Cheapest way to buy funds discussion

wolfie_bill_2

Years ago, when I was employed by BP, I enjoyed the benefits of their employee share scheme. Although I left BP sometime ago, I have held onto the shares (actually held in a number of separate PEP accounts), which are currently managed by HSBC.

HSBC have informed me that these will all renamed as Corporate ISAs in April 2008 and they will charge me either £18 + VAT for the management of each account, which contains £7000 or more or £90 + VAT for the management of a merged account (and as I have 7 PEPS, this would be the cheaper choice.)

My question is that given these are (or were) Corporate Single Company PEPS, what options do I have to transfer them to a different (lower cost) manager?

dunstonh

My question is that given these are (or were) Corporate Single Company PEPS, what options do I have to transfer them to a different (lower cost) manager?

No different to any other PEP or ISA. Single company share PEPs have been free to move or switch [easily] for about 8 years now.

wolfie_bill_2

dunstonh wrote: »

No different to any other PEP or ISA. Single company share PEPs have been free to move or switch [easily] for about 8 years now.

Thanks DinstonH - just shows my lack of financial knowledge. Where can I find more information on providers (and their charges) and how to go about it?, please

dunstonh

If you want to keep the share holdings then look up self select ISAs. Selftrade is one that is often mentioned on here for the DIY investor. If you want to switch to funds then Hargreaves Lansdown are usually best suited for DIY.

westoverg6

I see that Hargreaves Lansdown seems to be consistently mentioned as the best value platform for fund investment. I currently have some DIY investments through Skandia and Fidelity (FundsNetwork). Is there much difference between these and Hargreaves Lansdown?

I do find the search on Fidelity's site very illuminating. Searching for OEIC funds that have Morningstar Ratings 4 Stars or Higher and S&P AA or above reveals there are 3 funds returning over 30% in the last 12 months and a total of seven returning over 20%! Compare this to the market in general and other funds that have been recommended to me in past by Advisers and its hard to see what value Advisers do actually add! This search was not limited to any sector (as far as I am aware anyway) - it was across all funds listed on Fidelity's Funds Network, which demonstrates that funds' performance has been relatively low over the last 12 months.

Anyway grateful for a reply on the value offered by Hargreaves Lansdown compared to Skandia or Fidelity. Thanks.

Aegis

westoverg6 wrote: »

I do find the search on Fidelity's site very illuminating. Searching for OEIC funds that have Morningstar Ratings 4 Stars or Higher and S&P AA or above reveals there are 3 funds returning over 30% in the last 12 months and a total of seven returning over 20%! Compare this to the market in general and other funds that have been recommended to me in past by Advisers and its hard to see what value Advisers do actually add!

What you've done there is an incredibly simplistic analysis, presumably of only one sector and in only a very short time-frame. You certainly should not base your portfolio on the best performers over the last 12 months, as it fails to take account of strategies, asset allocation or risk profile.

An Independent Financial Adviser will have tools at his disposal that allow him to take your risk profile and use it to put together a diversified portfolio that should outperform the various indicies in the long run.

Basically, an IFA is going to add value when you want a lot of research and knowledge backing up your investment decisions, and with the option for compensation if a clearly incorrect decision is made for your financial circumstances/risk profile.

jamesd

Hargreaves Lansdown has:

* ISA: no HL charge to run the account, usually discounting all or all but 0.25% of the purchase initial charge of funds, 0 selling charge for funds, usually rebating 0.1 to 0.25% of the annual charge for funds.
* Fund account: as ISA
* SIPP: as ISA for buying and selling but no rebate of AMC.

I'm not familiar with the Skandia or Fidelity charges but those are likely to vary based on the deal you made with whichever adviser sold you the product.

dunstonh

its hard to see what value Advisers do actually add!

If you have looked at just the fund ratings (which are largely useless and should be ignored) and then picked past performance in the last 12 months then you clearly havent researched correctly.

