hargreaves lansdown

welbeck120

has anyone any idear why the share price has fallen back over past few days

DavidHayton

welbeck120 wrote: »

has anyone any idear why the share price has fallen back over past few days

It has gone back up 4.5p today!

It went up from 350p to 600p in less than six months. What goes up tends to come down when folk decide there are profits to be taken.

There is some talk around that the FSA may yet clamp down on HL's way of doing business. They look cheap partly because their charges are rather opaque. On one hand it appears that they are paying loyalty bonuses of 0.1%, meanwhile they are pocketing trail commission of more than double this. Others will know more.

David

jimjames

I'm not sure that their charges are opaque. I know exactly what the investment will cost me and it is not really any different with HL and other discount brokers. I assume they will make money on the money I invest with them but as long as I get a good deal thats fine.

Same as going to supermarket, I know Tesco will be making a profit on their sales but that is also opaque as they don't declare their profit on each item on the receipt.

Cautious_Investor_3

jimjames wrote: »

Same as going to supermarket, I know Tesco will be making a profit on their sales but that is also opaque as they don't declare their profit on each item on the receipt.

Disclosure rules state that a regulated firm must tell the customer the amount of initial and ongoing fee / commission they are being paid, this figure can be found on an illustration. If no illustration is given then it must be declared in writing at the point of sale.

The reason why some people see HL (and others) as somewhat opaque, or at the very least lacking transparency, is the fact that in addition to what is delcared they recieve rebates (kick backs) from the fund managers. The exact amount of these rebates is not declared in any meaningful way. Many believe that it should be and RDr may have a hand in pushing them into declaring the amounts of these payments.

When you also consider the fact that many direct firms offer lists of their favorite funds, in the shape of buy lists, or promote new fund launches heavily and take undeclared rebates there is the potential for a conflict of interest here.

I for one believe that they should declare the amount of these rebates. I have no problem with HL, or any other direct offer house making a profit, I just think all payments to them should be more clear and transparent.

The Cautious Investor

dunstonh

has anyone any idear why the share price has fallen back over past few days

Don't know if its linked but last week the FSA said it was re-opening the consultation on whether to ban bundled platforms or not. HL is a bundled platform. So, it would obviously be affected by that decision if it goes against them.

FATHEROFTWO_2

What does it mean by a bundled platform...?

Presumably its selling funds discounting the up front fee back and discounting part of the trail commision?

Any opinions on how a DIY HL self selected fund portfolio compares to what is provided by an FA and Im only refering to the total cost commision etc not performance?

jimjames

FATHEROFTWO wrote: »

What does it mean by a bundled platform...?

Presumably its selling funds discounting the up front fee back and discounting part of the trail commision?

Any opinions on how a DIY HL self selected fund portfolio compares to what is provided by an FA and Im only refering to the total cost commision etc not performance?

Well with HL you're not paying for advice so it will be cheaper but it's not comparing like with like. You're looking at least 3% initial commission that you won't pay on HL but one of the IFAs will be able to answer how much trail commission they would rebate compared to what HL do.

FATHEROFTWO_2

jimjames wrote: »

Well with HL you're not paying for advice so it will be cheaper but it's not comparing like with like. You're looking at least 3% initial commission that you won't pay on HL but one of the IFAs will be able to answer how much trail commission they would rebate compared to what HL do.

Cheers...thought it might be something like that.
So these wealth management companies noses are out of joint in losing custom to HL .

As you say its not like for like as there is no advice attached to the selling of funds.

I remember reading somewhere that HL get more of the trail commision than we might think but I dont see it being anymore than what an FA would get and HL still looks the better deal provided you are prepared to DYOR and buy without advice.

Either way users of HL are 3 percent up on the upfront fees straight off.

Well done to HL for allowing investors the choice :T

purch

Well done to HL for allowing investors the choice

Yes, Stephen Lansdown and Peter Hargreaves, Altruism is their only motivation.

FATHEROFTWO_2

purch wrote: »

Yes, Stephen Lansdown and Peter Hargreaves, Altruism is their only motivation.

YIP ....Know where you are coming from but is there a better way to independently buy funds?

purch

Maybe not "better", but exactly the same.........yes.