Which S&S ISA provider - Low cost trackers

gadgetmind

saveonarola wrote: »

which makes either option a bit pricey when you can get the HSBC trackers through HL or iii with no annual charge and no dealing charges.

I do worry that HL might start charging for those HSBC trackers. Can I also ask which bond/gilt funds people run alongside these trackers as the first ones I found did trigger HL's £200 pa fee in a SIPP.

dunstonh

I do worry that HL might start charging for those HSBC trackers.

Post RDR (and platform review which will be later in the year and not at the start by the way things are looking) they are going to have to. They may move earlier when the IFA trail commision is turned off on new transactions. That wont affect the HSBC trackers but it may see an explicit charge introduced instead irrespective of funds. 2012 is going to be an interesting time for platforms.

Which ones? I'd much prefer to go unbundled to keep costs down.

I'm not really up on the DIY platforms. So, the ones I know probably wouldnt help you much. Hopefully others who DIY will.

saveonarola

gadgetmind wrote: »

Can I also ask which bond/gilt funds people run alongside these trackers as the first ones I found did trigger HL's £200 pa fee in a SIPP.

I don't have these funds - I'm in the research stage at the moment - but I believe that HSBC UK Gilt Index Fund (TER 0.27%) does not trigger HL's 0.5%+VAT annual charge for non-commission-paying funds. I don't know whether this applies equally to a SIPP. iii has L&G All Stocks Gilt Index Trust (TER 0.25%).

saveonarola

gadgetmind wrote: »

I do worry that HL might start charging for those HSBC trackers.

dunstonh wrote: »

Post RDR (and platform review which will be later in the year and not at the start by the way things are looking) they are going to have to. They may move earlier when the IFA trail commision is turned off on new transactions. That wont affect the HSBC trackers but it may see an explicit charge introduced instead irrespective of funds. 2012 is going to be an interesting time for platforms.

dunstonh, what do you see in your crystal ball? Something like HL's 0.5%+VAT annual charge (with a minimum and cap) for all funds held on a platform, or a flat rate perhaps, like Bestinvest's £12.50+VAT per quarter (£60 a year) custody charge, with different platforms offering one or the other? Or do you think they could do it cheaper? Like Alliance Trust's £25+VAT ISA wrapper charge, but without dealing charges?

Sorry if this is slightly off-topic, but I'm just about to set up my first portfolio and the likely changes next year are complicating the process. I'm trying to tell myself that whatever happens, there won't be that much between the different platforms, because they have to remain competitive, but it's still awkward. Obviously, no one can say what will happen, but what's your best guess? I won't hold you to it...

gadgetmind

saveonarola wrote: »

I believe that HSBC UK Gilt Index Fund (TER 0.27%) does not trigger HL's 0.5%+VAT annual charge for non-commission-paying funds. I don't know whether this applies equally to a SIPP.

No 0.5% in a SIPP for that HSBC fund but it's not index linked. The cheapest index linked gilt fund seems to be the Royal London one, but it's not a tracker as the 0.43% TER shows. Also the NSBC UK Gilt Index can't be bought online with HL.

I'm coming down to a HL SIPP with HSBC/Royal funds or sippdeal with Vanguard trackers. I should be able to avoid fees with HL (as long as I stomach the 0.43% on the RL gilt fund) and with sippdeal everything will be ever so slightly cheaper but there will be a £60pa fee.

dunstonh

dunstonh, what do you see in your crystal ball? Something like HL's 0.5%+VAT annual charge (with a minimum and cap) for all funds held on a platform, or a flat rate perhaps, like Bestinvest's £12.50+VAT per quarter (£60 a year) custody charge, with different platforms offering one or the other? Or do you think they could do it cheaper? Like Alliance Trust's £25+VAT ISA wrapper charge, but without dealing charges?

I think you will see something like the unbundled platforms that currently exist. However, I think charges will fall over time as platforms consolidate and get more assets under management on them.

Too many platforms are losing money and require £X billion on them to be able to move into profit. Or they are currently "buying" clients at a loss to get as much on platform now before they introduce their revised charges.

At the moment, most unbundled platforms are more expensive than bundled. This is mainly as they appeared later and have less under management. However, each year we have seen charges fall back and there will come a point when they will get cheaper.

As to what levels we will see, god knows. The FSA will largely dictate that through its platform review. Plus, other things will come into play. You have unbundled platforms currently getting or in process of getting savings acccounts made available on them and long term aims are to be able to get your current account information fed into them as well so you end up with a full wrap account of all your assets. It will become more of a service provided that you pay for explicitly rather than based on value (the abolition of the ability to cross subsidise will help push more that way).

There will also be some unknown spanner chucked in somewhere. Some think VAT may be the issue and the fact that the current system of hidden rebates is actually be cheaper for most small investors and the FSA may view that too many will be worse off if they remove them.

Full wraps have been coming for nearly two decades but are still not here. It will probably be another decade or so before they really are.

I think the most important thing for anyone choosing a platform now is to keep an eye on the changes and make sure that the platform they chose now can re-register assets or transfer out at no cost. Don't pick one with transfer/exit penalties.

gadgetmind

dunstonh wrote: »

I think the most important thing for anyone choosing a platform now is not to keep an eye on the changes and make sure that the platform they chose now can re-register assets or transfer out at no cost. Don't pick one with transfer/exit penalties.

I *always* keep an eye on charges.

Hargreaves Lansdown charge a fixed £75+VAT to transfer out, which seems reasonable to me.

Ark_Welder

dunstonh wrote: »

I think the most important thing for anyone choosing a platform now is to keep an eye on the changes and make sure that the platform they chose now can re-register assets or transfer out at no cost. Don't pick one with transfer/exit penalties.

...although charging for transfers out could be introduced on the particular platform that is chosen. But there are occasional deals where a platform will rebate transfer-out fees (usually up to a certain amount) when transferring to them, so it will be worth keeping a lookout for these to post-RDR.

competitionscafe

gadgetmind wrote: »

Hargreaves Lansdown charge a fixed £75+VAT to transfer out, which seems reasonable to me.

Sippdeal has the same charge of £75+VAT
http://www.sippdeal.co.uk/Sipp/Charges/

JamesU

gadgetmind wrote: »

£60 a year via sippdeal, which seems reasonable.

Gadget, do you have a link to Sippdeal's Vanguard offerings? Interested to see how they compare with Alliance Trust. Sippdeal fund list I checked below, but cannot find any Vanguard funds here:

http://www.sippdeal.co.uk/Resources/Content/PDF/SD_Funds_list.pdf

JamesU