Hargreaves Lansdown "playing hardball"

jamesd

Yes, the rebate is taxable income if not in a pension or ISA. This may be a reason for some people to prefer clean funds in their fund and share account, since the charge reduction isn't taxable income.

ozzage

jamesd wrote: »

You can check the percentages by starting to place a deal. There will be a link to show commission and that produces a popup window with text like "HL currently receives renewal commission of 0.850% per annum, and pays clients a loyalty bonus of 0.250% per annum". In this example, commission is 0.85%, HL rebates 0.25% and keeps 0.60%.

Thank you so much for that. I can't believe I didn't know that was possible on HL!

jamesd

It's only been possible for a few months.

j0nathon2

jamesd wrote: »

1. for funds purchased after April the commission will be rebated to you but must by FCA rules be used to buy more fund units. HL will default to buying more of your biggest holding but you can tell them to hold it on account for you to buy whatever you want. You can't cash it directly, you have to buy a fund first. Then you can sell what you just bought to get money to pay the charges.

Is this in the letter H-L sent out or just from the rules - I don't remember reading this in last week's letter - especially about the default option? Of course, it could be in the small print and I didn't read that (yet).

ColdIron

It's in the Changes to the Vantage Service they sent in the post. Section 8 in General Changes (page 8) and Section A4 in the T&Cs (page 21)

j0nathon2

ColdIron wrote: »

It's in the Changes to the Vantage Service they sent in the post. Section 8 in General Changes (page 8) and Section A4 in the T&Cs (page 21)

Thanks. Must admit I read over it I think at the point it said you will still receive it.

Indeed, I must admit I didn't even open the mail until yesterday because I assumed it was their usual spam (felt as heavy!). I always double check as I tear up the address details before adding to the recycling!

Blackdog

jamesd wrote: »

Send HL a message asking them to provide you with a Client Holdings Valuation report. That will list all funds you hold, the AMC, the commission, how much of that is paid to you in Loyalty Bonus and how much HL keeps. The commission part is in both percentages and Pounds. They post it out.

You can check the percentages by starting to place a deal. There will be a link to show commission and that produces a popup window with text like "HL currently receives renewal commission of 0.850% per annum, and pays clients a loyalty bonus of 0.250% per annum". In this example, commission is 0.85%, HL rebates 0.25% and keeps 0.60%.

Right. And nobody knows that yet except HL.

Get the HL report. I have a spreadsheet that calculates it for me but I don't want to offer to calculate it for everyone when it's really up to HL to say what they are being paid.

The spreadsheet isn't too hard, though:

column A: the amount in Pounds that you hold in the fund
column B: the renewal commission
column C: the loyalty bonus
column column B - column C, heading HL % cut
column E: A * D / 100, HL cut in Pounds

Add a total at the end to get the sum of all column E values to get what you're currently paying HL. For example:

A 10000
B 0.85
C 0.25
0.85 - 0.25 = 0.6
E: 0.6 * £10000 / 100 = £60

Thank you so much jamesd for this clear and informative reply. I really appreciate your help and will ask HL for a holdings valuation report and get cracking with the spreadsheet.

7_week_wonder

jamesd wrote: »

Send HL a message asking them to provide you with a Client Holdings Valuation report. That will list all funds you hold, the AMC, the commission, how much of that is paid to you in Loyalty Bonus and how much HL keeps. The commission part is in both percentages and Pounds. They post it out.

You can check the percentages by starting to place a deal. There will be a link to show commission and that produces a popup window with text like "HL currently receives renewal commission of 0.850% per annum, and pays clients a loyalty bonus of 0.250% per annum". In this example, commission is 0.85%, HL rebates 0.25% and keeps 0.60%.

I'm another one who is incredibly grateful for your clear explanation, but I'm obviously being dense though as I can't see the link to commision charges anywhere on the page when I start to place a deal, am I being even more blind than normal? For instance, I'm trying to find the costs associated with Jupiter Ecology (Income) fund which I hold as an ISA. All I can find is:

Fund Manager Annual Charge 1.5%
Loyalty bonus 0.25%
Net annual charge 1.25%
Fund Manager other charges 0.19%

So, does that mean that come the new charges, unless I switch I will be paying 1.44% plus 0.45%?

If anyone has the time to explain I'd be grateful.

jamesd

Click on the buy more link and you should see the choice then.

7_week_wonder

Jamesd, thank you so much for your speedy response and for all your clear insightful posts. You are incredibly generous with your time and knowledge: I owe you a very large pint!