F&C Childrens Investment Plans - New Charges

jem16

jimjames wrote: »

Although by making it a percentage it meant that small savers were far more protected. It is a shame that the burden of increased fees is disproportionately hitting small savers.

Although that might be the case you really have to look on it as a service.

If you walked into the hairdresser's, you wouldn't expect to pay more just because you earned more would you?

oldwally

atush wrote: »

I have always recommended them too, and probably won't now (at least for specialised kids accts).

but I have a savings plan with F&C, in 5 figures. And they have not sent me a letter about any changes in charges. So this may be just for the children's plans? My plan is unwrapped.

No its on the savings plan too.........................I might be tempted to say its a FCUKing rip off but I wont

benalder284

I don't expect F&C to have to provide a service at a loss - they are a business and need to make profits. I am however bewildered by the way in which they have sought to explain this charge.

As regards RDR, it will be interesting to see what the reduction is, if any, in the TER of the F&C IT's. Any likely reduction will still mean account holders with small balances paying an awful lot more. This seems to be a recurring issue as exisitng cross-subsidies are removed. Although understandable, it is hardly supportive of those on 'middle incomes' trying to act prudently.

As someone with 6, sorry 5 (now I've sold out of the F&C CIP) different IT savings schemes for my daughter, the sooner all the firms get their RDR charging strategies sorted out and announced the better otherwise I'll spend most of 2013 selling and buying IT shares in response to different firms announcements :mad:

phil235

Biggles wrote: »

Whilst agreeing with the sentiments, I have some quarrel with the maths: (E), future annual charge, will be a much lower % than that, as it will be a % of the total in the account, not the annual amount added.

I appreciate that, Biggles. But my whole point is that the current 0.2% is based on the annual amount added, so a like-with-like comparison is of the annual fixed charge with the annual amount added. And that's what a new monthly saver (if there are any) will see as a percentage of his total sum in Year 1, unless he kicks off with a big lump sum. To put it personally, I'm currently paying about £2 a year for my two £40 per month plans (for two grandchildren), but in future will be paying £60 a year.

Also, I thought the Investment Trust makes its own charges in addition, which we don't see. If the new charge is replacing some hidden charge, surely F&C would have told us, to sweeten the pill?

I have emailed my previous post to F&C and will await their reply with interest.

snowcat53

Further to the discussion as to whether the CTF Shares account is more expensive than the Stakeholder, I have gone back to some old factsheets re the fund charges and management fees for the F&C Investment Trust (which is the usual choice for the Sharess account.
This is what I found

Date /Total expenses /Mgt fee rate
Jan 2007/ 0.45% / 0.15%
Jan 2009 /0.53% / 'fixed fee £6.1 m pa'
Dec 2012/ 0.92% ('ongoing charges') / 0.365%

The total cost now for the Shares account with this fund is therefore 1.285%. plus the new annual fee
For the Stakeholder the cost is 0.7% plan charge plus the Allshare tracker charges which are not stated (that i can see) but total charge capped at 1.5%. I might bet they are charging the full 1.5%.

So there seems no doubt that the F&C IT expenses have increased dramatically (more than doubled) in 6 years. I am sure this has never ben flagged up in any of their bumpf.
Am i minsinterpreting? Can they justify this?

I have previously been viewing F&C as a cheap S&S CTF account but this changes my view.

There are two parallel threads going on re this topic so I am posting in both.

Reaper

snowcat53 wrote: »

For the Stakeholder the cost is 0.7% plan charge plus the Allshare tracker charges which are not stated (that i can see) but total charge capped at 1.5%. I might bet they are charging the full 1.5%.

I know everybody is anti-F&C at the moment but actually their Stakeholder account is now and always has been (I think) the cheapest on the market.
The fund charge is 0.38% and even added to the plan charge that comes in at less than the 1.5% that everybody else is inflicting.
Source: Key Facts [PDF]

snowcat53

Ok 0.38% +0.7%. Personally I have not made my mind up about F&C and may stick with them.depending on the charges and options, although I dont like the way they are making these changes, or how they have doubled the investment Trust costs.

Next thing is to consider whether the performance on the Shares funds would justify the higher charges. ( Earlier it was a no-brainer as charges were less !)

atush

oldwally wrote: »

No its on the savings plan too.........................I might be tempted to say its a FCUKing rip off but I wont

Well they haven't written to me yet?

margaretclare

It’s clear that this approach is grossly discriminatory against what must be the vast majority of savers who can only afford a modest monthly contribution. For those starting from scratch to save monthly, the plan is effectively strangled from birth. Those of us saving for two (or more) children or grandchildren are hit with the flat fee for each account, even though the accounts may be identical.

Oooops. I only started a plan as recently as last week, for each of my twin great-granddaughters. I only want to put in £25 a month each because it has got 18 years to grow (whether I'm around or not). I've heard nothing about extra charges, but maybe I didn't read the small print well enough.

oldwally

atush wrote: »

Well they haven't written to me yet?

My letter was dated Feb 5th,I got it,I think Saturday,so given the vagaries of the post,you may get the "good news" Mon/Tues ?