Custody and dealing are two fees doing different jobs

Platform pricing is not one fee. It is generally at least two, charged on different bases for different services, and comparing providers on either alone gives the wrong answer.

What each fee pays for

A custody or platform fee pays for holding assets, maintaining records, producing statements and meeting reporting obligations. It accrues continuously whether or not anything is traded.

A dealing fee pays for executing an instruction. It arises only when something is bought or sold, and it is charged per transaction rather than on the balance.

The two are unrelated in what drives them. One scales with how much is held and the other with how often the investor acts.

They scale in opposite directions

Custody fees are frequently a percentage of assets, so they grow as a portfolio grows even when nothing else changes about the service being provided.

Dealing fees are usually flat per trade, so they matter enormously on small transactions and become negligible on large ones. Their weight depends on trade size, not portfolio size.

A regular monthly contributor and an occasional large investor therefore face opposite pricing problems, and a provider that suits one may be poorly suited to the other.

Why headline comparisons mislead

Marketing tends to lead with whichever fee is competitive. A provider with low custody charges will foreground them, and one with free dealing will foreground that.

Neither claim is false, and neither describes the total. The relevant figure is the combination applied to a particular pattern of holding and dealing, which differs for every investor.

Calculating that requires a realistic estimate of trades per year. Most people overestimate, then choose on dealing costs that turn out to matter little.

The structure shapes behaviour

Per-trade charges suppress trading, which for a long-horizon investor is usually welcome. They also suppress small regular contributions if each one triggers a charge.

Free dealing removes the brake entirely. The cost of a decision falls to nothing, which does not make decisions better and does make them more frequent.

Many providers offer reduced or waived dealing for scheduled investments while charging for ad hoc ones. That structure prices the pattern most likely to be maintained.

Other charges sit outside both

Fund charges are separate again and are deducted inside the fund rather than by the platform. They apply regardless of which platform holds the holding.

Transfers out, paper documentation and foreign exchange are frequently charged individually. Those appear in the fee schedule rather than in the summary comparison.

Reading the full schedule once is tedious and is the only way to see the structure. Providers publish it because they are required to, not because they expect it to be read.