H-L introduces a Tracker Platform Charge

dunstonh

koru wrote: »

When you say “should", do you mean that this will be obligatory or merely that RDR sets out to remove the factors that currently mean there is a different charge on different funds?

Should as in post RDR/platform review world. Not now. The cost of distribution should not be influenced by the type of investment being offered (other than dealing fees that may be applicable to certain investments).

So, you wouldnt be able to get away with charging £2 pm on a tracker whilst not doing the same on a managed fund. Equally you would not be able to take a commission or marketing payment for certain funds.

katp1984

I have a few questions re the BlackRock UK index tracker. I understand it is a UT and not a OEIC so there is a bid/offer spread.

Having looked at the buy and sell prices there always seems to be about a 5% gap (5.6% according to todays price) - My question is will this tracker have to perform approximately 5% better than the HSBC tracker to get the same outcome?

Looking at the performance, both trackers seem to be about the same - so a bit confused

All my previous investments have been in OEICs so never had to deal with a difference in buy and sell price.

Thanks for your help.

SnowMan

FRS wrote: »

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.

Good spot.

I had completely missed that the HSBC FTSE all share and HSBC FTSE 100 tracker were available through the Selected Investment Fund ISA (I had thought they were only available through the ISA Funds portfolio which doesn't accept ISA transfers)

So the HSBC FTSE all share fund through the Selected Fund Investment ISA looks a great get out for people with small ISA funds in an HSBC tracker currently through HL. i.e. transfer over to that and avoid the platform fee.

competitionscafe

katp1984 wrote: »

I have a few questions re the BlackRock UK index tracker. I understand it is a UT and not a OEIC so there is a bid/offer spread.

Having looked at the buy and sell prices there always seems to be about a 5% gap (5.6% according to todays price) - My question is will this tracker have to perform approximately 5% better than the HSBC tracker to get the same outcome?

That includes the initial charge (which HL discount), so the gap (spread) will be around 0.5% (varies each day) See:
http://monevator.com/2011/11/29/blackrock-index-trackers/

RoughRook

Can anyone explain what the difference is between the 'Institutional' HSBC tracker available through Hargreaves lansdown, and the same HSBC tracker offerered on various other platforms?

i.e. the difference between
HSBC FTSE All Share Index Fund Institutional A
and
HSBC FTSE All share Index R

I have a problem in that i cannot transfer out of HL as 'stock', because the new platform provider does not offer the 'Institutional' version of the HSBC all share tracker. I am being told that i will have to sell up and buy back later, probably 1 - 2 weeks later.

I am considering switching into another all share tracker (Fidelity) so that market move risks are limited to one day.
An alternative would be to switch into HSBC FTSE 100 and HSBC FTSE 250, but what sort of percentage allocations should be made to each of these two alternative funds to closely resemble the all share tracker? I realise that i would no longer have any small company exposure, but that is a very small percentage of the all share index, so probably not too critical if they are excluded.

Thanks for any enlightenment on the above!

tbm_2

FRS wrote: »

I just got the same letter, they are also offering an additional two months with no platform fees (i.e. until the 29th Feb) to allow you time to reorganise your portfolio.

Interesting. I got the letter too but I don't see anything about this offer.

RoughRook

tbm wrote: »

Interesting. I got the letter too but I don't see anything about this offer.

I got the letter, and fees are delayed until Feb 29th (for me). Does not matter because i'm off anyway. Their tactics have put me off trusting them with my money.

SnowMan

RoughRook wrote: »

Can anyone explain what the difference is between the 'Institutional' HSBC tracker available through Hargreaves lansdown, and the same HSBC tracker offerered on various other platforms?

i.e. the difference between
HSBC FTSE All Share Index Fund Institutional A
and
HSBC FTSE All share Index R

I have a problem in that i cannot transfer out of HL as 'stock', because the new platform provider does not offer the 'Institutional' version of the HSBC all share tracker. I am being told that i will have to sell up and buy back later, probably 1 - 2 weeks later.

I am considering switching into another all share tracker (Fidelity) so that market move risks are limited to one day.

There is an earlier discussion starting at post 130 about the institutional and R units.

They are separate funds but both have the same amc of 0.25% and both are invested almost identically to track the FTSE all share.

As you say this is a problem if re-registering from HL (institutional) to elsewhere which will probably offer only the R units.

