Tax, fees & accounts
Platform fee
Also called Custody fee or Account fee
What a broker or platform charges for holding your account, separate from dealing costs.
How it works
Charges come as a percentage of assets, a flat annual fee, or a combination, sometimes with caps. Which structure is cheaper depends entirely on portfolio size.
Percentage fees are punitive for large portfolios; flat fees are punitive for small ones.
Where it misleads people
Platform fees are charged on top of fund expense ratios. Two layers of 0.4% is 0.8% a year, and both compound against you.
Related terms
- Expense ratioThe annual percentage of your money a fund takes to cover its running costs.
- BrokerThe firm that holds your account and sends your orders to the market on your behalf.
- CompoundingEarning returns on the returns you already earned, so growth accelerates the longer you leave it alone.
- Transaction costsThe trading costs a fund incurs inside the portfolio, on top of its stated expense ratio.
More in Tax, fees & accounts
- Stamp duty
- Income tax on investments
- Tax wrapper
- FIFO and other lot methods
- Tax-loss harvesting
- Currency conversion fee
- Wash sale
- Capital gains tax
All 11 Tax, fees & accounts terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.