Index tracker - platform charges

jobits

Im a bit behind the times and have only just noticed that my HSBC All Share Index Tracker with Hargreaves Lansdown has had platform charges added! As I only have the one investment, would I be better off gong directly to HSBC - so that I wouldnt have to pay the charges? Would I lose anything for transferring the funds?

Perelandra

That would depend on how much your tracker is currently valued at- from May, HSBC Global Investment Centre will be charging a platform fee of 0.39% p.a....

Useful thread here:

https://forums.moneysavingexpert.com/discussion/4237711

Overall, I think most people are waiting to see what the falout is after all the RDR changes, since if you move now you may well find you need to move again.

I think the cheapest way to buy these trackers (but depending on how much you have invested) remains the retail-class funds through Cavendish-Fidelity.

bigadaj

I think hl charge for transfers out so you'd need to take that into account, £30 I think.

Cygnus_Alpha

jobits wrote: »

Im a bit behind the times and have only just noticed that my HSBC All Share Index Tracker with Hargreaves Lansdown has had platform charges added! As I only have the one investment, would I be better off gong directly to HSBC - so that I wouldnt have to pay the charges? Would I lose anything for transferring the funds?

I had a look at Alliance Trust's platform and the HSBC tracker AMC is 0.15% on there. There is a platform charge of £10 + VAT per quarter so that might be higher or lower than HL depending upon how much you have invested. I haven't taken out the Alliance Trust one yet as I'm still going through the small print to see if there are any catches I need to be aware of. But if there isn't I shall be transferring my ISA holdings where the AMC is loaded with renewal commission over to AT.

ChopperST

Ill check but I'm sure my management charge with Fidelity is 0.28 for my tracker.

Perelandra

ChopperST wrote: »

Ill check but I'm sure my management charge with Fidelity is 0.28 for my tracker.

ATS have the "C" class, which has the lower AMC (but will attract the platform fee).

HL only have the retail class, which has the higher AMC, and they also charge a platform fee.

Fidelity have both the "C" and retail class at the moment; the retail class (which works out cheaper overall) will need to be removed when the RDR changes come into force.

Assuming that the charges stay as they are, if you have a holding of less than £17k or so, Fidelity will be cheaper than ATS now and post RDR. If you have between £17k and £35k, Fidelity will be cheaper now, but more expensive later. If you have over £35k, ATS works out cheaper now and later. (rough figures).

For all values, either ATS or Fidelity are cheaper than both HL and going to HSBC directly. For now at least!

Cygnus_Alpha

Perelandra wrote: »

ATS have the "C" class, which has the lower AMC (but will attract the platform fee).

HL only have the retail class, which has the higher AMC, and they also charge a platform fee.

Fidelity have both the "C" and retail class at the moment; the retail class (which works out cheaper overall) will need to be removed when the RDR changes come into force.

Assuming that the charges stay as they are, if you have a holding of less than £17k or so, Fidelity will be cheaper than ATS now and post RDR. If you have between £17k and £35k, Fidelity will be cheaper now, but more expensive later. If you have over £35k, ATS works out cheaper now and later. (rough figures).

For all values, either ATS or Fidelity are cheaper than both HL and going to HSBC directly. For now at least!

Thanks for that analysis. You've saved me a job! One of my ISAs is with Fidelity Fundsnetwork. Do you reckon Fidelity let people switch to cheaper fund classes but stay in the same fund? If so I could just do that and not go to ATS.

Perelandra

Cygnus_Alpha wrote: »

Thanks for that analysis. You've saved me a job! One of my ISAs is with Fidelity Fundsnetwork. Do you reckon Fidelity let people switch to cheaper fund classes but stay in the same fund? If so I could just do that and not go to ATS.

Yes, although check for switching fees on the funds you have.

In the case of the HSBC ones, you probably don't want to switch- the old (retail) ones actually work out cheaper overall than the new ("C") class ones.

ChopperST

Perelandra wrote: »

ATS have the "C" class, which has the lower AMC (but will attract the platform fee).

HL only have the retail class, which has the higher AMC, and they also charge a platform fee.

Fidelity have both the "C" and retail class at the moment; the retail class (which works out cheaper overall) will need to be removed when the RDR changes come into force.

Assuming that the charges stay as they are, if you have a holding of less than £17k or so, Fidelity will be cheaper than ATS now and post RDR. If you have between £17k and £35k, Fidelity will be cheaper now, but more expensive later. If you have over £35k, ATS works out cheaper now and later. (rough figures).

For all values, either ATS or Fidelity are cheaper than both HL and going to HSBC directly. For now at least!

Big thanks for a succinct and helpful analysis Perelandra

Cygnus_Alpha

Perelandra wrote: »

Yes, although check for switching fees on the funds you have.

In the case of the HSBC ones, you probably don't want to switch- the old (retail) ones actually work out cheaper overall than the new ("C") class ones.

Ahh I tried to do it online but as my account is flagged as an investment through an adviser (I used an execution only discount broker), it won't show me other fund classes.

Interestingly, when I go in without signing in, it's like a totally different website with different options and offers. Clearly they want to keep walls between their different types of business.