Alliance Trust Savings massive fee hike

koru

srcandas wrote: »

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.

On average, over the long term, equities give a real return (after inflation) of about 5%. So, even if you are an average investor you are unlikely to make more than 5% per year on average over long-term. If some platform is creaming off a fee equivalent to 1% per year, that means they are taking 20% of the potential return. I'd rather limit their share to as little as possible.

Perhaps my tongue-in cheek comment about HL was a bit unfair, though it was based on my own experience of gradually moving my SIPP, ISA and dealing accounts away from HL, because there were better deals elsewhere. They are the big boys, so I wouldn't expect them to have the lowest fees or the biggest rebates, which is why I was surprised that maybe they were competitive on Vanguard for certain investors. However, I agree that you can't rely on this staying the same. There is going to be lots of changing of fees over the next couple of years, as companies jockey for position whilst trying to deal with the lack of commission.

srcandas

koru wrote: »

If some platform is creaming off a fee equivalent to 1% per year, that means they are taking 20% of the potential return. I'd rather limit their share to as little as possible.

Koru very fair comment but there will always be a cost and nothing stops you reconsidering your position every two or three years. In that light the potential savings are only a part of "20% of the potential return" for some of the years you invest. And as you point out there is often a cost of movement which negates any savings even further.

I'm just surprised there is not more concern regarding the stability of the provider, security of the internet access and personal data, and information quality. Someone recently here demonstrated how an hl graph was miss-leading and I pointed out X-Os poor security but these aspects seem very low in consideration (until something goes wrong ).

As jem says HL will be along shortly. So will others. And there is no guarantee that some will not change again. One strategy would be to sit tight and see how it unfolds. I doubt many will lose much by doing so and some will certainly lose out by jumping too early.

Sorry just wanted to express a counter view than that that may be assumed from the number of 'platform attack' posts these things seem to attract :beer:

middlepuss

srcandas wrote: »

One strategy would be to sit tight and see how it unfolds. I doubt many will lose much by doing so and some will certainly lose out by jumping too early.

Sounds like good advice to me. No point switching only to find the lot you switch to then changes its charges.

But do all the changes that are being made to the way charges are levied add up to investors in fact paying more or paying less in future? Or is it just a case, in general, of charges that were hidden becoming un-hidden but the overall level of charges remaining about the same?

rockitup

Think I will hang on for a few months too and see how all the other platforms act in regards to fees.

Vanguard ETF's were mentioned earlier in the thread, are they now available to buy?

wriggly

rockitup wrote: »

Vanguard ETF's were mentioned earlier in the thread, are they now available to buy?

Yes!
https://www.vanguard.co.uk/uk/mvc/investments/etf

Main benefits:
1. should be able to choose any platform providing access to the UK stockmarket.
2. slightly cheaper TER than the funds.

Main problems:
1. not as complete a selection as the funds, but you may be able to find other providers to fill in the gaps.
2. if you currently invest in accumulation funds, you need to re-invest the dividends from the ETF (at additional cost) to get the same effect.
3. handling spreads and premium/discount.

utigers

This might be a dumb question but here goes, if the rebate is disappearing does that mean the annual management charge is going to be reduced?

EG Annual management fee of 1.5% rebate of 0.25% making it 1.25% per annum? What is this going to be if we may have to also pay monthly/dealing fees etc.....

jem16

utigers wrote: »

EG Annual management fee of 1.5% rebate of 0.25% making it 1.25% per annum? What is this going to be if we may have to also pay monthly/dealing fees etc.....

It is expected that clean class fund prices will become the norm.

So a typical managed fund would be 0.75% plus platform fee of 0.25% (or whatever) plus 0.5% IFA fee, where appropriate.

A typical tracker fund would be 0.3% plus platform fee of 0.25% plus 0.5% IFA fee, where appropriate.

The IFA fee can be avoided on non-advised cases but not the fund fee or platform fee.

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?

By way of an update to my earlier reply, I sent an e-mail to Interactive Investor about Vanguard and they replied that they are planning to add the Vanguard unit trusts within 4-6 weeks. This would therefore be a possible improvement on ATS. Interactive Investor charges £20 per quarter, but they give you a credit of £20 against any dealing charges during the quarter, so if you are doing any dealing in the Vanguard funds, it would probably be cheaper to switch from ATS to Interactive Investor because the saving in dealing charges would more than offset the extra £8 quarterly charge.

Best Invest might be better still, because they have no dealing charges for buying and selling the Vanguard funds and they charge £15 per quarter, which is cheaper than Interactive Investor.

If you only hold a couple of Vanguard funds, HL might be cheaper, because you only pay £6 per fund per quarter.

So, there are quite a few permutations. And that's before you take into account anything else in your portfolio. If you are already paying the quarterly charges because you have other investments with Interactive Investor or Best Invest, there is no extra charge for the Vanguard funds.

chris1

koru wrote: »

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.

Has this happened with iii?

Is it likely to happen with ATS?

BLB53

Has this happened with iii?

Is it likely to happen with ATS?

Yes and Yes!