Hargreaves Lansdown "playing hardball"

colalba

I have been an H-L customer for many years and have a substantial amount there (shares acc, isa and sipp). I have been hanging on waiting to see what their new pricing structure will be. If I am disappointed then I will vote with my feet.

An earlier post noted that share centre was covering exit fees and I presume others will see the opportunity and offer similar deals to any disgruntled H-L customers.

I have counted it up and I think that there are 6 members of my extended family with holdings with H-L who will follow suit. I suspect that this is the case with many forum members.

So make it a good deal H-L !!!!

planteria

jamesd wrote: »

Still, there are extremely capable people there and they might manage it.

i hope so. their CS is good, the site is easy to use, their paperwork is clear.:)

SnowMan

grey_gym_sock wrote: »

bestinvest? sippdeal?

Youinvest (Sippdeal as was) already have a clean charging structure consisting of a £12.50 quarterly charge and a £9.95 trading fee for funds. Their terms and conditions say they can increases these with national average earnings if my memory serves me correctly. While they have to decide what to do with their dirty funds the structure is essentially there, albeit like any provider they can change their charging structure.

Fidelity Fundsnetwork have an adviser charging structure of £45 + 0.25% so there is some indication of what they will do for DIY investors. And with no re-registration fees away currently, there is always going to be the option to switch over to Cavendish (via Fidelity Fundsnetwork) who have just the 0.25% charge.

So apart from Best Invest and Hargreaves Lansdown, of the big players (and bearing in mind the big IFA platforms are already clean) I am struggling to see who hasn't got a clean funds charging structure in place.

That said you can invest in clean (Vanguard) funds currently with Best Invest, so I am perhaps being unfair to include them, although that looks like a temporary charging structure. They told me at the beginning of the year that they weren't sure if they were going to go the flat fee plus dealing charge model or the percentage fee model. With HL it is pretty much only the Vanguard funds which are clean via HL by necessity as there are no dirty equivalents.

The feel of the FCA guidance in reading it is that they expected providers to move to a clean charging structure as soon as possible (they explicity mention not delaying the legacy business inclusion until the April 2016 deadline). So if HL have their systems in place I would have thought they should act now rather than delay things. In the meantime the position is that investors with HL are investing with no knowledge of what charges they will pay in the future, which to me is against the spirit of full disclosure as I personally see it, especially as there is a hefty re-registration charge away, while technically not obviously breaking any FCA rules.

Some out there have said that it is in HL's interests to delay as long as possible so that they can retain their commission based model with its high but undisclosed margins (undisclosed in the sense they won't disclose what commission they are paid) as long as possible. If you wanted to push your clean charging decision up close to the FCA deadline, you might tactically announce that you intended to act early and then postpone the decision to try and make it less obvious what you were doing. Of course I'm talking generally, and I'm not saying that has been HL's intention, I can't possible know that and they seem to have said otherwise. But what a delay does mean is a continued period of uncertainty for HL investors.

For balance I will mention I would like to see Best Invest announce their plans also. They told me at the beginning of the year that they expected to announce there new charging structure in mid-2013 but even allowing for the slight delay in the FCA paper they are delaying also.

gadgetmind

SnowMan wrote: »

For balance I will mention I would like to see Best Invest announce their plans also. They told me at the beginning of the year that they expected to announce there new charging structure in mid-2013 but even allowing for the slight delay in the FCA paper they are delaying also.

BestInvest's £60 pa for an ISA and £120pa for a SIPP work for us as we hold a combination of Vanguard trackers, ETFs and ITs. All they have to do is extend this to holding clean funds and they're there.

SnowMan

gadgetmind wrote: »

BestInvest's £60 pa for an ISA and £120pa for a SIPP work for us as we hold a combination of Vanguard trackers, ETFs and ITs. All they have to do is extend this to holding clean funds and they're there.

Thanks I was in the process of editing my post when you replied to say that there was a clean option with Best Invest.

What stopped me going with Best Invest at the beginning of the year and choosing Sippdeal instead was that they couldn't tell me if their clean structure would be of the same structure post RDR (which is to their complete credit that they were honest with me).

So that it why I am debatedly including Best Invest as not having announced.

gadgetmind

I agree with including BestInvest in the "not announced" camp. However, they have a very simple charging model compared to HL with an "eat all you want" if you pay the fixed platform fee.

Currently my money is on our old S&S ISAs movng to BestInvest after all the cards are on the table but I really don't know where my wife's SIPP will end up.

rpc

I'm waiting on Best Invest too. Their structure looks to support clean pricing, but they haven't come out to say that's what they are going with.

I think I will be moving my HL ISA to BestInvest, but don't want to jump ship before (at the very least) BI have announced their pricing. Hoepfully their exit-fees-paid offer still stands at that point!

Rollinghome

colalba wrote: »

So make it a good deal H-L !!!!

Reported here http://www.ifaonline.co.uk/ifaonline/news/2305767/hargreaves-breaks-bad-news-to-failed-bidders-as-it-finalises-wealth-list
"Investment Week, IFAonline.co.uk's sister title, understands some groups have gone to lows of around 50bps for equity funds - well below the current clean price (with no trail or platform fee included) of 75bps."

So if all the funds you hold are within that group and they are the ones who reduce their AMC to 0.50% and if HL were prepared to reduce its net current margin down to say 0.5% or less, they'd then be price competitive with the likes of Cavendish for those particular funds. (Though with 36 IMA sectors but only 30ish funds in the group with an unknown number offering the discount headlined, that obviously looks a long shot.)

There would be the option of using only those funds with a reduced AMC but being limited to a small number of funds because the net cost of all the others on that platform were prohibitively high wouldn't seem a sensible way to invest.

There's also the question of whether the funds prepared to charge less will be the best managed or those most desperate for business. We can assume that those funds that have been so popular that they're soft-closing to limit incoming investments won't see a necessity to lower fees, and we could see managers concentrating on those funds where they get the full AMC at the expense of the cut-price ones.

The article also makes the point made here earlier:
"While groups that go well below current industry norms on price may argue they had to offer Hargreaves such attractive deals because of its dominant position in the market, it will nonetheless put pressure on their relationships with other distributors when they are made public."

Doesn't sound a good long-term move for fund managment groups to upset bigger platforms such as Skandia who might then decide not to offer funds unavailable to them at the same price. I'd imagine the best selling funds with clout won't welcome going down the road of becoming wholly dependent on Hargreaves Lansdown for their business.

If HL do as they previously said, they'll announce details of the RDR2 fee structure by the end of this week and implement it by the end of January.

gadgetmind

My GPP has a TER of 0.5% and we're trying to get this even lower. I pay under 0.4% for my SIPP.

1% between fund and platform is stratospheric and no way would I pay anything close to that.

WatsonNimrod

spannaman wrote: »

Don't hold your breath! Regarding my sipp they've just told me that they "hope" to make an announcement regarding new tarrifs "before the end of the year"...

:rotfl:

Yes, this thread kind of motivated me to ring them to see what the charges are going to me on my SIPP.

By the initial response I don't think I was the first person today ringing with the question. Certainly seems nothing will be announced this month.

Perhaps me being suspicious, but could they be waiting to release the fee structure after a bumper Santa run where we are all too busy with the festivities and office parties to notice the 'bad news'??