Sippdeal shocker (& link to template complaint letter)

bowlhead99

Financial_Saddler wrote: »

...and what seems to be the lack of a dividend reinvestment option is odd

Unlike some brokers their 'regular monthly investments' deal at £1.50 a pop extends to quite a few investment trusts. So if you get a chunk of cash back as dividends you can just have it invested in the next monthly cycle in whichever fund or ETF you fancy off that list. I don't think any brokers are really letting you reinvest for free, because any investment trust trade is on the stockmarket, after all.

So if I have a spare £200 built up from dividends I could just go into the Regular Investing tab and set it up to buy another £200 of PIN or BIOG or TEM or whatever I want to buy next, at the next regular dealing date. For a £1.50 charge my cash gets deployed in my IT of choice. If I do this in advance but then don't have the full £200 available, it won't execute and will wait until the next month when maybe I will have enough cash from new divs flowing in.

That seems a better way of doing things than me getting £20 of dividends and having it go and automatically reinvest it in PIN for me, buying me exactly one share and a massive disproportionate dealing fee compared to the new assets I acquire.

It may at some point be worthwhile opening a new thread to discuss whether Invstment Trust charges are becoming uncompetitive following RDR. Over 2% on Graphite is a right pain!

I agree this (and the point above) is a bit off topic for this thread. But just while we're here

- Some investment trusts are already quite cheap, just less of a screaming bargain than they were now RDR has reduced some of the baked-in fees for OEICs and UTs and the platforms or brokers have rejigged their annual charges.

- Others are a bit more pricey but if you buy into the idea that a fixed size investment trust might be more nimble than a monster active OEIC in navigating some markets, you might be able to justify the fees to yourself as long as the overall return is solid (especially if you are able to access the assets via a trust which is on a NAV discount anyway, or find a bit of gearing that you want).

- Others like Graphite are always going to be high fees. They couldn't exist as OEICs with potentially higher fund size and economies of scale, because of the illiquidity of the underlying assets. And they're providing access, through institutional partnerships, to individually selected private equity opportunities which by their nature are the exact opposite end of the cost scale from a fund that invests in a tiny minority position in a thousand public companies in an index. And as a private (non high-net-worth) investor you couldn't get access to the investment opportunities yourself (unlike going out and buying a share of Tesco or Google or whatever).

So you will always be paying >1.5% with a fund-of-funds like Graphite, because it's a complex and actively managed area. They need to make some money for managing the portfolio and investing in the individually-selected privately held assets they identify... and much of your exposure is through fund partnerships alongside other institutions where the underlying manager charges something like 1.5-2.25% on committed capital and 20% performance fee over a hurdle. So you have exposure to all those costs whether it's Graphite's pocket or some other manager's pocket you're lining.

By going through (e.g.) a Graphite fund-of-funds for diversification, instead of going direct to the underlying funds which are closed to you, you will inevitably be paying a little more than the big institutions for this access; but so long as the institutions themselves will suck up and pay a 2+20% fee structure, you either have to pay or not play.

Over time Graphite and their ilk have delivered the goods even after fees. But RDR will not significantly change Graphite's pricing, because you can't easily build yourself a rival portfolio and the cost drivers are all at the underlying private equity fund level from the guys doing the private equity deals. So it doesn't do you much good to shop around to Pantheon or Harbourvest etc, who would get the same level of underlying annual fees and performance fees from the guys who are actually doing the direct investing into PE or venture situations.

Apologies that was not Youinvest-specific...

EdSwippet

SnowMan wrote: »

My complaint is going to an Ombudsman which could take a year, but I have no confidence in a proper assessment being made.

I am also currently pursuing a complaint against Youinvest through the FOS. Youinvest's unilateral and contract-breaking RDR fees increase (weaseled by them as a "change to terms and conditions") took my annual charges from £50 to £300, and more than twice the price of holding the same stuff at Interactive Investor. Youinvest are insisting I pay them £230 to transfer out.

I'm probably a couple of months behind you in the process -- not long past the 'acknowledged by the FOS' stage -- but I sense that what happens to your complaint might presage what happens to mine.

You've been at this longer than me. As it proceeds towards its bitter end, are there any resources we could pool to make it easier/cheaper? Anything I can offer to help? A way to cover everyone who Youinvest charged to move away?

JasonPr

EdSwippet (and others): any update on your complaint?

JasonPr

I have about one more month until I have to file my complaint. SnowMan's experience makes me think it won't be successful but I think it's worth trying anyway.

Looking at some information I received from AJ Bell, it seems I can take my complaint to either the Financial Ombudsman Service or the Pensions Ombudsman (since it involves a pension/SIPP).

Does anyone have experience with the Pensions Ombudsman? Should I refer my matter there instead of the FOS?

EdSwippet

Jason, no update, but FOS cases take months, or years, or decades(?) to bubble up to the top of the pile.

Meanwhile I wait, and wait, and wait. My transfer from Youinvest to II has now comfortably entered its sixth month -- it is a good job I'm not trying to live on it. Fund holdings finally disappeared from Youinvest three weeks ago, and two out of seven have appeared in II. The remainder seem to be in limbo. The cash element still sits in Youinvest.

