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comparing all the different platforms and brokers etc will save me 245 pounds
Yes, eliminating the up-front fees will save you that much, but reducing your ongoing fees will save you even more. High annual fees are like being mugged once a year for a couple of percent of your savings, and this REALLY adds up over the decades.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
@jem16 and @gadgetmind
Thank you both very much.
I have now looked a little into the RDR and spoke to a very helpful chap from HL. He advised that they are not anticipating any particular fee rises. Only that certain fees are made more transparent.
I also understand that this transparency applies to all other platforms too.
I can now see that having access to ITs and ETFS can definitely bring your costs down so are definitely worth considering for including in an ISA S&S.
Again, thank you both for getting me to investigate fees further before committing!
Anyway, from my investigation of fees, my current understanding is:
Standard Fees Regardless of Platform:
- Managed funds (UTs & OEICs) have an initial percentage fee and yearly percentage management fee.
- Investment Trusts (ITs) charge a yearly percentage Net Asset Value (NAV) fee. You also need to consider that you can be buying shares over or under the value of the actual shares due to the difference from the NAV value to the price of buying the actual shares. Is cheaper than managed funds but a less transparent fee structure.
- Trackers (ETFs) charge a yearly percentage value only. Are the cheapest products to buy out of managed funds, ITs and ETFs.
ISA S&S Platforms:
Nationwide
- Offers only approx 20 managed funds
- Charges either a yearly fee or a capital fee between 0.18% to 1.07% of each held fund
- Have access to a financial planner
- Information on funds, fees, risks etc is clearly accessible in leaflet form.
- The most simple vehicle
- Unable to transfer
Hargreaves Lansdown
- Offers approx 2,600 managed funds, ITs and ETFs
- Charges 0.5% per year capped at 45 pounds in total but excluding funds
- There is a dealing charge between 5.95 to 11.95 in total but excluding funds
- ETFs has a platform charge of 1 or 2 pounds each
- Has a helpdesk
- Has information accessible online including advice on which products to buy depending on what you are aiming for
- Free to transfer
Cavendish Online
- Offers approx 1,200 managed funds, ITs and ETFs
- No further fees. ISA S&S platform is completely free.
- Free to transfer
Someone also mentioned Fidelity as a potential ISA platform in this thread too. They look great! But after taking a quick look, I think I would either go with HL or Cavendish but thank you very much for the recommendation.
Thank you very much everyone for all your help. I think I am slowly getting there...0 -
@jem16 and @gadgetmind
Thank you both very much.
I have now looked a little into the RDR and spoke to a very helpful chap from HL. He advised that they are not anticipating any particular fee rises. Only that certain fees are made more transparent.
Did you ask HL how they plan to make up for the loss of the Platform fee and part of the IFA that they currently receive and which will be banned through RDR and the Platform Review.I also understand that this transparency applies to all other platforms too.
Yes this is why other platform have already introduced fees, something which HL have currently not done.0 -
Did you ask HL how they plan to make up for the loss of the Platform fee and part of the IFA that they currently receive and which will be banned through RDR and the Platform Review.
Yes this is why other platform have already introduced fees, something which HL have currently not done.
No, I didn't ask anything that specific. I don't understand this all in enough depth to really ask these types of questions.
But aren't I right in thinking there is only a platform fee for ETFs and index linked products at the moment?
Edit: are you telling me stay away from HL and if so, who do you recommend?0 -
On a different note, is Cavendish too good to be true with the no frills and no charges ISA S&S platform?
I think I can live with the more limited number of products than HL and a less user friendly website if I don't have to pay any fees other than for the actual products themselves.
I have already decided that I can use the TrustNet website to hold my portfolio so I can still track what is going on anyway.
But if Cavendish don't charge, how on Earth are they making their money? And even more importantly, are they already compliant with the RDR changes?0 -
No, I didn't ask anything that specific. I don't understand this all in enough depth to really ask these types of questions.
But aren't I right in thinking there is only a platform fee for ETFs and index linked products at the moment?
Edit: are you telling me stay away from HL and if so, who do you recommend?
For managed funds HL like other online brokers get paid a % of your investment by the provider, which of course eventually comes from you. As I understand it, this non-transparency is the type of thing that RDR wants to remove.
Which broker you choose is in my view a relatively marginal decision. The important thing is that the broker provides access to the facilities you want. One way or another you will be paying for this, either directly as in the case of iii who will refund you with the monies they get from the providers or indirectly.0 -
But aren't I right in thinking there is only a platform fee for ETFs and index linked products at the moment?
