H-L introduces a Tracker Platform Charge

Rollinghome

koru wrote: »

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

I think you’re spot on and there could be real problems ahead for HL.

The smaller investor isn’t profitable for them while those with larger sums aren’t going to be willing to cross-subsidise them once they've a viable choice. HL are carrying way too much fat which their clients have been more than happy with largely because they haven’t realised just how much they’re paying for it. When businesses move into smart new offices it’s a good idea to check your bill.

Without the bigger investors and tasty marketing deals, I doubt they’ll be able hold on to that 0.8% take they’ve been used to. Unless they can come up with something pretty innovative it’s likely the days of silly profits are behind them. At the moment they’re thrashing around with a mish-mash of contradictory strategies.

The incompetence of their management is the other problem they have, highlighted by the way this has been handled and made worse by the provocative reported comments of the grinning Danny Cox. Ian Gorham, who took over from wily Peter Hargreaves as CEO last year just isn’t up to the job. It’s the old problem of finding a replacement when the founder of a company retires. Gorham’s background is primarily in accountancy services rather than retail and it shows.

It’s probably the time to be patiently evaluating alternatives but watching the exits.

ffacoffipawb

Rollinghome wrote: »

The incompetence of their management is the other problem they have, highlighted by the way this has been handled and made worse by the provocative reported comments of the grinning Danny Cox. Ian Gorham, who took over from wily Peter Hargreaves as CEO last year just isn’t up to the job. It’s the old problem of finding a replacement when the founder of a company retires. Gorham’s background is primarily in accountancy services rather than retail and it shows.

It’s probably the time to be patiently evaluating alternatives but watching the exits.

I can't find it now, and neither can Google, but I remember reading a couple of years ago aboout a HL investor who asked too many awkward questions and was very badly harrassed by HL. I definitely read this, but cannot find any record on t'interweb now - ring any bells with anyone?

jamesd

gadgetmind wrote: »

You will start to see platform charges but should also see ongoing per-fund charges dropping.

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.

Totton wrote: »

Which funds are affected by this?

I was replying to speculation with more speculation. I'm not aware of any price increases for most funds since the increase for holdings of lower value than £1,000 by eliminating the rebate for them.

My lack of awareness may just be because HL didn't bother to tell me and refused to tell me what they were getting when I asked them. Good luck in getting HL to tell you what they are charging so you can ask again later and see if they have increased their charges.

psychic_teabag

ffacoffipawb wrote: »

I can't find it now, and neither can Google, but I remember reading a couple of years ago aboout a HL investor who asked too many awkward questions and was very badly harrassed by HL. I definitely read this, but cannot find any record on t'interweb now - ring any bells with anyone?

Yes, I remember reading something like that. Found this post :
http://forums.moneysavingexpert.com/showpost.php?p=38742384&postcount=35
but perhaps there was something else.

FRS

This change has caused me a real headache. After finally getting myself clear of debt I decided to start saving and investing. I recently set up both a stocks and shares ISA and a SIPP with HL. The plan was to drip fed £200 a month into the ISA and £300 a month into the SIPP. After doing a bit of investigation I decided that the HSBC trackers would be an ideal start into the world of investing, so I started 3 in the ISA and 4 in the SIPP, drip fedding each with either £50 or £100. So far I've got between £300 and £600 in each tracker.

These changes have now forced me to rethink and completely change my strategy as I was looking at £6 a month charge for the ISA and £8 for the SIPP making the trackers unaffordable. I'll now have to reduce down to a single tracker in each account until I can figure out the best course of action.

I can understand HL wanting to make some money out of these trackers but the flat £2 per tracker per month per account really hits the small investor like me. My plan was to allow these trackers to grow for the next 10 years or so. That plan has been completely ruined by these changes, I would of much rather a flat fee per account then access to as many trackers as you want.

Jegersmart

I am not with HL, but I guess they just want to get rid of people with (relatively) small holdings?

I am with Fidelity Wealth and as far as I know there no charges on the SIPP, however they charge 0.25% when switching funds within ISA's......which I think is fair as it is extra work for them - i.e. if you leave stuff where it is then you just pay AMC as far as I am aware. Seems fair(ish)?

J

Rollinghome

psychic_teabag wrote: »

Yes, I remember reading something like that. Found this post :
http://forums.moneysavingexpert.com/showpost.php?p=38742384&postcount=35
but perhaps there was something else.

More trouble at Mill: Rebel shareholders challenge Hargreaves Lansdown director pay deals (link)

And yes, I've come across lots of stories from clients alleging they were abused by Hargreaves when they complained. Bit of a Jekyl and Hyde outfit behind the smiles.

principa

FRS wrote: »

This change has caused me a real headache. After finally getting myself clear of debt I decided to start saving and investing. I recently set up both a stocks and shares ISA and a SIPP with HL. The plan was to drip fed £200 a month into the ISA and £300 a month into the SIPP. After doing a bit of investigation I decided that the HSBC trackers would be an ideal start into the world of investing, so I started 3 in the ISA and 4 in the SIPP, drip fedding each with either £50 or £100. So far I've got between £300 and £600 in each tracker.

These changes have now forced me to rethink and completely change my strategy as I was looking at £6 a month charge for the ISA and £8 for the SIPP making the trackers unaffordable. I'll now have to reduce down to a single tracker in each account until I can figure out the best course of action.

I can understand HL wanting to make some money out of these trackers but the flat £2 per tracker per month per account really hits the small investor like me. My plan was to allow these trackers to grow for the next 10 years or so. That plan has been completely ruined by these changes, I would of much rather a flat fee per account then access to as many trackers as you want.

My situation exactly - I think a lot of us had this idea over the last few years. H-L does not want us to invest small amounts in multiple trackers without paying through the nose for the privilage. Can you transfer small (<£1000) holdings on their platform? I thought the minimum was £1000?

dunstonh

I am not with HL, but I guess they just want to get rid of people with (relatively) small holdings?

They wouldnt put it like that. Its more about charging people that are unprofitable to them by only using the loss leaders.

I am with Fidelity Wealth and as far as I know there no charges on the SIPP

I dont think Fidelity have the institutional funds (may do, not looked). I know they have some trackers but like HL and most other bundled platforms, they offer them on a loss leader/cross subsidy basis.

I would be more concerned about stage 2 when there are no bundled platforms left and no cross subsidy or loss leaders exist. In the scheme of things, this £2 is nothing. That said, the preferred method of the unbundled platforms is either to have a percentage applied or a fixed annual fee up to a certain amount and percentage after that.

Jegersmart

dunstonh

It will be very interesting to see how this develops. Ultimately, the taxpayer underpins the whole system. I noticed last year that Citigold starting charging me for taking cash out abroad - as do a lot of banks these days. This is a trend that will only get worse, our services companies will charge more and more to survive and/or grow.

J