In the sector you have analysed (as aegis mentions, it must be one sector only, which is not good), which of the "top" funds you looked at had the highest risk? Which ones were heavy in the areas which happened to invest in the areas that had done well? Was it because of their own internal allocation to assets that it had done well or was it a bit of luck?

Anyway grateful for a reply on the value offered by Hargreaves Lansdown compared to Skandia or Fidelity. Thanks.

HL discount many of the funds on their unwrapped and ISA wrappers (not on their pension wrapper though). The discount is typically only 0.25% p.a. You get a discount because you basically lose the ability to complain to the FOS if you use HL and the liability and compliance for HL is lower because of that.

munk

Presuming you mean Fidelity's FundsNetwork (FN) platform:

In my limited experience FN don't offer some of the funds that HL do - there are 2 or 3 funds I can think of off the top of my head that HL offer but FN don't and they're just the funds I've been interested recently. However this isn't to say FN offer fewer funds than HL, I don't know about that, all I know is the few funds I've recently been interested in are not offered by FN but are by HL.

Other advantanges of HL over FN:

• HL offer better discounts on initial charges - most funds on HL have a max of only 0.25% initial charge.
• HL offer annual trail commission rebates on the AMCs you pay (annual management charges) - check HL's discounts pages to get an idea how much you get back in rebate.
• HL offer a cash account - you can drop out into cash from any of your investments without having to withdraw the money from the investment account so it's easier to reinvest quickly. You're paid interest on the cash account, not as good as high interest savings a/c but probably better than inflation rates (or a kick in the teeth ). Note though - it seems FN are also about to offer a 'cash park' facility on their investment accounts similar to HL.
• HL offer a 'loyalty bonus' - can't remember the % figure but again it's better than a kick in the teeth.
• HL offer a referral bonus for referring new business to them.

I've managed investments on both the HL and FN platforms for the last 6 months and I'm just in the process of moving the FN holdings over to HL because IMO they're superior for the above reasons. Again IMO, there is not a lot that Fidelity has that HL doesn't - in fact can't think of anything positive that FN has over HL at this point in time (perhaps the fact they offer morningstar integration, but to be honest it's very lame compared to what they could achieve if they put some effort in, for example auto-entry of data in a morningstar portfolio every time you trade on your FN account).

Also see here for info on DIY vs IFA pros/cons:

http://forums.moneysavingexpert.com/showthread.html?p=7928011#post7928011

Woggy67

Hello All,

I have read Martin's now 'out of date' article and many of the entries on this forum. It has made me realize that my investments should be working harder in terms of receipt of Annual Management Charge (AMC) commission rebates and Initial Commission on any new investments I take out. However, having looked at the links to the various websites I am still confused , so here goes.

1) Firstly I am looking to take out an ISA for this year and have some specific funds I want to include. Can anyone recommend a provider that will allow me to mix and match some funds and also a discount broker to deal with please that will rebate commission?

2) Secondly I have a self built portfolio consisting of some PEPs, ISAs, OEICs, Bonds and Unit Trusts. From the recommendations in Martin's old article I have looked at Intelligent Money whose site now states that their commission rebating service is full.

This seems to leave Hargreaves Landsdown (HL) or Cavendish Online. Whilst HL seems to offer more advice, information, alerts on poor performance etc. it seems to offer less commission rebate than Cavendish. However, Cavendish does have charges for transfers (£25) and an annual charge for each plan (£10). However, this may still be a better option from my calculations, providing I can get all my investments into one plan. Have I understood this correctly?

I am not sure whether all my investments are able to be transferred over to a discount broker and therefore eligible for a rebate of AMC. Does anyone know if ISAs, OEICs, Bonds and Unit Trusts will be eligible? Also I am concerned by Cavendish talking about selling a fund before transferring. If possible I want to transfer my funds to a discount broker and still retain the tax free status for that investment for its relevant year. Is this possible?

As you can see whilst I am trying hard to follow the advice on offer, but I am still very much a novice and would appreciate any help, advice or guidance to help find the best place for my investments.

Many thanks.