Hargreaves Lansdown charges.

grey_gym_sock

Linton wrote: »

Now H-Ls 0.75% AMC maximum. Is that really the case?

we don't know how many funds HL have special deals for. 0.75% isn't very special, though - it's more like what you'd expect for a typical clean fund without a special deal. and some will be higher.

however, this is roughly where the AMC might be, not the TER. comparefundplatforms is using TER, so we'd need to add a bit on to make it comparable - perhaps another 0.2% or so?

dunstonh

however, this is roughly where the AMC might be, not the TER. comparefundplatforms is using TER, so we'd need to add a bit on to make it comparable - perhaps another 0.2% or so?

Nearly everyone else is using TER/OFC. It is just HL that have stuck with AMC and that is misleading.

The other thing to be careful of is different data points. So, a fund that recently lowered its OFC may show on one site but not yet been updated on another as they may have different data refresh points.

Linton

grey_gym_sock wrote: »

we don't know how many funds HL have special deals for. 0.75% isn't very special, though - it's more like what you'd expect for a typical clean fund without a special deal. and some will be higher.

however, this is roughly where the AMC might be, not the TER. comparefundplatforms is using TER, so we'd need to add a bit on to make it comparable - perhaps another 0.2% or so?

Thanks GGS - that accounts for a large part of where I think Cepheus's analysis is wrong. The Investec fund I have used as an example has a 0.75% AMC and 1.0% TER, so it would seem sensible for Cepheus to use 1.0 both for the H-L figure and for iii with no rebates. This may well change the conclusion!

cepheus

Linton wrote: »

Thanks GGS - that accounts for a large part of where I think Cepheus's analysis is wrong. The Investec fund I have used as an example has a 0.75% AMC and 1.0% TER, so it would seem sensible for Cepheus to use 1.0 both for the H-L figure and for iii with no rebates. This may well change the conclusion!

For what it's worth candid money which I think is the same site compares the old HL charges with III and others here based on 100k. These are for SIPPS but I don't think the overall charges are vastly different to an ISA.

Equivalent Annual Cost 1.03% for III verses 1.37% for HL

http://www.candidmoney.com/guides/13/guide-to-low-cost-sipps

My original calculation in my previous post was based on these funds which I hold, of which one has lower charges at HL due to being in their wealth thingy, although I ignored this since that might be changed when the new list comes out

Henderson UK & Irish Smlr Coms A Acc
Royal London Sterl Extra Yld Bd B
Unicorn UK Smaller Companies A

Linton

cepheus wrote: »

For what it's worth candid money which I think is the same site compares the old HL charges with III and others here based on 100k. These are for SIPPS but I don't think the overall charges are vastly different to an ISA.

Equivalent Annual Cost 1.03% for III verses 1.37% for HL

http://www.candidmoney.com/guides/13/guide-to-low-cost-sipps

My original calculation in my previous post was based on these funds which I hold, of which one has lower charges at HL due to being in their wealth thingy, although I ignored this since that might be changed when the new list comes out

Henderson UK & Irish Smlr Coms A Acc
Royal London Sterl Extra Yld Bd B
Unicorn UK Smaller Companies A

Your conclusion that H-L will be cheaper than iii under the new charging regime for your portfolio relies on the assumption that the fund manager charges will be substantially lower with H-L than iii. But if the same funds/classes are available to both platforms the fund manager charges must be the same (before any rebates).

cepheus

I think you are saying the overall net charge for typical iii funds after the rebate should be 0.75% and not 1.03% as assumed on the comparison site? The comparison site explicitly calculated the cost of my three funds and it is consistent with 1.03%. I have just used their figures. Do them yourself and print them here. The comparison site has a summary of the new HL charges here

So what does this all mean for HL customers?

HL's figures suggest the price changes will cost the firm (hence leave customers better off by) around £20 a year per customer on average.
Investors with commission paying funds will, on average, pay around 0.10% to 0.15% less a year (i.e. £10-£15 per £10,000 invested) from 1 March compared to the present unless they only own 'super clean' funds, in which case they might save a further c0.10% or more a year. The typical net annual charge for a fund at present is 1.33% and this will fall to 1.20% (i.e. 0.75% + 0.45%) for most funds and around 1.10% for 'super clean' funds.
If you hold shares, investment trusts or trackers your costs could fall or rise, but the latter looks more likely for many as per the earlier examples.
HL's service is, in many situations, expensive versus the competition. Customers will therefore need to weigh up whether they feel the service HL provides is worth the fee being charged.

http://www.candidmoney.com/articles/280/hargreaves-lansdown-announces-new-pricing

perhaps we can agree these charges still are not transparent! However I don't think it is wise to change providers at present if a comparison site suggests there is no advantage based on what information it has.

grey_gym_sock

do you mean AMC or TER?

the 1.03% figure for II is TER.

the 0.75% figure for HL's new pricing is AMC.

if you mean AMC, both HL and II are likely to have c. 0.75%.

if you mean TER, both c. 1.00%.

that's just approximately. it seems likely that HL will be fractionally lower on the fund cost (whether measured in AMC or TER), but the difference might only be c. 0.1% or 0.15%.

cepheus

let's keep it simple without all the abbeviations, why does it say Equivalent Annual Cost (the final cost) is 1.03% here at III and 1.37 for HL before the recent reductions at HL?

http://www.candidmoney.com/guides/13/guide-to-low-cost-sipps

and exactly the same for ISAs on the calculator?

I have asked them the question, hopefully they will get back to me.


Edit I've also sent the calculation to III so if the final cost is 0.75% I'm sure they will be quick to correct them!

grey_gym_sock

well, "Equivalent Annual Cost" (in candid money's SIPP guide) is total costs for both the funds (using 8 popular funds, which they specify) and the SIPP provider.

in the case of HL, the 1.37% figure - based on HL's old charges - consists of the full cost of the fund (using old expensive fund units) MINUS the rebate HL pay you.

with HL's new charges, that figure would perhaps fall to 1.22% (just an estimate - we don't know the exact figure yet). though it would be made up differently, viz. from cheaper "clean" fund units (costing c. 0.77%) + HL's explicit charge of 0.45%.

HL charge the same for an ISA or a SIPP (when holding funds).

II's 1.03% consists of fund charges MINUS rebate + £144 p.a. (their charge for a SIPP wrapper) + £10 per deal (unlike HL, who don't charge for fund dealing). (and we're assuming that II's charging model won't have to change.)

for an ISA, II charge the same fund charges and rebates as in their SIPP + £80 p.a. (which also counts as a pre-payment of 2 deals per quarter) + £10 each for any extra deals. so similar charges, but not identical, to their SIPP - it depends how often you deal.

note that, because II have some fixed charges in £ (for both SIPP and ISA), the overall percentage cost depends on the amount invested - it falls as investment size rises. for HL, that doesn't happen (until you go over £250k in funds).

Linton

grey_gym_sock wrote: »

....
II's 1.03% consists of fund charges MINUS rebate + £144 p.a. (their charge for a SIPP wrapper) + £10 per deal (unlike HL, who don't charge for fund dealing). (and we're assuming that II's charging model won't have to change.)
....

iii also supply clean funds with no rebate. How can the TER be different to the same funds from H-L? Or do you believe that H-L will go for the currently rare super-clean funds?