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H-L introduces a Tracker Platform Charge

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  • dunstonh
    dunstonh Posts: 119,712 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    On the advice side of things, the FSA has been positioning that platforms are not for everyone and advisers should consider off-platform as well as on. Particularly with smaller amounts or if the individual doesnt see the benefits of platform.

    So, it may be that the DIY side will follow.
    I was told by Fidelity that re-registering with their platform could take up to 6 months.

    Re-reging off Fidelity is a pain. However, 6 months is unusual to be quoted. Its normally a matter of a few days to a week.
    Compulsory fee free re-registration (a speeded up version) between platforms may help if it comes in

    It will be mandatory soon to offer this.
    plus some rules to deal with funds offered on one platform but not another (where re-registration is not possible).

    This is not an issue with unbundled platforms. Just bundled. However, they are on their way out soon so that should resolve the issue by default.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Totton
    Totton Posts: 981 Forumite
    jamesd wrote: »
    I doubt it. It's more likely that HL have been raising their charges for other funds without telling people, by reducing the rebates paid via the loyalty bonus.

    Which funds are affected by this?
  • Totton
    Totton Posts: 981 Forumite
    SnowMan wrote: »
    Things seem to be swinging full circle from direct to indirect and now back to direct.

    Yep I agree, isn't it great how all these supposedly customer friendly changes usually mean hassle or less for the majority. I don't believe that HL will be the only instance of increased fees, others may initially offer a cheaper service but once they have squeezed the market they will ramp up also. It's that or we go back to paying the fund providers an initial 5%

    The fund industry must be worried.

    Regards,
    Mickey
  • providers give rebates because they DONT want to show the actual CHARGES

    i asked about dividends and they set it was already worked into the price

    also annual fee worked into the price

    you dont get the full picture

    the industry has to show every cost
    £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£4200
  • koru wrote: »
    HL currently apparently earns income equal to approximately 0.8% of the funds invested through it. Will most of us be willing to pay them this much as an explicit fee, or will many of us prefer to put up with the hassle of administrating lots of different fund holdings with different fund managers in order to save the fee that HL demands?

    I suppose it depends how big your portfolio is. For a portfolio of £10,000, a fee of 0.8% is £80, and perhaps most of us would be willing to pay this in order to save a lot of administration hassle. But for a portfolio of, say, £200,000, 0.8% is £1600, which is a heck of a lot and I suspect there will be quite a few people who might balk at paying this as an explicit fee to HL and might prefer to start going direct to fund managers.

    Individual circumstances will of course differ, but personally I don't find it a lot of administration hassle to have ISA's from different years with different providers (one for funds, one for share/IT's) and then another for pension funds. For investments outside an ISA then perhaps yes, for ease of completing tax returns etc it may be a lot less hassle.

    For an overall portfolio view at a glance I can use the free trustnet, FT etc portfolio trackers and it only takes 30 seconds to manually amend or add a holding when you have bought or sold a fund.

    But having 3 or 4 different accounts does not really bother me as I am not frequently trading and the cost savings of using the most cost effective provider for different investments is worthwhile.

    [Unfortunately there is not one 'best value' provider for someone holding a mixed portfolio of shares, investment trusts and OEIC funds.]
    However if people are prepared to pay for the convenience of an all in one provider that is of course their choice to make.

    I would guess however that probably the majority of people who have an ISA account with HL only hold open-end funds (unit trusts/OEICS) and therefore would probably be better off in cost terms with say the Fidelity fundsnetwork platform via Cavendish (one off £25 charge for opening the account and full initial and trail rebate) than they are with HL (no one off charge, full initial rebate but only approx 50% of trail rebated).

    For those only holding open ended funds in an ISA the only exceptions to the above I can see would be those who switch funds very frequently as they would benefit from no switching charges on HL vs 0.25% charge on the Fidelity platform.
    "The happiest of people don't necessarily have the
    best of everything; they just make the best
    of everything that comes along their way."
    -- Author Unknown --
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    I would guess however that probably the majority of people who have an ISA account with HL only hold open-end funds (unit trusts/OEICS)

    Because of the £45 cap on those 0.5% charges, a HL ISA isn't a bad place to hold a ISA of ITs and/or shares as long as you've got a few years of allowance already in there.
    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.
  • dunstonh
    dunstonh Posts: 119,712 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The fund industry must be worried.

    Not at all. The unbundled platforms are booming. That is where the major growth is now.
    Yep I agree, isn't it great how all these supposedly customer friendly changes usually mean hassle or less for the majority.

    The move to unbundled platforms offering 17,000 investments compared to 1000-2000 commission paying only funds with a couple of loss leaders is how you have to view it.

    Looking at it logically (even if you end up worse off), it cannot be fair for larger investors and those using commission paying funds to subsidise smaller investors and those using non-commission paying investments.

    Moving from HL to Cofunds or Fidelity is just delaying the inevitable as both of those are bundled platforms.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    dunstonh wrote: »
    The move to unbundled platforms offering 17,000 investments

    I think that's too many by a factor of over 500, but I'm sure some people, mainly fund managers, think it's too few.

    Each to their own.
    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.
  • dunstonh
    dunstonh Posts: 119,712 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    gadgetmind wrote: »
    I think that's too many by a factor of over 500, but I'm sure some people, mainly fund managers, think it's too few.

    Each to their own.

    The number difference is massive and no-one is going to have 17,000 investments.

    However, the point is that bundled platforms only offer commission paying funds and a few loss leaders. The unbundled platforms offer non-commission paying funds (and rebate commission on commission paying funds) and give access to all quoted stocks/investments to ensure that no bias can be given to any one type of investment.

    Its not about having 17,000. Its about having choice that is not influenced by how much the platform or distributor is going to earn from it.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • koru
    koru Posts: 1,539 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    dunstonh wrote: »
    Moving from HL to Cofunds or Fidelity is just delaying the inevitable as both of those are bundled platforms.
    ...Which are both launching unbundled platforms next year. They are cheaper (via Cavendish) for funds than HL now, so I imagine they still will be, post-RDR.
    koru
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