H_L Master Portfolios

RobStaffs

I dont think the Master Portfolios is a multli managed product.There are individual funds that are recommended by H_L wrappped up to suit you risk appetite.Probably still in their interests to push these..I took three H_L MM products when I started out. Very naive back then.Will review and probably reinvest in new funds at some point.

The H_L interface and software is pretty good in my opinion. Most of the funds I have on there are in the top quartile..I keep on asking myself if they where so bad as many say on here then why are are to so successful?

I know, probably due to mugs like me :0)

Forever

RobStaffs wrote: »

I dont think the Master Portfolios is a multli managed product.There are individual funds that are recommended by H_L wrappped up to suit you risk appetite.Probably still in their interests to push these..I took three H_L MM products when I started out. Very naive back then.Will review and probably reinvest in new funds at some point.

The H_L interface and software is pretty good in my opinion. Most of the funds I have on there are in the top quartile..I keep on asking myself if they where so bad as many say on here then why are are to so successful?

I know, probably due to mugs like me :0)

If you happy with your investments then I can't see any problem at all.

Not everyone has the time and/or the inclination to browse through funds to find the best ones out there.

Best wishes with the investments

gadgetmind

RobStaffs wrote: »

I keep on asking myself if they where so bad as many say on here then why are are to so successful?

HL run a very slick and professional operation, however, the money for this comes from somewhere, which is why their annual fees are so high compared to other providers.

They have also in the past changed their fee structure with close to zero notice, which understandably riled a fair few people.

dunstonh

They have also in the past changed their fee structure with close to zero notice, which understandably riled a fair few people.

And we know that another change is coming.

RobStaffs

dunstonh wrote: »

And we know that another change is coming.

You have got me worried..What change?

dunstonh

You have got me worried..What change?

It's been discussed often in this section. HL's platform is not compliant with the RDR and platform review.

Whilst the RDR is an advice issue, HL currently keep some or all of the advice related trail commission. Trail commission is being turned off on new purchases made after Dec 2012 (this includes fund switches). So, they are going to need to charge to replace that lost income.

The platform review is year behind that and will not allow the currently undisclosed commissions and marketing payments made to bundled platforms (of which HL is one). Platforms will not be able to cross subsidise one type of investment with another (as they currently do). They will have to charge explicitly instead.

Whilst the platform review is year behind the RDR, the fund houses have been issuing their new share classes and many are only going to issue clean share classes and not a class that still pays the the platform a commission but not a trail commission. So, the bundled platforms are going to have to move quicker than 2014 or come up with interim charges pending a full change later.

iii made the full change to comply with the changes. However, to date, HL has only tweaked its charges. So, it will need to change them again (as will ever other bundled platform).

bowlhead99

HL makes lots of money from various types of commissions from the funds which its clients invest into and HL keep, allowing them to provide a low-fee service and still be profitable.

The FSA's Retail Distribution Review will stop some of this, with the aim of transparent fees being charged to end customers on different types of products, rather than having some supported by commissions and some not. This is why various other providers (like iii, discussed at length on these boards) have changed their fee structure to become compliant, making it more expensive for certain types of customers. HL do not appear to be compliant yet, so if you are a customer or prospective customer there is a bit of 'wait and see' as to how they will make their money from 1 Jan next year, ie how and when the fees will change.

HL published an official response to the FSA's Platform Consultation Paper in June and noted that it "builds on earlier messages given by the FSA that they wish to proceed with a ban on Platforms being remunerated by fund groups. The FSA's position does not come as a surprise, and our planning has been focussed on a 'no payments to Platforms' outcome."

However, other than communicating to their own shareholders that they are confident of being able to react to the regulatory changes and still be profitable with happy customers, they have not fully articulated their strategy or detailed pricing. It's not sensible to give away their business plan to their rivals yet, but those in the industry are working on the assumption that there has to be a change of some sort.

*ah, I see dunstonh has explained this pretty well while I typed this!

dunstonh

In addition to the above, it is a good idea to look at the Schroder class Z funds. These are their new clean class funds. A class X fund with 0.75% AMC would have been 1.50% before.

So, if you had an HL SIPP investing in say Schroder Asian Income Maximiser class A fund you would pay 1.70% TER (1.50% AMC).
If you used the clean class Z version of that fund, the charge is 0.96% TER (0.75% AMC).

The 0.75% difference is what is going to HL. Possibly more as the fund houses negotiate terms with different platforms and one platform could be getting 0.25% whilst another could be getting 0.5%. HL will disclose that only 0.5% is going to them as platforms are not required currently to disclose the hidden commissions and payments they receive.

The current unbundled platforms are charging between 0.1% and 0.70% typically (usually based on amount invested).

So, you end up with a three level charge
Platform/retailer charge 0.x%
Adviser (when used) 0.y%
Investment 0.z%
Total charge is the three combined

Current AMC/TER on commission paying funds still pays those three but you are not aware of the split. People using managed funds are likely to see charges fall over time whilst those using index trackers are likely to see them increase.

srcandas

RobStaffs wrote: »

You have got me worried..What change?

Rob not sure I'd worry. You may be better off after, you may be worse off, and you might see hardly any change.

Not sure people particularly choose HL because it is the cheapest anyway. It is certainly better quality with better security than others I have tried. Must be worth something

And I doubt HL are going to increase costs to a level where they see their client base disappearing.

I think I'd more worry about managing your own portfolio and getting tempted by something specific. My brother got seduced by Mr Bolton and his losses are horrible. He would have been much better off if he had gone with a designed/managed portfolio despite a few extra charges :beer:

gadgetmind

srcandas wrote: »

And I doubt HL are going to increase costs to a level where they see their client base disappearing.

That would assume that they learned a lesson from the last time they did exactly what you've described.

The truth is that they are all businesses, and they will all be working the whole land-grab, bait-and-switch, diversify one year, focus the next, that all businesses practice.

We know that charging is going to be more transparent, but we don't know who will charge fixed fees, who percentages, nor what their mixes between these will be for different holdings.

I've gone for BestInvest as they have partially "parted the kimono" with their fixed per annum fees for holding certain trackers and equities. Only time will tell ...