H-L introduces a Tracker Platform Charge

RoughRook

westy22 wrote: »

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.

That's good to know. I did not think that switching within the same 'family' of funds should 'morally' result in a delay and both sell and buy should be done at the same valuation/pricing point. But you can't take anything for granted. With markets as volatile as they are, a mere one day delay could result in a hefty loss (or gain) if switching large sums.

Rollinghome

Like Westy, my fund to fund switches were always done on the same day with the obvious exception of funds that were only valued weekly and on another day.

Whatever game HL are playing, it sounds as if they're causing a headache for a lot of people.

psychic_teabag

RoughRook wrote: »

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.

T&C A12 "Dealing in Funds" says that when you switch, you will be out of the market while the deals are done. The sale will be done one day and the the purchase on the following day.

Which makes sense if one manager has to release the money so they can send it on to the next manager. I guess when it's funds within the same group, they can shortcut the extra delay.

Rollinghome

psychic_teabag wrote: »

T&C A12 "Dealing in Funds" says that when you switch, you will be out of the market while the deals are done. The sale will be done one day and the the purchase on the following day.

Which makes sense if one manager has to release the money so they can send it on to the next manager. I guess when it's funds within the same group, they can shortcut the extra delay.

I've switched funds between different groups but has still happened on the on the same day. In most cases would have just rebalanced by moving £xxxx pound's worth from a to b so would be easy enough presumably: they know how much cash will be available and so how much to buy. I think it has been done in the same way when I switched whole holdings from one manager to another but would be sensible to clarify with them if it's important - might just depend on the circumstances.

ashtraxx

Hi,

Very annoyed with the way hargreaves and lansdown have gone about this, rather than using an intelligent measure like individual customer profitability they have instead gone for a simple approach. In a falling market this is pure greed to claw profit targets from customers with falling balances. Will be leaving them shortly and have cancelled my payments going in.

Anyone know if it is legal to give so little notice? After reading in media and complaining they have only now given notice, surely that is not enough time? With xmas as well it is very short notice at under a month

Ilya_Ilyich

They extended the notice period ashtraxx, the fees don't kick in until 29th Feb.

moneylover

Ilya_Ilyich wrote: »

They extended the notice period ashtraxx, the fees don't kick in until 29th Feb.

only for a small proportion of customers with substantial accounts, to give them time to 'reorganise their portfolios'. Those people have all had an individual letter.

competitionscafe

moneylover wrote: »

only for a small proportion of customers with substantial accounts, to give them time to 'reorganise their portfolios'. Those people have all had an individual letter.

According to an article on Motley Fool they will extend it for anyone, but only on request - you have to phone them up and ask.

moneylover

not according to something I read today, maybe a Citywire post, someone posted the email they had received from H-L which was a very firm 'get lost'

SnowMan

ashtraxx wrote: »

Hi,

Very annoyed with the way hargreaves and lansdown have gone about this, rather than using an intelligent measure like individual customer profitability they have instead gone for a simple approach. In a falling market this is pure greed to claw profit targets from customers with falling balances. Will be leaving them shortly and have cancelled my payments going in.

Anyone know if it is legal to give so little notice? After reading in media and complaining they have only now given notice, surely that is not enough time? With xmas as well it is very short notice at under a month

The 30 day term could be challenged under the Unfair Terms in Consumer Contracts legislation as it is not a term that was individually negotiated and what the term is saying, and taking into account the way the re-registration fees are not being waived either, is 'we can advertise low charges which we aren't going to honour in the long term, and then arbitrarily increase charges by 30 times or more (as in this case for some investors) with short notice and make it un-necessarily difficult to move away. I say arbitrarily as there has been no change in terms of commission paid to them by HSBC before and after 31st December 2011 as far as we can tell. There will be after 1st January 2013 but we are talking about now not a year's time.

The other challenge, and probably the best challenge, is whether they have infringed FSA rules; in particular FSA rules for execution only business. The whole point of the disclosure rules is that you have to tell people key information on their investment when they purchase. So HL can't just entice investors in with low fees and then when they are trapped in, arbitrarily increase charges at short notice (relying on a general 'we can increase charges term' deep in their terms and conditions); or at least if they do they have to give investors a free get out.

Remember the possibility that someone might find out that their long term investment had become very short term because they had been forced to move out months after their investment was purchased because of the platform fee was not mentioned in any of the information at time of sale. Clearly that subjects someone to a loss of return through being out of the market while they move to another provider and makes them subject to market fluctuations during the gap between selling and buying back.

Now every scenario can be covered at time of purchase, however HL having imposed such a major change should have agreed to waive the re-registration fee and been flexible in allowing people time to transfer out when asked to do so. Where HL have gone wrong legally in my view is in not allowing people to avoid charges by making it easy for investors to move away a) because of the short timescale of the notice of the change and b) because they won't waive re-registation fees or be flexible in any way.

They have confirmed in answer to my complaint that they will not waive the re-registration fee for moving investments. They have also confirmed if my ISA transfer is delayed just a few days into January they will charge me the £2 fee for January.

So I will be taking a complaint to the Financial Ombudsman as it doesn't look like HL are backing down on this. That will be the test of whether HL are acting legally.


To me HL have also done huge damage to their reputation by the way they have gone about things also. As a commercial company they are entitled to do things that damage their reputation. However that is a separate matter to whether what they have done is 'legal'.