T D Waterhouse & others cheating us on Interest Rates on self select PEPs and ISAs

NonGeographicalMan

jamesd wrote: »

NonGeographicalMan, you make a valid point about keyloggers but personally I'm more concerned about the lack of something like a shared secret (image or word that only you and the site know) to make it harder to scam people by email. The system used by A&L is quite nice, even if they do use a full PIN with it

NatWest have a three tier system of Customer ID, PIN and security word but the main weak area seems to be the customer ID where 6 of the 10 digits are comprised of your date of birth. However they only ask for two characters from your 4 digit PIN and at least 6 character security word and get you to select those from drop down click box lists one character at a time and not by simply white plain text entry of the whole word. At Nationwide the customer number elements are not forecastable but they get you to enter the whole security word in a white text box, however the digits of the PIN number are from drop down click boxes and you only select 3 out of the 6.

What annoys me about Peter Hargreaves is that all the criticisms I have raised of Hargreaves Lansdown are areas where they could improve their current service and are not criticism for criticism's sake but he is so arrogant and apparently bad tempered that he thinks he always knows best and that anyone like me who makes helpful suggestions about how their service can be improved is a bloody whinger to be shown the door.

Whereas at a cynical thick skinned corporate outfit like NatWest your comments will never get anywhere near an RBS board director for reply (even if emailed to them personally) and they will never actually act on your feedback but at least they will always respond politely with a letter noting your comments and not suggest that any customer who makes 3 complaints or more should simply be given their marching orders.

dunstonh

Hargreaves Lansdown do seem to be building up a significant economic moat. Pension companies continuing the trend to offering a broader range of investments and perhaps offering similarly easy online switching might inhibit them on the SIPP side, if the pension companies manage to do it well. I doubt that they will do it well enough.

It is possible for IFAs to beat HL on their SIPP but currently not possible on ISAs. However, that gap is closing.

What annoys me about Peter Hargreaves is that all the criticisms I have raised of Hargreaves Lansdown are areas where they could improve their current service and are not criticism for criticism's sake but he is so arrogant and apparently bad tempered that he thinks he always knows best and that anyone like me who makes helpful suggestions about how their service can be improved is a bloody whinger to be shown the door.

The one criticism of HL I have is that Peter Hargreaves or Mark Dampier are always looking for any media opportunity to slag off others. They are also prone to distorting data to suit their comments. They never appear to have anything positive to say. Probably as they see it as a chance to have a dig at their competitors. It isnt a position that they are in alone as quite a few companies act like that.

Perhaps their aggressive attacking style applies to customers as much as it does to others in the industry?

NonGeographicalMan

dunstonh wrote: »

Perhaps their aggressive attacking style applies to customers as much as it does to others in the industry?

I think this must be the case.

A reasonable well argued email to Peter Hargreaves merely brings back a response that every one else is happy with his service and anyway its so cheap you should bloody well be grateful and if you don't like it then you can get lost and go elsewhere. I can't begin to imagine how he treats any employees who dare to question the way the company does things. As to Dampier I totally objected to various emails he sent out to customers heavily promoting individual new unit trusts or OEIC launches and suggesting (especially with ones Skandia and Jupiter launched) that they had the same opportunity for a rapid upswing as a new share on flotation. When obviously this is not the case. I did also send a rather forthright email to Mr Dampier giving him that opinion and cc to Hargreaves. I also made clear my concern about Hargreaves Lansdown repeatedly encouraging people to move all their money to them, even when it is well above the Investors Compensation Scheme limit.

Whereas a similar email to most other MDs of most companies would probably be deferrred to a high level customer service person who will write a polite reply thanking you for your suggestions and saying they may be taken in to account in the future development of their product. Or alternatively some more human MD's answer themselves but are usually still unfailingly polite and charming in their approach.

NonGeographicalMan

The press release for the launch of Itrade's Self Select ISA in 2000 makes for interesting reading.

See www.prnewswire.co.uk/cgi/news/release?id=55082

They proudly boast that 5% on cash balances in the Self Select ISA will be paid. A far cry from the 1% or less that most of the big boys in the cartel are now paying!:eek:

This huge cut in self select ISA cash interest rates by most providers in the last two years is an obvious cartel like move that is exploiting and ripping off a captive and usually extremely immobile customer base. Especially when nearly all of them are now doing the same thing apart from Hargreaves Lansdown and to a lesser extent Selftrade (who at least pay 3.75% on all of your cash balances if they are over £15,000).

But what excuse do any of them have for not paying at least 5.5%?????

jamesd

NonGeographicalMan wrote: »

But what excuse do any of them have for not paying at least 5.5%?????

The same one as the high street banks: they still have their customers.

In your discussions with regulators you might usefully address the issue of switching costs, so that it's cheap and easy to move from one wrap provider to another. There's a precedent in the action that was taken for banks with direct debit and standing order transferring to make it easier to switch bank. Also in the free market option for annuities.

NonGeographicalMan

jamesd wrote: »

The same one as the high street banks: they still have their customers.

