H-L introduces a Tracker Platform Charge

black_taxi_2

i just sent email low cost trackers hook people who would normaly never invest---as there funds build up there prepared to look at other funds

not anymore

fieldofdreams

I hope something in this overly long response helps you!

SS2[/QUOTE]

Special Saver - many thanks for you detailed response.

The more I see on this the more I get the feeling that it may be better to hang fire until the "RDR" changes come in, otherwsise as Dunstonh indicated we could be chopping and changing from one provider to the next

I'd welcome the forums thoughts on this but as far as I can see for those currently investing relatively low amounts with HL it may be better to move to manage funds?

EG

I have approx £1000 invested in both Aberdeen Emerging markets and HSBC FTSE All Share Index.

Aberdeen has a TER of 1.89%
HSBC has a TER of 0.27%

So, this would mean annual charges of approx:

Aberdeen : £18.90
HSBC: £2.70 + £24(12 * 2 monthly charges ) = £26.70

However, up the amounts to £2000 and it tips the other way

Have I got this about right? Please bear in mind Ive only started looking at fund charges in detail since the latest HL announcement

Many thanks

gadgetmind

dunstonh wrote: »

How they replace it and how much they are willing to reduce their cut to is unknown. It is certain that £2pm is not going to be enough.

The likes of BestInvest, SIPPDeal and Alliance charge between £50 and £120 pa to run a SIPP holding Vanguard trackers.

Maybe that will have to go up once subsidies end, but at least that will make some of the specialist funds slightly more affordable.

Rollinghome

Those who've been caught by this have good reason to be peeved. To raise the charges without bothering to inform them by letter is unacceptable. Burying it in advertising bumph that most will bin without reading isn't an alternative.

Cheekily, they claim their customers will be paying more in order to "keep our charges competitive".

The timing is interesting. Some of the funds affected, such as L&G trackers, pay a reduced amount of commission so presumably they'll want to raise the charges again when that commission ends next year.

Are they just gauging the reaction and testing how price-sentitive their customers are? Are they sending a message to the FSA who have been keen to promote index funds while the final details of RDR are still being negotiated?

It seems an ill-conceived, scatter-gun ploy. It could equally irk some of their most profitable customers, those who have a very large sum invested mostly in commission-paying funds but with the odd few bob in one or two trackers. Especially by the way it was sprung.

Whatever the reason, it's a warning always to ensure you have a low-cost exit route from H-L in case you're caught with other wizard-wheezes to increase their margins over the next few months.

Ark_Welder

gadgetmind wrote: »

Out of interest, has anyone ever considered using HICL - HICL Infrastructure Company Limited -as the property element of their portfolio? OK, it's UK only, and one a single sector of the property market, but the dividends are solid and rising, and it goes for safe-as-houses investments.

Not HICL specifically, but others in the same sector. At times, I do a similar reassignment for other companies and funds depending upon their remit.

HICL does have investments in mainland Europe and Canada too, so about 15% overseas.

gadgetmind wrote: »

The likes of BestInvest, SIPPDeal and Alliance charge between £50 and £120 pa to run a SIPP holding Vanguard trackers.

Maybe that will have to go up once subsidies end, but at least that will make some of the specialist funds slightly more affordable.

For the OEICs/UTs that are available on their platform, ATS currently rebate all of the fees that they receive from the investment managers, both initial and annual - if they receive any. But there is a fixed dealing of £12.50 per transaction. So not sure that their fees would necessarily increase post RDR. Applies to both the SIPP and ISA, both of which have fixed annual charges.

dunstonh

For the OEICs/UTs that are available on their platform, ATS currently rebate all of the fees that they receive from the investment managers, both initial and annual - if they receive any. But there is a fixed dealing of £12.50 per transaction. So not sure that their fees would necessarily increase post RDR. Applies to both the SIPP and ISA, both of which have fixed annual charges.

I dont believe they refund the platform cut though?

If you see Inv Perp High Income with an AMC of around 0.75% then they do.

Ark_Welder

dunstonh wrote: »

I dont believe they refund the platform cut though?

If you see Inv Perp High Income with an AMC of around 0.75% then they do.

Intersting then. The AMC on that particular fund is being reduced by 0.5%, so down to 1%. Some other funds from other providers are being reduced by 0.75% to 0.75%. From the first page of ATS' fund list, the following is taken:

Rebates are calculated by the fund provider over a period determined by them using their own method of calculation. This period of calculation may be monthly, quarterly, six-monthly or annually. Alliance Trust Savings will then allocate the rebate received on its total holding based on the value of units or shares held by individual clients and the period of holding. The value of any rebate received will be affected by any fluctuations in the value of funds over the period

http://www.alliancetrustsavings.co.uk/pdf/list-of-funds.pdf?

mr_fishbulb

Glad I came on here today. I have the HSBC American Index fund. Currently invest £50 a month into it, and it has about £500 in there.

I'm guessing I can't sell it and buy another fund as other funds have a minimum lump sum investment of £1000. Harumph.

Another option is to double my contributions to £100 so it only costs me 2%. Not ideal, but at least it will get me up to the min lump sum quicker.

gadgetmind

mr_fishbulb wrote: »

I'm guessing I can't sell it and buy another fund as other funds have a minimum lump sum investment of £1000. Harumph.

Why not make it HL's problem and tell them you're going to move to somewhere like BestInvest (no fee for holding HSBC. Yet!) if they don't switch you to something else.

dunstonh

Intersting then. The AMC on that particular fund is being reduced by 0.5%, so down to 1%. Some other funds from other providers are being reduced by 0.75% to 0.75%. From the first page of ATS' fund list, the following is taken:

So, on that fund they are keeping the platform trail. Some funds pay more commission than 0.5%. So, that may account for the others. (some pay less)