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H-L introduces a Tracker Platform Charge
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I got the same letter from HL about BlackRock etc. It says they will hold back the charges until February 29th but doesn't say if I need to call them to accept this offer - or is it completely automatic?
I did some calculating with Excel on when the changeover point between the HSBC funds at 0.25% + £24 a year vs. BlackRock at 0.55% with no charge. If you have £8,000 in a particular tracker fund, then the costs are identical between the two. Below that amount BlackRock is cheaper, above that HSBC are cheaper. This was a bit quick 'n' dirty, it doesn't take into account spreads and it's based on AMC and not TER.0 -
Is there any reason why III would not be a suitable home for ISAs with HSBC trackers? Might also enable you to take advantage of the portfolio builder if you wanted to add ETF's or ITs to your holdings?The above facts belong to everybody; the opinions belong to me; the distinction is yours to draw...0
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Rollinghome wrote: »it's important to ensure you understand what you're buying.
Yes, always, and what other snouts might be in your trough.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 -
fieldofdreams wrote: »Many thanks for highlighting the blackrock trackers - I dont recall ever seeing the breakdown of index trackers on the HL site before, must have missed it.
I'm pretty sure it's new. In the latest mailshot from HL, there was a note on trackers that said "we are introducing a new platform fee, increasing information about .. tracker funds, increasing range of funds... and launching easier website search functions... We expect greater choice will include the popular Vanguard funds... Additional coverage will start shortly, by early January or before."
The cynic in me suggests that if HL start making more profit from trackers, they'll happily promote them.0 -
The cynic in me suggests that if HL start making more profit from trackers, they'll happily promote them.
Under RDR/platform review, they shouldnt be making any more profit from one type to the other. The whole point is to remove potential bias that may exist.
However, until that comes into effect, bias can still exist (as it clearly is with the introduction of this new tracker charge which will have to go post RDR)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.0 -
I think anyone with HSBC trackers with over £500 in should be keeping an eye on the HSBC Global Investment Centre as a good place to hold the HSBC trackers.
The problem with that at the moment is that the HSBC Global Investment Centre aren't accepting ISA transfers, and those with smallish funds I am guessing are in ISAs, but that policy of not accepting ISA transfers surely must change shortly.
I did some investigating and as far as I can work out HSBC Global Investment centre offers 2 types of ISA. A ISA Funds Portfolio and a Selected Investment Funds ISA.
The ISA Funds portfolio requires a minimum £500 investments in each fund, subsequent investments must also be £500. This ISA does not allow transfers in but it does give you access to the full range of HSBC trackers (e.g. FTSE All share, Pacific, Japan, American).
The Selected Investment Funds ISA does accept ISA transfer and also allows you to set up a regular saving plan. However it only gives you access to the FTSE All share and FTSE 100 trackers.0 -
Under RDR/platform review, they shouldnt be making any more profit from one type to the other. The whole point is to remove potential bias that may exist.
However, until that comes into effect, bias can still exist (as it clearly is with the introduction of this new tracker charge which will have to go post RDR)
I thought the point of RDR was to make charges explicit, not to make them all the same. Are you saying that post-RDR platforms will have to apply exactly the same charges to all funds (in other words, only a platform charge is possible, not variable charges)? If so, why would HL put themselves through all the hassle of changing their system now, only to change it again within the next year or two?0 -
saveonarola wrote: »I thought the point of RDR was to make charges explicit, not to make them all the same. Are you saying that post-RDR platforms will have to apply exactly the same charges to all funds (in other words, only a platform charge is possible, not variable charges)? If so, why would HL put themselves through all the hassle of changing their system now, only to change it again within the next year or two?koru0
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saveonarola wrote: »I thought the point of RDR was to make charges explicit, not to make them all the same. Are you saying that post-RDR platforms will have to apply exactly the same charges to all funds (in other words, only a platform charge is possible, not variable charges)? If so, why would HL put themselves through all the hassle of changing their system now, only to change it again within the next year or two?
You need to separate the three entities currently involved.
1 - adviser/distributor
2 - platform
3 - investment
In reverse
3 - the investment can have what ever charges it wants. There are no requirements for these to be the same.
2 - The platforms should be charging the same for their service irrespective of the type of investment you have. (not as it currently is with bundled platforms)
1 - the adviser and/or distributor should be paid the same irrespective of investments used.
Why HL are doing this now is only what they can tell us. Maybe its because pre-RDR/platform contracts are allowed to continue post RDR. They may go down the route of having money split between legacy contracts and new version contracts. Or maybe they think its time to cull the bottom end of their business that makes them no money (and probably creates a loss). Or maybe its a case of introduce a fee now but then phase it upwards over time. Increasing existing charges is easier and less damaging than introducing no fees. We could hypothesise to the cows come home.
As things currently stand though (knowing that the FSA could change its mind and some things are not yet decided), the FSA does not want a bias to exist between investment types on the distribution channels that market themselves as being independent.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.0 -
2 - The platforms should be charging the same for their service irrespective of the type of investment you have. (not as it currently is with bundled platforms)koru0
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