Hargreaves Lansdown "playing hardball"

gadgetmind

Linton wrote: »

A bit harsh in my view.

Maybe, but let's see what happens when those previously blindly using high TER active investments start to find out what they were really paying.

HL seem to think that they will swallow the "reassuringly expensive" line and remain content to see a large chunk of their retirement pot going to managers and middlemen.

If that's the case, then I stand by my statement.

dunstonh

I understand the theory of it - and theoretically its a good idea its just how it is going to pan out over the next year or so that concerns me - I feel there may be a risk of the fund managers ending up pocketing even more of my cash than they do at present.

It is almost certain that fund managers (as in fund houses) are winners out of the unbundling. Some fund houses were only getting a fraction of the annual management charge with some platforms. You have to look back in time for the reasons for that. With the unbundling, those contracts end and the fund house now get an to keep all of the charge. It does appear that some fund houses have also added a few basis points to their charges at the same time.

The losers are the platforms. They lose the hidden payments and rebates and the profitability of their model will drop unless they have volume or increase their charges (which is effect is only telling you what they were getting in the first place but you never knew it).

Whilst some platforms dont like talking about it, Fund houses often had to pay the platform to get and keep their funds on the platform. On top of that they would take a cut of the AMC as we already know. Some fund houses paid the platforms to promote their funds.

in time, you should see the fund charges reduce. Platforms are likely to consolidate (although that has been said for nearly a decade now and isnt happening) and volume should lower charges. That is the theory anyway.

gterr

If I were to move my 100k of funds (unwrapped) in specie from HL to another platform would this be classed as a disposal?


(I'm not worried about CGT, since the fund value is almost exactly what is was when I bought at the beginning of November. Just wondered about the need to report to HMRC if it counted as a large disposal.)

le_loup

No but it would in cash.

pip895

New article on possible HL charging:-


http://www.thisismoney.co.uk/money/diyinvesting/article-2516906/Hargreaves-Lansdown-reveals-new-fees-superclean-funds.html

gterr

le_loup wrote: »

No but it would in cash.

That's convenient. My unwrapped S&S fund is simple: only two holdings, so just £50 to move. My S&S Isa is more complicated and due for a re-think anyway, so I may well transfer this as cash (always assuming I will be moving from HL).

gadgetmind

For those who prefer to avoid high fees funds, there is still no mention of caps (currently £45 for ISA and £200 for SIPP) nor trackers (currently £2pcm per tracker).

If they apply this 35-70bps to *all* holdings, then I can't see HL coming out on top for anyone, so they are going to be mighty busy moving people off platform.

Lokolo

gadgetmind wrote: »

For those who prefer to avoid high fees funds, there is still no mention of caps (currently £45 for ISA and £200 for SIPP) nor trackers (currently £2pcm per tracker).

If they apply this 35-70bps to *all* holdings, then I can't see HL coming out on top for anyone, so they are going to be mighty busy moving people off platform.

To be fair, the article has said the information is from Barclays analysts so HL could still surprise us yet.... :rotfl:

gadgetmind

Yes, a surprise like this ----> :eek:

System

I only have a small pot of money invested in S&S ISA at the minute with HL, but will probably end up moving it to Charles Stanley direct (I only hold 1 managed fund now - will be expanding shortly). I think they are going to be far cheaper than HL.

I know the RDR has got a lot of bad press, but I must admit, this has made me think a lot more about charges so it is obviously doing some good, even if it has not been perfect.

I have already contributed a small amount to the ISA this year and I know that normally you can only contribute to one S&S ISA per year. Therefore if I do end up transferring, will I still be able to add more contributions once it is with another provider? (or does the 1 ISA per year rule apply)? This would affect my decision as definitely want to contribute more this tax year and don't want to be 'frozen out' by transferring.