Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Alan_Brown
    • By Alan_Brown 10th Mar 17, 6:46 PM
    • 177Posts
    • 253Thanks
    Alan_Brown
    Cheapest platform for trackers
    • #1
    • 10th Mar 17, 6:46 PM
    Cheapest platform for trackers 10th Mar 17 at 6:46 PM
    Hi,

    I have £170k in a Sipp and after dabbling with a few managed funds and different shares, I now want to put the proceeds in low cost trackers and leave them alone. I'm with Hl at the moment but going forward I don't want to be paying their larger platform fees when all I'm doing is investing in trackers (though I do know that HL negotiate special commission rates on popular trackers, and understand that the overall costs need to be taken into account, not just platform fees).

    For info, I'm 49 later this year and as well as the SIPP I have a small DB Pension (worth £4k a year) and also a DC Pension with my current employer worth £32k (this is the only Pension that I'm contributing money to).

    I'm looking to invest the pension and then leave it while I sort out my other finances (especially my mortgage) with the hope of retirement between 60 and 65.

    Any help would be greatly appreciated.
    Last edited by Alan_Brown; 12-03-2017 at 7:13 PM.
Page 1
    • dunstonh
    • By dunstonh 10th Mar 17, 6:55 PM
    • 88,746 Posts
    • 54,068 Thanks
    dunstonh
    • #2
    • 10th Mar 17, 6:55 PM
    • #2
    • 10th Mar 17, 6:55 PM
    though I do know that HL negotiate special commission rates on popular trackers
    Commissions are banned. Superclean share classes are available on most platforms. Some platforms will have more than others. HL do not have the most although they have a fair range.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • zagfles
    • By zagfles 10th Mar 17, 7:49 PM
    • 12,099 Posts
    • 10,045 Thanks
    zagfles
    • #3
    • 10th Mar 17, 7:49 PM
    • #3
    • 10th Mar 17, 7:49 PM
    Google Snowman's Spreadsheet to compare platforms.

    Also - HL are known to negotiate the platform fee if you're thinking of moving away - I think £170k is the sort of amount where they've been known to offer lower fees eg around 0.25% rather than the usual 0.45%. Worth a try - find a cheaper platform and ask them for a lower charge to stop you moving!

    Also don't judge on cost alone - make sure you read reviews of other platforms.
    • bigadaj
    • By bigadaj 10th Mar 17, 8:34 PM
    • 9,573 Posts
    • 6,094 Thanks
    bigadaj
    • #4
    • 10th Mar 17, 8:34 PM
    • #4
    • 10th Mar 17, 8:34 PM
    Even a negotiated reduction with Hargreaves is still going to look expensive I would have thought.

    A fixed fee provider like iWeb would, be much cheaper I would have thought though aren't there exit fees for hl?
  • jamesd
    • #5
    • 10th Mar 17, 8:36 PM
    • #5
    • 10th Mar 17, 8:36 PM
    HL cap their platform charge at £200 for ETFs and investment trusts and there are even more tracker ETFs than standard funds, with comparable prices. You will pay dealing charges, though. It's useful for buy and hold, with standard funds used for ongoing investing until the trade cost of switching a chunk into the ETFs is worthwhile.
    • fred990
    • By fred990 10th Mar 17, 11:09 PM
    • 6 Posts
    • 0 Thanks
    fred990
    • #6
    • 10th Mar 17, 11:09 PM
    • #6
    • 10th Mar 17, 11:09 PM
    I thought the same so went direct to Vanguard and avoided the platform thing. Did a FTSE tracker and also a 60/40 Lifestrategy fund. According to a few websites the charges are tiny, by all accounts you won't find a lower TER.
    • dunstonh
    • By dunstonh 10th Mar 17, 11:18 PM
    • 88,746 Posts
    • 54,068 Thanks
    dunstonh
    • #7
    • 10th Mar 17, 11:18 PM
    • #7
    • 10th Mar 17, 11:18 PM
    I thought the same so went direct to Vanguard and avoided the platform thing. Did a FTSE tracker and also a 60/40 Lifestrategy fund. According to a few websites the charges are tiny, by all accounts you won't find a lower TER.
    Originally posted by fred990
    Vanguard currently have no tax wrappers and messing around with the asset allocation could cost you more in lost returns than the charges saved.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • fred990
    • By fred990 10th Mar 17, 11:29 PM
    • 6 Posts
    • 0 Thanks
    fred990
    • #8
    • 10th Mar 17, 11:29 PM
    • #8
    • 10th Mar 17, 11:29 PM
    Oh....what would constitute 'messing about with the allocation' mean to the uneducated? Genuine question cos I did two funds of about £125k each and the last valuation looked pretty impressive, more so the 60/40 one. No expert here!
  • jamesd
    • #9
    • 10th Mar 17, 11:33 PM
    • #9
    • 10th Mar 17, 11:33 PM
    I thought the same so went direct to Vanguard and avoided the platform thing. Did a FTSE tracker and also a 60/40 Lifestrategy fund. According to a few websites the charges are tiny, by all accounts you won't find a lower TER.
    Originally posted by fred990
    Then read my account and pay half the price of Lifestrategy by mixing your own with other trackers.

