alternatives to H-L for tracker funds

moneylover

I know that when H-L first announced that they were planning to charge £2 for some trackers, there were several threads and many people's reaction was that they would move provider.

I wondered how people are finding Best Invest, Fidelity, Cavendish or wherever else they have moved to? I havent moved yet (I currently have a £3000 ftse tracker but want to get an American one too) and I do plan to move my tracker, even if, at the end of the day, other providers introduce a charge.

A few people have already commmented as a result of another thread I started which was not primarily about provider
https://forums.moneysavingexpert.com/discussion/3750815
so I thought I would see what other responses a dedicated thread might bring forth

I won't be using an ISA wrapper for the tracker so that cost is not relevant. I will keep H-L for funds and would use them if I did start an ISA. I am more concerned with how the service works.
In particular I like to think that I have some idea of what price my tracker would buy or sell at. H_L orders have to be in by 8am so no time to see how market opens;Best Invest is 9.30am so that is better and Fidelity is apparently 11am which is amazing . On that basis Fidelity seems best. However someone mentioned in the other thread, that on Fidelity, if you sell a fund or tracker and do an immediate buy, the money from the sell goes into a cash park and the new tracker or fund is not bought till the next day. But possibly that happens with all platforms ie you can't actually do a sell and buy in one day?

I am interested in comments because I realise how easy it is to make a mistake and I dont want to end up with lots of providers and my money spread around and therefore not so easily moved. I made a mistake when I started to buy shares in the summer; I started off with x-o because so cheap. They are very good for the money but I didnt realise I wouldnt be able to reinvest dividends cheaply so I then opened iii as well. Have learned to check things out more carefully now!

Thanks in advance for all comments

deadpeasant

I'm going to sell my HSBC American Index on HL and switch to Vanguard US Equity Index on my Alliance Trust account. The one-off dealing charge is about half the annual HL platform fee, and I'll be less tempted to tinker than I am on HL.

That's all unwrapped. I also have an ISA with HL where I have my fixed-interest holdings (the only investments worth ISA-wrapping for a basic-rate taxpayer without CGT concerns like me). I now wish I'd gone for an Alliance Trust ISA instead of the HL, now HL are charging these platform fees on most of my fixed-interest holdings.

Ark_Welder

deadpeasant wrote: »

I'm going to sell my HSBC American Index on HL and switch to Vanguard US Equity Index on my Alliance Trust account. The one-off dealing charge is about half the annual HL platform fee, and I'll be less tempted to tinker than I am on HL.

That's all unwrapped. I also have an ISA with HL where I have my fixed-interest holdings (the only investments worth ISA-wrapping for a basic-rate taxpayer without CGT concerns like me). I now wish I'd gone for an Alliance Trust ISA instead of the HL, now HL are charging these platform fees on most of my fixed-interest holdings.

ATS do have an annual administration charge on their ISA. Currently comes in at £30 per year, which includes VAT. But they do rebate a lot more of their commission than HL.

[Edit]
Plus, ATS have a dealing charge per purchase, which also applies to funds.

psychic_teabag

moneylover wrote: »

In particular I like to think that I have some idea of what price my tracker would buy or sell at. H_L orders have to be in by 8am so no time to see how market opens;Best Invest is 9.30am so that is better and Fidelity is apparently 11am which is amazing . On that basis Fidelity seems best.

Passive investors using tracker funds tend to take a buy-and-hold / don't time-the-market approach, so the actual day-to-day price fluctuations matter little. Just purchasing regularly on a monthly schedule avoids the timing temptation.

That said, it's not unreasonable to keep an eye on the price with a view to buying on dips. But again, those are probably deep dips lasting several days, rather than trying to pick the exact day it will bottom.

I think fund platforms try to discourage frequent trading - Fidelity and HL have explicit clauses in T&C saying they reserve the right to refuse requests from frequent traders.

deadpeasant

Ark_Welder wrote: »

ATS do have an annual administration charge on their ISA. Currently comes in at £30 per year, which includes VAT. But they do rebate a lot more of their commission than HL.

[Edit]
Plus, ATS have a dealing charge per purchase, which also applies to funds.

I think the ATS ISA comes with one free trade, so starting off with just L&G Gilt Index and L&G IL Gilt Index would be £42.50 in the first year and £30 thereafter, whereas the HL platform fees would be £48 annually.