On several occasions during the transfer Youinvest applied incorrect charges (beyond the disputed transfer out charge that they refused to waive), and they only appeared to start the transfer when cajoled. I expect to file a second complaint against them for delays and general incompetence. I am saving that for when they actually complete it, though it is anyone's guess when that will be. I have spent more time chasing Youinvest on this than I care to add up. The process has progressed from annoying to farcical.

Can you not forward your complaint to both organizations? My sense is that the Pensions Ombudsman might not be much help -- this is a generic problem with a platform that isn't pension-specific (you'd have the precise same issue with an ISA), so if you can't then the FOS is probably the right route. The FCA seems suitable too, though I'm not sure how ready they are to deal with individual investors.

Either way, I'd fire off complaints rather than just drop it. It only takes a few minutes to complete the FOS form, and nothing to pay to file it.

bdal65

Re: Foreign exchange commission AJ Bell sipp
Client is even less likely to notice the foreign exchange commission of 1% they charge since their trading room does not mention it and it is not disclosed as a charge on the transaction note- its hidden- which is very unwelcome- srely in breach of regulation rules of TCF Treating Customers Fairly?
Also they do not allow holding of foreign currency so the 1%'s will start racking up as when you sell a share you have to convert back to gbp and buy another foreign share you convert again - so they round trip is 2-3% of non recorded commission! That will kill any returns and is outrageous considering the cost charged elsewhere like with interactive brokers which is $2.50 per transaction.

bdal65

Aj Bell complaint foreign exchange commission they charged.

I am awaiting response by snail mail! They have clammed up and not using email or secure site email and now write that they respond by snail mail. Hoh hum this is going to take a lot of time judging by above complaints about AJ Bell.
I'm in for the long hall though.
In the meantime I am moving to another provider. I was with AJ Bell for years and put up with a terrible IT system but I have had enough of them now. I am paying outrageous fees for rubbish goods.

bowlhead99

bdal65 wrote: »

Re: Foreign exchange commission AJ Bell sipp
Client is even less likely to notice the foreign exchange commission of 1% they charge since their trading room does not mention it and it is not disclosed as a charge on the transaction note- its hidden- which is very unwelcome- srely in breach of regulation rules of TCF Treating Customers Fairly?

The fee schedule you signed up to clearly states "A foreign exchange charge of 1.00% will be included in the rate used to convert the value of your deal to sterling. We may share a proportion of this with our service provider." So when they tell you they've bought $1000 of shares and charged you an fx rate of 1.71, they could alternatively have said they charged you an fx rate of 1.693 plus an fx loading of 0.017, but they don't have to.

Also they do not allow holding of foreign currency so the 1%'s will start racking up as when you sell a share you have to convert back to gbp and buy another foreign share you convert again - so they round trip is 2-3% of non recorded commission! That will kill any returns

If you are doing higher volumes of trading in multiple currencies then an account that lets you hold multi-currency cash is key. Most mainstream providers don't offer this. Multi currency cash can't be held in an ISA, which is one of the most popular products this type of provider offers.

Some providers that have more of a background in broking rather than being a fund platform, do offer it - e.g. TD Direct. Others like HL, Halifax, iii, etc etc do not. Some like Bestinvest or X-O don't even offer overseas shares. If you are using someone who specialises more on international broking than domestic funds & shares, it is more common. So someone like Saxo or Interactive Brokers as you mention might have a better product for you depending on what account features you want.

and is outrageous considering the cost charged elsewhere like with interactive brokers which is $2.50 per transaction.

This is common with most mainstream platforms. HL is one of the largest and they start at 1.7% per transaction and don't go below 1% until your trade size is over 100k. Charles Stanley Direct will round it up or down 1% in their favour unless you are already paying through the nose for a telephone trade, then 0.35%. TD is 2% for small trades (though this is mitigated by them having multicurrency accounts) .

At $2.50 per transaction, if that's fixed, that's only 0.005% on a $50k trade and super competitive. It is a long way from mainstream retail pricing. Even a large corporate buying a million of currency is not going to get that close to the mid market rate. So if Interactive Brokers is doing currency without markup they have an unusual business model not followed by UK financial service providers.

However, as Interactive Brokers are a US business who do not even have an office in the UK, do not offer ISAs or SIPPs or any UK centric products, it's possible they don't offer accounts to people in the UK and so you are not making an apples to apples comparison with their prices versus Youinvest or its competitors. If they do offer services, they're limited compared to dedicated UK rivals in terms of our country-specific products. Generally speaking broking is cheaper in the US. I'm not sure why forex should be so cheap (it is not with all their local US rivals). But it is not a useful baseline comparison. You would not get an ISA or SIPP or the ability to invest into UK OEICS or UTs if you went with some of the rivals with the absolute best prices in the world for buying shares or forex.

This is not to say you can't find the services you want outside Youinvest. You have given them a complaint that you have not been treated fairly. I would surmise that it is unfounded. Meanwhile they will respond to your complaint in writing and you can move if you like. Some providers have better systems with different prices. Depending on what you hold and the deal size, those prices might be astronomically more (e.g. 0.45% pa at HL) or less (non-NAV-based fees at some other places).

I'm in for the long hall though.

I'd be interested to hear what you find through the door at the end of it.