New Index Tracker charges on HL - please help a newbie investor

SnowMan

OK bobsy didn't realise you had some non-trackers also.

So one option would be to transfer your trackers into those other funds to avoid the platform charge. Disadvantage of that is that you don't have your exposure to the trackers that you wanted.

Because of the ISA rules you couldn't open a separate ISA with (say) Fidelity in one of their tracker funds in addition to contributing to the 13 funds in the HL one because you are only allowed to invest in one investment ISA a year.

It might be very difficult to make a worthwhile complaint to HL given that you have the 13 funds that aren't affected as the effect of the platform charge doesn't look so extreme, it only affects 4 of the 17 funds and you can transfer to the other 13.

Looks terrible if your only funds were 4 trackers hit by the platform charge but that is not the case. In that scenario it would be worth complaining.

BLB53

One option is to move all your isa investments into cash, then transfer the cash over to a lower cost provider like iii.

black_taxi_2

when you read financial newspapers---for just £50 a month you can invest in a LOW-COST-TRACKER

not with HL anymore---fook me £2 a month is a 4% cost before its invested

stockmarket ave return--i will be kind 8%---so your getting a 4% return less t.e.r---cash isa looks better--pmsl

some of the managed funds are less---obviously HL are trying to get rid of the small monthly investor

Ark_Welder

bobsy31 wrote: »

To answer the above comment, 50 pound a month goes into my four trackers, the 650 goes across 13 more funds (50 pounds each).

I have only been doing this 6 months, the plan was to build up a core amount in each of these funds over the first 5 years of my investment life.

Next question would be to ask what the trackers are bringing to the party. A core and satellite approach based on trackers would usually involve having large holdings in the trackers and smaller holdings in a small number of more specialist funds. Is there much of an overlap, or any overlap, between the trackers and the other funds? I'm thinking more about the two FTSE trackers than the others.

How important is it to have all of your funds on the same platform? Whilst not trying to second guess how HSBC's charging structure might develop, their trackers are available on their own (limited) platform which might be less inclined to introduces specific fees for holding them. It would be possible to build up tracker holdings over a few years with HSBC as the platform provider, and then switch back to contributing to funds held with HL in later years. Depends upon how much administration and paperwork you're happy to deal with.

Special_Saver2

bobsy31 wrote: »

Hi

I am planning to open an ISA in my other half's name to invest in further funds and shares but this was very early in my thoughts as I am still researching.

You could switch your H-L funds out of the "platform charge" funds to the other funds and open a stocks & shares ISA in your other half's name with iii.co.uk for the "H-L platform charge" funds. An alternative to iii.co.uk is Cofunds - see post 75 of the other H-L platform fund thread. This may only be a temporary solution though - we need to see whether iii and Cofunds introduce a charge too in response to H-L's move.

Edit: I really like the ideas from SnowMan and Ark Welder about going with Fidelity or HSBC direct (provided that the retail versions that they offer to the public are as good as the offerings available via H-L / iii.co.uk / Cofunds).

SS2

pqrdef

I suppose this is a foretaste of joys to come, and things will get worse before they get better. It's all becoming nightmarish. We have to play at dodge-the-fees, otherwise all our profits will end up in the pockets of the financial services industry, which is of course their intention, and the inevitable fate of those who don't pay attention. But the silly ISA rules are likely to be a major obstacle to doing what would otherwise be the right things.

One way to play the ISA game is to have more than one ISA, and to fund different ISAs in different years, so that each investment can be bought in the most appropriate ISA fee-wise. This may allow one to ring the changes between different kinds of investment, e.g. ETFs and investment trusts as well as funds, though it doesn't help with timing.

Another trick is to divert part of the money into a cash ISA, and then transfer it to a S&S ISA in the following tax year. E.g one could put Jan/Feb/Mar money into a cash ISA, and transfer it to a S&S ISA on 6th April. In this case, the S&S ISA doesn't have to be the same one that the other contributions go into, either in the new tax year or in the previous year.

Which only goes to show what a silly game it is that the Exchequer and their friends in the City have wished on us.

bobsy31

Thank you all for your comments and input.

The current state I am in is I have 300 pounds in each of the 4 trackers so far. What I was thinking of doing was the following:

- stay with HL as I have lots of other funds I pay 50 pounds each into every month (13 funds over and above my trackers)
- go away from trackers altogether
- sell each of my 4 trackers
- for each tracker swap to a managed fund

For example:

- for my ftse all share and ftse 250 tracker to purchase funds such as Marlborough special sits, IP high income or ones from The White List' - so to have my UK exposure
- for my Europe tracker go for a European fund eg Blackrock, Threadneedle
- for my US tracker pick a US fund eg Schroder US

The above funds are some of the funds I looked into when I started, I went for Trackers in the end so am aware more research is required - any suggestions of what funds you hold in my proposed locations would be greatfully received

One other question - as I have 300 pounds in each of the trackers will I be able to switch 300 pounds as a start in each of the new funds I select or will HL make me want to put 1000 pounds minimum?
Or could I put the 4 lots of 300 pounds into any of my exisiting funds that I pay monthly into?

Many thanks again for your help

robmatic

My understanding is that the £1000 minimum doesn't apply when you're carrying out a switch.

Aegis

robmatic wrote: »

My understanding is that the £1000 minimum doesn't apply when you're carrying out a switch.

True, but you pay the full retail AMC on any holdings less than £1,000, so you end up paying more than you should.