HL charges

tony4147

The Telegraph have a couple of articles about HL charges and cheaper Companies

gterr

There are a couple of longer threads running about HL's new pricing structure in the Savings and Investments board.

jaybeetoo

The Times today has an article about HL cutting charges and starting a price war.

kidmugsy

dunstonh wrote: »

Effectively, HL were using the hidden commissions from managed funds to cross subsidise the index tracking funds

Nobody is as angry as someone whose agreeable subsidy has just been removed. Remember the Poll Tax fiasco?

jamesd

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.

If you start to place an order to buy you can find a link to commission which will tell you what the commission level is and how much of it is rebated to you in the form of the Loyalty Bonus.

On request, HL can also provide a report "Client Holding valuation" that has columns for:

Account (SIPP, ISA etc)
Sedol
Stock/fund
Description (Income or accumulation etc.)
Annual Charge (AMC)
Extra expenses (in the TER)
Trail commission % (paid to HL)
Loyalty bonus % (passed back to you from HL)
Annual platform fee £
Fund value (current amount invested by you)
HL received commission £
Annual Loyalty Bonus £
HL Retained Commission £
Charge retained by Fund Group £

So this will tell you the percentages and Pound amounts applicable to the investments held within your account, with convenient subtotals by account and overall totals.

ss53

Can someone check my understanding on this?

If you are solely invested in funds in a SIPP then you will get a new 0.45% annual charge.

If you remain invested in inclusive funds the you will receive a higher loyalty bonus to off-set the annual charge.

The new loyalty bonuses will not be published until 1st March.

So you won't know the effective cost until 1st March.

The increased exit/closure charges take affect on 1st March.

So you have no time to asses the effective charges and leave/transfer before the exit charges come in?

If that is true then surely it is worth an email to HL stating that you are reserving the right to transfer at your current transfer costs once they publish the full new effective costs of your portfolio?

jamesd

You will get the 0.45% charge plus any commission that HL chooses to keep. It hasn't committed to paying customers all commission and has apparently said in a press conference that it will retain any commission over 0.75% as well.

Yes, it's true that we won't know the actual implications of the changes until 1 March.

Some of the exit and transfer charges apply from 2 June 2014, others are already in place.

See Leaving HL without transfer charges for more on the subject of exit and transfer charges for those who leave.

grey_gym_sock

as jamesd said, the exit charges change on 2 june, not 1 march. though there is a case for disputing whether any exit charges should be levied.

it's pretty clear that they're retaining some commission (until 2016), but it's not clear how they will be calculating it. their written docs say "the typical loyalty bonus will rise to 0.75% or more" (very vague!), so i don't think it can as simple as keeping all commission over 0.75%.

xylophone

See Leaving HL without transfer charges for more on the subject of exit and transfer charges for those who leave.

http://www.moneymarketing.co.uk/news-and-analysis/wrap-and-technology/hargreaves-defends-exit-fees-and-re-reg-charges/2005316.article

"Chief executive Ian Gorham said it would not be good business practice if the firm was trying to generate “material revenue streams” from clients transferring out." So that's okay then...:D

xylophone

apparently said in a press conference that it will retain any commission over 0.75% as well.

This? http://www.hl.co.uk/investor-relations Retail Review Analyst Presentation

"Some trail commission on legacy funds will be
retained until April 2016 sunset date (transitional
arrangements)"