Cavendish Online

psychic_teabag

I wonder if Fidelity are subsidising Cavendish' usual fee to try to get as much business in as possible before the changes..?

buffman

psychic_teabag wrote: »

I wonder if Fidelity are subsidising Cavendish' usual fee to try to get as much business in as possible before the changes..?

I believe that they are

dunstonh

It is well documented that bundled platforms have been desperate to get as much as they can on platform before the changes. Fidelity have had periods when they have paid the servicing agent upto £100 for transferring assets to them.

The more you have on platform pre-RDR/platform review, the better the terms you will get to negotiate how much of an undisclosed backhander you will get from the fund house. Also, come platform review and the banning of the backhanders (as it currently stands), the more people on the old bundled method, the more they can use their income to cross subsidise charges on the unbundled side they will be offering post RDR/review. If you didnt have that cross subsidy, it would cost a massive amount. The unbundled platforms dont seem to turn to profit until they get to around £3-£4 billion. it can take many many years and hundreds of millions of pounds of loss to get there from scratch.

oldfella

is it clear if pre-RDR contracts will continue to pay rebates after the change to the new system ?

Reaper

dunstonh wrote: »

come platform review and the banning of the backhanders...

Would you agree that as individual investors we are better off making sure we are on bundled platforms before the changes come in because they will still be able to accept the backhanders on existing business and therefore keep our costs down?

I haven't looked at much literature on the new planned unbundled platforms but I get the impression they will cost me more, even if the charges are more honest and transparent.

dunstonh

oldfella wrote: »

is it clear if pre-RDR contracts will continue to pay rebates after the change to the new system ?

Yes. Pre RDR will continue paying unless there is some change to it (stopping premiums/increases/fund switches).

The fund supermarkets are complaining at the moment that fund switches shouldn't switch trail off because they wont on life and pensions (not that most life and pensions pay trail anyway). They think it should apply to all tax wrappers. They have a point in one respect but on the other hand life and pension contracts are packaged whereas a fund on a platform is not. A fund switch on UT/OEIC is a sell and buy for tax purposes. That isnt the case for life/pensions.

Would you agree that as individual investors we are better off making sure we are on bundled platforms before the changes come in because they will still be able to accept the backhanders on existing business and therefore keep our costs down?

If you are a lazy investor or a small investor then yes. Explicit charging suits more advanced investors and larger values. Hidden commissions and backhanders suits smaller investors and lazy investors (no fund switching - invest and forget)

I haven't looked at much literature on the new planned unbundled platforms but I get the impression they will cost me more, even if the charges are more honest and transparent.

Yes. On a like for like basis you typically find unbundled is around 0.1%-0.3% a year more expensive but coming down periodically.

Aegis

property.advert wrote: »

Waiting for the IFAs to chirp in with statements on how they can do all this and more for far less cost.

Not even close. Don't want that sort of business, so I'd be deliberately pricing myself out of the market for that type of request!

codetown

buffman wrote: »

This initial set-up fee is being waived until 1 Feb.

Can anyone point me to the page/pages where this 25£ initial set-up fee is waived? I am interested in opening an ISA with them, and would like to use this offer!

mike88

Yes I tranferred my wife's and my Funds Network funds into Cavendish. I thought it was too good to be true but it isn't and can't believe that we receive twice yearly payments into our bank accounts for doing nothing.

buffman

codetown wrote: »

Can anyone point me to the page/pages where this 25£ initial set-up fee is waived? I am interested in opening an ISA with them, and would like to use this offer!

http://www.cavendishonline.co.uk/investments/isas-oeics/

'CHRISTMAS OFFER - Cavendish Online £25 fee WAIVED when applying for the FundsNetwork ISA / OEIC above. Offer ends 1st Feb.'