Genuine alternative to HL?

kidmugsy

Imnoexpert wrote: »

My wife's IFA uses Fidelity for her ISA and they now charge her the 0.25% on funds, plus £45 a year with the adviser pocketing 0.5% from her on top oh and a 1% buy in charge.

Good grief! What are the charges within the funds?

grizzly1911

Imnoexpert wrote: »

Thanks RH.

I think Funds Network/Cavendish might be the way to go for me.

My wife's IFA uses Fidelity for her ISA and they now charge her the 0.25% on funds, plus £45 a year with the adviser pocketing 0.5% from her on top oh and a 1% buy in charge.

I suppose if I go direct I can choose Fidelity FN direct with a better website than Cavendish but it costs £45 a year more than Cav.?

In Fidelity's brochure it says "The total cost of investing in a clean share class won't always necessarily be cheaper than its bundled equivalent as a result of the new charges". So I take it some clean funds either don't exist or aren't as clean as others?

I shall miss HL if I go because it was through their pr and simple yet informative website and brochures that I got into 'investing'. I hope they read these forums.

I use Cavendish. The Cavendish/Fidelity site are effectively the same just with some window dressing if accessed through Cavendish.You can log into either to review.

I always deal through the Cavendish site but all confirmations come direct from Fidelity. I believe that some functionality may be locked out for Cavendish users but I have not found it an issue. Can't fault the customer service received form Cavendish or Fidelity.

You are right that when Cavendish offered clean and dirty, pre switch at to clean only at the end of last year, some dirty offerings worked out slightly cheaper due to the way the rebates worked. They now only offer clean, for new purchases, switches and top ups so more of a level playing field.

The Trustnet fee cap looks interesting but may be offset by the dealing charges depending on how you use the service.

Like you I use Trustnet for monitoring and research amongst others.

Is the 1% buy in charge, you mention, by Fidelity or the IFA?

hyposmurf

I started out with cofunds who seem to have been bought out multiple times.There charges seemed a bit lower than HL, but there service was pretty poor in compaision.Im looking for a service better than Cofunds but not to HL standards or costs.
What worries me is that its possible that the annual charges provided by many of these fund supermarkets adds quite a steep cost when you convert it to a percentage for a small investor.Almost to the point that it could just put us off investing.

Imnoexpert_2

Fidelity with an adviser.

The adviser gets the 1% which comes either in cash from the investor or is deducted from the fund.

The fund charges have been the standard 'dirty ones' but I presume will now be clean ones (though spookily an error was made recently and some money went into 'dirty' ones - I noticed and it was put right.

I am afraid advice has to be paid for. The guy my wife uses gives a lot of advice which we don't end up paying for -so we pay over the odds (in my view not his) for funds to keep him sweet.

I would prefer to have a deal with an adviser where he comes once a year gives me advice on all my finances from a fact find I do myself and I pay a fixed sum. When I suggested that some years ago nobody would do that - only quote a high hourly rate with no estimates of how many hours might be involved (the solicitor model).

Imnoexpert_2

Fidelity with an adviser.

The adviser gets the 1% which comes either in cash from the investor or is deducted from the fund.

The fund charges have been the standard 'dirty ones' but I presume will now be clean ones (though spookily an error was made recently and some money went into 'dirty' ones - I noticed and it was put right.

I am afraid advice has to be paid for. The guy my wife uses gives a lot of advice which we don't end up paying for -so we pay over the odds (in my view not his) for funds to keep him sweet.

I would prefer to have a deal with an adviser where he comes once a year gives me advice on all my finances from a fact find I do myself and I pay a fixed sum. When I suggested that some years ago nobody would do that - only quote a high hourly rate with no estimates of how many hours might be involved (the solicitor model).

zagfles

planteria wrote: »

all good points.

i have c£70k with HL. so i'm a small investor too.

what none of us want is to have to keep moving around...especially if incurring exit fees in the process.

there don't seem to be many alternatives to me. will look at Charles Stanley when we know the lie of the land. but.....part of me thinks that just sticking with HL might turn out to be a reasonable decision, as, as bowlhead eloquently describes, it is a market that will always be evolving, and there has to be a decent chance that HL will sharpen their offer if they need to to retain customers, and that a prospective new platform may increase their prices to increase their profits at some stage in the not too distant.

to be honest, being unsure of getting a 'good deal' makes me reluctant to commit to investing as much as i, perhaps, could.

I think it'd be daft to make any decision until they announce their new pricing. For lower value SIPPs (under £100k) HL are quite competitive even for funds - as there are no fixed/annual charges which nearly all the others have - for instance Cavendish charge £291pa fixed charge for SIPPs under £150k whereas HL charge nothing, and the other HL fixed charges are lower such as transfers, drawdown etc - which could easily outweigh the higher rebates/use of clean units.

