H-L introduces a Tracker Platform Charge

middlepuss

I had the H-L flier about Newton Emerging Income: "Act by 3 October to invest at launch and save 4%".

I wasn't mislead by it. H-L rebate initial charges on funds - it never occurred to me that they would stop rebating the initial charge on this one after the launch date.

Rollinghome

middlepuss wrote: »

I had the H-L flier about Newton Emerging Income: "Act by 3 October to invest at launch and save 4%".

I wasn't mislead by it. H-L rebate initial charges on funds - it never occurred to me that they would stop rebating the initial charge on this one after the launch date.

Not sure that whether you, me, or the bloke next door were successfully misled by Hargreaves Landown is entirely relevant. The intention to mislead seems fairly clear.

They say on their flyer "We can offer a 4% saving on the initial charge for clients who wish to invest at launch, but we must receive your instructions by 5pm on 3 October".

The truth is that there will be no 4% saving for those who place instructions before 3 October as there will be no change in the initial charge after that date. (And those who invest at launch will bear the full cost of buying the equities to be held in the fund.)

srcandas

Rollinghome wrote: »

(And those who invest at launch will bear the full cost of buying the equities to be held in the fund.)

For that reason I've never seen sense in buying at launch. There are some funds that just seem to jump up at launch and for that reason I wondered if they spread the launch cost but I've never seen such smoothing documented. Although it does make sense I think

Just received an offer from Fidelity to move all my investments under their roof in exchange for £500 (about 0.5%). It's tempting as I guess at some time in the future I may get an offer to move it back

middlepuss

Rollinghome wrote: »

The truth is that there will be no 4% saving for those who place instructions before 3 October...

Yes there will! You save the 4% you'd pay if you bought the fund direct from Newton.

And by the way you'll also save 4% if you buy this fund via H-L after 3 October.

Rollinghome

dunstonh wrote: »

Also, they have an awful lot of investment on the commission based platform. They could leave it there still paying them the commissions and only do new business or new purchases on a unbundled basis. In theory, they could then cross subsidise the unbundled side from the bundled side.

I'm not sure how that could work for them.

If they give clients the option to move or not without additional cost then presumably those who would gain by staying where they were would tend to do that while those who would be better off under the new terms would opt to move. HL would lose out on both.

Whatever they do there's likely to be some winners and some very unhappy losers. Especially as they're likely to lose a source of revenue from the fund managers that wasn't available to the competition. As with iii, they'll hear more from the losers than the winners. Should be interesting.

Rollinghome

srcandas wrote: »

Just received an offer from Fidelity to move all my investments under their roof in exchange for £500 (about 0.5%). It's tempting as I guess at some time in the future I may get an offer to move it back

I've never looked at those offers very carefully but I'm sure that someone could get very rich just by moving their investments backwards and forwards indefinitely. Or at least I'd like to think so.

Rollinghome

middlepuss wrote: »

Yes there will! You save the 4% you'd pay if you bought the fund direct from Newton.

And by the way you'll also save 4% if you buy this fund via H-L after 3 October.

Good. So it's clear even to a HL groupie like yourself that to say "but we must receive your instructions by 5pm on 3 October" isn't entirely truthful and at the very least misleading. The same charges will apply both before and after that date.

jimjames

middlepuss wrote: »

Yes there will! You save the 4% you'd pay if you bought the fund direct from Newton.

And by the way you'll also save 4% if you buy this fund via H-L after 3 October.

Hmm, I'd still say that was very misleading. The comparison is not given against buying from Newton, the implication is that you need to apply before 3/10 to get the discount from HL.

I have funds with HL and like their service but this kind of misleading ad does them no favours.

grey_gym_sock

"We can offer a 4% saving on the initial charge for clients who wish to invest at launch, but we must receive your instructions by 5pm on 3 October"

surely that's perfectly accurate. it's saying that after that date, you can't invest at launch with a 4% saving. which you can't, if that's the deadline for the launch.

it might make 1 wonder whether the available saving will be lower after the launch. and if you ring up and ask them, they tell you directly that it won't.

it's marketing. HL always think that now is the perfect time to invest.

(since i seem to be defending them, i should mention i have some shares in HL.)

gadgetmind

There is a certain size below which running a fund doesn't make financial sense, so I guess the fund managers use HL to kick-start them past this point.

HL probably only get their enhanced kick back if you sign up by end of play on the 3rd, hence the urgency.

Double glazing salesmen work the same way IMO.