HL Vantage/IP fund

koru

0.75% would be the expected rebate on a full unbundled platform. The hybird options that havent quite moved fully to unbundled but are a bit of both may be less.

And yet they both claim to give a full rebate. I assume that This Is Money took them at their word and just assumed the rebate would be 0.75%. In fact, Interactive Investor is powered by Cofunds and they keep part of the platform fee. Interactive Investor only rebate the trail commission and their share of the platform fee. I don't know the reason why ATS only rebates 0.5%.

koru

grizzly1911 wrote: »

Is there a drop dead date for the providers to be offering clean bundles?

As I understand it, where the platform is being provided by an adviser, trail commission is banned on funds sold after the end of this year. In the case of an execution only intermediary, I believe there is no firm date yet, but there seems to be an expectation that they will also be prevented from selling funds that carry trail commission. I believe platform commission should disappear at the end of 2013.

jimjames

koru wrote: »

As I understand it, where the platform is being provided by an adviser, trail commission is banned on funds sold after the end of this year. In the case of an execution only intermediary, I believe there is no firm date yet, but there seems to be an expectation that they will also be prevented from selling funds that carry trail commission. I believe platform commission should disappear at the end of 2013.

Which means if the current setup is better for you then move to a platform that is best for you now and hope that they will continue to provide the current model alongside the new version - as they will be permitted to do.

dunstonh

Cofunds havent introduced their unbundled platform yet. It is due very very soon. So, anyone using Cofunds is at best on the hybrid option where there is no trail (replaced with explicit fee) but there is still a platform commission being paid.

grey_gym_sock

jimjames wrote: »

Which means if the current setup is better for you then move to a platform that is best for you now and hope that they will continue to provide the current model alongside the new version - as they will be permitted to do.

however, that will at best only work temporarily. nobody is going to keep running old and new model platforms in parallel for ever.

at first, some providers will prefer the old platform, because it makes them more money. but when most ppl except those who benefit from the old model have moved to the new model, that will no longer be true.

there will be costs in running 2 platforms. eventually, providers may either force everybody to move over, or increase their charges on the legacy platform so far that there's no point in not moving.

so i wouldn't plan on keeping investments on old model platform indefinitely.

also, i take it that if you switch investments (from january 2014 onwards), the new investment will have to be on the new charging model.

koru

dunstonh wrote: »

Cofunds havent introduced their unbundled platform yet. It is due very very soon. So, anyone using Cofunds is at best on the hybrid option where there is no trail (replaced with explicit fee) but there is still a platform commission being paid.

I thought they had introduced it a few weeks ago. http://www.ifaonline.co.uk/ifaonline/news/2207779/cofunds-unbundled-model-goes-live

Club finance seems to be providing a whole bunch of commission free funds via Cofunds. These include funds that definitely don't include platform commission, such as Vanguard and HSBC C. The Club Finance website links you to the following Cofunds document to see what funds are available: https://www.cofunds.co.uk/docs/gb/cofunds-fund-list-gb.pdf

koru

koru wrote: »

I don't know the reason why ATS only rebates 0.5%.

I do now. It is because they have not negotiated platform commission, which is pretty poor, in my opinion. http://www.candidmoney.com/articles/204/updated-isa-discount-broker-comparison

donniej

A couple of updates on this - as koru mentioned, Cofunds have now introduced their unbundled pricing model. However, it's more expensive than the bundled model! £40/annum plus 0.3% per year. (On their bundled model, there's no fixed £40/annum charge, and the percentage ranges between 0.1% and 0.25% depending on the fund.) The charges on Fidelity are similar. So whilst the unbundled model looks attractive because the TER of the funds are lower, it'll probably end up being more expensive to buy the same fund in the bundled model than in the unbundled model. Some of the low-cost tracker funds are only available in the unbundled model; but if the funds you want to buy are available in the bundled model, it'll be cheaper to use that (most brokers will be using either one or the other; though I don't know of any who have migrated to the newer unbundled model yet.)

Generally speaking, if you only want to get a couple of funds and aren't planning on trading them, you may be better off with someone who charges trading fees and rebates the full commission - as mentioned above. iii and ATS are the cheapest as mentioned above (Selftrade, Sharecentre, sippdeal also charge trading fees, but don't rebate the full commission.)

0.75% isn't a fixed rate for the rebate - it'll depend on the fund. Some funds pay less platform fee or commission, so the difference won't be as great (e.g. the HSBC tracker funds pay 0.1% platform fee and no commission, so their TER won't be going down by 0.75%!)

Finally, it's misleading to insinuate that funds will be cheaper once the platform fee and commission are removed. Most likely they won't; the platform will still want to be paid, as will the provider - whether that's an IFA or a discount broker (you'd obviously expect the latter to be cheaper than the former.) However, the charges will be clearer, so it'll hopefully become easier to compare providers.

jem16

donniej wrote: »

Finally, it's misleading to insinuate that funds will be cheaper once the platform fee and commission are removed.

Whether it will be cheaper or dearer (or even the same) will all depend on the funds involved and the total amount invested.

What will happen is that the difference between managed funds and tracker funds will narrow. The average managed fund will be 0.75% and the average tracker fund will be 0.3%.

On top of both will be the platform fee and, if necessary, an advice fee.