In your discussions with regulators you might usefully address the issue of switching costs, so that it's cheap and easy to move from one wrap provider to another. There's a precedent in the action that was taken for banks with direct debit and standing order transferring to make it easier to switch bank. Also in the free market option for annuities.

But clearly there is a free and competitive market in interest rates for non ISA interest bearing deposit accounts (apart from the obvious con of headline rates with restrictive conditions like not being able to make a single withdrawal in the first year which in my opinion should be banned by regulatory action) but there isn't one at all for Select ISAs where whoever you switch to will be paying you way below the best cash interest rate in a non ISA cash deposit account and also way below the best rate in an a Cash Only ISA account.

The reason this is happening is because most of the big players with most of the marketing power took a cartel like decision around the same time to slash interest rates on Self Select ISAs from a reasonable one to a dismal one so that there was little investors could do about switching elsewhere.

Most notable in this regard are Barclays Stockbrokers on the Charles Schwab (nee Albert E Sharp) Self Select ISAs they took over and TD Waterhouse who slashed their highly competitive rate on cash in Self Selects ISAs to next to nothing around the same time.

The fact that only Hargeaves Lansdown, who pick up all the market aware rather than selling victim customers, and to a lesser extent Selftrade (if you have over £15,000 in cash with them that is) pay a slightly less derisory rate says to me that this is a cartel like move by the big boys that also include Halifax all of whom now pay damn all interest on their Self Select ISAs, even though interest rates have been rising sharply lately.

Paul_Herring

NonGeographicalMan wrote: »

Plain white boxes for entry of username and password and the requirement for the entry of the whole password and not just some characters in it from say drop down click character boxes (as per secure banking website practice) is a key logger software writer's paradise.

Loggers these days go beyond recording keystrokes, indeed some include screen-grabbers to work around the exact method you describe used to work around the key-loggers.

If you're relying solely on the web-site providers to address all your security concerns regarding logging on to their sites, you have more to worry about than whether a site uses dropdowns to enter your password or not.

JM_2

NonGeographicalMan wrote: »

JM2, I have read this thread with interest as I totally concur with everything you say about the great cash deposit ripoff on Self Select ISAs and PEPs. I am sorry to see that some of the forces of pedantry and cliqueishness who inhabit this forum and derive emotional satisfaction from trying to rip the legitimate arguments of others to shreds have tried to put down your own extremely valid arguments without any reasonable justification.

I held a self select PEP that was originally with Albert E Sharp and then Charles Schwab and finally Barclays Stockbrokers (due to continued takeovers) and this PEP for various reasons held large amounts of cash for long periods. To cut a long story short both Albert E Sharp and Schwabs paid perfectly fair interest rates of over 3% to 4% on cash (especially given that the market rate was then less than 5%) but when Barclays took over they cut the rate to 1% or so and then consumed most of that with charges on an account that by then only held cash and no shares or unit trusts. So I moved that PEP to Hargreaves Lansdown after I realised I had been done out of nearly £1,000 in interest over several years. Barclays were totally unapologetic over the matter being the total shysters they are, even though I wrote as far as their main board directors.

I discovered in a web archive that a couple of years ago T D Waterhouse actively marketed what a good rate of interest they were paying on cash balances on self select ISAs and PEPs but then they and Barclays and several firms cut the rate to virtually nil in what has quite blatantly been a cartel like move due to the enormous recent rationalisation in the online share dealing market. And even the supposedly good 4.25% rate at Hargreaves Lansdown is not that because they pay you a lower rate on the first £7,000. And also they have not increased their rates in line with recent increases in the market rate of interest like all the others.

I am currently having to shift my Self Select ISA after being shown the door by Mr Peter Hargreaves at Hargreaves Lansdown for daring to quibble with a few matters of company policy such as the highly insecure nature of the HL website's username and password log on boxes, the refusal of Hargreaves Lansdown to provide company reports and accounts on funds held in their ISAs and PEPs and then finally after I applied for their share offer they cheekily hung on to the £5,5000 they did not allocate to me in shares and instead wrote to me asking if I did not want to invest it in yet more funds well above the investors compensation scheme limit with them. Mr Hargreaves then wrote back to me in extraordinarily aggressive terms telling me to basically either shut up or take my business elsewhere and when I then contested his very high handed behaviour with the company's compliance officer I was given my marching orders.

It has become apparent from staff comments that Mr Hargreaves in fact does this quite regularly to investors who send him personally emails of complaint. Mr Hargreaves seems to enjoy his tyrannical ability to exercise absolute power over his customers and basically behaves like an old fashioned small shopkeeper.

So now I am left hunting round for alternatives and can find no one running a Self Select ISA/PEP plan with a better rate of interest on cash deposits than HL and no one matching their range of discounts on OEIC and unit trust initial charges. No doubt what Mr Hargreaves knows that investors will find when he decides to excommunicate them.

