Hargreaves Lansdown "playing hardball"

grey_gym_sock

sb93 wrote: »

Can I liquidate my holdings with HL (to avoid the £25 transfer fee) and then open a new S&S ISA with CSD?

yes, there is currently no charge to transfer to another ISA in cash, or to close an account. but there will be charges for both those things from 2 june.

jamesd

Anyone who does have trouble with HL wanting to charge transfer costs and such if it makes sense for them to leave might find this purported FOS decision of interest:

"Given that Malfesto incurred the pre-existing transfer fee when he transferred his holdings out of F&C, I am of the opinion that he was not 'free to dissolve the contract'. I note the business’ argument that 'freely' does not entail the waiver of all incidental expenses incurred during the exit. However, my view is that 'freely' would entail waiving any financial or practical barriers to exiting the contract. ... Furthermore, the FSA's finalised guidance 'Unfair contract terms: improving standards in consumer contracts' of January 2012, which has also been considered by both Malfesto and F&C, states that 'we would not regard consumers as being free to dissolve the contract if the terms did not provide that any exit charges would be waived to remove financial barriers to exiting the contract'. In my opinion, the use of the words ‘any exit charges’ implies that incidental expenses incurred in any event upon exit of the agreement, whether in the form of closure fees, ‘in specie’ or ‘cash’ transfer fees are not excluded. ...

I believe the imposition of the transfer fee on each Investment Trust has caused a significant imbalance to the detriment of Malfesto."

While it's not published at the FOS site, apparently it's FOS reference is 1398-5749/GS/IV26.

In the same discussion over there there's "I took a similar case to the FOS in late 2011 going into 2012 relating to a refusal by Hargreaves Lansdown to waive exit fees. Hargreaves Lansdown assured me that the refusal to waive exit fees was 'in keeping with their terms and conditions and the regulations laid down by the FSA'. Sound familiar? The FOS didn't agree with that HL assessment and my complaint was upheld and HL were deemed to have acted unfairly."

I suggest that anyone who is having trouble with HL works with others in a new topic here to gather appropriate references and responses to make life easier for all and help the FOS decide on all of the cases at the same time. Though it'd be really nice if HL made it unnecessary.

SnowMan

TCA wrote: »

Somebody posted on Monevator that a switch to percentage-based fees was rumoured for BestInvest. I hope it was just a rumour. Sticking with fixed fees could even prove fruitful for them.

There was an on-line article a few months ago that said Best Invest were going percentage based I'm afraid.

I can't locate it, and obviously have no way of knowing if that was true or not.

jimjames

sb93 wrote: »

Thanks for the reply

Can I liquidate my holdings with HL (to avoid the £25 transfer fee) and then open a new S&S ISA with CSD?

The £25 cash transfer fee only applies from June. Until then you can still transfer as cash for no fee.

Unless your investment is below the annual limit of £11k and you haven't put any money in this year then it is always better to transfer so you don't lose your ISA allowance.

Totton wrote: »

An interesting perspective here - http://langcatfinancial.co.uk/2014/01/back-for-more-hargreaves-lansdown-part-the-second/

For me, probably best to switch over completely to IT's where HL cap the a/c fee at £45 per year.

That's an interesting idea. Just need to check the AMC for the IT vs the fund version to work out the tipping point where it makes sense to switch.

guitarman001

jem16 wrote: »

You'll still pay the 0.2% annual charge for the fund.

However instead of paying £24pa if you hold one fund, you will pay a percentage charge of 0.45% on your total holding.

So if you have £10k in one Lifestrategy fund you will pay £45pa instead of £24pa.

If you have £100k in one fund you will pay £450 instead of £24.

jamesd wrote: »

For those funds the fixed charge is being replaced by the 0.45% charge. Whether this is a price increase depends on the amounts involved.
For US or any other non-UK stock you need to be aware of their very high foreign exchange commission, which starts at 1.7% of the deal value.

Thanks to you both! Wow... so any more than £5.33k in a Vanguard fund and you're worse off under the new fee structure. Is there anybody cheaper that has already announced their changes? SO can't be bothered changing!

I'm thinking of buying Apple, hence the US equity question

guitarman001

Contrary_clive wrote: »

Not so long ago I used HL for a Vanguard Lifestyle fund in an ISA wrapper. I encashed the fund and arranged an ISA transfer to SVS securities. They have shares/etf dealing fees of £1 for the first month followed by £5.75 thereafter. I bought into Vanguard ETFs (FTSE100, world hi-yield, Emerging mkts and Japan) for the princely sum of £4. The ongoing TER's are tiny and SVS take no ongoing mgt fee. There are also currently no exit costs if transferring the ISA to someone else in cash.

I'll have to check the exit fee for Hargreaves Lansdown ISAs then...

koru

gadgetmind wrote: »

My wife's unwrapped shares will be moving more slowly as we need to work within CGT, but I'll be making a start come April.

Why CGT? If you transfer in specie, no disposal (and no stamp duty and no risk of adverse market movement). If you sell in HL and repurchase on new platform, B&B rules say that the cost of your disposal is the cost of repurchasing them, so very unlikely to trigger a big gain.

Freecall

if you were paying £2pm for, say, a Vanguard LifeStrategy passive multi-asset fund, your costs will go up dramatically. If you had, say, £30k of your ISA balance in this, you’d see a rise from £24pa up to £135pa for holding it. That’s an increase of, like, 500% or something. Which is what we financial technical people call ‘a lot’. Just one of those things, but hard to swallow for some investors.

Love it.

Froggitt

sb93 wrote: »

Thanks for the reply

Can I liquidate my holdings with HL (to avoid the £25 transfer fee) and then open a new S&S ISA with CSD?

Yes but then of course you could have the bid/offer spread to pay and a purchase fee with the new provider.

Froggitt

grey_gym_sock wrote: »

how minimal? "standard" seems to be an uncapped 1% (min. £7.50) for dealing. so that's 2% to switch funds. if you switch more often than every 4.5 years, then it would be cheaper to pay HL 0.45% per year.

Minimal as in I've never switched a fund with HL.


I agree that their 1% uncapped is ridiculous.....I would look at the frequent trader if I wanted to do any switching. However the £60pa is too good to overlook. So, I am moving my legacy funds and shares ISAs to Share Centre, but will look around for a home for any for new funds I have to invest.


I also don't understand your maths!!!