Leaving HL without transfer charges

Rollinghome

Chris2000 wrote: »

There is a good chance that one or more of the regulatory bodies will force them to waive exit penalties for customers who are materially adversely affected by the new charges. HL would get much more goodwill and positive PR if they did this publicly and voluntarily, because it’s the right thing to do, instead of waiting until the complaints flood in and they are forced into it.

Can't see them ever wanting to publicly announce the waiving of charges - especially as the Royal Mail IPO alone brought them 27,000 new clients, many of whom will be tied in or clobbered by the new £30 account closure fee when they sell. Just getting that fee would gain them around £800,000 and they won't want to lose that if they can avoid it.

That's why they'll want to deal with the problem as cheaply and quietly as possible without it being taken up and given publicity by a newspaper or programme like Moneybox - which could open the floodgates for thousands to make claims like their own mini PPI scandal.

Their initial "take a walk" response was bonkers. People don't like being ripped off and even those who didn't persist will bear a long-term grudge.

masonic

Chris2000 wrote: »

The KIID claims a total ongoing charge of 0.02%. Can it be right that this fund class is available with no further ongoing costs except dealing charges? Even on a £1bn fund, 0.02% doesn't pay for much fund management unless it's fully automated. All the other unit classes I've seen have higher ongoing charges, including the clean class at 0.17%.]

That does sound a little too good to be true. Of course the ongoing charge figure doesn't include everything (for example, the cost of buying and selling the underlying fund constituents), so perhaps it is possible, but I would be very suspicious.

lejog2003

masonic wrote: »

When you reject a price increase and demand a free exit, then the new charges cannot be enforced, so there isn't a difference in terms of the law. The only issue would have been if HL was prepared to let it go to the Ombudsman over rejection of the new fees, which your case suggests they wouldn't (and nobody else has obtained a decision on that matter so far, but presumably your monthly charges of £120 are particularly high).

Even if they did let it go to the Ombudsman, it's inconceivable a free exit would be permitted but the rejection of the new terms would not. If you do not have the right to reject the new terms (and not be bound to them) then you do not have a right to a free exit.

Let's me make this clear to anyone unsure - HL's offer to refund increased charges in my case was not made in their "final response" but only after I told them that I was going to and indeed had contacted the ombudsman over the issue. Hence the pulling teeth remark.

And while I'd agree with your interpretation of the law, it's obvious its not one HL shares, nor do their lawyers.

masonic wrote: »

presumably your monthly charges of £120 are particularly high). .

As I've said before I have a SIPP in drawdown and the new charges represent about 7% of the maximum pension I can take (19k), so they do seem particularly high to me, although the pension is way below average wages and a fraction of my final salary. However, the charges are no higher than anyone else with a pension pot of that size, although the size of the increase probably is.

Something for people in the early stages of a SIPP to consider.

masonic

lejog2003 wrote: »

And while I'd agree with your interpretation of the law, it's obvious its not one HL shares, nor do their lawyers.

HL have stated that they don't believe customers should be given a free exit. I have yet to see an opinion from them as to whether customers are permitted to reject the contract variation, but what they believe is largely irrelevant providing they have sufficient stocks of goodwill or an aversion to testing their position with the Ombudsman.

lejog2003 wrote: »

As I've said before I have a SIPP in drawdown and the new charges represent about 7% of the maximum pension I can take (19k), so they do seem particularly high to me, although the pension is way below average wages and a fraction of my final salary. However, the charges are no higher than anyone else with a pension pot of that size, although the size of the increase probably is.

My point was really that if they have already caved in to £120 per month in the case of one customer, I'd be surprised if they'd let a claim for a smaller amount go to the Ombudsman.

naedanger

lejog2003 wrote: »

Let's me make this clear to anyone unsure - HL's offer to refund increased charges in my case was not made in their "final response" but only after I told them that I was going to and indeed had contacted the ombudsman over the issue. Hence the pulling teeth remark.

I don't think anyone disagrees that HL have been making it slow and difficult for people to complain, and I can well understand the pulling teeth remark.

