Hargreaves Lansdown "playing hardball"

Linton

Rollinghome wrote: »

And without wishing to add further to the confusion, TheTotal Expense Ratio (TER) doesn't in any way show the total expenses.

There a whole lot of other costs it leaves out, including all the costs of buying the underlying securities such as stockbroking fees, stamp duty and the 'turn'. Furthermore fund managers are able to hide other costs such as by paying over the odds to the broker to receive services that would otherwise have to be shown in the AMC or TER.

All part of the murky game.

But on the other hand it also ignores the benefits that operating through a fund manager provides. For example, the fund manager should be able to get much reduced spreads on share dealing than a private investor could. This should offset a possibly significant part of the stamp duty, for smaller companies it could more than offset it.

Rollinghome

Linton wrote: »

But on the other hand it also ignores the benefits that operating through a fund manager provides. For example, the fund manager should be able to get much reduced spreads on share dealing than a private investor could. This should offset a possibly significant part of the stamp duty, for smaller companies it could more than offset it.

I wasn't trying to persuade or dissuade anyone from investing directly or through funds. I do both. I was doing no more than pointing out that the TER does not reflect the fund's total costs.

On the other hand, as you might say, whether or not a fund would obtain a narrower spread (I'm not aware of any evidence of that) large funds in particular certainly do have the additional handicap of driving the price higher when they try to buy and driving the price lower when they try to sell. Which is why large funds become so much less nimble than smaller funds.

Should IP Income/High Income decide to get out of BAT or any of its largest holdings the market will gulp.

Blackdog

astralweeks wrote: »

In reply to Blackdog, I have had a conversation with HL this morning and apparently the report name is a "Trail Commission Statement". One is being sent to me today.

Thanks for this. I did message them a couple of days ago but have not heard back from them so will try again and ask for the report by name.
Welcome to the forum and congratulations on being thanked 6 times on your first post! It's nice to know people value your contribution.

le_loup

Heard from them just an hour ago that their message queue is massive and they are doing their best to get them answered sequentially.
You can understand that they are dealing with a flood!

Blackdog

Ah, maybe I am stuck in the queue then. Unusual for HL to not at least send an acknowledgement that they are busy. Not surprising though that they are busy and I don't assume that they are busy with people applying for accounts.

wstevew

All the platform comparisons leave out the cost of taking your money, exit fees.

So here is an example of what it costs to take your money and close the account.

Presently, our charge for transferring a Vantage Stocks & Shares ISA to another provider is £25 per holding. Cash is not counted as a holding; however you may incur a dealing commission on the sale of any investments. Therefore, as you hold 3 funds the fee would be £75.

From the 2nd June this will be changing to a fee of £25 per holding with a fee of £25 for the transfer of cash. In addition, if the account is closed there will be a closure fee of £25 + VAT. Therefore, presuming your investments remain the same as at present and VAT is unchanged, the fee at this point would be £130 for an in-specie transfer.

At this point, to transfer to another provider as cash would cost £55.

I hope this has been of assistance to you, if you have any further queries please contact us on 0117 900 9000.

Kind regards,

David Grew
Investment Helpdesk

gallygirl

Right, this is my home for the next month. Currently have SIPP with HL and employee pension with FL. Haven't heard anything from FL - not sure if they are affected? And have filed too safely the letter from HL so not off to a good start. One of my funds is closed to new money anyway. Don't even know what clean funds are .

dunstonh

Haven't heard anything from FL - not sure if they are affected?

FL dont operate a platform. So, you wouldnt be paying for platform services with them.

jamesd

The FL one would presumably be a group personal pension. That would be able to continue on its existing terms for a while, though it might also have been updated to clean funds. Not mandatory yet to do that.

This post explains a bit about clean funds. Instead of a fund charging an annual charge then paying a cut to a platform provider like HL and a cut to a financial adviser, or HL again in this case, the clean fund strips out that extra part of the annual charge and leaves it to the two providers - platform and IFA - to make explicit charges for their services. A platform cut would typically be in the 0.25-0.3% range and an IFA cut 0.5% for funds with a total annual charge of 1.5%. By taking both pieces HL has been getting more like 0.65% and for the Wealth 150 their average is actually more than the fund manager gets to keep.

gallygirl

Thanks both of you. Some serious reading needed. Have messaged HL and asked to resend but from reading on here of delays I'm not expecting a quick response.