Best Invest announce RDR pricing structure

gadgetmind

Their old Ts&Cs say - "Custody fee: if you invest in one or more funds or shares at any time during a quarter that do not pay us an annual
commission we will charge you a quarterly custody fee (currently £12.50 where the fund is held in an Investment Account, £12.50 plus VAT where the fund is held in an ISA Account, or £25.00 plus VAT in a SIPP Account). You will pay one custody fee per quarter for each account that holds any non-commission paying funds (or other
securities."

I have definitely been paying £30 per qtr for my SIPP and my wife £15 per qtr for her ISA.

If VAT has gone as part of these changes, then happy days!

bigsy

gadgetmind wrote: »

If VAT has gone as part of these changes, then happy days!

Table 1, page 6 of the 'Key facts' pdf at http://www.bestinvest.co.uk/media/488456/keyfacts%20non-advised.pdf suggests that VAT is not payable on the account custody fee.

gadgetmind

Blimey, so it does.

It also describes the custody fee as applying to "(Equity holders before 1 March 2014)" so this could be a good option for quite a few people with larger pots.

bigsy

I'm still not convinced.

I have a largish holding of Vanguard funds and some ETFs within an ISA. Why should I convert the funds to ETFs and continue to pay Bestinvest £50/year 'custody fee' when some other platforms charge less for holding and trading equities and also offer regular savings options?

gadgetmind

Which platform that's announced post-RDR pricing would you suggest is better?

I'm not too bothered about our six figure pots, but my wife's SIPP may need a better home.

koru

gadgetmind wrote: »

Blimey, so it does.

It also describes the custody fee as applying to "(Equity holders before 1 March 2014)" so this could be a good option for quite a few people with larger pots.

So that explains the mystery of the different FAQ pages on the website. Looks like anyone could lock in the custody charge for shares, as long as they hold some shares by the end of this month.

bigsy

gadgetmind wrote: »

Which platform that's announced post-RDR pricing would you suggest is better?

'Better' for you or me?

My interest is in a home for my ISA, not a SIPP. There are several options for at least two out of three of cheaper trading, cheaper/no account fees and regular share investing options when compared to Bestinvest for an ETF ISA. I'm simply considering some of them which may suit my plans.

koru

gadgetmind wrote: »

I'm still researching ETFs. but these are already on my list.

VWRL - All World, TER 0.25%
VUKE - FTSE 100, TER 0.1% (yes!)
VFEM - Emerging markets 0.45%
MIDD - FTSE 250, 0.4%
ISP6 - S%S 600 Small Cap

I already old SLXX and ISXF, which are corporate bonds.

VUKE is certainly very cheap, but are the others cheaper than funds? Most of the Black Rock D class have sub 0.2% OCFs. The BlackRock Emerging Markets Equity Tracker Fund D has an OCF of 0.28%, which is way cheaper than 0.45%.

koru

koru wrote: »

So that explains the mystery of the different FAQ pages on the website. Looks like anyone could lock in the custody charge for shares, as long as they hold some shares by the end of this month.

Now confirmed to me by BI: "If you convert to ETF trackers before 28th February we will passport the existing share dealing terms. So effectively after transacting you will pay £100 a year custody charge to hold ETFs per account indefinitely."

I might shuffle some investments around, so I hold some investment trusts in my Best SIPP and hold the Japan and Pacific trackers in my ISA elsewhere.

JasonPr

gadgetmind wrote: »

BestInvest have confirmed that I can simply swap our Vanguard trackers for the (roughly) equivalent ETFs and remain on the custody charge.

Can anyone explain why ETFs attract a custody charge while funds have a percentage fee?

I don't understand the rationale of different pricing but BestInvest is the second company to do this, so there must be some explanation.