    That wasn't about building a full replacement but maybe others would like to join in and put together the alternatives to replicate everything in them at lower cost.

    Oh....what would constitute 'messing about with the allocation' mean to the uneducated? Genuine question cos I did two funds of about £125k each and the last valuation looked pretty impressive, more so the 60/40 one. No expert here!
    Originally posted by fred990
    That would mean changing the percentages of the funds.

    HL cap their platform charge at £200 a year for ETFs in their SIPP so £200 on £250,000 would be 0.08% platform charge. £45 cap in the ISA, 0.018%. No platform charge on them in the fund and share account. All plus the ETF cost and dealing. My post lists regular funds not ETFs but you can probably find comparable ETFs and still come in cheaper with HL than direct with Vanguard if you're using Lifestrategy. No dealing charges on funds so you can use a bit in them and pay their platform charge to make modest allocation changes without paying dealing costs until the change becomes big enough to do the ETF transaction(s).
    Last edited by jamesd; 10-03-2017 at 11:48 PM.
    • fred990
    • By fred990 10th Mar 17, 11:41 PM
    • 6 Posts
    • 0 Thanks
    fred990
    Okay,,,,these two are part of a bunch outside of my DB pension (maxed out). Thought I was being clever going to Vanguard...this is getting complicated....
    • fred990
    • By fred990 10th Mar 17, 11:45 PM
    • 6 Posts
    • 0 Thanks
    fred990
    Jamesd..... I can't recall the exact figures but I thought Vanguard was waaaay cheaper? Less than 0.2 % overall, am I missing something major?
    • dunstonh
    • By dunstonh 11th Mar 17, 12:14 AM
    • 88,746 Posts
    • 54,068 Thanks
    dunstonh
    Okay,,,,these two are part of a bunch outside of my DB pension (maxed out). Thought I was being clever going to Vanguard...this is getting complicated....
    Originally posted by fred990
    Holding it outside of a tax wrapper means you can be subject to income tax, capital gains tax and inheritance tax. In the case of not holding it in a pension, you are also missing out on tax relief.

    hat would constitute 'messing about with the allocation' mean to the uneducated?
    Asset allocations (how much % is held in each area) are built using a structure and assumptions based on economic data. Whilst models are different based on different assumptions, they all follow a certain structure. Picking a single sector at random and adding a random amount to it means you are making management decisions without any structure. You are going to be reliant on luck rather than judgement.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Teaandscones
    • By Teaandscones 11th Mar 17, 12:57 AM
    • 111 Posts
    • 82 Thanks
    Teaandscones
    HL cap their platform charge at £200 for ETFs and investment trusts and there are even more tracker ETFs than standard funds, with comparable prices. You will pay dealing charges, though. It's useful for buy and hold, with standard funds used for ongoing investing until the trade cost of switching a chunk into the ETFs is worthwhile.
    Originally posted by jamesd
    I have used HL and found they have good service but they are expensive for funds if we are talking around 170k. I stayed with them but switched my tracker funds to equivalent ETF's on a buy and hold basis to keep charges down (though there were one-off dealing costs).
  • jamesd
    Jamesd..... I can't recall the exact figures but I thought Vanguard was waaaay cheaper? Less than 0.2 % overall, am I missing something major?
    Originally posted by fred990
    Just that nil platform charge and 0.08% or 0.12% in various proportions is less than half of 0.22% for the Lifestrategy funds on platforms. An extra 0.1% for them doing the rebalancing work from time to time.

