Best Invest announce RDR pricing structure

TCA

gadgetmind wrote: »

Hmmm, I now see that trackers will attract this uncapped fee but ETFs won't. I guess I'll switch my trackers across to equivalent ETFs, but I'll need to check the fees.

Yes, the FAQs confirm this:

http://www.bestinvest.co.uk/clear-pricing/faqs

How is the service fee calculated?

The fee is based on the average daily value of your holdings for all funds held per account excluding uninvested cash. Please refer to the Tariff tab to view the rate at which your accounts will be charged.

How often will the fee be taken?

All charges, including the custody fee element for holding equities, will be calculated monthly from 1 March and will be collected midway through the following month, one month in arrears.

Will shares, investment trusts and ETFs be included when calculating my service fee?

No, if you hold these types of equity investments the same current flat rate custody fee amount will apply. The custody fee is irrespective of value and irrespective of the number of equity assets held. From 1 March this will form part of your monthly service fee and be taken as one single charge.

How will my custody fee be taken?

From 1 March, the custody fee, which is remaining at the same existing flat rate, will be taken on a monthly basis and will form part of your overall monthly charge. This means that per month the amount you will pay for holding equities will be:
General investment account: £4.16 per month
ISA and Junior ISA accounts: £4.16 per month
SIPP account: £8.33 per month

How will the service fee be deducted from my accounts and how will you notify me of the amount due?

The default fee arrangement will be to collect the due amount from the relevant account. If there is not enough cash on the account to cover the fee, the necessary number of units will be sold from your largest fund holding to cover the fee. There is no fee charged for this process and you will not need to worry about having enough cash available to cover fees.

Alternatively you can elect for all service fees to be paid by direct-debit from your nominated bank account. We will notify you of the fee amount prior to the collection date, which is on or close to the 28th day of the month.

gadgetmind

I'm not sure why a Vanguard Developed World tracker will attract 0.4%/0.3% fees with no cap whereas the XWXU ETF will just cost £60pa/£120pa and this fee will also cover ITs, shares, etc.

I think I'll bang in a letter to HL this w/e complaining about the fee on holding unwrapped ITs and REITs (with no escape route that isn't punitively expensive), do some research regards other platforms, grab an up-to-date list of BestInvest ETFs, and then maybe give them a call on Monday.

I'm also going to chew BestInvest's ear regards their new fees being per account. They have previously had charging based on family holdings, but have backed away from this.

koru

TCA wrote: »

Will shares, investment trusts and ETFs be included when calculating my service fee?

No, if you hold these types of equity investments the same current flat rate custody fee amount will apply. The custody fee is irrespective of value and irrespective of the number of equity assets held. From 1 March this will form part of your monthly service fee and be taken as one single charge.

That's interesting. They have two pages saying different things. You are quoting from https://www.bestinvest.co.uk/clear-pricing/faqs

Whereas if you go to https://www.bestinvest.co.uk/simple-pricing/faqs the FAQs say something different:

Will equities such as shares, investment trusts and ETFs attract a service fee?
Yes, if you hold these types of equity investments the same fee will apply. The service fee is irrespective the type of investments held.

Is there a different rule if you already have shares/ETFs with them?

koru

Blimey, they also have https://www.bestinvest.co.uk/competitive-pricing/faqs

Good way to avoid confusion guys!

gadgetmind

"Bestinvest is fully supportive of these changes as they aim to raise standards in the financial services industry by making it easier for investors to understand the differences between investment services on offer and the associated fees."

Um, OK, principle great, now follow through and make it easy for us to understand!

TCA

koru wrote: »

Is there a different rule if you already have shares/ETFs with them?

Yes. I "think" so. It's slightly more specific on yet another page. My bolding and capitals:

"As you hold shares as well as funds, we will retain the existing custody fee arrangement for your equity investments. NEW Online Investment Service (OIS) clients will have the percentage fee levied on ALL investments, irrespective of type. The service fee will only be levied on YOUR fund holdings, as we believe retaining the existing custody fee arrangement for your equities will be better value for you."

http://www.bestinvest.co.uk/clear-pricing/tariff

Admittedly all this above I found via their email, seeing as I am a customer already, so I'm not sure if a new client can get through to these pages by just clicking through the website. I haven't checked. But it might have been a bit clearer if they just separated the info into existing customer/new customer charges!

gadgetmind

My wife currently has an ISA with BestInvest. Can she move her SIPP there and still make use of Custody Fee for this account? She is already a customer ...

I have a SIPP with BestInvest. Can I move my ISA there and still make use of the Custody Fee. I am already a customer ...

I guess I need to call them as this has currently got more holes than a Swiss cheese.

snowcat53

Catching up with this. Looks like will be bad news for me with predominantly very low cost Vanguard and other tracker funds.
I think the idea of switching to ETFs may be good one - thanks gadgetmind.

Having read their info I am now thoroughly confused . It seems to be sayoing that because I hold shares ITs and ETFs as well as funds theyy will charge the old sutody fee on the former but the new % service fee on the total of the latter. Is that right?

TCA

snowcat53 wrote: »

Having read their info I am now thoroughly confused. It seems to be saying that because I hold shares ITs and ETFs as well as funds they will charge the old custody fee on the former but the new % service fee on the total of the latter. Is that right?

Yes. Same custody fee as before for your ITs and ETFs, except now payable monthly in arrears. But from 1st March, any funds you hold will be charged on the new percentage basis. I think.

koru

jamesd wrote: »

I just called to check. £25 per item to transfer out and they won't waive it for departing clients. A gentleman by the name of Jonathon (unsure of which spelling form) there told me that it is industry best practice to make such charges and have the new provider refund them. That was with the not a customer phone choice and it's possible that they might give existing customers a different answer.

Since I dislike such client lock-in attempts that makes it significantly less likely that I'll even consider them. Claiming it's industry best practice when it is contrary to FCA guidance on unfair contract terms is particularly unimpressive.

Might be interesting for someone else to ask them in email and see if they say the same in convenient written form.

It's particularly interesting to see how many providers in this line of business seem to not be paying attention to the unfair contract terms paper and FOS rulings on this matter, which to me implies that the FCA unfair contracts team has some work still to do in this market.

I am an existing client who will be paying a lot more if I stay with them. I e-mailed asking about exit fees and they replied saying, simply: "Of course if you decide to transfer away from our Platform there will be no exit fees levied."

That seems pretty unambiguous. Whether this applies to all existing customers, I could not say, but I can't see why they would single me out for favourable treatment.

Well done, BI! They have every right to change their pricing in a way that makes them unattractive for me to stay with them, as long as they waive the exit fees, so that I am not in a situation of "Heads they win, Tails I lose".