We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Tracker Funds?
Comments
-
Will it? I think that may be wishful thinking by some.With platforms charging explicitly, irrespective of type of investment held, this brings the cost difference of managed and trackers much closer.
For many years investors have been able to buy a tracker ISA directly from L&G for 0.5% and others. I'm not sure why that should change and will presumably limit what anyone else, including H-L, could charge on top. Why would anyone pay them more than they would pay direct from L&G etc. when there are additional advantages such as instant dealing by buying direct?
If managed funds want to continue charging 1% or more, excluding commission, and someone wants to charge another 0.5% on top then I don't see that the gap will have closed. UTs will continue to have the competition of low cost investment trusts.
And of course you wouldn't want to ignore facts would you? Not in your trade.As usual ignoring the fact that there are a lot of IFAs out there who already charge a fee rather than a commission, therefore either rebate the trail commission in full or utilise units which don't have trail commission.
Come on, the IFA bashing is getting really old.
There now are indeed and many more will be forced by RDR to do so, the same RDR that you repeatedly tried to trash in your posts to this board a short while ago.
I notice that you don't mention that, having formerly worked for a bank, you now work for an IFA. No doubt you will tell us that in no way influences your opinion but you just prefer not to mention it. Offering facts that you prefer to go unmentioned is not "IFA bashing" and it's just the hyper-sensitive sillyness of some in your trade to claim so.
I, on the other hand, am just an investor of many years. I don't have any tracker funds though my wife has a tiny percentage of her investments in an HSBC US tracker. I therefore don't have your reasons to have any bias
Lokolo has just started his first job so will be interesting to see if he ever uses an adviser and on what basis when he has enough savings. And if he's interested, Tim Hale is British and his book 'Smarter Investing' is published by the Financial Times. You may find Financial Times books more informative than relying on some posts by vested interests on message boards.0 -
Rollinghome wrote: »And of course you wouldn't want to ignore facts would you? Not in your trade.
If you want to call me a liar, please have the guts to do so directly and cite your proof. Otherwise please don't insinuate as such without good reason.There now are indeed and many more will be forced by RDR to do so, the same RDR that you repeatedly tried to trash in your posts to this board a short while ago.
I have always been in favour of the RDR generally. There are a few things about it that I don't like, but to claim that I tried to trash the RDR is just plain wrong.
If you want some clarity of my views, here are the highlights:- the qualifications requirement is spot on for the time being, though it would be nice to see some exams with more relevant content and less emphasis on passing multiple choice exams. Ultimately I see this as rising to a level 6 qualification requirement, which I think is good if they want to turn the industry into more of a profession, not so good for affordable financial advice
- banning commission is going to have knock-on consequences that haven't been thought through fully by the FSA. In theory I support the idea of transparent charging, but if it leads to higher costs I think it's not a worthwhile trade-off for the consumer. Ultimately I think it's much better for the consumer to have more choice rather than less, however I can appreciate that the FSA wants to remove commission bias (though I'm surprised they haven't actually bothered to demonstrate that it exists before banning commission to get rid of it...)
- general implementation has been terrible. The FSA has been very slow at releasing some very critical papers which detail how certain aspects of RDR are going to be set in motion, which has made it next to impossible to actually revise business models ahead of 2013
I notice that you don't mention that, having formerly worked for a bank, you now work for an IFA.
Actually I don't at the moment...No doubt you will tell us that in no way influences your opinion but you just prefer not to mention it.
... so it doesn't. But nice ad hominem.Offering facts that you prefer to go unmentioned is not "IFA bashing" and it's just the hyper-sensitive sillyness of some in your trade to claim so.
Of course it's IFA bashing. Before you turned up, there was a discussion on the merits of tracker funds vs managed funds. The first person to mention IFAs was you, and you immediately brought commission bias into the equation as though that was the only reason anyone would ever recommend managed funds over trackers. How is that anything other than IFA bashing?
It's not the first time you've agenda-trolled a thread to denigrate IFAs, I'm sure it won't be the last either.I, on the other hand, am just an investor of many years. I don't have any tracker funds though my wife has a tiny percentage of her investments in an HSBC US tracker. I therefore don't have your reasons to have any bias
I have trackers and managed funds in my portfolio. In general I prefer managed funds, but in certain sectors I believe trackers do better, so I use them.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
For the record (before Rollinghome accuses me of hiding my details or something equally sinister), I'd neglected to update my profile for quite a long time, so it was showing me in the wrong job. Now updated to "between jobs", which is fairly accurate.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
Rollinghome wrote: »For many years investors have been able to buy a tracker ISA directly from L&G for 0.5% and others. I'm not sure why that should change and will presumably limit what anyone else, including H-L, could charge on top.
To comply with the FSA ban on bundled platforms, HL and other bundled platforms, will have no choice but to change their business model as they will have to make up the money lost from the provider kick backs. Fidelity have already begun that move with the introduction last year of a platform fee of £45 for those with investments over £50k and this year lowering that to around £20k. Eventually all will have to follow.Why would anyone pay them more than they would pay direct from L&G etc. when there are additional advantages such as instant dealing by buying direct?
If they want the ability to be able to choose from all providers (which is the main reason for choosing a platform/funds supermarket) they will have to pay the platform fee.
If they don't want to pay the platform fee then they go direct to the provider if this is cheaper. Only drawback with this, if they are using the ISA or pension wrappers, is that they are then limited in choice to one provider.0 -
The US has a higher rate of CGT for investments held for less than one year and this applies to all trades within the fund at the time that they happen. In the UK there's no higher rate for the first twelve months and the capital gain is when the fund holder sells the fund, not when the fund sells something. There's also a CGT allowance here that can eliminate much CGT by bed and breakfasting even if outside a tax wrapper.Is there a reason for this? How is their tax system different?
The result is that in New York State the average managed fund beat the average tracker by a couple of percent before tax but under-performed after tax.
Since the taxation that makes the difference doesn't exist in the UK it's necessary to use care over US studies of fund returns and US practices like long term buy and hold which are tailored for the US tax system.0 -
Here's a good site with much discussion on index tracker investing:
http://monevator.com/category/investing/passive-investing-investing/0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.2K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.3K Work, Benefits & Business
- 601K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards