Commfreefunds.com

mutley74

anyone invested with this comany?
http://www.commfreefunds.com/


sounds good compared to HL for fund investing. DAK think HL will review its commission rebate offers? (i am going to email them and see)

mike88

These are the cheapest - 100% rebate of trail commission for a one off charge of £25. The registration process could be easier but worth it in the end. Link here:

http://www.cavendishonline.co.uk/investments/isa-oeic.php

jimjames

Just had a look at their site and it all depends on which funds.

If you have trackers like the HSBC range then they are more expensive than HL as you'd be paying £60pa for their service whereas HL is free.

mutley74

mike88 wrote: »

These are the cheapest - 100% rebate of trail commission for a one off charge of £25. The registration process could be easier but worth it in the end. Link here:

http://www.cavendishonline.co.uk/investments/isa-oeic.php

Cavendish appear to rebate all the comission, but initial charges vary between 0-2% depending on the fund

• 100% initial commission is reinvested. The usual rate if you went direct is between 3 and 5%, of which 3% is often commission. By using Cavendish this means that our initial charges range between 0 and 2%. To find out the fund discounts click here for Cofunds or click here for Fidelity.
• 100% renewal (trail) commission will be paid back into your bank account every month (via Cofunds) or every 3 months (via Fidelity).

mike88

mutley74 wrote: »

Cavendish appear to rebate all the comission, but initial charges vary between 0-2% depending on the fund

• 100% initial commission is reinvested. The usual rate if you went direct is between 3 and 5%, of which 3% is often commission. By using Cavendish this means that our initial charges range between 0 and 2%. To find out the fund discounts click here for Cofunds or click here for Fidelity.
• 100% renewal (trail) commission will be paid back into your bank account every month (via Cofunds) or every 3 months (via Fidelity).

But the odd thing is that every fund I have bought through Cavendish has been free of initial charges even though the website suggests there might be a charge. Switches are also free.

dunstonh

mutley74 wrote: »

anyone invested with this comany?
http://www.commfreefunds.com/


sounds good compared to HL for fund investing. DAK think HL will review its commission rebate offers? (i am going to email them and see)

This model could be banned within 6 months. So, I would be on guard.

They are offering only retail versions of funds, not institutional. So, that can make them more expensive there. Plus, they are basically setting a model that charges you £60 a year and relies on [text removed by MSE Forum Team] rebates from the fund houses. If those [text removed by MSE Forum Team] rebates are banned then this model will fail.

atypical

dunstonh wrote: »

Plus, they are basically setting model that charges you £60 a year and relies on kick backs and rebates from the fund houses. If those kick backs/rebates are banned then this model will fail.

They call themselves 'RDR ready' and have written an article explaining the changes and why they're ready for them here:
http://www.commfreefunds.com/documents/the_commission-free-world.pdf

In essence, the argument is that they'll always be cheaper than an IFA (as if this is the only alternative). It will be interesting to see what Hargreaves ends up doing.

dunstonh

atypical wrote: »

They call themselves 'RDR ready' and have written an article explaining the changes and why they're ready for them here:
http://www.commfreefunds.com/documents/the_commission-free-world.pdf

In essence, the argument is that they'll always be cheaper than an IFA (as if this is the only alternative). It will be interesting to see what Hargreaves ends up doing.

Problem is that the RDR is not finalised yet. Especially when it comes to platforms.

They are using Cofunds as the platform. Cofunds is currently a bundled platform. The FSA paper on platforms isnt due to June. So, if bundled platforms are banned, then their proposition will have to change. (personally, i dont think they will be banned but will have to display the earnings in another way.


Good luck to them but I think they are too cheap to sustain those charges.
1 - They are intermediaries (same as an IFA). They will be subject to intermediary requirements and levies. That has to be accounted for.
2 - They collect the annual fee manually. Thats a cost burden
3 - The £60 is inclusive of VAT but VAT has to be paid. So, they are losing £10 of that £60 straight away.

They will be lucky to earn around £20 a year out of each client. Volume in this sort of thing is key.

HL became successful because they had the years to build up and take most of the IFA commission and then set up their own platform so they get the hidden rebates and marketing payments as well as offering their own brand funds which are cash cows. If they had stuck with Cofunds, then it would never have developed into the business it is today.

Maybe commfree think they can follow that but I doubt £60 a year is going to do it in just the short time left before the annual trail commission goes anyway. Post 2012, they will be no cheaper than any other bundled platform offering (assuming bundled platforms still exist).

You wish them success but what a gamble. At least if they do fail, the money is with Cofunds and you wont have to worry about solvency issues of the intermediary impacting on your investments.