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Changes ahoy at the HSBC Global Investment Centre

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  • nicknameless
    nicknameless Posts: 1,055
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    presumably new purchases of the dirty class trackers will not be possible after a certain date?
  • SnowMan
    SnowMan Posts: 3,350
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    presumably new purchases of the dirty class trackers will not be possible after a certain date?

    They didn't give a specific date for when the dirty class will be withdrawn although you would expect it would have to be some time between when the clean class are made available (probably January 2013) and 1st January 2014 when platform RDR is expected to come in. I suspect from a practicality viewpoint it would be more likely to be January 2013.
    I came, I saw, I melted
  • SnowMan wrote: »
    They didn't give a specific date for when the dirty class will be withdrawn although you would expect it would have to be some time between when the clean class are made available (probably January 2013) and 1st January 2014 when platform RDR is expected to come in. I suspect from a practicality viewpoint it would be more likely to be January 2013.

    What a right royal PITA :mad:

    I don't have much money with them as just started up a passive investment portfolio but looks like I will now have to look elsewhere for next year.

    It seems the 'set things up, drip feed, ignore and get on with life' approach isn't that simple at the moment!

    Any recommendations?
  • SnowMan
    SnowMan Posts: 3,350
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    edited 3 December 2012 at 11:14AM
    What a right royal PITA :mad:

    I don't have much money with them as just started up a passive investment portfolio but looks like I will now have to look elsewhere for next year.

    It seems the 'set things up, drip feed, ignore and get on with life' approach isn't that simple at the moment!

    Any recommendations?
    Talking specifically about the HSBC trackers:

    Personally I would suggest anyone with HSBC existing funds on the GIC stays put for the immediate time being and waits for things to settle down before moving those existing funds away. It could be that holding HSBC dirty legacy trackers remains cheapest for the immediate future.

    And I cannot see any reason not to carry on contributing until new investment into the HSBC dirty class on the GIC is not allowed. It sounds like it will reasonably easy to exit from the GIC when the time comes.

    Interactive Investor offer the clean C class trackers but their £80pa platform fee and other transfer and withdrawal charges makes it an expensive option to hold these funds for most.

    And Alliance Trust Savings may offer the clean class from January but again with a platform fee of £48pa and other charges including dealing charges for buying and selling funds it may not be a good option for many.

    In terms of new money if HSBC GIC stop allowing investment into the dirty class in January 2013, Fidelity Fundsnetwork bundled version might be an option (or possibly Cavendish although I would prefer to directly access Fidelity Fundsnetwork rather than through Cavendish as there is no obvious advantage to the latter). Fidelity Fundsnetwork may still be offering the dirty class of HSBC trackers without platform fee right up to the end of 2013. Although what Fidelity Fundsnetwork will do about RDR and when is unknown so hard to say.

    Best Invest offer the HSBC dirty trackers without platform fee but I would currently avoid them because of their account closure and transfer fees. When things settle you want to be able to move away easily and could be more difficult if holding funds with Best Invest.

    Sippdeal and Hargreaves Lansdown can be ruled out because of their platform fees and other charges to hold the HSBC trackers.


    When the dust settles there may also be a good way of holding Vanguard or HSBC clean trackers or other cheap trackers that might become available which will mean ditching the HSBC dirty trackers.

    Much as I like Vanguard I can't invest with them now because it means paying a platform fee. Paying a platform fee isn't necessarily a problem but what is a problem is that the platform fee could be changed at short notice.

    A Legal and General UK index (FTSE all share) clean class may become cheap to buy again (at the moment the dirty class is only cheap if bought through Cavendish).


    In summary being in a flexible position to be able to move later is very important so I would consider sticking with the GIC for now.
    I came, I saw, I melted
  • wow thanks

    this is becoming almost as clear as choosing an energy supplier and tariff:rotfl:
  • good advice about keeping your options open and watching exit charges.

    i thought the plan was that fidelity fundsnetwork would be charging 0.25% + £45 per year if you go direct, and you'd save the £45 if you go via cavendish.

    which might make GIC and cavendish similar pricing.

    for smaller investments, you'd only want to pay a percentage for a platform (e.g. GIC or cavendish). for larger investments, you'd only want to pay a fixed charge (e.g. iii or ATS).

    but the other important factor is the range of funds available.
  • amictus
    amictus Posts: 301 Forumite
    I have been following this for a while so just wanted to say thanks for sharing your findings and advice.
  • SnowMan
    SnowMan Posts: 3,350
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    i thought the plan was that fidelity fundsnetwork would be charging 0.25% + £45 per year if you go direct, and you'd save the £45 if you go via cavendish.

    The £45 charge is I understand an option that Fidelity Fundsnetwork provide in return for which investors incur no initial or switch charges.

    As the main trackers used by DIY investors on Fidelity Fundsnetwork such as the HSBC range and the Fidelity range have no initial or switching charge there is currently no £45 charge and it doesn't make sense to switch to that option as it just means paying £45 for nothing.

    An active fund bought through Cavendish typically has an amc of 1.5%. Of that 1.5%, Fidelity keep 0.2% as a platform charge, the fund manager gets 0.75% and the remainder of 0.55% is paid as commission to Cavendish. Of that 0.55%, 0.5% is effectively given back to the investor as extra units and Cavendish keep 0.05%. So the 0.25% you mention is the platform charge of 0.2% plus the 0.05% cavendish keep.

    However that is just a typical example. With a tracker with a low amc (such as the HSBC range and Fidelity moneybuilder range) the percentages have to be completely different and lower.

    It does indicate what the Fidelity Fundsnetwork proposition may be like after RDR. So an investor may be charged 0.25% pa to purchase a fund via Cavendish made up of the 0.2% and 0.05% Fidelity and Cavendish fees).

    For the active fund the investor is in the same position. For the tracker they are charged more than pre RDR.

    However I have not seen any announcement that this is what Fidelity will do post RDR (or how they will deal with legacy business) and would be interested in anything that clarifies that.

    The only clues I have are in this article which is fairly vague but possibly suggests they won't change things until the end of 2013.

    I am holding HSBC trackers and the Fidelity Moneybuilder UK index on Fidelity Fundsnetwork (not via Cavendish) so I am very interested in any news on this.
    I came, I saw, I melted
  • good point that you can currently opt out of the £45.

    http://www.moneymarketing.co.uk/wrap-and-technology/fidelity-fundsnetwork-reveals-unbundled-pricing-model/1049067.article is an article mentioning the 0.25% + £45 model. and it says the £45 will be compulsory from next january.

    cavendish seem to think the £45 won't apply to them - http://www.cavendishonline.co.uk/investments/RDR
  • SnowMan
    SnowMan Posts: 3,350
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    edited 3 December 2012 at 2:32PM
    good point that you can currently opt out of the £45.

    http://www.moneymarketing.co.uk/wrap-and-technology/fidelity-fundsnetwork-reveals-unbundled-pricing-model/1049067.article is an article mentioning the 0.25% + £45 model. and it says the £45 will be compulsory from next january.

    cavendish seem to think the £45 won't apply to them - http://www.cavendishonline.co.uk/investments/RDR

    Must say I am pretty confused about who the £45 will apply to from January.

    All I know is that the £45 from January doesn't apply to me personally. And they've told me that nothing will change with my account in the immediate future (post January 2014 who knows)

    I don't think it will apply to any other investors who come direct to Fidelity Fundsnetwork without an adviser (unless they've opted in to the £45 possibly).

    Anyone going via Cavendish (i.e. not direct) might have had to pay the £45 perhaps but Cavendish obviously have some sort of exemption which means they don't after all.
    I came, I saw, I melted
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