Rollinghome

Imnoexpert wrote: »

Thanks RH.

I think Funds Network/Cavendish might be the way to go for me.

My wife's IFA uses Fidelity for her ISA and they now charge her the 0.25% on funds, plus £45 a year with the adviser pocketing 0.5% from her on top oh and a 1% buy in charge.

I suppose if I go direct I can choose Fidelity FN direct with a better website than Cavendish but it costs £45 a year more than Cav.?

In Fidelity's brochure it says "The total cost of investing in a clean share class won't always necessarily be cheaper than its bundled equivalent as a result of the new charges". So I take it some clean funds either don't exist or aren't as clean as others?

I shall miss HL if I go because it was through their pr and simple yet informative website and brochures that I got into 'investing'. I hope they read these forums.

I never see the Cavendish website, just go straight to the Fidelity login. There's no need to use the Cavendish website at all after you've registered with them.

Cavendish operate just as agents/introducers more or less in the same way as your wife's adviser but on an execution only, non-advisory basis. All your dealings will be directly with Fidelity. I've only ever contacted Cavendish once when I opened the account with them a couple of years back. I got a very helpful reply within 20 minutes and have never needed to contact them again. For any query with the account I'd message or phone Fidelity and all payments are made directly to Fidelity.

Yes, post RDR all new new investments on any platform will have to be "clean", ie not paying commissions to intermediaries, so the funds most likely to cost more to hold will mostly be tracker funds that previous paid no or minimal commission. For example, most HSBC index trackers had an AMC of 0.25%. With Cavendish there was no extra charge, unlike with HL, and no commission to rebate either. With the clean C class the AMC is now down to 0.10% but in line with RDR all funds, both passive and active, will have the same platform fee: so you'd now pay 0.10% + 0.25% platform with Cavendish and with 0.10% plus whatever figure they decide on with HL.

People with very small amounts invested might well be happy to pay a bit extra to stick with HL. For those with substantial accounts HL is likely to cost them hundreds if not thousands extra each year and very hard to justify. If you want a SIPP then you may need to add that to your calculations but as I'm retired that isn't an issue for me.

I left just a bit of ISA money with HL through laziness and because I wrongly expected them to announce their rates much sooner and that has cost me about £1k or so more than if I'd moved it away from them with everything else.

I'm sure HL won't let you off receiving their sales literature that easy, and yes, they do read this board avidly.

Totton

I find it strange that so many are assuming that the right thing to do is move to a new provider when as yet we don't know the full picture, sit and wait it is for me.

For those looking for cheaper options why not consider dealing with a fund provider or investment trust company direct where you can get some good deals. For example Fundsmith direct at £100 a month or Caledonia IT at £10 minimum a month via The Share Centre.

http://www.caledonia.com/our-business/invest-in-caledonia
https://www.fundsmith.co.uk/Home.aspx

There are quite a few others...

grey_gym_sock

i don't think there's any real problem for smaller investors. though there's plenty of details to get lost in for any size of investor.

if we're just talking about investing in funds (i.e. UTs/OEICs) ...

for ISAs or unwrapped, either cavendish/fundsnetwork or charles stanley will charge 0.25% p.a. for the platform (with no fixed annual fees, and no dealing commissions). which is fine for smaller pots.

SIPPs are more difficult, in that most providers do have fixed charges. if you only want funds, the cheaper option is probably to use a personal pension instead of a SIPP.

Rollinghome

Totton wrote: »

I find it strange that so many are assuming that the right thing to do is move to a new provider when as yet we don't know the full picture, sit and wait it is for me.

For those looking for cheaper options why not consider dealing with a fund provider or investment trust company direct where you can get some good deals.

I hadn't noticed anyone suggesting anyone moves immediately if that's what you're saying but perhaps I missed whichever posts you're referring to. On the basis of what HL have already said it obviously does make sense to consider the options.

It's quite a hassle to move an ISA from Hargreaves Lansdown in particular and, unlike Fidelity who make no charge, they hit you with a fee of £30 for each fund or stock you want to move from them in specie rather than in cash.

They'll be forced to announce their new fees within a few weeks anyway. It's true that there's not much chance they'll be competitive on price but for some people they might offer something that makes it less worth the hassle of moving. It's likely to come down to whether it's going to cost tens of pounds to stay with them or hundreds.

We could also see changes and more new entrants to the market for a long time ahead so probably important to avoid being locked in by high exit charges if possible. What we see on 1 April is unlikely to be the last word.

Dealing direct can sometimes be an option but gets complicated if you have more than just a few funds and need to have accounts with oodles of companies and sometimes the mechanism for buying can be clunky. In most cases, but not all, buying a UT or oeic direct will be more expensive than using a fund supermarket and not everyone will want to invest everything they have with Smiffy.