H-L charging structure

psychic_teabag

jamesd wrote: »

One possible way to approach that is to put new money into other places. Gradually the portion held at HL will end up being just the things that are only available there or any that might be best held there for some other reason.

For the ISA there's no charge for a cash transfer out and that may work for some of the things you hold, where it's not cheaper overall to pay the £25+VAT to transfer a holding.

A slight variant would be that when you put new money in somewhere else, you buy there and sell on HL on the same day. Then you can do a partial transfer of the resultant cash, for free. So that you gradually reduce the amount held at HL without being out of the market. (Well, strictly, I suppose your new money is effectively out of the market for the time it takes to transfer, but psycologically it's probably better than selling a fund and being out of the market before you can buy it back again, if that makes sense.)

Reaper

On the subject of their Wealth 150 I see Investors Chronicle have just had a dig.

Hargreaves recommends one China fund, yet eight Europe ex UK funds. And what is that China fund? Jupiter China, which has been listed for the second time among rival platform Bestinvest's Spot the Dog list of underperforming funds.

Also HL is considering another "core" tier in the list based partly on whether the fund manager is willing to reduce their charges.

Source: http://www.investorschronicle.co.uk/2013/05/01/comment/smart-money/hargreaves-must-offer-proof-of-impartial-wealth-A8iEzFZqNav6pDxtSlFIpO/article.html

grey_gym_sock

yes, this does rather bring us back to the same problem the platform review was supposed to solve ...

we used to have HL promoting funds with (say) an AMC of 1.5% and a rebate of 0.25% (on which they got an undisclosed commission, of about 0.75%); and not promoting funds with an AMC of 0.25% (on which they got a much lower undisclosed commission, perhaps 0.1%); and not even carrying funds with an AMC of 0.15% (which wouldn't pay HL any commission).

now HL are going to be paid by explicit charges, instead of hidden commissions.

however, it sounds like they will be promoting funds with an AMC of (say) 0.65% (where they've negotiated a reduction from the standard 0.75%), ahead of funds with an AMC of 0.75% (where there's no reduction) - which makes some sense. but also ahead of funds with a much lower AMC of 0.1%-0.3% (and again, no reduction for HL) - which doesn't make sense (to the customer).

so there may still be an anti-tracker bias.

IC mention the absence of property funds in the "150" list. personally, i don't think that direct property works well in an open-ended fund (because it's illiquid). the problem here is a bias to open-ended funds.

Forever

If you have over 10,000 to invest, it seems to me like a good idea to hold your more 'aggressive funds' plus those which are now hard or soft closed which you don't want to loose with HL and pay the 0.6% annual fee. After all, HL does have a lot of funds and it's free to switch between them.

Then put your steady core investments such as trackers and/or defensive type funds on a different platform which is cheaper but doesn't necessarily have the flexibility which HL has to offer in terms of range of funds or the flexibility to change funds.

At least this is the conclusion I am beginning to foresee for myself at the moment anyway.

As for HL's wealth 150, I've never taken too much notice of it. After all, it lists new funds in it which they could never verify so it is obviously just a 'sales' listing. Well to me anyway.

grey_gym_sock

well, i'm waiting to see what the other providers will do. and exactly what HL will do - they say the 0.6% will be lower if you have more invested, but they don't say how much lower on what amounts invested.

you're right that availability of funds on different platforms is another factor. and that is also a bit up-in-the-air, with the switch to clean fund classes.

saintalan

dach wrote: »

I find the cheapest way to invest in trackers is to buy Vanguard etfs through X-O http://www.x-o.co.uk/
the cost is a one off charge of £5.95 and there are no further charges, until you sell
etfs available include ftse 100 (ter 0.1%) and s&p 500 (ter 0.09%)
https://www.vanguard.co.uk/uk/mvc/investments/etf#fundstab

Hi dach hadn't come across x-o before and their site is a bit short on info.

Do you know if the do Vanguard LifeStrategy fund and if so what charges?

Any other words of wisdom?

Cheers

Alan

Porcupine

I don't know for sure, but x-o is a broker of things listed on stock exchanges - which includes investment trusts, ETFs, etc. Unit trusts and OEICs ('funds') aren't listed securities, so I doubt you can buy them via x-o. I don't think Vanguard have any LifeStrategy or similar funds available as ETFs (US or UK), their ETFs are just plain trackers.

jamesd

You can't buy funds at x-o. The closest you can get is ETFs and investment trusts. Which is close enough for some purposes for some people, though the range of active management strategies and access to the best of the managers is pretty limited by it in some areas.[STRIKE] x-o also doesn't offer a pension product.[/STRIKE]

pqrdef

grey_gym_sock wrote: »

well, i'm waiting to see what the other providers will do

I get the feeling we won't know what anybody's real deal is until we put in the transfer form and they phone us to find out what it'll take to keep us.

saintalan

jamesd wrote: »

...x-o also doesn't offer a pension product.

They do offer a SIPP via Liberty.

Thanks

Alan