TD Direct introduce 0.35%pa platform fee from August 2013

SnowMan

TD Direct Investing are introducing a massive 0.35% platform fee from August 2013. Previously there was no platform fee for passive funds which paid them little or no commission. This message has appeared on their website over the weekend it seems.

http://www.tddirectinvesting.co.uk/investment-choices/funds-unit-trusts-and-oeics/funds-pricing/

Try out new clean funds online fee free until August 2013

We know that every investor is different and we want to provide you with the support you need to understand and try out new clean funds.
For this reason, we will not be charging a platform fee on clean funds until August 2013. The fee we will introduce at this time will be 0.35%.

Thanks to jamesd for a post alerting forumites to this.

srcandas

SnowMan wrote: »

TD Direct Investing are introducing a massive 0.35% platform fee from August 2013.

But surely no great surprise. And the word 'massive' is a bit over the top.

We are in the new world where current clients are valued less than new ones. Where financial companies in particular stretch the laws of advertising to the extreme. Where companies who offer a better consistent service are slagged off by many on forums for being a few pence dearer. Where the consumer seems to be more impressed by price than quality. It's globalisation and we had better get used to it

At least they gave plenty of notice, stated it clearly, and had not previously promised not to do it (as far as I am aware) :cool:

bowlhead99

I agree for larger investments that's going to be pretty expensive (eg a supercheap tracker at 0.2% plus this fee ends up at over half a percent for a basic no frills tracker). I suppose you can't expect a broker to allow you to maintain an account with them without trading fees or commission income, as has been mentioned many times here before. It has only been possible in the past due to cross subsidy from things they generate income on.

For some smaller investment pots I suppose it could be OK. For example if you had £500 in a non-commission fund, it's £1.75 a year - this presumes you don't get hit with an annual fee too - while somewhere like H-L would be prohibitively expensive charging £2 a month, or others would charge you a trading fee on each transaction.

Of course, the competition might be doing absolutely anything with their fee structures a year from now. Nice of TD to give us some advance notice.

SnowMan

It amounts to a doubling or even tripling of charges including the OCF on the best trackers (eg HSBC FTSE all share 0.18% to 0.53%) and makes them very expensive for trackers. Someone with say a 200K portfolio of clean trackers is looking at a new £700 annual charge.

As TD had just announced changes in charges from February 2013, I expect many of us were expecting to be OK for 2013 at least without further charges.

I was banking on them introducing a flat fee for holding funds in line with their charges on ISAs below a certain amount currently.

We have found out about it effectively through an internet press article. I personally think that's a shabby way for customers to find out. Finding the links on the TD website isn't easy.

Yes the notice is good. We have yet to see if they will waive re-registration fees and closure fees for those hit by the charges and wanting to move away.

gadgetmind

Is there a cap to this fee? If not, this is going to seriously impact larger pots making other providers a better option, or at least it will be before they also add platform fees!

grey_gym_sock

TD are presumably only hoping to get business from ppl with smaller fund portfolios. or ppl with bigger 1s who aren't very MSE.

RetiredInThailand

srcandas wrote: »

And the word 'massive' is a bit over the top.

Given that they do absolutely nothing in return for this fee, and given that their fee is double what the actual management charge for the fund is, and given that it is an annual percentage charge rather than a one-off transaction charge, I think that "massive" is very apt.

I have a fairly large holding of HSBC FTSE 250 ACC trackers with NatWest (who actually sub-contract to TDWaterhouse). Until now there has been no charge at all for holding these funds, which seems normal to me. But NatWest are also introducing a fee of 0.3% and as a result I will be dumping my HSBC tracker fund holding and buying iShare FTSE 250 ETFs instead. Cost of holding these? Nothing.

RetiredInThailand

gadgetmind wrote: »

Is there a cap to this fee? If not, this is going to seriously impact larger pots making other providers a better option, or at least it will be before they also add platform fees!

As far as I know there is no cap. Anyone fortunate enough to have GBP100,000 worth of these would be paying GBP350 in fees every year, in return for nothing at all.

I see no excuse for an annual percentage fee at all, especially on funds that are probably held long-term rather than frequently traded. A standard GBP10 transaction fee would be acceptable and logical, as it is when buying shares.

StevieJ

Why not go direct to the source of the Tracker e.g. L&G?

JohnRo

Go direct to Vanguard and stump up £100,00 minimum investment.

Looks to me like people are getting their wires crossed.

TD state trail commission, it says nothing about AMC

That means a fund paying more than 0.5% trail commission is reduced down to a fee of 0.35%

and a fund paying less than 0.5% trail commission is reduced to zero.

gadgetmind

JohnRo wrote: »

Go direct to Vanguard and stump up £100,00 minimum investment.

Do they provide ISA and SIPP wrappers? It's the need for these wrappers that throws us at the mercy of platforms.