TD Direct introduce 0.35%pa platform fee from August 2013

grey_gym_sock

RetiredInThailand wrote: »

Dealing fees of GBP10 or so for purchase is reasonable and I would be prepared to pay this for a fund purchase. I see no reason why I should pay a large annual fee of 0.3% for nothing.

some providers are starting to introduce dealing fees for funds. perhaps you'd be better off with 1 of them. though i don't know if you'll find anybody offering funds with dealing fees and no other charges whatsoever. e.g. ATS have dealing fees, quarterly fees, and some other ad-hoc fees, but no percentages.

percentage fees on funds are not new. until recently (when they introduced some "clean" funds), all funds available via TD's platform have been paying them a hidden commission. what's new is that charges are becoming more open.

I have a fairly large holding of shares and ETFs and I dont pay a bean for those, even though the broker has to deal with all the dividends and corporate actions. There are no dividends or corporate actions with the HSBC ACC trackers.

i'm not sure how the costs (to a platform) of holding shares and holding funds compares, TBH.

My trading account with my broker always has zero funds in it, as all transactions are settled by direct credit or debit to a savings account. So there's no money being earned there either.

very sensible of you. you're probably being cross-subsidized by less sensible ppl. i.e. if everybody were like you, your broker's dealing fees would be higher.

Personally I dont see why I need a "platform" at all to hold tracker funds. They can just bung them into my nominee CREST account along with all the others.

well, they can't ... CREST doesn't handle funds, surely. could a cheap execution-only stock broker offer funds just a cheaply? maybe, but it's not that easy. there are different IT systems required to handle funds.

RetiredInThailand

Maybe the answer is just for HSBC to introduce a FTSE 250 ACC tracker as an ETF. Then I can buy it for GBP10 and hold it for nothing (apart from the regular management fee). It's either that or watch my cash go from their funds into iShare ETFs which I can hold for nothing.

Jegersmart

JohnRo wrote: »

I take the point about a larger pot obtaining better value but hyperbole aside, the rest of your post is comparing apples and oranges imho. It could just as easily be argued a smaller pot constantly trading back and forth for the same percentage fee is getting massively better value than a much larger pot sat paying large fees for little or nothing.

I personally don't see the connection between what investment amounts you hold and a platforms entitlement to a slice of that amount. They provide a service which facilitates the purchase, sale and viewing of that investment and should get paid for those services they provide. There has to be a charge based approximately on costs and some profit, not just fleecing wealthier customers.

A more apt analogy for me would be something like a toll road charging a percentage based on the market value of your vehicle, is that fair?

No. I don't agree. If you have a larger pot you get more value out of such a service. I also get a discount on the AMC because of my larger pot. What is next - a fixed interest payment from the bank regardless of size of holding?

It is fair that wealthier clients pay more, after all to me £1000 is the same as £10 to you, it is all relative.

J

JohnRo

Jegersmart wrote: »

after all to me £1000 is the same as £10 to you, it is all relative.

We'll have to disagree, I assure you I'm definitely not that wealthy though

Interest is a function of the debt money system, it isn't a service. If you're looking for analogies, premium current accounts that charge a fee of say £25pa instead start charging a percentage fee.

Jegersmart

JohnRo wrote: »

We'll have to disagree, I assure you I'm definitely not that wealthy though

Interest is a function of the debt money system, it isn't a service. If you're looking for analogies, premium current accounts that charge a fee of say £25pa instead start charging a percentage fee.

hehe, fair enough - thanks for the debate (and fwiw I hope they start to use a fixed charge but I won't be holding my breath).

J

waiax73

A friend of mine tried to do a cash transfer. Apparently there's a £30+VAT closure fee + £35 for each line of stock....

donniej

Closing an account with TD is indeed horrendously expensive.

Both TD and iii use Cofunds Institutional, which means that they won't be subject to Cofunds' new pricing model (i.e. TD customers won't have to pay both Cofunds and TD.)

RDR is actually going to make investing in tracker funds much more expensive, because most platforms charge a flat fee regardless of which fund is being invested in.

Choosing someone like iii or ATS who charge per trade can be a good deal depending on how much you trade. I know that if I have to pay a per-trade charge, I won't trade (instead of rebalancing every so often), so in some ways I prefer a percentage fee which is either very low or capped.

gadgetmind

donniej wrote: »

RDR is actually going to make investing in tracker funds much more expensive, because most platforms charge a flat fee regardless of which fund is being invested in.

Maybe Vanguard will start letting people have ISAs and SIPPs with them directly that use only Vanguard products?

They'd get my business!

jabba42

What platforms would you guys suggest for ETF's with 100K+?

RetiredInThailand

jabba42 wrote: »

What platforms would you guys suggest for ETF's with 100K+?

For ETFs you dont need a "platform", you just need a broker. Most of the online ones will do trades for between GBP7.50 / GBP15.00 and many of them will waive their yearly fee/CREST fee for a holding of that size. Mine does.

For what it's worth I dumped my HSBC tracker funds and bought iShare ETF trackers instead, saving myself quite a lot in yearly fees.