Online stockbrokers TD Waterhouse and E*Trade are expecting to launch online funds supermarkets ...
Online stockbrokers TD Waterhouse and E*Trade are expecting to launch online funds supermarkets by as early as the end of next week.
These would allow share traders to add units in unit trusts and OEICs to the direct equities they hold in self-select Isas.
Paul Stallard, TD Waterhouse's vice-president of marketing, said other additions would be made later this year, which might include educational material online. Other online brokers such as Barclays Stockbrokers and SelfTrade are launching funds supermarkets, and StockAcademy.com and online information provider www.widelearning.com base their offerings to customers on shareholder financial education. Widelearning.com provides information to companies such as Merrill Lynch HSBC.
E*Trade is planning to launch a supermarket by 29 March, using a research and ranking tool provided by Morningstar, with access to 240 Isa unit trusts and tracker funds from 25 providers.
E*Trade customers will receive one statement for all their holdings in self-select Isas. The funds Isa will offer real-time access to fund holding values, allow switching between funds from different providers for a low fee, and free switching between funds offered by the same provider. E*Trade fund Isa holders will not need to hold other E*Trade accounts.
The data provided by Morningstar will also provide news on the funds and markets and compare fund managers' philosophies and their investment performance.
No charges are incurred for withdrawals from E*Trade's fund centre, and the initial charge is between 1.25% and 1.5% depending on fund, plus an annual fee of between 1% and 1.5%.
The minimum lump sum investment into the E*Trade centre is £1,000 or £100 per month by direct debit, and customers can register at www.etrade.co.uk.
Britain's online broking industry is in a period of rapid change. Some brokers, such as iDealing, have targeted cost-conscious customers with a £5 quarterly administration fee, while other online brokers have moved quickly to open up other income streams. SelfTrade is also launching an online fund supermarket, while providers such as Durlacher's www.nothing-ventured.com have moved into online self invested personal pension plans (SIPPs).