contractual. And yet they are easy to leave untotalled: they arrive in four different forms from two different companies.

The four charges

Platform fee. What the platform charges to hold your investments. Either a percentage of your portfolio each year, or a flat monthly or annual amount.

Fund charge. What the fund manager charges, expressed as an ongoing charges figure. Deducted inside the fund, so it never appears on your statement — it simply makes the return lower than the index the fund tracks.

Dealing charges. Per-trade costs. Some platforms charge nothing for funds and a fixed amount for shares; others reverse it.

Foreign exchange. Applied when buying assets priced in another currency. It is charged inside the conversion rather than billed separately, which is what makes it easy to miss — and on a direct holding of US or European shares it can be the largest of the four.

Percentage or flat: the crossover

This is the decision that matters most, and it is entirely arithmetic.

Portfolio	Percentage platform (0.35%)	Flat-fee platform (£120/yr)
£10,000	£35	£120
£40,000	£140	£120
£100,000	£350	£120
£250,000	£875	£120

Below roughly £35,000 the percentage model is cheaper. Above it, the flat fee pulls ahead and the gap widens indefinitely. Many percentage platforms cap their fee for shares specifically, which shifts the crossover again.

The important consequence: the right platform changes as your portfolio grows. A choice that was correct at £15,000 can be costing hundreds a year at £120,000, and nothing prompts you to revisit it.

What it compounds to

Two investors each hold £50,000 and add nothing, over ten years, with the same underlying investments returning 6% a year before costs.

• Total annual cost of 0.45% (platform plus fund): the pot reaches roughly £85,700.
• Total annual cost of 1.15%: roughly £80,200.

A difference of 0.7 percentage points a year — which sounds trivial in a table — costs around £5,500 over the decade on a portfolio of this size. On a larger portfolio, or a longer horizon, the figure is considerably worse.

Dividend tax rates for basic and higher-rate taxpayers were recently increased, announced at Budget 2025. That makes the shelter an ISA provides on dividends worth more than it was, not less.

The FX charge nobody adds up

Currency conversion is charged as a percentage of each conversion, and that percentage is set by the platform rather than by the market. Someone buying US shares monthly is paying that charge every single time, in both directions when they eventually sell.

For a portfolio built through regular purchases of overseas assets, FX costs can quietly exceed the platform fee. A comparison table cannot show them, because they depend entirely on how you trade.

How to actually check

The practical version of this exercise takes an hour, once a year:

1. Find the platform's annual charge for your portfolio size and mix, including any caps.
2. Add the ongoing charges figure of every fund you hold, weighted by how much you hold.
3. Estimate dealing costs from last year's actual trades.
4. Add FX costs on any non-sterling purchases.
5. Express the total as a percentage of your portfolio.

That single number is the honest one. And no statement adds it up for you — which is what keeps it unexamined.

Why this matters to us

We do not sell financial products and we take no commissions from any platform, which means we have nothing to gain from where you hold your money. Making the true cost visible is exactly the kind of thing an independent tool should do, and exactly the kind of thing a product-selling one has little reason to.

Sources

• Financial Conduct Authority — MS17/1: Investment platforms market study, accessed August 2026.
• Financial Conduct Authority — Consumer Duty, accessed August 2026.
• Financial Conduct Authority — Asset management market study, accessed August 2026.
• HM Treasury — Budget 2025, accessed August 2026.

Last reviewed: 2 August 2026 · Figures reflect the 2026/27 UK tax year.

This article is general educational information about UK tax and investing rules. It is not personal advice or a recommendation, and it does not take account of your circumstances. Tax treatment depends on individual circumstances and may change. Figures reflect our understanding of the rules for the 2026/27 tax year at the date of publication. If you are unsure, consider speaking to an adviser authorised by the FCA.