HL Annual management costs

hyposmurf

Just running through charges on HL, am I right in thinking that as well as the TER for the funds with them, you would then need to add 0.5% off youre totall funds after the TER has been taken out?


http://www.hl.co.uk/shares/share-dealing/dealing-charges


ISA - 0.5% a year (capped at £45 a year)


For instance TER for Cazenove UK Smaller Companies Class B Accumulation is 1.6% if you had £500 in this fund.Youd then have another 0.5% taken from this after the TER had been taken out?


If thats true they do look very expensive.Are there any charges Im missing if you just hold your funds with them and make monthly top ups?

jimjames

I thought for a moment that HL had slipped out their new charges on the quiet!

Had a quick look and those are not applicable to funds just to shares and ETFs so the 0.5% would not apply in the example you've given

grey_gym_sock

no, i think you're misinterpreting how it would work.

cavenoze UK smaller companies class B is currently shown on HL as a TER of 1.61%, of which they give you 0.25% back as "loyalty bonus", so a net cost of 1.36%.

if you log in to HL and pretend you want to buy the fund, it tells you that HL are getting a total commission of 0.9% on it. so after returning 0.25% to you, they're keeping 0.65%.

if you're holding the class B units when the new charges come in, although HL don't have to change anything for existing holdings (yet), they've said that they plan to give a full rebate (i.e. 0.9% in this case), and charge you an explicit fee (undisclosed). so your net cost would be 0.71% + the explicit fee. so you're better off if the explicit fee is under 0.65%, worse off if it's over. just as example, suppose HL charge 0.5%, then your total cost would be 1.21%, which is a price drop of 0.15%.

for new purchases, you'd instead have to buy "clean" units: lower TER, no rebates, and with the same mystery HL fee added on top. looking at the same funds on youinvest's site, the cheapest units are class X, with a TER of 0.86% - which would actually not be quite as good as "dirty" class B. because if you add on the same (made up) explicit charge of 0.5%, you're paying 1.36% in total - the same as you currently pay with class B, but less than class B with the full rebate.

however, if HL can get this fund with a lower AMC than even class X (i.e. either a "superclean" class, or class X with an extra rebate in units), that might be cheaper still. i've no idea whether they can, though this fund is currently in the "wealth 150", which presumably makes it more likely.

planteria

but is soft closing, so may finish up not being pushed at all

grey_gym_sock

planteria wrote: »

but is soft closing, so may finish up not being pushed at all

oh, so we can probably forget about "superclean" for this fund.

the general idea applies to other funds that are still fully open.

slinga

Looking into my HL funds in detail I see just about all have a debit of around £45 and this is noted as 'Corporate action.
HL explanation is:

What does 'Corporate Action' refer to?

If a stock you hold has undergone a rights issue, merger, takeover, consolidation or other material change this will be listed here as a 'Corporate action'. It is also common to see 'Corporate action' listed alongside an adjustment to your cost figure, in most cases this will be an 'equalisation payment'.

But it doesn't explain precisely why I've had money deducted.
And HL does it in a 'sly' way.
I've only found it because I was just looking to check on stuff which I would normally not have done.

Am I looking at this correctly????

westy22

slinga wrote: »

Looking into my HL funds in detail I see just about all have a debit of around £45 and this is noted as 'Corporate action.
HL explanation is:

What does 'Corporate Action' refer to?

If a stock you hold has undergone a rights issue, merger, takeover, consolidation or other material change this will be listed here as a 'Corporate action'. It is also common to see 'Corporate action' listed alongside an adjustment to your cost figure, in most cases this will be an 'equalisation payment'.

But it doesn't explain precisely why I've had money deducted.
And HL does it in a 'sly' way.
I've only found it because I was just looking to check on stuff which I would normally not have done.

Am I looking at this correctly????

Are you sure that this is not actually a credit to you? Most 'Corporate Actions' of this nature result in a credit to you and effectively reduces your cost figure and is usually the result of you getting a proportion of the dividend or income already earned on the holding at the time you purchased.

If it is a debit entry in the Cost column of your Stock Movements record then it is a credit!!

hyposmurf

jimjames wrote: »

I thought for a moment that HL had slipped out their new charges on the quiet!

Had a quick look and those are not applicable to funds just to shares and ETFs so the 0.5% would not apply in the example you've given

Yes I just noticed after submitting the post that the cpst was for a share I had.My post didnt show in my control panel or on the site afterwards, so couldnt delete it?
This happened with a prev!ous post I made didnt show up until next time I logged in.

hyposmurf

grey_gym_sock wrote: »

no, i think you're misinterpreting how it would work.

cavenoze UK smaller companies class B is currently shown on HL as a TER of 1.61%, of which they give you 0.25% back as "loyalty bonus", so a net cost of 1.36%.

if you log in to HL and pretend you want to buy the fund, it tells you that HL are getting a total commission of 0.9% on it. so after returning 0.25% to you, they're keeping 0.65%.

QUOTE]


That 0.25% though only kicks in after youre over £1000, which can take a while if your only making small regular payments.


I didn't know that about that trick to see the breakdown of loyalty bonus, so thanks and cheers for the comparison of fees.

PParka

jimjames wrote: »

I thought for a moment that HL had slipped out their new charges on the quiet!

I've just found out that Hargreaves Lansdown is to unveil its pricing model on 15 January.

slinga

westy22 wrote: »

Are you sure that this is not actually a credit to you? Most 'Corporate Actions' of this nature result in a credit to you and effectively reduces your cost figure and is usually the result of you getting a proportion of the dividend or income already earned on the holding at the time you purchased.

If it is a debit entry in the Cost column of your Stock Movements record then it is a credit!!

Thanks for the reply it is shown as a negative in the cost column but nowhere is it explained and it doesn't occur with all the funds I have bought.
And it isn't shown as any additional units to the fund.