HL charges

finebone

Just received a letter from HL about the new Vantage Service charging structure from 1/3/2014.


Very disappointed to read that "new FCA rules means we must apply the same Vantage charge for all funds. Therefore, we are removing the existing flat £1 and £2 per month platform fee currently applied to a number of index tracking and other funds, replacing it with the same low cost tiered tariff across all funds"


Looks like I will have to pay 0.45% per annum (in addition to the tracker fund charges) which means that the fees I pay to HL on my SIPP drawdown pot will go up over seven fold!


Anybody know of a cheaper alternative (and the likely switching costs)?

elantan

ive came across the same thing today, i started a thread about it further down the board, i'm not sure if it will help you at all though ... and obviously i cant give any advice ( you wouldnt want it anyway)

i am currently looking into Cavendish to see if they meet my needs ... and so far ( but i still have more research to do) they seem to

traineepensioner

"Looks like I will have to pay 0.45% per annum (in addition to the tracker fund charges) " ....... Time to move? but where?

Sterlingtimes

I have the same problem with a large holding in a Vanguard tracker fund. The platform fee increases from £24 per annum to 0.45% of holding (less any manager's reduction). This is a huge price hike. It's dishonest that the headline sells this as an improvement for customers.


Is there a cost in exiting H&L and transferring elsewhere?

jaybeetoo

I would wait until other companies have announced their new charging structure. Also the full details of the new charges (and a charges calculator) won't be available until 1 March.

sandsy

All FCArules say is that platforms must have an explicit charge instead of recovering their income from hidden cashbacks from the fund managers whose funds they offer (and who charged you more for their funds subsequently). There are no rules which say how these charges must be levied.

Different platforms are approaching this in different ways so if the new HL charges don't work for you, shop around. That's the advantage of explicit charging - it makes to easier to make comparisons between different options.

xylophone

http://monevator.com/cheap-vanguard-index-funds/ Written before today's announcement - have a look at the other providers mentioned?

peterg1965

I too am unhappy about the hugely increased up front costs of my ISA, SIPP and fund account with HL. It looks as though my charges will be in the order of £56 month, not insignificant.

I really need to look at moving away which is a shame as I like their platform. I am also not wanting to spread my portfolio of two different providers.

jaybeetoo

The reason these changes are being brought in is the current system hides many of the charges. I have no idea what I'm being charged today. At least under the new scheme the charges will be transparent making it easier to compare companies. By moving from hidden charges to a transparent system it looks as if the charges are going up and that may not be true.

Rather than jump ship now (and possibly find the lifeboat has a leak), I'm waiting until at least March to let everything settle down and for all companies to announce their charges.

Freecall

jaybeetoo wrote: »

The reason these changes are being brought in is the current system hides many of the charges. I have no idea what I'm being charged today. At least under the new scheme the charges will be transparent making it easier to compare companies. By moving from hidden charges to a transparent system it looks as if the charges are going up and that may not be true.

Rather than jump ship now (and possibly find the lifeboat has a leak), I'm waiting until at least March to let everything settle down and for all companies to announce their charges.

I would agree with your comment about waiting until March although the 'hidden charges' bit is not necessarily key here.

Many posters have VLS funds and up until now HL offered a really good deal. That will now completely disappear for even medium scale investors. I think that they will have little choice but to look elsewhere.

dunstonh

Very disappointed to read that "new FCA rules means we must apply the same Vantage charge for all funds. Therefore, we are removing the existing flat £1 and £2 per month platform fee currently applied to a number of index tracking and other funds, replacing it with the same low cost tiered tariff across all funds"

It is a logical thing to do and we all knew it was coming for over a year. The intention was to remove bias and reduce cross subsidy.

Effectively, HL were using the hidden commissions from managed funds to cross subsidise the index tracking funds and run them as loss leaders to allow them to say they could be a low cost provider. HL are one of the last platforms to move to the required charging method.

Anybody know of a cheaper alternative (and the likely switching costs)?

most personal pensions.