As things stand jokers like Barclays and TD Waterhouse pay almost nothing interest wise after their annual PEP and ISA charges and people like Alliance Capital and Halifax pay at best just over 3% while Selftrade pays 3.75% on all cash if the cash balance is £15,000 or over but much less than that if less than £15,000 is held in cash. In other words no one comes close to my online cash savings with Icesave now paying 6.20%,

Those of you who say why not run the arrangements yourself ignore the fact you cannot do this and get an ISA or PEP wrapper as well. But when you consider a capital gains tax allowance of £9,000 per annum perhaps it is better to do away with the PEP/ISA wrapper altogether and then bed and breakfast the maximum every year and then earn 6.2% on any money you want to keep out of the market and hold in cash.................

I raised the whole issue of cartel like behaviour exploiting captive Self Select ISA and OEIC customers with the Office of Fair Trading yesterday and they seemed quite interested in investigating and are going to come back to me. All these interest rates on cash on Self Select ISAs are a blatant ripoff. The only thing that varies is the scale of the ripoff. The brazen levels of ripoff at Barclays and TD Waterhouse are quite beyond belief.

Hi

NonGeographicalMan,

Thanks for your post.

I really commiserate with you.

And I am sorry to hear of your experience.

I have not referred to this Board for a while, as I became despondent from some of the replies. Reason for the delay in my reply.

I am glad I did not transfer to Hargreaves as suggested by some in this thread.

I'd be interested to hear what the OFT has to say.

Interesting what happened to British Airways.

Kind regards


JM_2

NonGeographicalMan

JM_2 wrote: »

I have not referred to this Board for a while, as I became despondent from some of the replies. Reason for the delay in my reply.

I am glad I did not transfer to Hargreaves as suggested by some in this thread.

I'd be interested to hear what the OFT has to say.

JM2,

Interestingly I did not get an update email notifying me of your reply to my post. I wonder how that happened as I know I subscribed to the thread.

Sitting here today with around £44,000 in cash and only £10,000 invested, mainly not being in the market for nearly a year looks a good idea so why only at Hargreaves Lansdown can one get a decent (5.3%) if not outstanding rate of interest. Clearly there is a cartel in operation.

By Monday I have to decide either to invest while still at HL and then move with the money invested (where it becomes frozen for trading for 2 weeks or more) or move the money in cash in the PEP and ISA to Selftrade. If there is another big fall tomorrow I'm tempted to place buy orders for a load of funds for Monday morning and then move to Selftrade while still invested. I can't see the UK market going much below 5,300 and there is sure to be a big upturn once it hits bottom. I reckon the Dow Jones could go all the way down to about 11,500 or so. Also USA still doesn't look an attractive place to invest.

Or with it being August is there going to be a bigger crash still (like down 30% from the highs) because only the young guys are left in the office and the software programs are driving the whole thing in terms of marking down the shares more and more with no buyers about. Obviously a load of people will be just about to go on holiday for 2 weeks on Saturday and internet communication on holiday and dangers of using webcafes to trade are such that loads of people may simply sell and then go away. Then the traders will have to mark prices down and down further until they can find any buyers for those shares. Thinking of that there could be a big plunge again tomorrow in London.

Its crazy there should be a drop like this when the market has only just got back to its high of several years ago but perhaps the whole consumerist model of rampant consumption and lending that has been driving the thing along is finally about to pop? And this is happening even without oil prices going crazy again.

JM_2

NonGeographicalMan wrote: »

JM2,

Interestingly I did not get an update email notifying me of your reply to my post. I wonder how that happened as I know I subscribed to the thread.

Sitting here today with around £44,000 in cash and only £10,000 invested, mainly not being in the market for nearly a year looks a good idea so why only at Hargreaves Lansdown can one get a decent (5.3%) if not outstanding rate of interest. Clearly there is a cartel in operation.

By Monday I have to decide either to invest while still at HL and then move with the money invested (where it becomes frozen for trading for 2 weeks or more) or move the money in cash in the PEP and ISA to Selftrade. If there is another big fall tomorrow I'm tempted to place buy orders for a load of funds for Monday morning and then move to Selftrade while still invested. I can't see the UK market going much below 5,300 and there is sure to be a big upturn once it hits bottom. I reckon the Dow Jones could go all the way down to about 11,500 or so. Also USA still doesn't look an attractive place to invest.

Or with it being August is there going to be a bigger crash still (like down 30% from the highs) because only the young guys are left in the office and the software programs are driving the whole thing in terms of marking down the shares more and more with no buyers about. Obviously a load of people will be just about to go on holiday for 2 weeks on Saturday and internet communication on holiday and dangers of using webcafes to trade are such that loads of people may simply sell and then go away. Then the traders will have to mark prices down and down further until they can find any buyers for those shares. Thinking of that there could be a big plunge again tomorrow in London.

Its crazy there should be a drop like this when the market has only just got back to its high of several years ago but perhaps the whole consumerist model of rampant consumption and lending that has been driving the thing along is finally about to pop? And this is happening even without oil prices going crazy again.

Hi NGM,

Sorry seem to have missed your post.

I am really fed up with these sharks.

As you say a cartel is in operation.

These sharks must be making a killing from all our cash , with the current cash crisis.


I wonder what is the percentage of cash held in these self select ISAs and PEPs.

Must be an enormous figure now.

Take care

JM_2