Alliance Trust Savings massive fee hike

koru

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Just got an e-mail from ATS notifying that they are switching from the previous annual fee of £30 for each ISA account and will now be charging £12 a quarter, so £48 per year. What's worse, they will now be charging the same fee on Investment Dealing Accounts and First Steps accounts (for children).

I will be going from fees of £60 per year (ISA for me and wife) to £288 per year (two ISAs plus 2 IDAs and two first steps accounts).

All of a sudden, the fee changes by iii start to seem very reasonable. With them I would pay just £80 per year, which would cover all six accounts.

koru

I suppose we will now have to jump through the same hoops as iii. ATS will refuse to waive exit charges, punters will complain to the ombudsman that it is unfair to hike charges so much whilst also penalising punters who wish to exit, then hopefully (after talking to the ombudsman) ATS will suddenly have a revelation and realise that what they always intended to do was to waive exit charges.

westy22

Well, have a read of this from just a couple of days ago!!

http://www.fool.co.uk/news/investing/company-comment/2012/06/26/a-fund-supermarket-and-broker-with-a-difference.aspx

koru

How cynical can you get? Carrying out a marketing interview like that only days before revealing fundamental changes to your fees. I thought iii were outrageous, but ATS makes them look very reasonable indeed. In fact, I bet iii are kicking themselves that they announced their own fee hikes a month ago. If they made the same announcement next week, they would look far better, in comparison with the new ATS fees.

koru

Details of new charges here:

http://www.alliancetrustsavings.co.uk/pdf/Table-of-Charges-010812.pdf

They apply from 1 August.

westy22

Anyone for a bet that there will a rash of these price increases appearing over the next couple of weeks? I think that all these providers have had these changes planned and known for many weeks and were just waiting for the optimum time to announce them

jem16

westy22 wrote: »

Anyone for a bet that there will a rash of these price increases appearing over the next couple of weeks? I think that all these providers have had these changes planned and known for many weeks and were just waiting for the optimum time to announce them

They were all waiting on the FSA Platform review to confirm ban on platform rebates which has just been announced on the 27th. Now they have no option but to change to a compliant model.

wriggly

So for us investors who use AT solely for access to Vanguard, what's the best alternative?

1. We can transfer our Vanguard mutual funds to another platform that provides Vanguard.

2. We can cash in and buy the Vanguard ETFs instead, giving access to more platforms, but with some risk of being out of the market for a while, and perhaps not being able to keep the same allocation.

Any suggestions for the above possibilities?

koru

wriggly wrote: »

So for us investors who use AT solely for access to Vanguard, what's the best alternative?

1. We can transfer our Vanguard mutual funds to another platform that provides Vanguard.

2. We can cash in and buy the Vanguard ETFs instead, giving access to more platforms, but with some risk of being out of the market for a while, and perhaps not being able to keep the same allocation.

Any suggestions for the above possibilities?

Best Invest charges £15 per quarter custody fee for Vanguard, which is £60 per year. Not really any better than ATS. At present, they don't charge any custody fee on the HSBC trackers, so you could switch to the HSBC equivalent. However, I can't imagine Best Invest is going to keep offering these trackers with no fee forever.

If you only have one or two Vanguard trackers, Hargreaves Lansdown would be cheap (never thought I would see myself typing that!) as it charges £24 for each tracker per year.

If you have several accounts between you and other family members, Interactive Investor might be a good option, again using alternative trackers. (They don't currently do Vanguard, although now that they have switched to giving full rebates for all trail and platform commission, I can't see why they would not offer these index funds.)

srcandas

koru wrote: »

...........
If you only have one or two Vanguard trackers, Hargreaves Lansdown would be cheap (never thought I would see myself typing that!) as it charges £24 for each tracker per year.......................

Don't get me wrong but some of these strong reactions to changes in T&Cs are surely over the top. Some time ago I looked for a home for my SIPP and share dealing. I chose hl because it offered greater security, a successful company I thought would value my trade, and better analysis than others. Yes cost was considered but it is not the whole story.

Yes we have all read the books about reducing costs being important as it is one aspect everyone can control but if you really are so bad at investing that a small percentage makes a difference perhaps investing is not for you.

Should say koru this is in general and not aimed at you. But your comment on hl rather stood out for me.

The actions of ii seemed pretty unreasonable and I think people were right to gang up, fight and ultimately win a cheaper escape route. But at the end of the day these companies are in business. Lets not get all emotional over it.

Yeah get together, negotiate a deal, and move on but slaughtering the industry although they were IFAs is a bit extreme I think

Just my two penny worth.

From what koru has offered here I think if I was a customer I'd be grateful to them for showing me the door

jem16

koru wrote: »

If you only have one or two Vanguard trackers, Hargreaves Lansdown would be cheap (never thought I would see myself typing that!) as it charges £24 for each tracker per year.

The problem is that HL will still have to change as its whole charging model is currently non-compliant.