Hargreaves Lansdown "playing hardball"

Lokolo

dunstonh wrote: »

Funds dont have dealing charges. Direct investments do.

I don't think the question asked was about a specific platform, but YouInvest do have fund dealing charges from Jan 1st.

http://www.youinvest.co.uk/Resources/Content/PDF/AJBYI_ISA_charges.pdf

£4.95 to trade funds, £9.95 for shares.

There is no custody charge for holding shares, there is a 0.2% custody charge for funds.

I think this is what sock is saying anyway!

grey_gym_sock

dunstonh wrote: »

Funds dont have dealing charges. Direct investments do.

i don't think i follow. what does this imply for how an RDR-compliant platform should charge?

I only went by what is currently on their website.

fair enough.

dunstonh

It is interesting that they are charging what is in effect an initial charge for funds. It is not a dealing charge. That would not breach platform review. Although it is a strange charge to make. However, it may go some way to offset their annual costs. Possibly deterring monthly premiums being made (low profit - even loss making in some cases)

The difference in charge between funds and shares could be due to the funds not having a dealing charge but shares do. So, in effect, you could alternatively present it as £4.95 initial charge with a further £5 dealing cost for direct investments.

Initial charges are allowed. They are just unusual nowadays.

Rollinghome

jamesd wrote: »

Maybe, if they didn't realise how many were just giving them time before acting on a decision to move that's already been made if their pricing doesn't improve. That's my situation and it has been for quite a while now.

Porcupine wrote: »

I'm in a similar position, but I've already given them that chance.

Ditto here.

I moved everything away from HL two years ago apart the parts of both our ISAs that were with them. In retrospect, leaving anything with them was lazy and a mistake. I expected RDR pricing to emerge much sooner than it has done and it seemed sensible to wait for a while. Leaving just those two pots with them after I moved the rest has cost me around £2k more over the two years. At least I didn't consolidate our ISAs with HL as I'd considered doing earlier.

It's now clear there's no chance of HL coming up with competitive pricing even for a substantial amount but I might hang on for a bit longer, not to see what they offer, but to see what the competition does and do the sums. HL I've given up on.

The timing's not too bad for me as I'll have a very large wodge of cash coming out of some fixed rate deals this summer that I squirrelled away in 2009 before rates fell. All that will be invested as soon as there's an opportunity.

And we've just got back from our weekly shop at Waitrose. We like them because they've a decent deli and other things we like but mostly because they don't have misleading sales gimmicks and have a genuine integrity. In other words, the complete opposite of Hargreaves Lansdown.

I'd guess Waitrose might be 4-5% more than Lidl but a long way from treble the price that HL charge over better alternatives. (I don't have anything against Lidl either and would choose them over Tesco every time.)

I see HL as more like Kwik-fit. Slick and user-friendly but wouldn't be sensible to take anything either say at face-value.

Rollinghome

Lokolo wrote: »

Do Cavendish currently apply the post RDR charging to clean funds? Their site says about what they will charge (which seems to be a decent blank of 0.25% across everything), but not when the charges will come into effect.

Bear in mind that CavendishOnline act only as the introducer and you'll do all business directly with Fidelity Fundsnetwork (or Cofunds if you prefer).

Fidelity currently offer both clean and dirty fund classes. Through Cavendish you'd get 100% of the trail commission rebated (by giving you extra units) on dirty funds or you'll pay a 0.25% platform fee on clean funds. In most cases the outcome will be the same so a typical dirty fund will cost 1.5% less 0.5% rebated to give 1% net and the same fund as a clean version will cost 0.75% plus 0.25% platform to also give 1% net. The choice is yours.

After 16 December, they'll no longer offer dirty funds and all new investments will be made into clean share classes. Existing investments will be unchanged unless you choose to convert them.

HL have said they couldn't even get close to a 0.25% platform fee without making a loss.

bigadaj

Rollinghome wrote: »

Bear in mind that CavendishOnline act only as the introducer and you'll do all business directly with Fidelity Fundsnetwork (or Cofunds if you prefer).

Fidelity currently offer both clean and dirty fund classes. Through Cavendish you'd get 100% of the trail commission rebated (by giving you extra units) on dirty funds or you'll pay a 0.25% platform fee on dirty funds. In most cases the outcome will be the same so a typical dirty fund will cost 1.5% less 0.5% rebated to give 1% net and the same fund as a clean version will cost 0.75% plus 0.25% platform to also give 1% net. The choice is yours.

After 16 December, they'll no longer offer dirty funds and all new investments will be made into clean share classes. Existing investments will be unchanged unless you choose to convert them.

HL have said they couldn't even get close to a 0.25% platform fee without making a loss.

I've enquired about moving and am currently with cofunds through another broker. They told me a few weeks ago that a transfer in specie would take several weeks as I would have to transfer to fidelity funds network, they couldn't offer cofunds though still have people on it as a legacy.

gadgetmind

Rollinghome wrote: »

HL have said they couldn't even get close to a 0.25% platform fee without making a loss.

Chuffing 'ek, I'm starting to get all emotional and even to well up a little bit!

But back in the real world, companies that can't control their costs tend to get eaten alive by competition. Perhaps HL need to channel their energies into running an efficient organisation rather than their current combination of procrastination, spin and bleating?

Why should customers care where their profit/loss point lies? HL are middlemen trying to exist in a world hell bent on disintermediation, and they need to learn how to make their business model work by adding value despite thin margins being a prerequisite to retaining customers.

jamesd

Rollinghome wrote: »

HL have said they couldn't even get close to a 0.25% platform fee without making a loss.

If I recall correctly, what they said was that their average break-even level was 0.32%. That doesn't mean that they can't be profitable at 0.25% for customers with non-small amounts with them, just that the overall average needs to be above that level.

It's the nature of their business that there are some fixed costs then low additional costs for extra money placed via them. That should leave room for better pricing for customers with non-small amounts with them, while still keeping their business profitable overall and on individual customer levels. £250 a year or so on £100,000 doesn't seem likely to be unprofitable even if it's less than what they take now.

Totton

HL are middlemen trying to exist in a world hell bent on disintermediation, and they need to learn how to make their business model work by adding value despite thin margins being a prerequisite to retaining customers.

I don't know about that, HL seem to have learnt very quickly how to make their business model work.
:beer:

In all my dealings with various fund supermarkets the only one I have ever found to be better than HL was American Express, that was back in the days when they ran an excellent platform before exiting the business.

zagfles

Rollinghome wrote: »

Bear in mind that CavendishOnline act only as the introducer and you'll do all business directly with Fidelity Fundsnetwork (or Cofunds if you prefer).

Fidelity currently offer both clean and dirty fund classes. Through Cavendish you'd get 100% of the trail commission rebated (by giving you extra units) on dirty funds or you'll pay a 0.25% platform fee on clean funds. In most cases the outcome will be the same so a typical dirty fund will cost 1.5% less 0.5% rebated to give 1% net and the same fund as a clean version will cost 0.75% plus 0.25% platform to also give 1% net. The choice is yours.

I notice that in a SIPP they refund the trail commission outside the SIPP! But they say HMRC can't confirm the tax status of the payments - they confirm it's OK but can't confirm if it's taxable or not!

Pretty good if it's not taxable as that'd be an extra 0.33% free for a 40% taxpayer...is anyone getting this and were you taxed on it?

Guess this will start drying up with the move to clean funds anyway...