However I would not want people thinking the process was now difficult. Everyone who complains about the exit charges, and any excess charges that apply during the period until the transfer completes, will have them refunded. There are template letters they can use. Then they need persistence and to press on with the compliant regardless of what is said in any replies from HL that are not their final response.

Also if anyone has any problems they can post back here and I am sure they will get help and encouragement.

So to everyone who has, or is planning to exit, please reclaim your exit charges, and any excess charges that apply during the period until the transfer completes.

westy22

Chris2000 wrote: »

As an aside, the class they have added looks interesting:
http://www.halifaxmarketwatch.co.uk/cgi-bin/digital/security.cgi?username=&ac=&id=134123

The KIID claims a total ongoing charge of 0.02%. Can it be right that this fund class is available with no further ongoing costs except dealing charges? Even on a £1bn fund, 0.02% doesn't pay for much fund management unless it's fully automated. All the other unit classes I've seen have higher ongoing charges, including the clean class at 0.17%.]

AJ Bell Youinvest also offer that class of FTSE AS Acc - I have no idea how it varies from the 0.17% 'clean' version or the 0.27% 'dirty' version. It is certainly the cheapest FTSE AS tracker that I have seen generally available (but happy to be proved wrong!).

gterr

I, too, have received the letter from HL confirming that they will waive my exit fees "as a favour". However, they did not refer to the second part of my complaint letter which concerned itself with the imposition of the new platform fees should my transfers not have completed by the time the 0.45% platform fee starts.


Their letter did not include the words 'final response", even though I had requested their final response, so I will write to them once again.


Getting there, but it's a slow process.

Chris2000

westy22 wrote: »

AJ Bell Youinvest also offer that class of FTSE AS Acc - I have no idea how it varies from the 0.17% 'clean' version or the 0.27% 'dirty' version. It is certainly the cheapest FTSE AS tracker that I have seen generally available (but happy to be proved wrong!).

Thanks, I've now found the prospectus which makes it all a lot clearer.

Institutional units (which really do have zero annual management charge) have £10m minimum subscription and are only available to HSBC Group companies or otherwise at the discretion of the Authorised Corporate Director.

Institutional A units have 0.25% amc, £1m minimum subscription and are available to anyone. Clean C class are the same but with only 0.1% amc (and without the 0.15% trail commission).

Unfortunately for me, this means Halifax now offer 3 of the 4 different classes of accumulation unit available in this fund, but the one they are missing is the one that I'm keen to transfer out of my HL ISA before 1st March!

dave875933

I’ve also seen that cheap HSBC all share tracker at Halifax. Did think it must have been an error but if not would be simultaneously good and annoying as its availability would make a big difference to platform choice.

Actually the lack of standardisation of funds is a substantial impediment to competition in this area as well as exit fees. You might argue different funds classes is competition but it’s also a confusing tactic. At the end of the day what we want from funds is investment expertise/efficiency. And what we want from platforms is execution efficiency and tax wrapper efficiency. (Maybe fund houses could provide that direct.) I can understand funds wanting to save on distribution costs by giving cheaper prices to bigger buyers but this should be handled much more clearly. The ability of platforms to provide funds cheaper due to bigger buying power is ultimately something that comes from us as customers! It just feels like a false/made up thing to be competing on.


As it makes such a big difference as well I don’t think funds and platforms should be able to hide behind E&O excluded when giving info on fund fees. Not saying forced to continue to give it you at that rate if unsustainable but you should be given a charge free exit to put you back in position you were in before once mistake is uncovered, with a fair rate of interest. And if it has been a factor in choosing platform then of course free exit.

masonic

dave875933 wrote: »

Actually the lack of standardisation of funds is a substantial impediment to competition in this area as well as exit fees. You might argue different funds classes is competition but it’s also a confusing tactic.

Maybe what we need is for fund houses to remove whatever part of the AMC they are willing to discount to some of the platforms and charge the other platforms the difference directly. Or would that make the charges less transparent and fair?

As it makes such a big difference as well I don’t think funds and platforms should be able to hide behind E&O excluded when giving info on fund fees.

I'm beginning to think it isn't a mistake. But it's worth bearing in mind the OCF is only quoted over the previous year. The costs do vary, and the 0.02% might not be representative of the future costs.