Cheapest Sipp: build yourself a low cost DIY pension article

jamesd

What fund is still asking as much as even 1.25%, let alone 1.75%? There are usually commission-paying and non-commission-paying versions of funds available and few interesting ones will have a fee as high as 1.25% in the commission-free version. In HL terminology the ones paying commission are "inclusive" and the others are "unbundled". The unbundled forms aren't always the cheapest once the platform fee is allowed for.

Chickereeeee

The unbundled funds (the only ones you can now buy) do not usually go much above 1% AMC. Their price is the same on every platform, except where a special discount has been negotiated - e.g. there are a few like this on HL. They would show as a special fund class.

Give an example of the funds you are looking at?
C

dunstonh

The fund fees seem to vary greatly

They shouldnt differ at all apart from where superclean are offered and then its only typically around 0.05% p.a.

I have a SIPP and ISA with Hargreaves Lansdown and was advised that they're expensive but the fund charge is about 1.25% pa average for each fund. The supermarkets (that I've checked so far) charge an average of 1.75% for the same fund!

I suspect you are not comparing like for like. You are probably comparing unbundled (clean) with bundled (retail).

jamesd

Chickereeeee wrote: »

except where a special discount has been negotiated - e.g. there are a few like this on HL. They would show as a special fund class.

HL just reports an incorrect annual fund charge and claims a discount on that inflated price, when the after discount price is really the one that the fund manager offers to everyone who has that fund class. At least that is what they do in the cases where I've noticed that. For this to be a genuine discount the fund class would have to be sold only via HL and HL would also not be misleading investors by reporting a false too-high annual charge for the fund.

There are some where HL appears to offer an actual discount on the fund class that is paid out to customers.

Chickereeeee

jamesd wrote: »

HL just reports an incorrect annual fund charge and claims a discount on that inflated price, when the after discount price is really the one that the fund manager offers to everyone who has that fund class. At least that is what they do in the cases where I've noticed that. For this to be a genuine discount the fund class would have to be sold only via HL and HL would also not be misleading investors by reporting a false too-high annual charge for the fund.

There are some where HL appears to offer an actual discount on the fund class that is paid out to customers.

I dont believe so. There are two cases with HL:

1) They have a new fund class/ which has lower charges (eg ISIN: GB00BGLC5L23)
and
2) The use the normal share class and offer a rebate (eg ISIN:GB00B8KT3V48)

I think these are genuine discounts but are less than their management charge, and only apply to a few funds.

C

zagfles

Chickereeeee wrote: »

I dont believe so. There are two cases with HL:

1) They have a new fund class/ which has lower charges (eg ISIN: GB00BGLC5L23)
and
2) The use the normal share class and offer a rebate (eg ISIN:GB00B8KT3V48)

I think these are genuine discounts but are less than their management charge, and only apply to a few funds.

C

Yes I've noticed that. The discounts do seem to be genuine but they only apply to a small number of funds.

zagfles

dunstonh wrote: »

They shouldnt differ at all apart from where superclean are offered and then its only typically around 0.05% p.a.

Nope, much higher, see http://www.hl.co.uk/funds/wealth-150

ikan_bilis_2

I'm trying to respond to chickereee and dunstonh although there have been a few posts since!

I'm aware of unbundled/inclusive/clean/dirty but even so I suspect that I'm not comparing like with like, so help would be appreciated, for example there doesn't seem to be a AMC fee at HL.

The latest that I've looked at is Charles Stanley, so here's an example ....

Marlborough Multi Cap Income Class P Acc is .79+.75+ 0.3% platform fee but is only .64+.45% platform fee at HL.

dunstonh

Marlborough Multi Cap Income Class P Acc is .79+.75+ 0.3% platform fee but is only .64+.45% platform fee at HL.

They are rebating some commission to give an effective superclean price (but using a different way of doing it - they are not alone doing it that way).

A fair amount of financial press coverage today about how both Labour and Conservatives want to remove commissions and move to fee basis on non-advised distribution to match advised. This is in part due to people getting confused with hidden charges and complicated pricing.

for example there doesn't seem to be a AMC fee at HL.

AMC is not used on UTs/OEICs any more. Only pension funds and life funds (where the AMC equates to the OCF). AMCs are still published but shouldnt be used.

Chickereeeee

ikan_bilis wrote: »

Marlborough Multi Cap Income Class P Acc is .79+.75+ 0.3% platform fee but is only .64+.45% platform fee at HL.

I think you are adding the OCF (0.79) to the AMC (0.75) in Charles Stanley's case. The OCF includes the AMC. So you just pay the 0.79% + 0.3% for CS.

C