Fund rebates - Interactive Investor as good as HL?

koru

itm2 wrote: »

My question is: for funds which HL has not negotiated a "special deal" with the fund manager, is it likely that iii will pass on the same level of commission rebate as HL? (the majority of my funds are not on HL's Wealth 150 list).

I would have thought that in most cases you would switch to clean funds, because these are usually cheaper than the dirty equivalent net of rebate and you will have to switch to clean in 2 years, anyway. There are some rare examples where the rebated dirty is cheaper, though if the fund is not in a tax-free wrapper, you will pay tax on the rebate (unless HL's challenge of this rule succeeds).

So, it is probably more relevant for you to ask whether HL will have cheaper clean class than II. I think HL's claims of superclean funds are limited to the Wealth 150 (actually about 90), so I think that for your funds outside the W150, the fund charge will be the same with HL and II.

HL has made clear that they will not rebate all of their commission on some dirty funds. II typically rebates 0.64%.

grey_gym_sock

koru wrote: »

II typically rebates 0.64%.

is that c. 0.11% less than other fully-rebating platforms, because of cofunds taking a cut?

i'm still a bit confused by ii's pricing. i saw their recent announcement that they had no plans to raise their prices. but won't confunds have to be paid differently from april (for new investments)?

juliamarsh

Freecall wrote: »

Is this correct? I thought that they were just giving a dealing fee credit (they call it 'commission').

The total amount of incentives that they have on offer amounts to £240 for new customers. £120 in cash into your account within 28 days, and 12 commission free trades, 3 per quarter, on top of your usual 2/quarter. You have to transfer at least £3000 of investments and they must receive your transfer forms by 28th Feb. It is £10/line of investment so you would need to transfer 12 lines to get the full whack, and the commission free trading credit must be used during the quarter that it is applied to the account otherwise it lapses. Here are the full terms and conditions from their website:-

Terms and Conditions of Transfer Offer

New Customers

The offer is capped to the cash value £120 per customer, regardless of how many different providers are transferred from, and to the value of £120 of additional commission-free trades, per customer
Each unique investment line transferred will qualify for a £10 cash incentive up to the maximum of 12 lines regardless of the number of different providers that have been transferred from.
A minimum transfer amount of £3,000 of investments is required to qualify for this offer.
Each transferred investment must have a minimum value of £10.
To qualify for this offer, we will need to receive your transfer forms by 28 February 2014.
The cash will be paid to your trading account within 28 days of the transfer being completed.
All quarterly credit, including the transfer-offer commission credit, must be used up in the quarter it is added to your account. Any remaining commission credit will be removed from your account at the end of the quarter.
The commission credit is applied to your overall account and can be redeemed against any trading fees you incur within your investment, ISA or SIPP account held with us (trading fees are charged at £10 for real-time UK and international trades and £1.50 for regular investments).
The commission credit is in addition to the £20 quarterly credit which is applied to your account together with your £20 quarterly account fee.
Your account must remain open for twelve months following the transfer to receive the full £120 in commission credit. Accounts which are closed during this time, will lose any outstanding commission credit.
A transfer of cash will not count as a transfer for the purpose of this offer.
If you transfer out of Interactive Investor within 12 months of receiving the cash payment we reserve the right to deduct that payment prior to the transfer of the account.
Interactive Investor reserves the right to amend or withdraw this offer at any time.

itm2

Many thanks for that Julia.

juliamarsh wrote: »

A transfer of cash will not count as a transfer for the purpose of this offer.

It looks as if the £120 cash can only be recovered for transfers of stock, rather than cash, so as HL charges £25 per stock for each stock transfer, and I have more than 20 stock lines between my ISA and unwrapped funds account, it may actually be cheaper to convert the HL holdings to cash first, and forego iii's £120 offer.

Re. Having a 2nd SIPP: as I'll be going into drawdown next year I didn't want the complication of a 2nd provider, although iii's flat rate £144 annual SIPP charge is quite tempting. I haven't looked into iii's costs (if any) for drawdown/GAD calculation, so maybe I should explore this further before I make a final decision.

Mattygroves2

itm2 wrote: »

It looks as if the £120 cash can only be recovered for transfers of stock, rather than cash, so as HL charges £25 per stock for each stock transfer, and I have more than 20 stock lines between my ISA and unwrapped funds account, it may actually be cheaper to convert the HL holdings to cash first, and forego iii's £120 offer.

Don't forget bid / offer spreads and initial charges on rebuying if applicable and the danger of being out of the market for weeks whilst the transfer goes through. Very easy to lose significant sums of money by moving into cash and then rebuying although you would be able to buy clean funds after the transfer.

Porcupine

Mattygroves2 wrote: »

Don't forget bid / offer spreads and initial charges on rebuying if applicable and the danger of being out of the market for weeks whilst the transfer goes through. Very easy to lose significant sums of money by moving into cash and then rebuying although you would be able to buy clean funds after the transfer.

One thing you could do is consolidate the 20 funds into one/a few (eg a 'world' tracker) and transfer that. You're still invested so you still get the general market fluctuations (in the short term, markets tend to move in sync) and you can sell it and rebuy what you wanted once you're through the transfer window. The tricky bit is finding fund(s) that match the aggregate risk profile of your entire portfolio (as just buying a tracker could be higher risk if you had a proportion of bonds, say)

This also means there's no urgency because the £25 stock transfer fee hasn't changed. However it may be slower than a cash transfer (so perhaps worth waiting for all the other rats to leave the sinking HL first)

avfc1982

Not wanting to hijack the thread but I have a query related to this...

I've got a couple of dirty tracker funds with HL that I'm thinking of transferring across to iii:

BlackRock Emerging Markets Equity Tracker A Acc (TER 0.62%)
BlackRock Global Property Secs. Eq. Tracker Class A Acc (TER 0.63%)

iii have the D Class clean version of these funds available on their platform, HL do not.

How will an in-specie transfer be handled by iii? Will they just leave my funds in the A Class and regularly rebate the commission or will they transfer them to the clean D Class when they're moved across?

dunstonh

iii have the D Class clean version of these funds available on their platform, HL do not.

Although HL will be making clean class versions of funds available.

How will an in-specie transfer be handled by iii? Will they just leave my funds in the A Class and regularly rebate the commission or will they transfer them to the clean D Class when they're moved across?

iii will keep the class A ones in place.

avfc1982

dunstonh wrote: »

Although HL will be making clean class versions of funds available.

Thanks dunstonh, have HL given any timescales for this?

I'm assuming it's unlikely to be prior to the end of Feb when iii's transfer offer expires.

dunstonh

avfc1982 wrote: »

Thanks dunstonh, have HL given any timescales for this?

I'm assuming it's unlikely to be prior to the end of Feb when iii's transfer offer expires.

It will almost certainly tie in with the launch date of the new pricing. The two things go hand in hand.