    But my post gives only a few funds so maybe someone who likes the Lifestrategy investment mix might want to find the cheapest HL offered funds and ETFs to replicate it based on their published holding mixtures. A bit of work but potentially some useful money saving for the many Lifestrategy fans here. Funds for the people with smaller pots, ETFs for bigger with a bit in the funds to cut the number of rebalancing transactions.
    I have used HL and found they have good service but they are expensive for funds if we are talking around 170k. I stayed with them but switched my tracker funds to equivalent ETF's on a buy and hold basis to keep charges down (though there were one-off dealing costs).
    Originally posted by Teaandscones
    Yes, that's the way to go there for bigger tracker holdings, ETF versions rather than standard funds.
    Last edited by jamesd; 11-03-2017 at 1:14 AM.
    • Triumph13
    • By Triumph13 11th Mar 17, 7:13 AM
    • 1,009 Posts
    • 1,195 Thanks
    Triumph13
    Very interesting about HL and ETFs. I've been putting off researching the details of the most efficient places to invest as it's all in employer's pensions at the moment, but I'd been dismissing HL as too expensive. I'd also been putting off the research as still a few years to go and everything seems to be changing so fast anyway!
    For say £500k in a couple of trackers where I ideally want to sell 0.3% per month, might it make sense to hold it at HL in ETFs, sell 3.6% once a year to incorporate some rebalancing, take 1/12 as cash and buy funds with the other 11/12 and sell 1/12 each month?
    • AnotherJoe
    • By AnotherJoe 11th Mar 17, 9:18 AM
    • 7,040 Posts
    • 7,510 Thanks
    AnotherJoe
    Very interesting about HL and ETFs. I've been putting off researching the details of the most efficient places to invest as it's all in employer's pensions at the moment, but I'd been dismissing HL as too expensive. I'd also been putting off the research as still a few years to go and everything seems to be changing so fast anyway!
    For say £500k in a couple of trackers where I ideally want to sell 0.3% per month, might it make sense to hold it at HL in ETFs, sell 3.6% once a year to incorporate some rebalancing, take 1/12 as cash and buy funds with the other 11/12 and sell 1/12 each month?
    Originally posted by Triumph13
    Why would you buy funds and then sell them almost straight away ????????

    There are many places where the concept of "buckets" of cash/equity are discussed, very crudely (as there can be a lot of detail and sophistication to this that I'm glibly ignoring) you'd have say a couple years or so spending in cash available and then each period you either draw down from that cash, or from your equities, depending how the market has gone.

    If the market did well, draw down from market and top up cash if it needs it, if its dipped, draw down from cash. The idea is to avoid drawing down from equities if there's been a crash. Obviously you can only put this off for so long but studies using past data show it can make quite a difference to how long your overall funds will last.
  • jamesd
    The Guyton-Klinger rules that I like formalise taking money from equities when high to put into cash to draw on when they are low. Worth a look.
    • EdSwippet
    • By EdSwippet 11th Mar 17, 9:31 AM
    • 516 Posts
    • 481 Thanks
    EdSwippet
    For say £500k in a couple of trackers where I ideally want to sell 0.3% per month, might it make sense to hold it at HL in ETFs, sell 3.6% once a year to incorporate some rebalancing, take 1/12 as cash and buy funds with the other 11/12 and sell 1/12 each month?
    Originally posted by Triumph13
    It might. HL would charge £200 for the SIPP and £11.95 for each ETF trade.

    But then, of the flat-fee platforms, iWeb charges £180 for the SIPP and £5 for each trade, and you would be free to use funds as well as ETFs without facing egregious fund holding charges. Interactive Investor/Motley Fool also undercuts HL and has no added fund holding charges. Most ETFs are distributing, making fund accumulation units very useful for long-term buy and hold portfolios.
    • coyrls
    • By coyrls 11th Mar 17, 10:18 AM
    • 817 Posts
    • 808 Thanks
    coyrls
    Very interesting about HL and ETFs. I've been putting off researching the details of the most efficient places to invest as it's all in employer's pensions at the moment, but I'd been dismissing HL as too expensive. I'd also been putting off the research as still a few years to go and everything seems to be changing so fast anyway!
    For say £500k in a couple of trackers where I ideally want to sell 0.3% per month, might it make sense to hold it at HL in ETFs, sell 3.6% once a year to incorporate some rebalancing, take 1/12 as cash and buy funds with the other 11/12 and sell 1/12 each month?
    Originally posted by Triumph13
    I personally wouldn't choose a platform where I couldn't invest in funds because of the cost. Putting everything in ETFs, ITs and shares seems an artificial restriction.
    • Triumph13
    • By Triumph13 11th Mar 17, 10:45 AM
    • 1,009 Posts
    • 1,195 Thanks
    Triumph13
    Why would you buy funds and then sell them almost straight away ????????.
    Originally posted by AnotherJoe
    Because I'd like to sell a fixed percentage every month and that would be the cheapest way with HL. By selling a fixed percentage I get the equivalent of pound cost averaging rather than try and time the market and guess at which point of the year to sell.
    If I'm on a platform with dealing charges I'll probably end up settling for quarterly, but monthly would be my ideal. A lt of it is psychological that if I try and time the market then see it go up immediately after I sell I know I'll get grumpy.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,617Posts Today

8,785Users online

Martin's Twitter