Switching to another HL fund may work prior to re-registration. It may depend a bit where you are moving to how you go about that.

One option is to transfer to Fidelity and switch to the Fidelity Moneybuilder UK index fund which also tracks the FTSE all share and has a similar TER (actually marginally higher) to the HSBC all share tracker.

A good try to achieve this might be to switch the HSBC FTSE all share institutional fund to the Fidelity Moneybuilder UK index fund through HL and then look to re-register that Fidelity Moneybuilder UK index fund with Fidelity.

You will need to check with Fidelity whether re-registering is possible (they have limits on size of investment I think and it depends if it is ISA and non ISA so do your own reaserch there if going that way) and they may have some offers where they agree to pay the re-registration fees.

HL are refusing to waive the registation fee (see earlier in the thread) so if you are re-registering and HL won't waive the fee then put in a complaint and take it to the Financail Ombudsman. I think you will have a good chance of winning if you do and it will hiit HL in the pocket if you go the Ombudsman. That is what I am doing.

If you sell up and then buy elsewhere yourself as you say there will be 'time out of the market' loss and you will be subject to market movements while you are out of the market which can work both ways. Obviously if in an ISA you need to transfer not sell up and buy elsewhere or you will lose ISA status.

If selling up with HL if you put in an order on the Tuesday which results in you selling at (say) 12 midday on a Wednesday the funds won't reach your cash account with HL until Tuesday the following week, and then you will have to BACS them out on the Tuesday so they won't reach your personal bank account until the Thursday and then you have to re-invest them. So yes a couple of weeks out of the market potentially.

RoughRook wrote: »

I got the letter, and fees are delayed until Feb 29th (for me). Does not matter because i'm off anyway. Their tactics have put me off trusting them with my money.

My thinking too. The main reason I am moving out of HL is not a financial one but that I have lost all trust in their very shady and underhand operation.

RoughRook

Thanks Snowman for the reply.

I like the look of BestInvest because they say they cover transfer costs (£500 max) and actively mention tracker funds on their home page, instead of hiding them away in the background which HL always appeared to do.

I looked back at post 130 onwards and did a little digging myself, but some things are still very fuzzy.

A difference between the ‘Institutional’ and ‘Retail’ offerings now appears obvious. The HSBC all share (Inst) fund price quoted on HL is different to the price for the same fund quoted on HSBC’s own website, due to HL offering a slightly different form of the fund. Fair enough.:

http://services.assetmanagement.hsbc.co.uk/site/Individuals/Public/Funds_Prices/OEIC_Funds/Price_Yields/landing_page

But, for all other HSBC index funds offered by HL:
HL quoted price = HSBC quoted price = BestInvest quoted price

But the TERs quoted by BestInvest is different to those quoted by HL and HSBC.

Example:
HSBC FTSE 100 index fund
HL quote 0.27%
HSBC quote 0.27%
BestInvest quote 0.31%

Surely, if BestInvest are quoting the same daily price (although updated a day late by BestInvest) in its ‘fund facts’ documentation, then the TER is going to be the same? They can't be quoting current fund prices for a fund that they are not actually offering and which has a different TER???

So my assumption is that BestInvest are quoting the incorrect TER, and their offerings of HSBC index trackers are exactly the same as HL, apart from the ‘All share’ tracker. Although on first glance they appear to be slightly inferior offerings, but are not. But still, i may be incorrect.

Phew! Trying to keep those intent on picking pieces out of the pie is hard work, but work that needs to be done.

Gadgetmind appears to have done his homework on BestInvest. Maybe he can shed his own thoughts on what I have just mentioned above?
Or anyone else?

I'm also trying to find out if switching between one HSBC fund and another HSBC fund with Hargreaves lansdown would be done on the same day, hence no (or very little) risk of market movements. Or would it be, like i have witnessed before when switching between different fund providers (e.g. Fidelity to HSBC), they sell one day and buy the next. They state on their dealing web page that they try to buy on the same day where possible. Not too sure what that exactly means, but from my experience in the past they like to hang on to the cash for a day.

westy22

My switches between HSBC trackers on HL were done on the same day - in fact within a couple of hours of each other. This was last week when I switched a smallish HSBC FTSE100 balance into HSBC FTSE All Share.