HL u-turn on investment trusts

grey_gym_sock

http://www.hl.co.uk/news/articles/investment-trusts-a-review-of-charges

they will not, after all, introduce a separate holding charge for ITs. they'll continue to be treated the same as other shares/ETFs/bonds.

i suppose this annoyed too many ppl, and wasn't going to raise that much revenue anyway. (and isn't required by RDR2.)

hyposmurf

Perhaps they're now starting to worry at how many people have/going to jump/ed ship since they introduced their new pricing structure.

Glen_Clark

I guess HL hoped the competition was going to start charging to hold investment trusts too. But they haven't. So HL have had to back down.
This is not necessarily a good thing for the customer. It costs HL money to administer a share account. If they do it free they have to take the money by overcharging somewhere else. You have got to get money in the till somehow or you go bust.
I wondered how these share platforms could stay solvent when they do so much for free. But having joined one, and found how easy it is to trade, I found myself trading more than I imagined I would. So I guess that's one way they make their money to subsidize the services they don't charge for. Rather like those who drink a lot subsidise pub customers who make one drink last all night. They have to do it that way because customers wouldn't pay an hourly charge for being there and using the facilities.

Academic

I particularly like the line " we are pleased to say that the changes have largely been well received............" :rotfl:

grey_gym_sock

well, the proof of the pudding is in the inflow/outflow of investments over (say) the next 6 months. this is something HL always report on (interim results, also out today, showed very strong inflows up to the end of december).

don't assume that the reactions on MSE, especially from active posters, are typical.

(i still hold HL shares, which may be warping my judgment on this )

dunstonh

Personally, i wonder if the charge was a potential breach of the platform review and they have removed it for that reason.

westy22

"Therefore, we decided that where we received commission on investment trusts we would rebate that commission in full to clients" Ian Gorham

I'd be interested to know which ITs have been paying them any commission.

westy22

Ah, I now see further down in the article - FCSS has been paying them a commission.

Rollinghome

They still seem to not understand that what has irritated clients as much as anything else has been the slimy, disingenuous presentation of the changes by Gorham and co.

There's yet more of it in that announcement:
"Therefore, we decided that where we received commission on investment trusts we would rebate that commission in full to clients, and that we would amend the annual charge for holding investment trusts in Vantage so that they would be charged separately from shares.... We have always listened to clients and designed our service around what they want. I believe it is therefore the right thing to do to revert to a charging structure that clients are happy with."

Which are all these ITs paying commission? ITs don't normally pay commission and they're presumably referring to Fidelity China Special Situations, which was the fund that their "analyst" Dampier initially rubbished in Independent and elsewhere when they thought as an IT it wouldn't be paying them trail commission. After Fidelity saw the error of their ways and agreed to pay them trail it suddenly got the HL hard-sell and became a wonderful investment opportunity - if not for those who actually invested.

In hindsight, that may have been the point where the downhill slide of HL's reputation for integrity gathered momentum.

gadgetmind

Ah, right, I guess I'll now delete 3/4s of the letter I'd written.

We'll still be moving two ISAs and a SIPP and asking for fees to be waived.

gadgetmind

dunstonh wrote: »

Personally, i wonder if the charge was a potential breach of the platform review and they have removed it for that reason.

Quite possible. The fact that most of their competitors didn't include such a charge also made it pretty obvious that it wasn't a requirement of RDR.

BestInvest have played fair and allowed existing customers to continue with the Custody Fee model. They are also allowing them to move other wrappers onto their platform using the old charging model *and* are even suggesting that people move from trackers to ETFs to keep charges low.

Now *that* is customer service done right.

My model currently shows my total fees will be now close to 0.35% as long as I keep rebalancing to at most once per year.