iii introducing quarterly £20 charge

grey_gym_sock

TD's platform fee and platform commission are different things. the latter is a commission paid by funds to (in this case) TD.

RDR is supposed to involve first trail commission being abolished, and then (later) platform commission. TD may now be prepared for the former, but not for the latter.

yes, their charges may not change for a while, if "a while" could be 18 months, or longer if the FSA drags its feet.

dunstonh

Remember that there are two commissions. The trail commission and the platform commission. The unbundled platforms are rebating both. The bundled platforms are only rebating some or all of the trail commission.

Trail commission stops on new business in 6 months time. Platform commission will still be available to platforms until the platform review kicks in about 12-18 months later. Although clean priced units are now appearing from multiple fund houses. (such as Schroders with their clean class units having an AMC of 0.75% compared to retail being 1.5%)

Any platform that relies on undisclosed kick backs or part rebates will have to change their model

gingellr

dunstonh wrote: »

Remember that there are two commissions. The trail commission and the platform commission. The unbundled platforms are rebating both. The bundled platforms are only rebating some or all of the trail commission.

Trail commission stops on new business in 6 months time. Platform commission will still be available to platforms until the platform review kicks in about 12-18 months later. Although clean priced units are now appearing from multiple fund houses. (such as Schroders with their clean class units having an AMC of 0.75% compared to retail being 1.5%)

Any platform that relies on undisclosed kick backs or part rebates will have to change their model

Thanks for that.

So are you saying after the platform review all companies will have to rebate both? So therfore TD etc will probably change thier own charges.

Also what do you mean by bundled/unbundled?

brineybay

Thanks victormeldrew2. I agree X-O's platform is basic, but I've used them for a couple of years, and they are easy to talk to and their service is simple but reliable. If only they allowed dividend reinvestment, I'd never have bothered with Interactive in the first place.

Alex2011 - When I complained about the quarterly charge to Interactive, they actually said if I created a Shareprice account they would do an 'internal transfer' (transfer all my holdings to Shareprice) and that way I could avoid the quarterly charges and would not have to pay transfer fees. (That was when they were refusing to waive the transfer fees). I don't know if others were given this option?

The Shareprice account has £10 trading fees and does not charge administration or annual charges, which I'll admit is strange seeing as they are owned by iii. I asked if Shareprice was likely to implement similar charges, and I was told “There is no indication of the quarterly fee being introduced to Shareprice in the near future”.

But since the transfer fee is now waived, I might as well go back to X-O, as Shareprice.co.uk doesn't allow divi reinvestment either, and I have a lot more faith in X-O!

Good luck to everyone with transferring their shares! :cool:

MrDaLi

dunstonh wrote: »

Remember that there are two commissions. The trail commission and the platform commission. The unbundled platforms are rebating both. The bundled platforms are only rebating some or all of the trail commission.

Trail commission stops on new business in 6 months time. Platform commission will still be available to platforms until the platform review kicks in about 12-18 months later. Although clean priced units are now appearing from multiple fund houses. (such as Schroders with their clean class units having an AMC of 0.75% compared to retail being 1.5%)

Any platform that relies on undisclosed kick backs or part rebates will have to change their model

So is II just ahead of the curve in rebating the lot (ie. both the trail and the platform fee) or is this something some of the other brokers do?

dunstonh

So are you saying after the platform review all companies will have to rebate both? So therfore TD etc will probably change thier own charges.

Quick summary of the impact of the RDR (starting Jan 2013) and the platform review (date not yet known, was originally the same as the RDR but pushed back 12-18 months approx)....

Current situation is that managed funds typically include the cost of retail and distribution but you dont know who is getting what out of that AMC. So, a 1.5% AMC fund sees the adviser being paid, provider being paid and fund house being paid.

Post RDR, the adviser remuneration will no longer be paid. This is known as trail commission. If you use an adviser, it will be an explicit charge but the fund charge will be lower (so they largely cancel each other out). At the moment, some distributors keep the adviser commission in full or part even if they are not giving advice. That will stop.

post platform review and assuming no more changes (as it is not cast in stone yet), the platform will not be able to be paid out of the investment. Investment charges should be clean and if you use a platform, then you should pay a platform charge on top and if you use an adviser then you pay an adviser charge on top.

The current system has seen managed funds cross subsidise those buying shares or index trackers as they have largely been issued as loss leaders as more buy managed funds than other types. Post RDR/platform review, the charges should be the same irrespective of investment type (other than dealing costs). There should be no bias towards one type of investment or another.

Whilst the platform review is now behind the RDR, the fund houses have started issuing clean classes in advance. So, whilst they could still issue funds with a hidden platform remuneration in them, it isnt logical for them to have a clean class, then an retail class (for pre RDR business) and then a class for each of the different platforms. It would cost too much. Although theoretically, that could still happen.

bundled platforms are those that keep hidden commissions for themselves. Unbundled are those that rebate any commission (if any) and charge you explicitly instead. Unbundled platforms have been around for a good few years but have really upped their game in recent years and all bundled platforms are expected to be forced to go unbundled by either RDR or platform review at the latest. If they dont, then they wont earn any money.

Firms that are moving to unbundled may do it in stages. Introduce little charges here and there now or in the next 6 months and then gradually change them until the platform review date. Others will go the whole hog now.

damsonjam

Thinking of TD Direct, based on a quick look and feedback on here (thanks, folks!) so that I can get this well underway by the end of June and avoid the charges..

TD Direct DOES have some exit chaarges but they seem manageable, for my fund anyway:

Other Charges
Charge Details Value
Plan Transfer In FREE
Cash Withdrawal FREE
Transfer Out of Stock £35 per holding
Account Transfer Out and Closure £50 (+ the relevant Administration Fee)
Account Closure £50 + VAT (+ the relevant Administration Fee)
Note: The Stock Withdrawal per holding charge does not apply for Account Transfer Out and Closures

gingellr

damsonjam wrote: »

Thinking of TD Direct, based on a quick look and feedback on here (thanks, folks!) so that I can get this well underway by the end of June and avoid the charges..

TD Direct DOES have some exit chaarges but they seem manageable, for my fund anyway:

Other Charges
Charge Details Value
Plan Transfer In FREE
Cash Withdrawal FREE
Transfer Out of Stock £35 per holding
Account Transfer Out and Closure £50 (+ the relevant Administration Fee)
Account Closure £50 + VAT (+ the relevant Administration Fee)
Note: The Stock Withdrawal per holding charge does not apply for Account Transfer Out and Closures

I am assuming you are going for an ISA as the...

"Note: The Stock Withdrawal per holding charge does not apply for Account Transfer Out and Closures"

I believe is only for ISA accounts and not for standard trading accounts but you would need to check with TD to be sure.

pqrdef

dunstonh wrote: »

Quick summary of the impact of the RDR (starting Jan 2013) and the platform review (date not yet known, was originally the same as the RDR but pushed back 12-18 months approx)....

Bearing in mind of course that the FSA itself won't be with us much longer. There's still time for some new thinking.

marello

I'm hit by this too. If I transfer my ISA elsewhere do I lose out whilst the process happens?

I emailed td direct and they didn't seem to understand what I was asking (I believe I'm looking for a reregistration/ in speccie transfer?)