H-L introduces a Tracker Platform Charge

gadgetmind

OK, some figures from 2010. Assets under management = £17.5 bn and revenue of £159 million, so about 0.9% of assets held dribble into HL's pockets each year. They have 330,000 active clients, so £530 per client per year.

Lokolo

gadgetmind wrote: »

OK, some figures from 2010. Assets under management = £17.5 bn and revenue of £159 million, so about 0.9% of assets held dribble into HL's pockets each year. They have 330,000 active clients, so £530 per client per year.

I contribute towards that. About £15 a year

Some people must be paying loads!

gadgetmind

Lokolo wrote: »

Some people must be paying loads!

I'm sure some with large SIPPs in drawdown are, but (based on a squint at a pie chart) only 75% of HL income comes from Vantage.

BTW, the average holding per customer works out to north of £50k.

mr_fishbulb

mr_fishbulb wrote: »

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.

Update - I called them up and made my changes no problem. Switched the monthly contributions to a new fund, and also sold my existing HSBC index fund and bought the new one.

For anyone who's interested I went with the Threadneedle American Smaller Companies fund as a replacement for the HSBC American Index. It's not a direct replacement by any means, but I figured I've already got enough US Large Cap in my pension and Tech funds.

competitionscafe

koru wrote: »

Then again, most of the service that they provide seems to be fully automated, so I am not sure if they do have any incremental costs, other than in relation to carrying out acquisitions and disposals. If that were the case, it would make more sense for them to charge only for acquisitions and disposals (like ATS!) and then maybe a small additional fee on a platform basis (like ATS does on pensions and ISAs) as a contribution to the costs of running the platform, which will be mainly fixed (that is, they will be much the same regardless of the number of funds each punter holds). The more I think about it, the more the charging basis adopted by ATS makes sense.

ATS is loss making though while HL is very profitable. ATS lost £7.8m last year while HL made £129 million profit before tax:
http://www.heraldscotland.com/mobile/business/corporate-sme/alliance-trust-costs-up-as-chief-given-34-rise-alliance-costs-up-as-boss-gets-34-pay-rise-1.1096782

Perhaps HL has the economies of scale to make an ATS charging structure profitable but it would be a lot less profitable than their current model as AT rebate all trail vs HL rebate of half trail.

bigsy

competitionscafe wrote: »

ATS lost £7.8m last year while HL made £129 million profit before tax.

I suspect those figures predate the introduction of annual fees by ATS so it would be interesting to see what difference, if any, they have made.

black_taxi_2

moved to an investment trust --F&C global smaller companies isa

H-L platform fee-on trackers left a really nasty taste in mouth/didnt like questioning what the future meant in charges.

all the best with what u all do

Rollinghome

gadgetmind wrote: »

OK, some figures from 2010. Assets under management = £17.5 bn and revenue of £159 million, so about 0.9% of assets held dribble into HL's pockets each year. They have 330,000 active clients, so £530 per client per year.

I suspect that might be their problem post-RDR. Most clients won't be aware just how much of their investments is going to pay for the service. When it becomes obvious, more than a few will be asking whether they want the free envelopes or lower costs and better returns.

gadgetmind

Rollinghome wrote: »

more than a few will be asking whether they want the free envelopes or lower costs and better returns.

Well, I know which it would be for me!

However, if we take 75% of that £530, it's pretty much £400 pa. If that would cover my SIPP, ISA and share accounts, and there would be no per-fund fees or 0.5% charges, then I wouldn't regard it as being silly.

Sadly, those just starting out investing, who have to date been subsidised by more mature ones, would find such a flat rate rather off-putting.

Perhaps we'll see a capped 0.5% being common? Who knows.

Lokolo

gadgetmind wrote: »

Well, I know which it would be for me!

However, if we take 75% of that £530, it's pretty much £400 pa. If that would cover my SIPP, ISA and share accounts, and there would be no per-fund fees or 0.5% charges, then I wouldn't regard it as being silly.

Sadly, those just starting out investing, who have to date been subsidised by more mature ones, would find such a flat rate rather off-putting.

Perhaps we'll see a capped 0.5% being common? Who knows.

Quite. If you're willing to send me a cheque I'd be more than happy to accept it....