H_L Master Portfolios

dunstonh

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

I doubt they will either. I suspect they will offer a post RDR/platform review compliant platform that is available for new business whilst keeping existing people on the old one until they have to move over. They will then cross subsidise the unbundled platform from those paying more on the old platform.

Just a guess at what they will do. They have too much to lose from moving everyone over to an unbundled platform. iii did that and despite most people being better off, many failed to realise it.

grey_gym_sock

that's interesting.

just to get this clear: if HL (or any provider) want to keep as many ppl as possible on the pre-RDR, per-platform-review charging structure, then can they do that for investments bought before the end of this year, but not after? i.e. customers would move onto the new charging structure the first time they switch funds, or move into a cash for 1 day and then buy back the same fund?

and would automatically reinvesting dividends in the same funds count as a new investment?

dunstonh

grey_gym_sock wrote: »

that's interesting.

just to get this clear: if HL (or any provider) want to keep as many ppl as possible on the pre-RDR, per-platform-review charging structure, then can they do that for investments bought before the end of this year, but not after? i.e. customers would move onto the new charging structure the first time they switch funds, or move into a cash for 1 day and then buy back the same fund?

and would automatically reinvesting dividends in the same funds count as a new investment?

It only applies to new purchases made post changeover. Anything set up the old way can stay the old way until something is done to change that.

Most contractual events (such as auto reinvesting divs) can continue as long as it was put in place before changeover. A manual fund switch or a new purchase or new instruction is where it starts getting complicated.

This also assumes they decide to run a pre and post version of the platform and decide the costs of running two is not viable. they will know their data and costs and will decide that. Lazy investors will stay where they are. Those that know what they are doing will likely move to unbundled unless they have small holdings. Ultimately, there will come a tipping point where say getting rid of 20% of the bottom end of their business will save them more than 20% in costs. Larger and medium sized investors are unlikely to move. It is small investors that will lose out and there isnt any profit in small investors without cross subsidy unless you charge them more than the current level of charges.

This goes for all bundled platforms btw. Not just HL. There are still the last minute changes and yet to be decided issues as well.

ffacoffipawb

Given I have a SIPP HYP that is UK direct equity, I have asked HL to do the following switch (holding amount is about 10% of the HYP SIPP):

Sell

Stock: HL Multi-Manager Income & Growth Trust Accumulation Units
Type of deal: Switch
Quantity: 18,742.386 units

Buy

Stock: BlackRock Emerging Markets Equity Tracker (Acc)
Quantity: 20.00 %

Stock: BlackRock Japan Equity Tracker (Acc)
Quantity: 20.00 %

Stock: BlackRock Continental European Equity Tracker (Acc)
Quantity: 20.00 %

Stock: BlackRock North American Equity Tracker (Acc)
Quantity: 20.00 %

Stock: BlackRock UK Equity Tracker (Acc)
Quantity: 20.00 %

Staying with shares because I don't like bonds! And no platform fees for these!

EDIT: Just checked SIPPDEAL and these 5 low cost (under 0.7% TER) funds are not on the list of funds that they offer! So if I no longer want a HYP I would need to transfer to H-L or pay 0.8% more for funds at SIPPDEAL. Strange as I thought SIPPDEAL were cheaper than H-L, but obviously this isn't always the case.

bowlhead99

I was rather confused trying to follow this:

ffacoffipawb wrote: »

Given I have a SIPP HYP that is UK direct equity, I have asked HL to do the following switch (holding amount is about 10% of the HYP SIPP):

Sell
Stock: HL Multi-Manager Income & Growth Trust Accumulation Units
Type of deal: Switch
Quantity: 18,742.386 units

So you are switching ~£20k worth of units, and that is only 10% of the HYP SIPP, so the HYP is worth aroud £200k, correct? Then you say:

EDIT: Just checked SIPPDEAL and these 5 low cost (under 0.7% TER) funds are not on the list of funds that they offer! So if I no longer want a HYP I would need to transfer to H-L or pay 0.8% more for funds at SIPPDEAL. Strange as I thought SIPPDEAL were cheaper than H-L, but obviously this isn't always the case.

