H-L introduces a Tracker Platform Charge

JamesU

competitionscafe wrote: »

Yes not bad but not the cheapest - for an ISA with only IT's and/or shares Sippdeal have no annual charge and slightly lower dealing charges, while idealing has an annual charge of £20 (£5 per quarter) and slightly lower dealing charges and xo has a no frills service with no annual charge and low dealing fees (£5.95).

i-Dealing are excellent. Fine for ITs, shares, gilts, prefs, etfs etc. Annual charge of £20/yr. All trading at £9.90 including EU/US at same price. International trading not as comprehensive as TD Waterhouse though.

http://forums.moneysavingexpert.com/showpost.php?p=42576134&postcount=4

https://forums.moneysavingexpert.com/discussion/comment/42576134#Comment_42576134

JamesU

ffacoffipawb

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.

Think I found it now ....

http://www.powerpos.com/hl-sucks/

No, just read it, that wasn't it, unless some stuff has been removed.

Richard7890

I'm moving from Hargreaves!

I got their Investment Time mag and its not exactly clear whats being charged so called them - looks like I'll get stuffed with over £100 fees! Crazy.

Checked Bestinvest website where I've got an ISA , then spoke to a nice lady there who's sending me something to sign and switch the investments to them, simple!

Dont need to talk to hargreves, all done for me and saved £100 in the process. Nice days work!

psychic_teabag

Does anyone happen to know the dealing cutoff time at bestinvest. I find HL's 8am cutoff a bit annoying, and would be nice (though not essential) if where-ever I move to has it a little later. Haven't found it on the website yet. I did email them, but haven't had a reply yet (which in itself is a bit off-putting - have to hope they're more responsive on the phone or once you're a customer).

EDIT: got my answer - 9:30am

SnowMan

masonic wrote: »

One option open to them is to offer to waive re-registration fees for disgruntled customers who contact them to say they are transferring out because of these new charges. I'd imagine pursuing HL for those re-registration fees would be the best complaint to take to the FOS.

HL have written to me in response to my complaint saying they WON'T be waiving the re-registration fee. I have to write back to them again (under their complaint procedures) to say I am not happy with that response (which I am going to do) and then will be taking it to the Ombudsman on the re-registration fee basis.

gadgetmind

psychic_teabag wrote: »

have to hope they're more responsive on the phone or once you're a customer.

I've called Bestinvest twice, and both times they answered on the first ring.

principa

On reflection I am less bothered about his move despite holding 4 HSBC trackers with them. I'm using this as an opportunity to consolidate and there are a couple of good global/active funds which I already hold that will suffice - performance is comparable to the trackers.

Going forward, I'll invest directly with HSBC or Fidelity if HL do not get their passive fund offerings in order. I am quite happy with their service to date, even though they appear to contact me every time Artemis's William Littleworth farts.:D

bxboards

I've put in for the H&L to BestInvest Switch, my stuff is a mixture but with 4 or 5 HSBC trackers and 1 Royal London, I'm looking at 5 x £24 a year..componded over the lifetime of my SIPP and ISA that is a hell of a lot...

koru

Another point occurs to me as I think through the ramifications of the switch to a post-RDR world. Will it remove much of the rationale for trackers?

Part of the argument for trackers is that actively managed funds are handicapped by the higher level of expenses that is charged by such funds. If they charge an extra 1% AMC in comparison with passive trackers, they need to deliver consistent outperformance of 1% per year in order to beat trackers. Supporters of passive investment argue that there are few, if any, fund managers who can consistently outperform the index by an amount that is sufficient to offset this fee handicap.

Let's not get into a debate about whether or not this is correct. What I am wondering is whether the fee handicap is going to be much lower following the RDR changes. A typical active fund currently charges 1.5% AMC, but as I understand it, 0.5% of this is usually paid as commission to the adviser (and in some cases rebated to the investor by discount brokers) and a further amount of roughly 0.25% is usually paid to platform providers such as Cofunds, HL Vantage, ATS, BestInvest. So, on a fully unbundled basis, the active fund should in future be charging an AMC of perhaps 0.75%. (The investor might be paying an explicit fee to the adviser and might also be paying an explicit platform fee to the platform provider.But they will be paying the same whether they are investing in active funds or trackers.) The typical AMC on a low-cost tracker is about 0.3%, so the extra cost of an active fund might be less than 0.5%. If so, this is a smaller handicap for the active fund manager to overcome.

It does not necessarily remove the argument in favour of trackers, but it does weaken the argument somewhat. Investing in active funds would make sense as long as you think that on average your portfolio of active funds is going to outperform equivalent trackers by only 0.5%.

dunstonh

Will it remove much of the rationale for trackers?

Potentially if you use a platform.

Trackers will be 0.1% to 0.2%. Whereas the likes of Inv Perp High income will then be 0.75%.

However, the situation is one that a platform is an incremental service. So, in theory going direct is more likely to come back into fashion if you want the lowest costs. Although you will likely have to use retail funds and not institutional funds.