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Leaving HL without transfer charges
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Please DO NOT refer to the case fee in your correspondence to either the firm or FOS. If the the firm or FOS think that you are threatening to refer the complaint to FOS because the firm will have to pay the case fee, this will be considered a frivolous and vexatious complaint. Your complaint will then be DISMISSED even though it would have been successful.
Regards,
malfesto.
Totally agree. And nobody should be complaining to the Financial Ombudsman Service unless they genuinely believe they have been treated unfairly.
My help is solely for people who genuinely feel they have been treated unfairly and would like help pursuing matters. I think those posting here who are looking at taking cases to the FOS all come under that category.I came, I saw, I melted0 -
I have now fired off my transfer forms and drafted a complaint to HL - any comments before I send it off?
[FONT=Verdana, sans-serif]Complaint – Vantage SIPP Income Drawdown Account .......[/FONT]
[FONT=Verdana, sans-serif]
I received notice from you on 15th Jan of changes to your fees and it has been confirmed by you (via secure message sent on 16th Jan) that these will result in a massive increase in my platform charges from £72 to £1325 per year from 1st March 2014. Your message also indicated that you would be unwilling to waive exit fees. As a result of the massive increase in charges, I have initiated a transfer of my investments to another platform.
In the circumstances, I have two issues which I would like you to address:[/FONT]- the refusal to waive exit charges.
- the possibility that if there is a delay in transfer that I shall be charged a monthly fee of £110 (up from £6) from 1st March.
Waiving Exit Charges
Your secure message to me stated “Our Terms & Conditions allow us to vary our terms to reflect current or future changes in law, Financial Conduct Authority (FCA) rules or regulations, without providing the option of a free transfer. Our recent changes are the result of a regulatory initiative by the FCA and as such they do not require us to permit free transfers out.”
I disagree with this for the following reasons:- The clause allowing HL to vary prices due to regulatory reasons without allowing a free exit was introduced in changes notified to me on 31/12/2012. The current change is effectively a unilateral change to terms and conditions that applied when I invested with HL, without allowing me a free exit (via a two step change made in quick succession)[FONT=Verdana, sans-serif].[/FONT]
- [FONT=Verdana, sans-serif]The massive increase is as a result of HL's commercial decisions not the FCA changes. It is my understanding that the FCA made no rulings on the level of charges, HL have decided what to charge. For example, if my holdings were in similar ETFs rather than funds, the new charges would be capped at £200 per year - a[/FONT]pplying a similar cap to funds would have equally satisfied the new regulations.
[FONT=Verdana, sans-serif]I believe charging the massive new fees from 1st March if a transfer is incomplete is subject to the same considerations as charging exit fees – as the OFT Guidance says “Any kind of variation clause may in principle be fair if consumers are free to escape its effects by ending the contract.” There are additional considerations:[/FONT]- [FONT=Verdana, sans-serif]I have initiated a transfer in a timely manner, but have no control over the time taken to complete the transfer. HL have at least partial control over the timescales.[/FONT]
- [FONT=Verdana, sans-serif]I do not believe there any regulatory reasons forcing HL to implement new charges on 1st March and that the old charges could be continued until transfer is complete.[/FONT]
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[FONT=Verdana, sans-serif]That sounds fine. I might be tempted to change
to[FONT=Verdana, sans-serif]The massive increase is as a result of HL's commercial decisions not the FCA changes. It is my understanding that the FCA made no rulings on the level of charges, HL have decided what to charge. For example, if my holdings were in similar ETFs rather than funds, the new charges would be capped at £200 per year - a[/FONT]pplying a similar cap to funds would have equally satisfied the new regulations
[/FONT]
I know it was in my example letter but I might be tempted to delete[FONT=Verdana, sans-serif]The massive increase is as a result of HL's commercial decisions not the FCA changes. It is my understanding that the FCA made no rulings on the level of charges; HL have decided what to charge. For example HL could have introduced a per fund explicit charge equivalent to the explicit charge I was previously paying of £24 per fund across the board, and this[/FONT] would have equally satisfied the new regulations. So it is is HL's decision to switch from a per fund fixed charge to a percentage charge (which has nothing to do with regulatory requirements) which has caused the massive increase.
I think HL probably know that is your next step (they are almost certainly monitoring this thread!).and of my right to take a complaint to the Financial Ombudsman Service.I came, I saw, I melted0 -
Are you guys hoping to waive both the transfer fees (ie £25 per fund) and the £30 fee to close the account?0
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Yes that is good. I mentioned HL's ETF cap of £200 because I was going to make the point that is similar to to the platform charges I'll be paying ATS (to whom I'll be switching) and is thus is a commercially viable price to charge.
I think that HL really do believe this is down to the FCA and that we have to hammer home to them that the level of the new charges and their determination to protect their margins is their responsibility not the FCA's and certainly not their customers'!
I'll craft a version that includes both old charges and new ETF charges being RDR compliant.0 -
Are you guys hoping to waive both the transfer fees (ie £25 per fund) and the £30 fee to close the account?
Well in my case its a flat £75 to transfer a SIPP, but yes having been informed of terminating the contract due to price increases, HL should be waiving all exit charges and not applying increases until after transfer is complete.0 -
New version of the relevant para - thanks to Snowman.
The massive increase is as a result of HL's commercial decisions not the FCA changes. It is my understanding that the FCA made no rulings on the level of charges, HL have decided what to charge.
For example, HL could have introduced a per fund explicit charge across the board equivalent to the explicit charge I was previously paying of £24 per fund, this would have equally satisfied the new regulations.
As another example, if my holdings were in the equivalent Vanguard ETFs, HL would cap the new management fees at £200 per year. Applying a similar cap to funds would also have equally satisfied the new regulations. Indeed this would be similar to the SIPP management fees charged by my new supplier on clean funds and trackers, so apparently a commercially viable level.
It is is HL's decision to switch from a per fund fixed charge to a fund charge based on a percentage charge (capped only at very high holding levels) that has caused the massive increase. This has nothing to do with regulatory requirements.0 -
Rather than massive, use a word like "disproportionate" or "excessive" or a phrase like "prohibitively expensive" - implying the charges are unfair / extreme / unaffordable.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0
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Since you've made the point that the price increase was not a regulatory requirement is it worth adding that the OFT does not consider price increases, even associated with so called 'valid reasons', to be fair unless a customer can exit the contract freely?[*][FONT=Verdana, sans-serif]The massive increase is as a result of HL's commercial decisions not the FCA changes. It is my understanding that the FCA made no rulings on the level of charges, HL have decided what to charge. For example, if my holdings were in similar ETFs rather than funds, the new charges would be capped at £200 per year - a[/FONT]pplying a similar cap to funds would have equally satisfied the new regulations.The OFT does not consider that use of 'valid reasons' normally justifies price increases, essentially on grounds stated in paragraph 12.3 that is, lack of verifiability
Overall the complaint is looking very good.0 -
Rather than massive, use a word like "disproportionate" or "excessive" or a phrase like "prohibitively expensive" - implying the charges are unfair / extreme / unaffordable.
Excellent point. I've added the following to paragraph 1
These new management charges amount to a disproportionate 6.8% of the drawdown income I am allowed to take under a recent GAD recalculation.
and changed massive to disproportionate thereafter.
And I've started a new thread if anyone wants to comment on this unfairness / extremeness / unaffordability.0
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