Yes, which is why HL must change as they aren't compliant with the Platform Review nor RDR.Edit: are you telling me stay away from HL and if so, who do you recommend?
No I'm not telling you to stay away from HL. I'm just pointing out that, despite what HL have told you, their charging structure will have to alter. HL were one of the biggest objectors to the Platform Review.On a different note, is Cavendish too good to be true with the no frills and no charges ISA S&S platform?
You are being charged. It's hidden in your amc at the moment.I think I can live with the more limited number of products than HL and a less user friendly website if I don't have to pay any fees other than for the actual products themselves.
The product itself contains those charges. For example the typical managed fund with an amc of 1.5%, 0.75% goes to the fund provider, 0.5% to the IFA and 0.25% to the platform.
With Cavendish, you get back the 0.5% IFA part as you are receiving no advice but Fidelity keep the 0.25% and give 0.05% to Cavendish.
After RDR and the Platform Review, these charges will all have to be paid explicitly as separate fees.
Some platforms have already introduced fees and are rebating the platform and IFA fees included in the amc. At the moment this has seen the costs rise for trackers as they have been cross-subsidised via the managed funds. Previously you were getting managed funds at around 1.5% and trackers for 0.3%. That will change to around 0.75% for managed and 0.3% for trackers plus Platform Fee (unavoidable) and IFA fee (if appropriate).
More and more fund houses are introducing clean class fund prices such as 0.75% for managed funds. So HL, for example, will lose the other 0.75% that they were getting ( 0.25% of that was rebated to you) so will have to make up that lost revenue somehow.But if Cavendish don't charge, how on Earth are they making their money? And even more importantly, are they already compliant with the RDR changes?
No they are not compliant currently. At the moment they are being paid part of the Platform Fee from Fidelity.0 -
For managed funds HL like other online brokers get paid a % of your investment by the provider, which of course eventually comes from you. As I understand it, this non-transparency is the type of thing that RDR wants to remove.
Which broker you choose is in my view a relatively marginal decision. The important thing is that the broker provides access to the facilities you want. One way or another you will be paying for this, either directly as in the case of iii who will refund you with the monies they get from the providers or indirectly.
If pricing structures of managed funds are changing and online S&S isa platforms are changing, is it best to wait until next year to see exactly what impact the changes are going to have?0 -
If pricing structures of managed funds are changing and online S&S isa platforms are changing, is it best to wait until next year to see exactly what impact the changes are going to have?
I would say go now with the platform that provides the interface and service you need (but not much more) and pay the appropriate charges. For a year or two differences in charging approaches wont make a lot of difference. It isnt known when the charging changes will happen and what precisely they will be. However, when the dust settles competition should ensure that charges across all online providers are pretty similar.0 -
Yes, which is why HL must change as they aren't compliant with the Platform Review nor RDR.
No I'm not telling you to stay away from HL. I'm just pointing out that, despite what HL have told you, their charging structure will have to alter. HL were one of the biggest objectors to the Platform Review.
You are being charged. It's hidden in your amc at the moment.
The product itself contains those charges. For example the typical managed fund with an amc of 1.5%, 0.75% goes to the fund provider, 0.5% to the IFA and 0.25% to the platform.
With Cavendish, you get back the 0.5% IFA part as you are receiving no advice but Fidelity keep the 0.25% and give 0.05% to Cavendish.
After RDR and the Platform Review, these charges will all have to be paid explicitly as separate fees.
Some platforms have already introduced fees and are rebating the platform and IFA fees included in the amc. At the moment this has seen the costs rise for trackers as they have been cross-subsidised via the managed funds. Previously you were getting managed funds at around 1.5% and trackers for 0.3%. That will change to around 0.75% for managed and 0.3% for trackers plus Platform Fee (unavoidable) and IFA fee (if appropriate).
More and more fund houses are introducing clean class fund prices such as 0.75% for managed funds. So HL, for example, will lose the other 0.75% that they were getting ( 0.25% of that was rebated to you) so will have to make up that lost revenue somehow.
No they are not compliant currently. At the moment they are being paid part of the Platform Fee from Fidelity.
Oh I see!
Edit: I think Linton above just answered my other questions. Thanks for this explanation though. I feel much more enlightened about all the changes now
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