Leaving HL without transfer charges

naedanger

funinvestor wrote: »

I'm also in the process of transferring my SIPP and ISA from HL to ii and it looks as though I'm still free to trade, although I'm holding off in case it complicates matters. Anything new will go into my ii accounts (although for the ISA not until 6th April to avoid paying into two separate ISAs in the same tax year).


Looks like others have been given until end of April to transfer free of charge. They gave me a deadline of 31st March, which I thought I would meet, having had confirmation that ii have contacted them and confirmed my wish to leave by secure message, but they have posted me a transfer request form for the SIPP, which arrived only yesterday (Saturday) so will not get back to them until Tuesday at the earliest... I'm hoping this isn't sleight of hand on their part, but will obviously pursue the matter via the FOS if they attempt to reinstate the exit fees.

I think everybody is being given around a month, so your deadline will depend on when you first complained.

However, assuming your offer was similar to mine, to meet the deadline you only need to request the transfer in that period. If HL have sent you a form then it seems like they must already have received your request (possibly not directly from you but from II). The fact they are sending out another form seems to just be part of their process. (Does the form mention that you agree to exit fees being paid. If so then score out that wording and refer to the offer you were given.)

If HL levy any exit fees then complain to them immediately. (I suspect they may, but because of incompetence rather than design.)

[If you do not request the transfer by the deadline then I am not sure FOS would uphold your complaint unless the reason for the delay was due to HL's actions (or possibly some very special personal circumstances). I think FOS would require HL to give someone an opportunity to exit within a reasonable period. If HL did that and the customer did not take up the offer within the stipulated period (provided that period was reasonable) then it no longer seems that HL are at fault in that case.]

funinvestor_2

Thanks Naedanger... They do indeed mention exit fees; no doubt they don't have a form for transfers without exit fees, so this is perhaps understandable. I first complained back in February, but they asked me to wait until after the release of the reduced charges on the W150+ funds on 1st March before making a decision and I confirmed my decision two weeks ago. I've spoken to them today and they have said they will honour the agreement to waive the fees so long as the form is posted today, so it may simply be that it wasn't sent straight away due to the volume of transfer requests.

yatinsardana

Just in case anyone is interesting in the wording of the letter HL sent to me waiving charges:
"As our letter of 13th January explained, new regulatinos introduced by the FCA come into force on 6th April which dictate how investment platform providers can be remunerated for their services. While the main focus of the changes has been in relation to the impact on funds, the changes in regulations actually apply to all elemtnes of the provision of platform services. The aim of the new regulations is to ensure that a platform presents such products or types of products to its customers on an equal footing and to eradicate cross subsidisation between them. The rules therefore allowed for HL to differentiate - and required us to rebalance - our platform charges for different types of retail investment product, for example active and passive funds.

In terms of whether we are required to allow our clients to exit their contract free of charge as a result of the introduction of our new tariff, I can confirm that we have taken legal advice and conducted extensive research on the subject - consulting the relevant legislation, regulatory guidance and undertakings. Essentially, the rules indicate that provided the changes are made for a valid reason which is specified within the contract and that requisite notice has been provided, there is no requirement for us to waive our exit charges. We believe we have met these criteria and as a result we are entitled to levy our exit charges.

In your case however, we recognise that you feel very strongly on this particular issue. HL have always aimed to be viewed as a fair and reasonable company and as such, given your strength of feeling on the subject, we would be happy as a gesture of goodwill, to waive our transfer chargefs, for any transfer request received within 1 month of the date of this letter. We shall also ensure our new charging structreu is not applied to your account while the transfer takes place. I trust you will find this to be a reasonable outcome to your complaint."

Then they told me to contact them if I disagree or contact FOS if I don't think they'll be able to help.

SnowMan

yatinsardana wrote: »

In terms of whether we are required to allow our clients to exit their contract free of charge as a result of the introduction of our new tariff, I can confirm that we have taken legal advice and conducted extensive research on the subject - consulting the relevant legislation, regulatory guidance and undertakings. Essentially, the rules indicate that provided the changes are made for a valid reason which is specified within the contract and that requisite notice has been provided, there is no requirement for us to waive our exit charges. We believe we have met these criteria and as a result we are entitled to levy our exit charges.

