Leaving HL without transfer charges

badger09

Hope this is the right HL thread

Like many, I’m confused by all the RDR (and non RDR related!) changes to Platform charges.

I’m already retired, decent pension, realistically looking at 10 – 15 years max to add to investments. Opened account with HL in April 2013. So far, only invested in VLS fund in ISA & Emerging Markets tracker in SIPP. Was planning to add another 1 or 2 funds max to each, as pots get bigger. Investing £1k or £2k at a time, so say 6 purchases per account per year – but could reduce the frequency. Not likely to buy shares and don’t know enough about ETFs yet.

SIPP – 2 year’s contributions £7200. ISA – 2 year’s S&S contribution £11400. Next year I’ll top up SIPP and use full ISA allowance; also considering transferring in cash ISAs approx £32k.

I was just going to sit tight until all the Platform charges had been announced, but, I don’t want to pay 0.45% if I can get a similar service for less, and I’m really concerned that HL’s new exit charges from 2 June, will have a disproportionate effect on my tiny pots. If I move now, I think (using Snowman’s excellent spreadsheet) the best would be iWeb (though Vanguard Emerging Markets isn’t available). If I sell and move everything out as cash, I’ll face another dilution levy when I buy back in, but that is a one off, and its quicker to move as cash than in specie.

Then there’s the change to ‘clean’ funds to add to the confusion – or will the Vanguard Funds be unaffected as they are already clean?

Just one final question. Is it worth complaining to HL about the new charges, or should I just move now before they take effect?

I’d be really grateful if anyone could point out any glaring errors in my thought process, or offer any opinions.

naedanger

badger09 wrote: »

Is it worth complaining to HL about the new charges, or should I just move now before they take effect?

In my view:

1) It is not worth complaining about their proposed future charges.

2) It is worth demanding that any transfer costs are waived or refunded if you instigate a transfer within the next month.

If you can avoid all transfer costs by transferring now then that is probably your easiest course of action. However if that entails incurring charges from HL then you should demand HL refund those charges.

masonic

badger09 wrote: »

If I sell and move everything out as cash, I’ll face another dilution levy when I buy back in, but that is a one off, and its quicker to move as cash than in specie.

Then there’s the change to ‘clean’ funds to add to the confusion – or will the Vanguard Funds be unaffected as they are already clean?

Just one final question. Is it worth complaining to HL about the new charges, or should I just move now before they take effect?

The dilution levy for your Vanguard fund is going to come quite close to the cost of an in specie transfer. It really comes down to whether you pay the ~£100 exit fees or complain and attempt to get them refunded. Moving in cash would make getting your losses refunded more difficult (but not impossible). The charges you are asking them to waive will not be as high as others who have been successful, so I'd think your probability of success will be very high.

grey_gym_sock

yes, vanguard funds are all clean already.

the SIPP would be more expensive with iweb, because they charge £75 per year in admin charges (or more on larger SIPPs). almost all SIPPs have similar minimum charges, so HL are actually not bad value at 0.45% on a small SIPP. you might get lower charges by transferring to a personal pension (e.g. via cavendish online).

on the other hand, you can clearly save by moving the ISA away from HL. iweb are fine if you don't deal too often. note that they are removing their regular dealing service, so all deals will cost £5.

Chris2000

I sent my complaint to HL today, asking for exit fees to be waived. The new charges on a portfolio of index-trackers are a significant increase.

Following earlier comments on the complaint process, whatever it says on the website, it should not be necessary to post a formal letter. HL is regulated by the FCA and their staff should be trained to recognise that any oral or written expression of dissatisfaction is a complaint and to deal with it accordingly. If they don't then maybe it's time the regulator paid them a visit to remind them of the rules.

http://fshandbook.info/FS/html/FCA/DISP/1/4

Also, treating customers fairly does not mean treating all customers the same. There is nothing inherently wrong with HL offering some customers a special retention discount. But where, for example, they have both a lock-in and the power to vary charges, they should not abuse their ability to vary charges by applying an unfair increase.

Stanley_St

Today I got my own copy of the standard letter from HL agreeing to waive exit fees ('as a gesture of goodwill'). This came as a response to my complaining about being fobbed off the first time I complained.

I get the impression that everyone who asks does ultimately get what they ask for. I feel slightly better towards the company, but still feel the decent thing would be for them to announce that everyone can leave without penalty before the new charges come in.

gadgetmind

Well, quite.

Stochasticity

Another success story here in terms of getting exit charges eventually waived (accompanied by the usual HL "we're doing you a favour" marketing spin). Keep the complaints rolling in.

ffacoffipawb

Stochasticity wrote: »

Another success story here in terms of getting exit charges eventually waived (accompanied by the usual HL "we're doing you a favour" marketing spin). Keep the complaints rolling in.

I wonder if they are haemorrhaging clients now?

socrates

I have several Vanguard Products as part of my portfolio - HL rep tried to convince me on the phone yesterday that I was not going to be worse off - well at least she tried

What is the exact process (step by step guide for dummies) to follow for moving my portfolio?

I am sure others here would benefit from this also....