Alliance Trust Savings massive fee hike

dunstonh

jimjames wrote: »

If their charges are anything like the ones they've introduced for trackers then they may well be excessive. The HL tracker charges are uncapped unlike the ones for shares which seems grossly unfair.

The difference in charges depending on the asset is the sort of bias the platform review is designed to get rid of.

There will always be the odd differences in charges between investment universes (dealing charges on some but not other things). However, fundamentally, there should be no difference other than that.

Thrugelmir

chris1 wrote: »

That would indeed be bad news, and didn't a Bank of England representative recently suggest introducing regulation to force it through?

Why need for regulation? Its a service that costs money to provide.

The UK is an exception in terms of consumer banking worldwide.

The cost of providing is loaded elsewhere i.e. loan. overdrafts, mortgages.

Splitting the banks up into retail and investment will accelerate the process I suspect.

grey_gym_sock

OTOH, why the need for regulation? if the banks choose to provide "free" banking, why shouldn't they?

it may be that "free" banking is only offered because of the opportunity it gives the banks to cross-sell other products. but would they stop cross-selling if they ended "free" banking?

banking is already not free: they effectively charge by paying less interest on bank accounts than on savings accounts. this charge may be lower than they'd like it to be, now that interest rates are so low that bank accounts mostly pay literally 0, so they can't reduce it any further. i would think that this is the main reason they might like to introduce explicit charges.

Thrugelmir

grey_gym_sock wrote: »

banking is already not free: they effectively charge by paying less interest on bank accounts than on savings accounts.

There's no connection. As they are 2 different products.

Because you buy your car from dealer A does not mean that you don't have your car serviced with dealer B. There's choice in the market. Customers aren't loyal.

koru

We are getting a bit off topic with the discussion of free banking.

juliamarsh wrote: »

Can I just ask everybody - are you moving your holdings to another provider now and requesting AT to refund the charges, or are you waiting to move your holdings until after you have been given a final decision on your complaint and/or had a reply from the Ombudsman?

I think I will probably move now, because ATS is increasing its charge for transfers out from £15 to £20 at the end of July, so it would be the worst of all worlds if I wait until August and then get turned down by the ombudsman. I also need to get out before the end of July in order to avoid paying first quarterly charge. I need to get cracking, so that I have a chance of having closed my accounts by the end of this month. If I wait, I could end up paying about £170 more.

Thrugelmir

koru wrote: »

then get turned down by the ombudsman.

The ombudsman doesn't rule on commercial issues.

Many of the these increased changes are no doubt to discourage low value, low transaction users.

chris1

jimjames wrote: »

Glad I closed my account with them in May. Closed rather than transferred as it kept the charges to a minimum.

What charges did you have to pay to just close it?

koru

I had an interesting conversation with one of the call centre staff at Interactive Investor today. He was fascinated to hear about the fee changes by ATS. He tacitly admitted that iii were forced by the ombudsman to waive exit fees for customers who wanted to exit as a result of the new admin fee and he thought it was very unlikely that the ombudsman would not do the same with ATS.

koru

Thrugelmir wrote: »

Many of the these increased changes are no doubt to discourage low value, low transaction users.

I think you are right, although some of the changes are done more intelligently than others.

ATS wants to charge for every account, even a First Steps account with a small amount invested for a child. An account like this might not be very profitable in itself, but if it is held in addition to a Trading Account and ISA account for the parent, the incremental costs of providing the First Steps account are probably negligible. So, why insist on charging £48 per account?

If both parents have a trading account and an ISA account, and they have two children, each with a First Steps account, ATS will now charge £288 per year. Whereas another family might have exactly the same underlying holdings, but they are spread across only one or two accounts, in which case the fees would be may be £100-200.

ATS is encouraging families with multiple accounts to move elsewhere. For instance, with Interactive Investor the same family with six accounts would pay £80 per year (and receive £80 credit against dealing fees). Or, if one or both parents have Interactive Investor SIPPs, there would be no fee for the ISA and Trading and First Steps accounts. That seems a much more intelligent approach, because it encourages customers to move as much business as possible to the platform.

koru

I just received a letter from ATS giving their reply to my formal complaint. (Apologies to those who also read the TMF forums, as the following post is duplicated there.)

It has all the sort of rubbish you would expect. For instance, a claim that they have moved to a quarterly charge to spread the cost across the year as they feel this is more beneficial to clients. So instead of paying £30 once a year we now pay £48 per year, a 60% increase, for the privilege of spreading the cost! Lucky us.

They also repeat their “guarantee" that their quarterly charge will not increase in 2013. Which I interpret as meaning that if you are foolish enough to stay with ATS they will increase their charges in 2014.

They claim that the FSA Unfair Contract Terms Regulations do not apply to terms that set the price, therefore the option to exit without penalty does not apply. Funny, because I thought that was why Interactive Investor eventually introduced a waiver of exit charges, although perhaps there were other reasons why they felt they had to back down.

The one good bit of news is that they drew my attention to their terms and conditions in relation to changes in charges, which say:

“If a change is made to our charges and you object to it, you will be entitled to close your account and withdraw your investments. If you do this, the closure of your account and the withdrawal of your investments will be effected at the charges that were current prior to the changes coming into effect. In either case, if you wish to exercise your right to close your account, you must give us notice in writing that you wish to do so within 60 days of the relevant change coming into effect."

As the new charges (quarterly fees and increased charge of £20 to transfer an investment out) come into effect on 1 August, this seems to mean that as long as I give notice that I wish to close my account by 29 September, I should not suffer the increased admin fee and I should still be able to transfer my investments out at the old charge of £15 per investment. I had assumed that I needed to rush to find an alternative, but this seems to mean that I don't.