Hargreaves Lansdown - High Charges Warning

user3468

One thing to watch out for if you are considering holding investments with Hargeaves Lansdown or do so in their ISA is rather than discounting management fees they charge an additional 0.5% plus VAT (0.0575%) on certain funds.

For example the management charge on Fidelity's UK Index fund is 0.1%. If you hold this in a Hargreaves Lansdown ISA you will be pay 0.1% plus 0.575% an effective increase in the charges of 575%.:mad:

purch

Do you expect them to manage your ISA for nothing ???

wombat42_2

It just seems to be an issue with index funds where management charges are normally very low as index funds are just run automated. It will work out cheaper to use the company (such as Fidelity) direct.

user3468

Agreed if relevant index funds are part of the funds you want to hold the Hardreaves Lansdown service is expensive (for the index funds part).

It's a shame as most people want to hold a balance between index and other funds (on which Hargeaves Lansdown make a fee) and the flexibility to hold both types of funds in one account and to do switches between funds when appropriate would be useful but clearly not if it comes at the price of significant additional charges.

dunstonh

It's a shame as most people want to hold a balance between index and other funds

Most? I dont think so. Apart from newbie investors who have read an incorrect article at fool, I dont think most would want to. Experienced investors wouldnt use unit trusts for trackers.

RayWolfe

If you want funds in low charge trackers, keep them with the investment manager. You can always transfer them (or the cash) to a fund supermarket when you have learnt enough to avoid trackers.

thrupence

user3468 wrote: »

Agreed if relevant index funds are part of the funds you want to hold the Hardreaves Lansdown service is expensive (for the index funds part).

It's a shame as most people want to hold a balance between index and other funds (on which Hargeaves Lansdown make a fee) and the flexibility to hold both types of funds in one account and to do switches between funds when appropriate would be useful but clearly not if it comes at the price of significant additional charges.

If you want a FTSE all share tracker, they don't bump up the fee on the HSBC one. It's 0.25%

http://www.h-l.co.uk/funds/security_details/sedol/3100844

In fact they don't seem to charge any additional on any of the HSBC trackers, so far as I can see.

Alternatively you can use a low cost ETF and just pay the initial and exit trading fee to HL.

Trackers are better thought of in the US because it's highly unusual for active managers to outperform the US indices over the long term, so the chances of picking the outperformers is low, unless you're lucky enough to invited to join Bernie Madoff's fund.......

dunstonh

Trackers are better thought of in the US because it's highly unusual for active managers to outperform the US indices over the long term, so the chances of picking the outperformers is low, unless you're lucky enough to invited to join Bernie Madoff's fund.......

Plus the taxation in the US favours trackers rather than managed. Most of the myths on trackers are based on the US market and then ported to other markets where the same may not be true.

jra123

Is it possible to get some of the advantage of USA - style trackers by going through a USA fund, like Vanguard?

I heard Vanguard has the lowest charges for an ISA FTSE tracker?

See the Vanguard UK website and the fee page.

I can only find two brokers who provides the Vanguard tracker : alliance trust and Investor Profile, neother ofwhom I know anything about. I asked my usual broker who cannot yet do so.

Re : the comment about experienced investors not using unit trusts as trackers, what would the better alternative be?

thank you!

Newbie2saving

user3468 wrote: »

...For example the management charge on Fidelity's UK Index fund is 0.1%. If you hold this in a Hargreaves Lansdown ISA you will be pay 0.1% plus 0.575% an effective increase in the charges of 575%.:mad:

Just shows you it pays to read the T&C's and small print in fine detail with the different fund supermarkets offering different charges. Good spot.

ViolaLass

I'm rather confused by this thread as this tracker

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal--and--general-uk-index-class-r-accumulation

which I happen to hold also does not appear to attract an extra charge from HL. Am I looking in the wrong place?