Halifax share dealing transfer costs - rip-off or normal?

undermanager

I have a couple of share accounts with Halifax Share Dealing, including an ISA shares account. I want to move them to Sippdeal for various reasons but am shocked that Halifax will charge me for the 40 or so stocks I hold in my Halifax accounts over £1000 just to re-register them electronically with Sippdeal (no charges from Sippdeal)!!! Halifax charge £25.00 per stock plus a small admin fee. There is no cap.

How can Halifax justify such outrageous costs for an electronic re-registration, or is this perfectly reasonable?

Reaper

Before signing up you should always check the charges. In the case of the Halifax a quick search reveals they will charge £25 per share, so 40 shares are £1000:
http://www.halifax.co.uk/sharedealing/charges/

I hope you are not about to make exactly the same mistake with Sippdeal. They charge £20 per share to do the same thing, so nearly as bad:
http://www.sippdeal.co.uk/DealingAccount/ChargesAndRates/

Do you want to keep all the shares? If not you could sell them, transfer the cash and buy something else on the other side, though that means you would be out of the market during the transfer. That would work out a bit cheaper but really only worth it if you wanted to make changes anyway.

I am guessing it is a dealing account you are after. If it was a SIPP then Sippdeal would refund you up to £500 of Halifax's charges.
http://www.sippdeal.co.uk/TransferInOffer

dunstonh

I dont think £25 per stock is unreasonable. Halifax share dealing is a no frills, explicitly charge service. Whilst other providers will factor admin costs into other charges, some charge for each service explicitly. i.e. those that dont charge tend to have a platform charge instead that covers all or most admin tasks.

If you think £25 per holding is a rip off then why are you moving to SIPPdeal? Sippdeal charge a not too dissimilar amount of £20 per holding.

undermanager

Ok. Exactly what is the £25.00 per share for? How can this amount be justified in terms of the costs Halifax incur?

Daniel54

undermanager wrote: »

Ok. Exactly what is the £25.00 per share for? How can this amount be justified in terms of the costs Halifax incur?

You would have to ask them,but a quick google shows HL charge £25 Equiniti £35 and Sippdeal £20,so an unscientific answer to your question is that the charges are not abnormal.

Over and above admin costs,I guess one reason for the charges is to deter investors from transferring between platforms on a regular basis.

When I looked at a few different platforms earleir this year I was focussing on dividend reinvestment costs,which led me to stay with Halifax,but certainly the transfer costs were an additional disincentive

latecomer

sell them all and then re-buy somewhere else if you dont like the transfer costs?

bowlhead99

undermanager wrote: »

Ok. Exactly what is the £25.00 per share for? How can this amount be justified in terms of the costs Halifax incur?

Well, how much does it cost to build an infrastructure and trading platform and employ staff at every level of the business from director to regulatory compliance to internal audit and risk management to trading to operations to customer service, to create legal entities to establish an account for you and acquire shares on your behalf in safe custody and hold your assets and data and produce periodic reports for you and HMRC, and provide an online platform to allow you to interact and receive live valuations and statements? And then liaise with the staff at the brokerage to whom they have lost the business, to conduct an in-shares transfer from their nominee account to the nominee account of that receiving broker who claims to act for you?

How long is a piece of string?

But I suspect that they have costed up what it costs to run their business and do all of the above with enough margin for them to stay in business, and allocated that necessary income over the average activities they carry out through the course of the year, resulting in a price per each activity that the customer sees (rather than a price per activity that happens behind the scenes which the customer does not see).

My guess is that based on what you see at a smattering of other low-cost execution-only brokerages or platforms, £20-£25 is reasonable. Unless they have already charged you a monster annual fee and don't need any more revenue from you on your way out.

You can minimise the costs you are paying them for dealing with the exit and transfer of securities, by selling the securities and just having cash in the account.

Then they don't have to facilitate re-registration of lots of individual lines of stock into another name and update all their system, because the shares are already out of their system. They can simply send that cash over to the receiving broker (subject to stepping through all of their controls to do with the payments authorisation process, HMRC paperwork, account closure documentation and system updates, etc etc)

If you think it should be free, why not build a rival business? It would only cost you a few tens of millions to set up a reliable and credible platform, and you are sure to win business from all the customers who don't like to pay for the work they create for you. Unfortunately taking customers who don't like to pay for a service and want to be able to walk for free, is not a great business model so you may change your mind once you have failed at it.

dunstonh

I had to fill out over 60 stock transfer forms a couple of years back. Took ages. Whilst electronic methods have taken some of that work away, there is still the cost of liability and things going wrong to consider as well as some stock transfers taking months to complete and anything outstanding for long periods costs money. So, all that has to be factored into one level fee for everyone. Also, how much do you think that software and IT infrastructure costs to develop and maintain. They have to recover their outlay. So, whilst the actual cost of some button presses may not be much, the expense of putting in place equipment to allow cheaper and easier workloads has to be paid for.

Effectively, you are asking them to do work to take your business elsewhere. Wouldn't you charge in their shoes?

grey_gym_sock

you could use 2 brokers in parallel, making new purchases on sippdeal, and keeping your existing shares on halifax until you want to sell them (and then take the cash out).

though this approach is less easy for ISAs, as (to keep the ISA wrapper) you'd need not to take the cash out from halifax, but to make partial cash transfers to sippdeal - which is more fiddly - and i don't know if halifax charge for (partial) cash transfers, though many brokers don't.