I'm not a kneejerk HL basher though. The interface and phone service are both good. (Why though is the maximum timescale on the charts only 5 years, widely regarded as a minimum horizon for investing? I go to the Trustnet charting tool for a bigger picture.) And I appreciated free fund deals after the August crash when I made lots of little switches from gilts to equities. (I wonder how many deals you have to do before HL gets angry?)

Ark_Welder

deadpeasant wrote: »

I think the ATS ISA comes with one free trade, so starting off with just L&G Gilt Index and L&G IL Gilt Index would be £42.50 in the first year and £30 thereafter, whereas the HL platform fees would be £48 annually.

I'm not a kneejerk HL basher though. The interface and phone service are both good. (Why though is the maximum timescale on the charts only 5 years, widely regarded as a minimum horizon for investing? I go to the Trustnet charting tool for a bigger picture.) And I appreciated free fund deals after the August crash when I made lots of little switches from gilts to equities. (I wonder how many deals you have to do before HL gets angry?)

The one free trade in the ISA is currently valid until 31st July 2012.

But to go back to the OP too, if trackers are the only investments being considered - at least initially - then the other option is to check out whether the fund manager provides a fee-free method of making an investment. HSBC and L&G do so. But deciding factors might include whether the investor is happy to have paperwork (e.g. annual statements) from several sources - assuming that the trackers are not the only assets held - and whether there is likely to be a transfer between tracker and funds at some stage in the future. If there is, then the next factor is whether the investor will be happy to be potentially out of the market for a few weeks. But if the intention is to build up the trackers and just add other assets at a later stage then the trackers could remain with the fund manager.

deadpeasant wrote: »

(I wonder how many deals you have to do before HL gets angry?)

You could research into this and report back to us!

Special_Saver2

moneylover wrote: »

I wondered how people are finding Best Invest, Fidelity, Cavendish or wherever else they have moved to?

H_L orders have to be in by 8am so no time to see how market opens;Best Invest is 9.30am so that is better and Fidelity is apparently 11am which is amazing . On that basis Fidelity seems best. However someone mentioned in the other thread, that on Fidelity, if you sell a fund or tracker and do an immediate buy, the money from the sell goes into a cash park and the new tracker or fund is not bought till the next day. But possibly that happens with all platforms ie you can't actually do a sell and buy in one day?

I have been with Cofunds for a while. When you carry out a switch, you have to wait a day for the funds to be credited to your account from the sale (and then the purchase will be executed the next day).

As for dealing times, with Cofunds there are individual cut-off times depending on the fund you are purchasing. It is generally 11am but for more details, see this pdf document. Looking at that document, I can now understand why any purchase that involves Standard Life funds takes an extra day - their cut-off time is 3pm for valuation at 7.30am the next morning.

I have just applied for a Fidelity account under Cavendish's special offer (£25 fee waived until 1st February and all trail commission rebated) so we shall see how I get on with them. They do not offer all the funds that I have with Cofunds so I shall probably have a combination of Cofunds and Fidelity going forward.

SS2

dunstonh

I have been with Cofunds for a while. When you carry out a switch, you have to wait a day for the funds to be credited to your account from the sale (and then the purchase will be executed the next day).

Cofunds part pre-fund. Some fully pre-fund. Others dont pre fund at all and wait until settlement. Lack of prefunding can be an issue with some platforms.

middlepuss

deadpeasant wrote: »

I'm going to sell my HSBC American Index on HL and switch to Vanguard US Equity Index on my Alliance Trust account.

How do the TERs compare, HSBC American and Vanguard US Equity Index?

psychic_teabag

HL have a table at http://www.hl.co.uk/funds/index-tracker-funds/view-index-tracker-funds

• HSBC: 0.28%
• Vanguard: 0.20%

moneylover

Special_Saver2 wrote: »

I have been with Cofunds for a while. When you carry out a switch, you have to wait a day for the funds to be credited to your account from the sale (and then the purchase will be executed the next day).

As for dealing times, with Cofunds there are individual cut-off times depending on the fund you are purchasing. It is generally 11am but for more details, see this pdf document. Looking at that document, I can now understand why any purchase that involves Standard Life funds takes an extra day - their cut-off time is 3pm for valuation at 7.30am the next morning.


SS2

Have read the document its interesting. However surely Cofunds has just one cut off time each day for buys and sells?

Someone, somewhere mentioned that the cut off daily time at Fidelity was 11 am. Does anyone know if that is correct? Surely it cannot be that late if many of the actual funds have a cut off time of 11 am as how would Fidelity get the ones that came in at nearly 11am executed that day?