Hargreaves Lansdown "playing hardball"

Lokolo

Imnoexpert wrote: »

I wonder if we need a new thread for all this?

I see there is also a £10 fee for paper statements, a £25 account closure fee, and £25 fee for cash transfer to another provider if I've got this right. Small beer I suppose but maybe this is the future.

How will the 0.45% be collected? I would want the charge to be easily allocated to the fund .

I hope someone out there is now going to do a good platform cost comparison calculator.

There is an FAQ on their website (whcih I finally found - http://www.hl.co.uk/lowcharges - FAQ tab, and its near the bottom)

HL wrote:

Charges will first be collected from cash on your account. To help you manage cash balances to meet the fees due we have introduced a "Suggested Minimum Cash Balance."

The Suggested Minimum Cash Balance is designed to give you an idea of the cash you should hold on account to meet future fees. It is just a suggestion, however. You can ignore this if you wish.

If you don't have any cash on your account, and you have fully subscribed so you can't top-up, you could consider adding money to a Vantage Fund & Share Account. If you have no cash in your ISA or SIPP, we will try to collect fees from cash you hold in your Fund & Share Account before we sell any of you holdings.

If there is insufficient cash on an account to pay the fees due and insufficient cash in the Fund & Share Account too, we will sell sufficient holdings to cover the amount owed and restore the minimum cash balance. There will be a small charge of £1.50 per deal if an automatic sale is required (some other brokers charge up to £29.95 for this).

Our system will look to collect fees in this order:

Cash in the account in which the fees were generated. If no cash on the account then
Loyalty bonuses received on units purchased before 1 April 2014. If no loyalty bonuses then
Cash in your Fund & Share Account. If no cash in your Fund & Share Account then
Sell holdings to cover fees from the account in which the fees were generated
We will normally sell units of the largest fund holding first. If, for whatever reason, we are unable to sell units of the largest fund holding, we will sell units in the next largest fund holding, and if you do not hold funds we may sell part of other holdings.

This is the way in which most brokers collect fees. What makes the Vantage Service different is providing a suggested minimum cash balance to help keep sufficient cash on account to avoid selling holdings.

Disappointing that you can't choose where to take cash from. If I have cash awaiting allocation, they will take it out of my ISA, which I don't want them to do if they can take it from outside the ISA.

SnowMan

Imnoexpert wrote: »

I hope someone out there is now going to do a good platform cost comparison calculator.

I've done one as an excel spreadsheet (and allowing for dealing costs also). Haven't yet factored in HL's sharedealing/ETF charges though just their new fund charges.

It is just difficult making it generally available, it doesn't convert well into google docs.

The comparefundplatforms tool is good, but I think it is easier to compare by taking out all fund manager costs and just comparing platform costs.

Glen_Clark

The Telegraph are reporting on this today. http://www.telegraph.co.uk/finance/personalfinance/investing/10572558/Broker-Hargreaves-Lansdown-sparks-investment-price-war.html

PS: I thought it looks a bit like a puff piece for Hargreaves Lansdown. Do they advertise in the Telegraph?

dunstonh

Glen_Clark wrote: »

The Telegraph are reporting on this today. http://www.telegraph.co.uk/finance/personalfinance/investing/10572558/Broker-Hargreaves-Lansdown-sparks-investment-price-war.html

PS: I thought it looks a bit like a puff piece for Hargreaves Lansdown. Do they advertise in the Telegraph?

It looks like one big love-in with the Telegraph. Its almost as if the Telegraph let them write their own news article without checking whether the facts were correct.

dunstonh

How will the 0.45% be collected? I would want the charge to be easily allocated to the fund .

Most of the unbundled platforms operate a cash fund and the charges/rebates are handled through that. The few that dont will sell units to pay charges.

jamesd

One clearly good thing: HL is letting people continue to choose whether to buy the inclusive/current or unbundled/clean funds. For funds that have higher charges for the clean versions the current version would provide a way to avoid that price increase.

SnowMan

SnowMan wrote: »

For low value fund SIPPs though HL look good value because of the lack of separate account fee.

Looks like HL are extremely good value for fund only SIPPs up to about 40K and still good a bit above that.

HL's platform charge is slightly less than Youinvest below 40K (if we ignore a range between about 8K and 10K where Youinvest become temporarily and marginally cheaper before Youinvest's separate account fee jumps from £20pa to £60pa).

The crossover point is at 40K where the platform charge (before dealing costs) is equal for Youinvest and HL at £180pa.

And then ATS joins the party at £41,333 where the ATS and HL platform charges are the same at £186pa

When you bear in mind that it costs to buy funds with Youinvest and ATS, HL look the cheaper option for fund only SIPP only portfolios up to 40K and just above that it depends how often you deal.

I've ignored exit charges that would apply if your SIPP is increasing over time, requiring an eventual move away from HL (if deciding on a cost basis).


I've ignored Interactive investor in the comparison, as it is hard to see their charges being sustainable, but technically above £31,111 they are cheaper than HL for fund only SIPPs (before allowing for dealing costs).

dunstonh

Looks like HL are extremely good value for fund only SIPPs up to about 40K and still good a bit above that.

Although if you have upto £40k then you are probably better off with a personal pension and not a SIPP.

SnowMan

dunstonh wrote: »

Although if you have upto £40k then you are probably better off with a personal pension and not a SIPP.

Indeed.

For a SIPP, 0.45% + fund charges is still quite a high charge (especially when you factor in potential future exit costs)

jimjames

Lokolo wrote: »

We currently really now only have 2 choices, HL and CS. CS is cheaper by 0.2%.
.

No sure that's true.

What about Cavendish Online? Only 0.25% and no dealing charges.

Looks to me like it might be the best option for small investors and possibly large ones until they reach the £200 cap but have no dealing to take account of. Anyone regularly adding money may be better off with Cavendish up to a much higher amount.