Hargreaves Lansdown Dividend re-investment charges

cornishphil

Am I the only one to think that H-L's dividend re-investment fees are a bit on the high side, especially for folks with modest portfolios?Dividends are not re-invested until they reach £200 per company shares held and the charge is£10, which for £200 =5%.
The other minus is that any amount below £200 remains uninvested, which rather defeats the much trumpeted benefits of dividend compounding.I guess H-L derive a large amount of their income from these "soft" semi hidden charges and allows them to make their headline charges look competitive.

Jegersmart

That sounds unacceptable to me, why should people with small holdings be punished further?

J

Vortigern

I agree, HL's fees and conditions for dividend re-investment are sufficient to deter me from using that service. Cheapest way is perhaps to use the share issuing company's own dividend reinvestment plan although that might not be possible with some nominee accounts. eg BT's DRIP costs 0.5% commission + 0.5% stamp duty if your shares are in Equiniti's Shareview service. Scottish Mortgage's IT savings plan can re-invest dividends and charges stamp duty only.

cornishphil

Yes,I do wish I hadn't put some of my share holdings into H-l.It's not as if I'm likely to be troubled by CGT! Of course the same applies to dividend bearing Investment Trusts

THoy_2

Vortigern wrote: »

I agree, HL's fees and conditions for dividend re-investment are sufficient to deter me from using that service. Cheapest way is perhaps to use the share issuing company's own dividend reinvestment plan although that might not be possible with some nominee accounts. eg BT's DRIP costs 0.5% commission + 0.5% stamp duty if your shares are in Equiniti's Shareview service. Scottish Mortgage's IT savings plan can re-invest dividends and charges stamp duty only.

Like in the Old Bill cartoon from the WW1..do you know a better hole to go to ? I have a large proportion of my money invested thru HL & havd always been happy with the service. I dont reinvest dividends , but cajn use them for investment in any shrfes I like. Suggest people use the vantage scheme and thereaby get a further small return on their investments, It mounts up over they year :-)

ozzage

I use HL extensively for funds, but hold my ETFs with Halifax Sharebuilder for exactly this reason.

With Halifax I pay 2% with no minimum charge for dividend reinvestments.

srcandas

As an HL supporter (at the moment) I don't use auto re-invest. If you have a range of shares why would you? The divs come thick and fast and investment options change daily :cool:

As for small the costs are much the same for HL big or small. Why should a large volume punter subsidise the small investor? Volume discounts exist everywhere for good reason.

Ozzage seems to have the answer

But I understand the frustration when the cheaper platforms offer potentially poor security and facilities (not a reference to Halifax of whom I know little).

:beer:

mr_fishbulb

You don't have to reinvest - you can keep the money in your cash account (which is also in the S&S ISA if that's where the shares are held). You can then decide to reinvest, or put it towards a different investment.

To do this, Click on the CASH tab when you're logged into you're account. Select the "Change income options" from the Quick Links menu on the right. Then select "Held on account".

Vortigern

THoy wrote: »

Like in the Old Bill cartoon from the WW1..do you know a better hole to go to ?

To clarify - I didn't say don't use HL, just don't use their dividend re-investment service.

johnrd

Hi all

I'm just getting angry about this myself. HL give a statistics about £100 invested in 1899 being worth £160 in capital growth and £22,000+ with reinvestment -- but actually they would have MOST of that if that £100 was held in an ISA!

So my specific question. Does anyone know of any way to hold shares in an ISA and still benefit from the company's own DRIP?

And a question for Martin. I know you 'don't do investments', but this would be a fantastic campaign that would save people £millions if you could expose these costs and help to drive them down.

And if you're not quite the right person to get involved, could you recommend anyone who might fancy the fight?

Thanks! jd

grey_gym_sock

i don't know of any ISA (or other nominee account) which lets you use the company's own DRIP. it might be quite expensive for the ISA provider, as the admin process would be different for each company. i suspect a better bet is to pick an ISA provider with their own (reasonably priced) dividend reinvestment scheme. there are a few.

alternatively, if you're not a higher rate tax payer, or not maxing out your ISAs every years, just have the dividends paid out to you, and make an additional lump-sum investment when you have enough cash for it.