Danny Cox of Hargreaves Lansdown being pulled apart on Radio 4 Moneybox over new fees

ColdIron

Glen_Clark wrote: »

Sounds interesting:) have you got a weblink please?

Details are scant at the moment but it's on the 1st page of Your Quick Guide to Changes to the Vantage Service and page 9 of Changes to the Vantage Service explained that they sent in the post and in the Pdfs at the bottom of - http://www.hl.co.uk/lowcharges

SnowMan

Grey gym sock looked into the 0.06% trackers.

I think the conclusion was (without checking) that the 0.06% is AMC and not OCF (TER).

It might only be a FTSE100 tracker also which is super clean (I think someone else said) and at most the super clean class is about 0.1% cheaper than the clean class so effectively reduces the platform fee to 0.35% for that one investment which is still expensive.

Tiglath

I'm a relatively new tiny investor with less than £1000 in VLS100; will they still charge £2/month on the fund as well as 0.45% per annum? Am I right in thinking the 'loyalty bonus' for a £1000 investment in a fund is being done away with?

EDIT: Think I may have answered my own questions but confirmation from the more experienced would be great, cheers.

dunstonh

I am curious about the announcement of the super low cost trackers from L&G and Blackrock at 0.06%.

Skandia have got lower pricing on their blackrock trackers since RDR. e.g. Blackrock Cont Euro moved from 0.22% to 0.12%. So, it is likely to happen with others.

Be aware that HL use AMC for their pricing. Everyone else has moved to ongoing fund charge (OFC) - the replacement for TER. So, be careful if you are relying on HL information about charges. If they say AMC then they are using the old method that will show a lower charge than OFC/TER. It does not mean it is actually lower than others that use OFC/TER.

ColdIron

Tiglath wrote: »

I'm a relatively new tiny investor with less than £1000 in VLS100; will they still charge £2/month on the fund as well as 0.45% per annum? Am I right in thinking the 'loyalty bonus' for a £1000 investment in a fund is being done away with?

They are scrapping the £2 platform fee and replacing it with a 0.45% charge so if you have less than £5,333 you are better off. The Loyalty bonus never applied to the VLS anyway so won't affect it

There are other changes to the Loyalty Bonus. Previously this only kicked in on funds greater than £1,000 but I assume this no longer applies as they must rebate all commission and there is no threshold any more. I haven't seen that expressly stated though

dunstonh

Tiglath wrote: »

I'm a relatively new tiny investor with less than £1000 in VLS100; will they still charge £2/month on the fund as well as 0.45% per annum? Am I right in thinking the 'loyalty bonus' for a £1000 investment in a fund is being done away with?

EDIT: Think I may have answered my own questions but confirmation from the more experienced would be great, cheers.

You are losing your cross subsidy and will pay 0.45% instead of the £2pm. The loyalty bonus gimmick (which was only a part refund of the charges you were paying) will be done away with as it does not comply with the platform review. It will need to be replaced with a full refund from 2016 for existing business and 2014 for new business.

JohnRo

I imagine Danny Cox feeling like he'd managed to escape a burning building when that interview ended.

jimjames

JohnRo wrote: »

I imagine Danny Cox feeling like he'd managed to escape a burning building when that interview ended.

Yes I think he escaped at just the right point. Another 60 seconds of questions could have been rather damaging for him!

The other thing I thought was interesting was he suggestion that fund managers don't deserve to be paid much and that a platform should get more. It seems strange that they have only just come out with that gem. Key section is at 5:45 in the programme.

bigadaj

I'm not a marketing person but what seems to have come out of this is they are trying to be different things to different people, if they maintained a consistent approach then many of these issues could have been avoided. As to whether this will hit them in terms of revenue and profit remains to be seen.

Claiming to have started a price war is patently ridiculous and stupid, they could have emphasised that they offered value and service, and avoided any comment on absolute costs, responding to any comments with examples like the value in low value or SIPPS or low value trackers for those with smaller funds

I've not listened to the money box interview as yet, I'm normally about a week behind on my podcasts, but playing a straight bat and emphasizing that they have taken the opportunity of rdr to emphasise transparency of charging, and offer a quality of service at reasonable cost would have worked for many.

I'm still not convinced that losing people with large holdings of basic trackers is such a disaster for them, as there is probably more profit to be made from less experienced investors.

JohnRo

bigadaj wrote: »

I'm not a marketing person but what seems to have come out of this is they are trying to be different things to different people, if they maintained a consistent approach then many of these issues could have been avoided. As to whether this will hit them in terms of revenue and profit remains to be seen.

Claiming to have started a price war is patently ridiculous and stupid, they could have emphasised that they offered value and service, and avoided any comment on absolute costs, responding to any comments with examples like the value in low value or SIPPS or low value trackers for those with smaller funds

I've not listened to the money box interview as yet, I'm normally about a week behind on my podcasts, but playing a straight bat and emphasizing that they have taken the opportunity of rdr to emphasise transparency of charging, and offer a quality of service at reasonable cost would have worked for many.

I'm still not convinced that losing people with large holdings of basic trackers is such a disaster for them, as there is probably more profit to be made from less experienced investors.

I can only speculate, but perhaps it is as simple as "old habits die hard"

The way they've handled this is a wonderful insight into the prevailing culture at HL, which seems to thrive on obfuscation and apparently finds it difficult to behave in the manner you describe towards it's customers, which I totally agree would have been far and away more beneficial to them and much preferred by existing and potential new customers.