Are you sure that these 5 are not available at Sippdeal? Are you just looking at the 2000ish funds on their fund list which cost somewhere in the 1.5% range (adjusted by discounts and/or commission rebates)? You can hold other funds by simply paying a custody fee of £12.50 a quarter (flat fee no matter how many non-fundslist funds you have). If you no longer want the £200k high yield portfolio and sell it to buy trackers, this fee is only 0.006% of a £200k portfolio each quarter, it would just get lost in the roundings.

I hold Vanguard trackers within my Sippdeal portfolio, and as their TERs are in the 0.25%-0.35% range, I would go for those rather than switch out to HL for the ability to buy Blackrock trackers at 0.7% ?? Disclaimer, I have not researched the difference between Vanguard and Blackrock but hopefully Vanguard's tracking error is no worse than the half percent cost saving every year.

Edit - the custody fee is more material if you're only investing small amounts, so perhaps if when you said "...if I no longer want a HYP...", you really meant "..if I no longer want one of the equities in the HYP...", you might have a point. Sippdeal's fixed annual custody fee of £60 inc VAT is 0.3% on 20k invested, obviously reduces as a percentage if spread over more assets.

ffacoffipawb

bowlhead99 wrote: »

I was rather confused trying to follow this:
So you are switching ~£20k worth of units, and that is only 10% of the HYP SIPP, so the HYP is worth aroud £200k, correct? Then you say:

Are you sure that these 5 are not available at Sippdeal? Are you just looking at the 2000ish funds on their fund list which cost somewhere in the 1.5% range (adjusted by discounts and/or commission rebates)? You can hold other funds by simply paying a custody fee of £12.50 a quarter (flat fee no matter how many non-fundslist funds you have). If you no longer want the £200k high yield portfolio and sell it to buy trackers, this fee is only 0.006% of a £200k portfolio each quarter, it would just get lost in the roundings.

I hold Vanguard trackers within my Sippdeal portfolio, and as their TERs are in the 0.25%-0.35% range, I would go for those rather than switch out to HL for the ability to buy Blackrock trackers at 0.7% ?? Disclaimer, I have not researched the difference between Vanguard and Blackrock but hopefully Vanguard's tracking error is no worse than the half percent cost saving every year.

Edit - the custody fee is more material if you're only investing small amounts, so perhaps if when you said "...if I no longer want a HYP...", you really meant "..if I no longer want one of the equities in the HYP...", you might have a point. Sippdeal's fixed annual custody fee of £60 inc VAT is 0.3% on 20k invested, obviously reduces as a percentage if spread over more assets.

Hello, yes the SIPP HYP is actually £235k so is large. I didn't know about the custody fee - I thought that the 2,000 or so funds list was the lot and you couldn't invest in anything else (funds-wise). Not worried about a small custody fee!

Thanks

To clarify:

SIPPDEAL HYP SIPP = £235k (21 HYP shares, usual suspects VOD, GSK, AV., HSBA, RDSB, BP. and 15 others)
HL Funds SIPP = £25k
Current Employer Stakeholder (Sal Sacrifice, Friends Life Blackrock funds similar split to the HL switch) = £50k

The current employer stakeholder will be transferred to my HL SIPP when the job finishes which may be some time next year!

bowlhead99

Yes, the available fund options at Sippdeal are much bigger than their 'funds list'. Obviously there are ETFs, individual shares etc which you can just look up by name or by ticker code - and this extends to funds as well. Just search by name or sedol and if it comes up with a price and terms, you can probably trade it.

I did speculatively put in an order for a fund that I thought was soft-closed, which showed as 'in progress', but then had a phone call from them early in the morning to say they weren't accepting new subscriptions. But generally you can probably plan to invest in most of the mainstream funds you've heard of, and give them a call to check if needed.