Commission-free apps have changed how people across Wales put money into shares and funds. They have not made it free. The regulator’s own figures show where the cost went, and an hour with your statements shows what it is costing you.
From Cardiff and Swansea to the market towns of Powys and the coast of Gwynedd, more people in Wales are managing their own investments than at any point in the last twenty years. The apps are easy, the adverts promise zero commission, and for a nation that has historically kept its savings in building societies and cash ISAs, that has been a real change in habit.
Zero commission is accurate as far as it goes. It is also beside the point, because commission was never the main cost for most ordinary investors. The costs that remain are the ones almost nobody adds up.
What the FCA’s figures show
Two sets of numbers published under Financial Conduct Authority rules make the picture clear. Every regulated provider of leveraged products has to state the percentage of its retail customers who lose money; across the major UK firms that figure sits between roughly 70 and 80 per cent. And the firms’ own audited accounts, taken together, put average revenue at around £4,685 per active UK client per year. That figure has barely moved while advertised commissions fell to nothing. The money did not disappear; it moved into lines that are harder to see.
Those figures, and the platform-by-platform detail behind them, are collected in a set of UK trading statistics compiled from the FCA’s disclosures and the brokers’ own filings, which is a more reliable starting point than any pricing page.
Where the money goes
Four lines carry most of it. The spread, the gap between the buying and selling price, is the largest and the least visible, because it is quoted as a ‘from’ figure that reflects a calm market. Currency conversion is the second: a saver in Wrexham buying US shares every month pays a conversion charge every single time, and across providers that ranges from a few tenths of a per cent to around 1.5 per cent. Platform or custody fees are the third, worked out on different bases by different firms. And for anyone using leveraged products, overnight financing is often the biggest of the lot.
None of it is hidden in any regulatory sense. It is simply spread across enough small lines that no single one looks worth worrying about.
The one-hour check
You do not need a spreadsheet or an adviser. You need last year’s statements and an hour, ideally with a cup of tea.
Start with the itemised fees: platform charges, custody, inactivity and withdrawal fees. Then take a handful of your trades and compare the price you got with the mid-market price at the time, which most apps show in the order history; multiply the typical gap by the number of trades you made. Add up every currency conversion at the rate the platform actually applied. If you hold leveraged positions, total the financing charges, which are listed separately.
Put the four together. For someone buying UK funds a few times a year the total is usually modest, and the exercise simply confirms it. For anyone dealing regularly in overseas shares, or holding leveraged positions, it is common to find the real annual cost is several times the advertised one, without a word of the marketing having been untrue.
What to do with the number
Not necessarily switch. Moving a portfolio has its own friction, and for smaller pots the differences between platforms are small in pounds. The point is that platform choice becomes a decision made with your own figures rather than a habit. Independent testing that opens funded accounts and records what real trades actually cost, of the kind published by The Investors Centre, exists because the published fee tables only describe what a platform chooses to itemise. Your own statements describe what it actually took.
The cheapest platform is not automatically the right one, and cost should never be the only factor. But of all the things that decide how a Welsh saver’s money grows over the next twenty years, the cost of the platform is one of the very few they fully control, and it takes an hour to measure.