MSE News: Guest Comment: How financial advice will change for good

Rollinghome

gadgetmind wrote: »

Sadly, you can't go it alone in this way for ISAs and pensions.

You can currently put directly held equities in ISAs at no extra cost with some brokers and can hold funds bought directly from managers as ISAs also at no additional cost. I suspect though that probably the majority gain little or nothing from holding equities in ISAs under the current rules.

gadgetmind

Rollinghome wrote: »

I suspect though that probably the majority gain little or nothing from holding equities in ISAs under the current rules.

I do hold some equities and ITs in ISAs, but mostly they are unwrapped.

My comment on "go it alone" is you do need an ISA/pension provider/platform so can't avoid these fees.

gadgetmind

oldvicar wrote: »

Very sad. But ever wondered WHY NOT?

Because HMG has loads of rules and regulations relating to ISAs and pensions, and the platform provider is there to enforce most of them.

jamesd

Lokolo wrote: »

As long as i make the right investment choices

Right. Always. Investing now is probably a good one, even though the markets might still fall another 20%. Or more. But do it gradually or wait for a clear upturn - which would mean missing the bottom but can be safer. I'm still keeping a lot in cash but leaving my regular monthly investing in place.

No warranty of any sort for my thoughts on the current market. Predicting the future is inherently unreliable.

jem16

jamesd wrote: »

Explicit charges may eliminate the option for the platform provider to decide the split.

At the moment (on unbundled platforms) the split of a typical 1.5%amc fund is 0.75% to the fund manager with a 0.75% cash rebate which is then used to pay the IFA's fee and the platform provider's fee.

Roll on banning of cash rebates and we all assume that the fund managers will drop their 1.5%amc to 0.75% with no rebate.

The big question is - will they?

jamesd

It'll probably be a mixture because one platform has asked for 0.75% with no rebates and at least two others have said they would use the current ones, but without keeping rebate money themselves, because they think they could negotiate discounts to below 0.75%.

If things work well for consumers we might find comparison sites for investments that identify the cheapest place to hold each investment. It can be as easy to have lots of pensions or ISAs as savings accounts, just takes more work putting such things together.

jem16

jamesd wrote: »

It'll probably be a mixture because one platform has asked for 0.75% with no rebates and at least two others have said they would use the current ones, but without keeping rebate money themselves, because they think they could negotiate discounts to below 0.75%.

Which platforms are you referring to?

jamesd

Skandia and Fidelity say they won't use a 0.75% clean fund class and Skandia likely to keep current share class for unbundled proposition.

Cofunds says it is requesting a clean share class of 0.75 per cent from fund managers as part of a description of its announced unbundled pricing.

Lokolo

Rollinghome wrote: »

I'm afraid HL will charge you for their services - and if you aren't looking at the overall cost of investing and the return then you should be.

But as James has pointed out, what they charge you and everyone else will be determined primarily by the competition. (They may also make the business decision to attract the small fry in the hope they will one day become bigger fish, or they may not.) Whatever, the overall cost of investment using their services will have to show value compared with directly held equities including ITs, low cost index tracker funds direct from the managers, and of course cash. Otherwise even the stupidest investors will go elsewhere.

Even more so when investment managers are no longer able to bump up the sales of their most expensive products by paying large dollops of commission to IFAs. Post RDR, IFAs will be more inclined to recommend investment routes that offer good value rather than just those that pay them commission.

So if HL don't want your business any more, which I doubt will happen, and the cost of investing through them becomes unattractive, invest in another more cost-effective way. That's what investing is all about. There's more to it than just buying managed retail unit trusts from HL.

Quite so, but I am a cheapskate and will go to the cheapest available. However I don't want it to get to the point whereby I am charged 2/3x as much because of these changes.

I would quite happily have the 0.75% charge I am currently paying through the investments, to be charged explicitly (and the fund AMC lower by the same amount) , however, from what has been released so far, this isn't going to happen and infact if I wish to continue investing it's going to cost me a lot more.