Cheapest way to buy funds discussion

Former_MSE_Andrea

The following discussion relates to the Cheapest Way to Buy Funds article.

Click on reply to discuss or ask questions.

erb

Me first ;D I have used Hargreaves Lansdown for a few years now and found them to be good. Some funds have been bought with full rebate of initial charge and also some annual rebate usually about 0.25%.

As well as the rebates Hargreaves Lansdown provide recommendations on which funds they think will do well going forward. Also, you can access your Vantage Account online to get valuations or buy and sell funds in ISA, PEP, and fund accounts.

I have emailed them on several occassions to ask questions on administrative aspects and recived quick and helpful replies.

Apart from being a satisfied customer I am in no way assocciated with Hargreaves Lansdown.

erb

Anybody else buy funds through a discount broker ???. If so your comments would be appreciated.

Surely somebody else has somthing to say on this subject.

blinko

great article mse thanks

deemy2004

I stick to Investment trusts rather than Unit trusts.

I Remember 1987 when the buggers would not answer the phone !

brodev

I have used Bestinvest for a few years now. They give a risk assesment form for you to fill in and based on the results of this they allocate you a rating. This is then used to work out your personal portfolio. You can do an online review of your portfolio at any time and if you have more thn £60,000 with them they will do 2 free reviews per year. There are a number of useful online tools. They refund all buying commision but no annual commision. They answer the phone promptly but they are not so good at replying to emails. They also seem to take there time when any hiccup occurs. Overall I would say that they are fairly good. I am a customer only

paul666

I don't know why Martin got the Cavendish stuff so wrong.
There is a maximum initial charge of 0.25% with any fund since you'd buy a fund with no initial charge then *switch* to the fund you really want. Switching costs only 0.25% regardless of the fund's normal initial charge. and the £10 is taken off the 'renewal commission', not the 'dividend' as Martin says.
The £10 fee applies once per account, not per fund so the more PEP's/ISAs with cavendish you have, the more renewal commission you get refunded - again this is different from what Martin seems to be suggesting unless he means products other than collective investments.
At the next tax year, if you apply though the fidelity website, then there is no fee payable to Cavendish to taking out further investements for the new tax year.

I've had occassion to phone and email Cavendish a number of times over the last year and so far they've been helpful and prompt if a little terse sometimes.
I've also received my first renewal commission refund cheque.

It's all a bit strange at first and requires a bit of head scratching and form filling but it's ultimately worth it.

No particular connections apart from a slightly worrying affection for helping me making the most of my money.

Chippy_Minton

Could someone please explain the annual management charge and renewal commission. Are they the same thing? Is the renewal commission % rate included in the AMC % rate? E.g. if AMC is 1.5% and broker's renewal commision is 0.5%, does the 0.5% come out of the 1.5%?

Thanks for any explanations!

dunstonh

Chippy_Minton wrote:

Could someone please explain the annual management charge and renewal commission. Are they the same thing? Is the renewal commission % rate included in the AMC % rate? E.g. if AMC is 1.5% and broker's renewal commision is 0.5%, does the 0.5% come out of the 1.5%?

Thanks for any explanations!

amc and renewal commission are not the same thing.

the renewal commission, comes out of the annual management charge and is not additional.

blinko

the renewal comission i think is based upon the funds beliving that your advisor is still providing a service to you and he gets a little bit of a percentage and hence discount brokers etc will pass a little saving on to you !

by the way anyone know whats happend to chartwells website

dunstonh

blinko wrote:

the renewal comission i think is based upon the funds beliving that your advisor is still providing a service to you and he gets a little bit of a percentage and hence discount brokers etc will pass a little saving on to you !

Not necessarily. You can choose to take full upfront commission or a lower amount and trail commission. It usually takes 4-5 years for the trail commission to break even with full initial. Either method has no impact on charges to the client but obviously could impact on discounts given back.

I would think that most employed IFAs or those attached to a firm would take full initial whilst owner/partner IFAs would be inclined to take the lower intial and the trail commission.