Leaving HL without transfer charges

gterr

jimjames wrote: »

Transfers in specie have been charged for some time so it may be unlikely to waive those fees as they were already known about.

Fees for cash transfers are different as they do not charge at present.

Yes, but the reason I wish to leave is because their change of charging structure amounts to a significant unilateral variation of contract. I am not happy with the new contract and wish to leave, Under those circumstances I believe I should be able to leave without financial penalty.


This argument has been made successfully in the past. Links to follow.

jimjames

innovate wrote: »

I haven't got my HL letter to hand right now but I recall there was a cap of £45 in the ISA and £200 in the SIPP. Have I got this wrong?

Yes, there is no cap for funds. The cap only applies to shares.

So someone with £2m in funds will be paying £4000 per year. Not sure of the justification of that as I can't believe the admin for 1 fund with value of £10k is any more than 1 fund with a value of £2m.

grey_gym_sock

jimjames wrote: »

there is no cap for funds.

well, there is ... the cap is £4000 (on a £2m holding).

gterr

Malfesto has contacted me to pass on the following links concerning his previous successful claim to the FOS regarding transfer charges. Malfesto is confident that the FOS would uphold a similar complaint should HL fail to waive transfer charges in this case.


http://forums.moneysavingexpert.com/...php?p=63925897

http://forums.moneysavingexpert.com/...php?p=63978327

http://forums.moneysavingexpert.com/...php?p=64384620

grizzly1911

gterr wrote: »

Well, there's the problem of being out of the market, the problem of dealing charges to buy back into the funds (depending on which platform you move to) and the problem of bid-offer spreads or dilution levies on some funds. I also have one fund that is soft-closed.


For these reasons I would very much prefer to transfer funds in specie, but this will cost my husband and me several hundred pounds to achieve unless the transfer charges are waived.

Could you not transfer the soft closed and the "odds" in specie and fold the rest into cash.

It may reduce the transfer cost significantly and allow you to move on.

I would be surprised if HL hadn't factored in the contract challenge scenario and don't have a suitable reposte waiting.

gterr

grizzly1911 wrote: »

Could you not transfer the soft closed and the "odds" in specie and fold the rest into cash.

It may reduce the transfer cost significantly and allow you to move on.

I would be surprised if HL hadn't factored in the contract challenge scenario and don't have a suitable reposte waiting.

Hi Grizzly, Yes you may be right. I started this thread so that anyone who wanted to challenge HL on their transfer charges could read the relevant links. I'm not intending to spearhead a campaign.

jamesd

Please also see malfesto's post that contains the positive result of contacting the FCA's Unfair contract terms team in another incident. It appears that contacting this team may be an efficient way to proceed, asking them to consider:

1. That HL estimates that their changes will make 100,000 of their 500,000 customers worse off.
2. HL has indicated that they will not waive transfer or exit charges.
3. The FOS has ruled in similar cases, including for HL, that such charges, including in specie transfer charges, should be waived - include the examples I gave, that you should include in full in appendices.
4. Many customers will not be aware of these things so will pay charges that they should not have to pay.
5. This appears to be a good opportunity for the team to act in advance of consumer detriment and protect less well-informed consumers while also reducing the risk for those who do know that they can take the matter to the FOS.
6. Exit charges that appear to exceed likely costs are common in the direct to consumer part of the industry at present, to the extent that providers regularly offer to reimburse some costs of those transferring to them. It appears that the charges are being used to try to inhibit consumer switching between providers.
7. Since there are more pricing announcements happening from competitors, and talk of a possible price war, now may be a good time to proactively contact other leading players in the direct to consumer fund platform market and let them know the FCA's views on these matters, in an attempt to forestall consumer detriment more widely.

Perhaps a few people might want to do this in varying ways and let others know how it goes, for the common good?

I simply haven't fully decided yet what I'm doing, so it's premature for me to do it, but it seems likely to be good to do it now for those who have very obvious decisions already made.

It seems better to get the regulator involved rather than have lots of individual disagreements with HL and then lots of FOS cases - it might make them unnecessary, as well as helping those who don't know their options so well.

SnowMan

jamesd wrote: »

Perhaps a few people might want to do this in varying ways and let others know how it goes, for the common good?

I contacted the Financial Conduct Authority about the Youinvest unfair behaviour.

Someone from the FCA rang me up last week to say they were referring it on to a more senior colleague.

So it is encouraging that the FCA are listening to customers :T

jamesd

SnowMan, thanks! Is there some sort of case reference that might be included in anyone who contacts them about HL? It'd be really nice to hand them a convenient package of a pattern of adverse behaviour towards consumers. That's the sort of demonstration of an industry-wide issue that may get them a good deal more involved in the general protection aspect to tackle the wider problem.

jamesd

Elsewhere I've seen some people wondering why the charges should be waived, particularly if they were specified in the contract, so lets consider some examples in other lines of business to provide a context:

1. Current accounts. Without even any need to a price change, the initial current account provider passes on details of all direct debits and standing orders, synchronises the transfer of money to the new place and for a year passes on transactions and new details to others who try to use the old account.
2. Power companies. Even in fixed term deals, an increase in prices mean you get to leave without paying exit fees.
3. Phone companies. Same as power.
4. Internet companies. Same as power.

No point in listing all of the others where it's now completely expected that there will be no costs for transferring out even from a fixed term contract. The exit charges in the contracts just don't apply in this situation and it's completely accepted by providers that they don't. But this still seems to be a sticking point for at least some fund platforms, who instead of recognising what other industries have recognised, appear to be trying to use the charges to discourage leaving.

In the case of Hargreaves Lansdown there are at least these possibly detrimental to consumers aspects:

A. The outright increase for investment trusts.
B. Size-dependent increase or decrease in tracker fund costs.
C. Increase price transparency, even for those with lower costs, who might suddenly realise how much they have really been paying and be unhappy with that previously undisclosed cost.
D. Assorted other changes that can be significant for various people.
E. Pricing practices in the industry, where fixed or capped fees are quite common, that can make it desirable to transfer all or most of the money even if only part of the price mixture is increased. So a change in ITs might make you unhappy then the general economics might favour moving the lot, or most of the rest, including any pieces where prices might actually be lower.

Also of note is that HL hasn't yet announced the full set of changes, that wont' happen until they finally disclose the fund charges. So those holding funds don't yet even know the final implications because HL is still withholding that information for a while longer.