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H-L introduces a Tracker Platform Charge
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roadster198 wrote: »I was hoping to stay with a fund supermarket so I could keep everything under the one roof. I'm still very new to this and would like to keep everything straight forward as possible.
I am not an expert on the different platforms but you would need to look at the different platforms find which one was best and move to that.
While you might be able to identify which one is currently cheapest the affects of changes in charges due to the RDR is impossible to predict. That is the price you pay for having the convenience of everything under one roof at the moment.
The nature of the HL platform charge being per fund makes it not a good option for those invested with relatively modest amounts in a number of tracker funds. Finding a platform with just one fixed charge rather than one fixed charge per fund would seem to be best if you want to have a number of funds.
Of course you have the option just to invest in 1 tracker fund (for example a FTSE all share tracker) wait out what happens next year and then look to a range of trackers covering different markets (e.g. Europe, FTSE 250, Pacific, American) in later years when the effects of the RDR are apparent and things have settled down. That at least keeps it simple and you can switch to a direct provider such as Fidelity or M and G and have all your funds there.
You might want to consider active funds also as your knowledge increases albeit I don't do active investing myself.I came, I saw, I melted0 -
Have to say I share the above posts disappointment with HL. Small investors like myself have taken decisions based on a long term strategy - in my case a monthly drip feed into a mixture of actively managed funds and "low cost" trackers. Effectively for small investors a tracker investment with HL no longer seems a viable option. In my case I have relatively small investments (totalling about £3000) in 4 HSBC trackers covering the UK, US, Japan and Pacific Index indices, so as it stands Im going to be hit with a £96 annual charge for holding these.
I dont think the situation is helped by the fact that there are changes on the horizon which will affect charges across a number of different providers, making the decision to switch now a very difficult one
I'm sitting tight for the moment but as it stands my thoughts are to stick with HL, sell the tracker investments and move into actively managed funds, then review the situation again once the RDR changes are announced. Long term I want to move back to a situation where half my portfolio is in trackers ( assuming the charges are acceptable ), which will then involve lump sum purchases back into the trackers funds where I guess there is an added risk as timing the market will be important, where as up to now the monthly drip feed has been levelling out the risk0 -
It not just tracker funds I have found that my
CF Lindsell Train UK Equity Income will also attract a £2 platform fee.
Not that H-L bothered to tell me or put it in their sales mag0 -
It not just tracker funds I have found that my
CF Lindsell Train UK Equity Income will also attract a £2 platform fee.
What's their justification for that?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
The fact remains that they decided to make (for example) the HSBC trackers available as a loss leader and have now changed their mind.
They get no commission now from the fund provider, they get no commission next year after the platform fee comes in and they get no commission in 2013 when RDR comes in. To that extent nothing has changed other than they have decided no longer to offer trackers as a loss leader.
To entice people into what are long term investments and then suddenly force them to sell by increasing charges by what in some cases is a multiple of 30 or more is terrible.
I can see it must be disappointing to anyone who was counting on HL to continue offering this deal. I suppose I am just such a cynic that I always expected them to make a change like this sooner or later.koru0 -
I suppose I am just such a cynic that I always expected them to make a change like this sooner or later.
I think everyone knew it had to happen at some point, it's just the way they did it, and the per tracker fee with no cap, that bugs people.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
It not just tracker funds I have found that my
CF Lindsell Train UK Equity Income will also attract a £2 platform fee.
Not that H-L bothered to tell me or put it in their sales mag
The most positive way to look at this may be that it’s a warning of what to expect from HL.
In the past they’ve been able to offer a high level of service at a reasonable price. They’ve been able to do that because it’s been paid for by additional commissions and marketing backhanders on top of the normal trail commission they’ve been receiving from our investments. They’ve had a big advantage over the smaller competition. Come RDR that will, depending on the final negotiations with the FSA, all go and there’ll be a more level playing field.
HL are already one of the more expensive options for share-dealing so don’t be too surprised to see them equally expensive for funds once the covert backhanders stop with leaner operations such as Best Invest and Chelsea Financial Services offering better value. Real competition is good for the consumer.
It’s always been likely that there may be an increase in costs for holding index funds but that could be a lot less than HL are trying to get out of them, especially if the fund managers give more attention to their direct selling operations – as they are likely to do.
Fund managemnt fees are far higher in the UK than in most other countries. Without the likes of HL and financial advisers being incentivised with commission to sell their products then we might expect more genuine competition there and downward pressure on management fees both for active and for passive funds.0 -
CHARGES QUESTION
if you do regular savings into a investment trust isa/say £100 a month
do they deduct .50 stamp .20 dealing fee first each month?
ie. deduct 70p then buy £99.30 worth of share price
also the month it comes to pay annual fee split in two jan/july
lets call it £60+vat £73.50/2=£36.75
jan--monthly £100
dealing fee 70p+£36.75= £37.45
£100-£37.45=£62.55
so in jan/july you would only get £62.55 buy worth of share price?
everything looks small but adds up£48515 interest £181 (2009)debt/mortgage-MFIT/T2/T3
debt/mortgage free 28/11/14
vanguard shares index isa £1000
credit union £400
emergency fund£500
#81 save 2018£42000 -
black_taxi wrote: »CHARGES QUESTION
if you do regular savings into a investment trust isa/say £100 a month
do they deduct .50 stamp .20 dealing fee first each month?
Stamp duty will be deducted if the investment trust is incorporated in the UK. There are some that are incorporated in places such as the Channel Islands upon which stamp duty is not due (although the tax treatment of the distributions is different too).
Dealing fees will depend entirely upon the platform used. Generic platform providers will have their transaction fees and not all necessarily have a reduced charge for monthly dealing with small amounts. Some investment trust companies have their own service. Aberdeen Asset Management, for instance, have no dealing charges for purchases (so just stamp duty, when applicable) , but your choices are restricted to their own range. There is a fixed fee for sales, and also for their ISA wrapper. Other management platforms will have their own charging structures.Living for tomorrow might mean that you survive the day after.
It is always different this time. The only thing that is the same is the outcome.
Portfolios are like personalities - one that is balanced is usually preferable.
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Rollinghome wrote: »Slapping an extra charge on without any indication or prior notification, now that is disgraceful. Are they expecting everyone to check every one of their holdings themselves to see if HL's hand is about to go in their pocket?
I suppose HL find themselves with quite a tricky decision to make. They have built a huge customer base and a reputation for being good value. Having done so, they now face a choice. Other competitors, such as Cavendish and ATS, are clearly offering even better value than HL, but they are not very well known and they spend very little on marketing. So, does HL cut its fees to the bone so that it remains competitive or does it charge slightly higher fees and rely on the fact that most of its customers are unlikely to realise that they could save money by going elsewhere? I suspect its profits will be much higher under the second option than the first. If that means a few of the type of people who use MSE leave HL and go elsewhere, I suspect this will be more than compensated by the fat profits they make on the other customers.
In fact, the more I think about it, it is almost inevitable that a market leader like HL is not going to be the best deal, because they are going to be more interested in milking their customer base than retaining a few thrifty customers. It's the same as PAYG mobile phones: if you want the cheapest deal, you are unlikely ever to get it from the big boys like Vodafone, because they know they can get away with charging an extra five quid a month to most of their customers. And if you want the cheapest telephone landline, it's very unlikely you will ever get it from BT, because they are still milking their customer base and name recognition.koru0
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