Just to reiterate why this is either wrong or at the very least subject to significant doubt where there is an increase in charges, the OFT guidance OFT311 in section 12 clearly says

Note the absence of a 'valid reasons' route to fairness. The OFT does not consider that use of 'valid reasons' normally justifies price increases, essentially on grounds stated in paragraph 12.3 that is, lack of verifiability

And that is before you add in the additional FCA requirement to treat customers fairly.

rpc

I got the same wording, despite my complaint specifically highlighting OFT311 and quoting that same passage at them!

masonic

SnowMan wrote: »

Just to reiterate why this is either wrong or at the very least subject to significant doubt where there is an increase in charges, the OFT guidance OFT311 in section 12 clearly says <snip>

...better for them to "overlook" the regulatory guidance and quickly settle with anyone who looks like they might challenge them on it, than to acknowledge it and have to give everyone the option of a free exit. Sadly, many will not call them on it and will end up paying.

rpc

masonic wrote: »

...better for them to "overlook" the regulatory guidance and quickly settle with anyone who looks like they might challenge them on it, than to acknowledge it and have to give everyone the option of a free exit. Sadly, many will not call them on it and will end up paying.

If only we could set up some sort of body to develop regulations for companies like HL to abide by so that this "complain and you get a free pass, don't complain and you pay" approach could be forced out. Some sort of authority on financial conduct maybe.

We can dream I suppose...

yatinsardana

rpc wrote: »

If only we could set up some sort of body to develop regulations for companies like HL to abide by so that this "complain and you get a free pass, don't complain and you pay" approach could be forced out. Some sort of authority on financial conduct maybe.

We can dream I suppose...

Exactly my thought. I'm currently editing the letter template that naedanger gave to me to complain to FCA about the general manner in which HL are dealing with the whole process. The template is as follows:

Mr Martin Wheatley
CEO
Financial Conduct Authority
25 The North Colonnade
Canary Wharf
LONDON
E14 5HS


Dear Mr Wheatley,

Concerns about FCA's Regulatory Oversight of Hargreaves Lansdown

I am writing to you because it is not clear to whom within the FCA I should address my concern, which is that the FCA are not taking action to investigate the manner in which Hargreaves Lansdown is implementing changes to it charges. These changes I believe affect well over 500,000 customers.

My concern is not that Hargreaves Lansdown have increased their charges but rather the manner in which these increases have been implemented. In particular they have:

1. issued a highly misleading letter on the changes to all their customers,
2. made no attempt to give customers meaningful client specific information,
3. not recognised legitimate complaints,
4. unfairly discouraged customers from taking their complaints further, and
5. imposed charges on exits that are unfair terms according to OFT guidance.

By doing this Hargreaves Lansdown are preventing many of their customers from making informed decisions and are placing unfair barriers on them obtaining competitive terms elsewhere. This risks seriously undermining some of the aims of the Retail Distribution Review.

In summary, Hargreaves Lansdown have implemented the increases in a manner that puts their own commercial interest far ahead of its duty to treat customers fairly.

I am not concerned for myself and am aware of my rights to complain, to the FOS if necessary. However I believe that to have a competitive financial services industry it is important that the regulator ensures, in a timely manner, that companies comply with regulations. The matter I am concerned about directly affects hundreds of thousands of customers and so is very significant.

I am very happy to elaborate on the claims I have made if they will be taken seriously.

Your sincerely

I wanted all of your opinion as to whether or not I should now mention that in addition "it appears that HL are precisely offering to waive exit charges for majority of the customers as long as they complain. People who do not do so, are having to pay their exit charges unfairly."
I've essentially made two drafts, one with this addition and one without and printed both of them out so I have them ready tomorrow so I can post it. I don't have a printer at home!

Rollinghome

yatinsardana wrote: »

I wanted all of your opinion as to whether or not I should now mention that in addition "it appears that HL are precisely offering to waive exit charges for majority of the customers as long as they complain. People who do not do so, are having to pay their exit charges unfairly."
I've essentially made two drafts, one with this addition and one without and printed both of them out so I have them ready tomorrow so I can post it. I don't have a printer at home!

Well that version is certainly most likely to get the FCA's attention and ensure they understand the point you're making. There must be countless customers who have fallen prey to their tactic of not acknowledging complaints as complaints so as to not give details of the required complaints procedure and have just let the matter drop.

It might be that the FCA have already had a word in their ear about their wheeze of taking both full commission and the full 0.45% platform charge on some bundled funds such as Ruffer. See here. All Ruffer funds now seem to have disappeared from HL with none now showing up in Search: http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results?companyid=1129&tab=prices&sectorid=&tab=prices

naedanger

yatinsardana wrote: »

I wanted all of your opinion as to whether or not I should now mention that in addition "it appears that HL are precisely offering to waive exit charges for majority of the customers as long as they complain. People who do not do so, are having to pay their exit charges unfairly."
I've essentially made two drafts, one with this addition and one without and printed both of them out so I have them ready tomorrow so I can post it. I don't have a printer at home!

I think you should include the additional wording. It is a good point well worth making.