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HSBC Tracker Funds - Platform vs Direct Investment

I'm trying to work out the most cost effective way of investing in the range of HSBC tracker funds:

http://www.assetmanagement.hsbc.com/uk/advisers/funds-in-focus/indextrack_fund.html


At the moment, Fidelity offers these free of fees (0% initial charge, no holding fees, no trading fees). For example:

https://www.fidelity.co.uk/investor/research-funds/fund-supermarket/factsheet/fees.page?idtype=ISIN&fundid=GB0000438233


HSBC have their own platform, which also allows fee free investment in these tracker funds:

https://investments.hsbc.co.uk/product/206/investment-funds-online

https://investments.hsbc.co.uk/funds/view/48/

I'm pretty sure that Fidelity's current fee structure will not compliant with requirements following the RDR and platform reviews in 2013/2014. I assume that it's the same situation with HSBC's own platform, even though the platform and funds are owned by the same provider. Have I got this right?


Another other option is to invest in the funds directly:

http://www.assetmanagement.hsbc.com/uk/advisers/fund-range/index-trackers/literature.html

http://services.assetmanagement.hsbc.co.uk/site/media/pdf/professional_advisers/OEIC_and_ISA_and_PEP/oeic_app.pdf

My understanding is that by avoiding the use of a platform, it will be possible to maintain the current fee free pricing structure. Am I missing something here?

Aside from the inconvenience of not having online access for valuations and making trades, are there any other reasons to go through a platform?


Thanks!

Comments

  • dunstonh
    dunstonh Posts: 117,971 Forumite
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    Post RDR an platform review, theoretically, buying funds direct would be cheaper than holding them on platform. However, fund houses may decide to add on administration charges in the same way platforms are going to have to. It is probable that some will get into bed with certain platforms for distribution purposes and charges discounted to reflect that. Its a bit unknown.

    If you intend to buy and hold with no future trades then the rules allow existing funds to continue on the same charges.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • that's interesting: i hadn't spotted that HSBC had a direct option as well as their own platform. it's on the advisor part of their website, but i take it you can use it without having an advisor, too.
  • JamesU
    JamesU Posts: 1,060 Forumite
    Part of the Furniture Combo Breaker
    that's interesting: i hadn't spotted that HSBC had a direct option as well as their own platform. it's on the advisor part of their website, but i take it you can use it without having an advisor, too.

    Yes you can. The HSBC trackers are purchased in an ISA via their Global Investments Centre, provided they are a minimum £500 purchase. Was discussed in detail quite some time ago by Snowman in his really useful posts here:

    http://forums.moneysavingexpert.com/showpost.php?p=48733469&postcount=160
    http://forums.moneysavingexpert.com/showpost.php?p=51502173&postcount=6

    JamesU
  • afwone
    afwone Posts: 78 Forumite
    JamesU wrote: »
    Yes you can. The HSBC trackers are purchased in an ISA via their Global Investments Centre, provided they are a minimum £500 purchase. Was discussed in detail quite some time ago by Snowman in his really useful posts here:

    http://forums.moneysavingexpert.com/showpost.php?p=48733469&postcount=160
    http://forums.moneysavingexpert.com/showpost.php?p=51502173&postcount=6

    JamesU

    Just a pity that old ISAs can't be transferred in. New ISA business only it seems.
  • SnowMan
    SnowMan Posts: 3,467 Forumite
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    edited 4 September 2012 at 5:32PM
    JamesU wrote: »
    Yes you can. The HSBC trackers are purchased in an ISA via their Global Investments Centre, provided they are a minimum £500 purchase. Was discussed in detail quite some time ago by Snowman in his really useful posts here:

    http://forums.moneysavingexpert.com/showpost.php?p=48733469&postcount=160
    http://forums.moneysavingexpert.com/showpost.php?p=51502173&postcount=6

    JamesU

    Thanks.

    Worth saying that since I posted about the Global Investment Centre in those earlier linked to posts the minimum investment per fund has now been reduced to £100 from £500 see the key features document here or scroll down to the top 5 FAQs on the left side of the web page 'Is there a minimum amount I have to invest?' here
    I came, I saw, I melted
  • amictus
    amictus Posts: 301 Forumite
    dunstonh wrote: »
    Post RDR an platform review, theoretically, buying funds direct would be cheaper than holding them on platform. However, fund houses may decide to add on administration charges in the same way platforms are going to have to. It is probable that some will get into bed with certain platforms for distribution purposes and charges discounted to reflect that. Its a bit unknown.

    If you intend to buy and hold with no future trades then the rules allow existing funds to continue on the same charges.

    Thanks. Yeah I guess that makes sense. I guess we won't know for sure whether direct investment will incur similar charges until all platforms have made the necessary changes. As I was for the cheapest way to make smaller regular investments (monthly), I don't think I'll qualify for continuation of existing charges.

    I'm starting to think that the most cost effective way will be to make regular purchases (quarterly) of a low cost ETF (e.g. https://www.vanguard.co.uk/documents/portal/factsheets/ftse-all-world-etf.pdf) through a low cost broker (e.g. £5.95 trading fee with X-O).
    JamesU wrote: »
    Yes you can. The HSBC trackers are purchased in an ISA via their Global Investments Centre, provided they are a minimum £500 purchase. Was discussed in detail quite some time ago by Snowman in his really useful posts here:

    http://forums.moneysavingexpert.com/showpost.php?p=48733469&postcount=160
    http://forums.moneysavingexpert.com/showpost.php?p=51502173&postcount=6

    JamesU

    I mentioned the HSBC Global Investments Centre as I was hoping there might be some way of them continuing fee free investment in their own trackers. However it looks as though this is very unlikely. If you're willing to go with a zero fee platform and hope the fees they introduce are bearable, why not go with Fidelity, which doesn't have the same limitations?
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