TD Direct introduce 0.35%pa platform fee from August 2013

TCA

Thanks bowlhead. My preference is to use two separate brokers for ISA and trading accounts. My trading account is currently with Best Invest (yet to declare RDR changes), largely because I started off on the multiple Vanguard index tracker route and it seemed a good option. Now I've decided I'll just use my ISA for fund activity (probably Vanguard Lifestrategy with IWeb the current frontrunner) and stick to only investment trusts (LTBH) in my trading account. A part active and part passive approach.

TD Direct would seem a good option for trusts therefore (and I could of course add funds any time subject to their charging) but also thinking X-O might do a similar cheaper job, albeit share dealing only and no dividend reinvestment.

avfc1982

For those of you with TD Direct potentially looking for a way out looks like they maybe waiving transfer out fees for ISAs according to the Telegraph report below:

http://www.telegraph.co.uk/finance/personalfinance/investing/10639076/Time-for-an-end-to-fund-shop-exit-fees.html

I have secure messaged them to confirm whether this is for both cash & in-speccie so will post back here once I've had confirmation one way or the other.

msauk

I thought I understood platform charges, clean funds, trail based funds and the myriad other charges for using a broker, but could someone enlighten me on my experience and why it's occurred in this way.

The negative feeling in this thread about the introduced 0.35% charge left me thinking I'd made an error with choosing TD - but I'm not so sure.

I have a fund-only investment wrapped in an ISA: Vanguard LifeStrategy, which I opened with TD in March 2013. It's part of a 20-30 year plan. I’m not interested in dealing in ETFs/shares, and I and have just about topped up my holidng with this year's annual ISA allowance. The current market value of my ISA holding in this fund is greater than £35k.

I thought I’d sit it out what with the proposed 0.35% platform fee by TD, due from August 2013, as it seems like the rest of the platform industry is in a state of flux and things haven’t settled yet. TD platform fee/charge is levied twice a year, to my knowledge, in January and August.

As expected, TD informed me, by email sent 09.01.14, of what I was due to pay. What didn’t make sense was that on the day the fee was debited from my account (six days after the email notification), the exact same sum was rebated. The apparent result as it appears to me: zero in platform fees/charges. An error on TD's part?

Here's what they wrote to me in their most recent email:

As your portfolio contains trail-based fund holdings, we are writing to remind you of your options and help you decide what to do next.

Option 1: Convert to clean funds
You can choose to convert your holdings into clean funds. With clean funds, there is no trail commission included in the ongoing charges, which means more of your money will stay invested in your portfolio. TD was one of the first companies to introduce clean funds and we now have over 1,600 available on our platform.

If you'd like to convert to the clean funds alternative, please call our specialist funds team on 0844 322 2524. You can find information in the funds pages of our website however you may want to seek independent financial advice to help you decide what's right for you.

Option 2: Keep your trail-based funds and continue to get a rebate on the trail commission
You can also choose to keep your existing trail-based holdings and continue to receive a rebate on the trail commission we receive. Bear in mind, this rebate will be adjusted for income tax according to your personal circumstances. For more on the differences between trail-based funds and clean funds, see the 'Funds' section of our website.

If you'd like to take this option, you don't need to do anything. Full details of your trail commission rebate and any rebate tax applied can be found in your statements or by logging in to your account.

An update on our platform fee
After a review of our pricing policy, we've decided to keep our platform fee at 0.35% of the funds in your portfolio. We’ve also placed a cap on our platform fee and reduced our stock withdrawal charges. For more information, read our updated rates and charges.

Our platform fee is calculated daily and applied twice a year, along with any trail commission rebate or rebate tax. Full details can be found in your statements or by logging in to your account.

Thanks for any advice.

donniej

as it seems like the rest of the platform industry is in a state of flux and things haven’t settled yet

It's getting pretty close now - Chelsea FS haven't announced their new pricing, and HL hasn't stated how many funds they have secured preferential rates on. Other than that, most providers have announced their new pricing.

The problem with TD Direct is their high exit fees. It'll cost quite a bit to switch to another provider.

An error on TD's part?

I seem to remember TD had a free period as a part of their switch to the 0.35% fee, but I couldn't find any details on their website. I wonder if that was the reason?

koru

msauk wrote: »

As expected, TD informed me, by email sent 09.01.14, of what I was due to pay. What didn’t make sense was that on the day the fee was debited from my account (six days after the email notification), the exact same sum was rebated. The apparent result as it appears to me: zero in platform fees/charges. An error on TD's part?

Here's what they wrote to me in their most recent email:

As your portfolio contains trail-based fund holdings, …

AFAIK, Vanguard funds don't pay trail commission, but if TD are wrongly treating them as if they do, then perhaps this explains the rebate of platform fees? However, I thought they would charge the 0.35% willy nilly and then rebate commission, rather than rebate the platform fee.

TCA

Sorry, mis-post

msauk

Following up from my recent posting about not fully understanding the platform charge levied by TD in relation to investment in a Vanguard LS fund -take a look at the next email/apology I received.

Dear xxxx

On 24 February 2014 we sent you a communication about trail based funds. I apologise that we sent you this communication in error, as there are no trail based funds in your portfolio.

You do however hold clean funds (funds which don't contain trail commission in their ongoing charges). I'd like to confirm that there is no action for you to take in regards converting from a trail based fund.

If you have any queries about this or any other matter, please call us on 0844 322 2524.

Once again, I'd like to apologise for any confusion.

Thank you for continuing to invest with TD Direct Investing.

Yours sincerely

Stuart Welch
Chief Executive Officer
TD Direct Investing (Europe) Limited

So koru is right about the Vanguard LS funds not being trail funds.
@donniej - I, too, have no recollection about a 'free period', as part of the introduction of the 0.35% fee. Just plenty of warning about when the fee would 'start'.

I'm still puzzled about the rebate of the fee levied by TD, though.

SnowMan

Looks like TD Direct have reduced their percentage platform fees on funds essentially from 0.35%pa to 0.3%pa

http://www.tddirectinvesting.co.uk/choose-an-account/rates-and-charges/

Click on the view the changes bit at the top of that page for further detail.

bigsy

SnowMan wrote: »

Looks like TD Direct have reduced their percentage platform fees on funds essentially from 0.35%pa to 0.3%pa

It must be hard work keeping that spreadsheet of yours up to date

SnowMan

bigsy wrote: »

It must be hard work keeping that spreadsheet of yours up to date

Indeed. But a new version has been uploaded to allow for the TD changes :beer: