rplan discounts fees to 0.25% p.a.

grizzly1911

talexuser wrote: »

I'm having everything transferred into Cavendish/Fidelity from CoFunds and will see how things are after April when I put another allowance in. Your "blink" analogy is apposite, if Fidelity/Cavendish wish to retain their competitive position I think they will have to introduce a cap on fees, if they don't it is a signal they might be interested only in targeting many customers with smaller portfolios where the difference does not matter so much. The free switching does not sway me because I tend to hold (hopefully but so far historically) good funds for long periods so would not spend that much on switching (Buffet method).

Last time I looked iWeb (the cheapest at the moment for funds) had an exit fee of £125 and iii £120, but these are tending to being tweaked so you have to check the latest T&Cs all the time.

As far as service is concerned I don't really have any, as long as the website works and I get my statements that's ok. The accumulation of rebates and lower charges over many years is more important to me after seeing how moving to rebates etc from high cost providers in the early years has paid off each year.

I have been happy with Cavendish. they have provided good service and always been helpful on the phone including queries for other portfolios.

I will wait for now as I am happy with the return and for the flexibility it gives saving a couple of hundred quid isn't a deal breaker. Certainly the position is no worse than it was when they were rebating fees, which was an improvement over where the funds were held previously.

I have been doing a lot of rearranging as pots have come together so the free dealing has been an advantage. As things mature and I consolidate further alternatives may become more attractive.

Interesting how we feel the need to get to the cheapest offering, now that things are more transparent, without always looking at the bigger picture.

Moving sizeable portfolios isn't as easy as switching energy suppliers unfortunately.

waiax73

talexuser wrote: »

He says in the mail they ignore switches after the first free 2 assuming all switches take place at the same time of year. If this was the case then the further 6 paid for switches in the above example would be £60 a year, over 10 years would be £600 and NOT the £1600 that comes up in their comparison table, so it remains false and misleading.

Ok, it seems I need to run you through this step by step. To make it easier to follow, I'll use your example: £11,520 invested per year + 8 switches per year for a period of 10 years.

All calculations are correct, if you carefully read the 'How we work this out section':

"For recurring investments, the ongoing commission is calculated on the amount invested at the end of each year:

[...]

total dealing charges = (number of funds purchased * dealing charge per fund * period) + (number of funds rebalanced * dealing charges per fund) + (percent of portfolio rebalanced * amount in portfolio * switch fee * period)"

This means that they assume investing into 10 funds each year, which is also correct, given that the comparison assumes a portfolio of 10 funds.

Therefore:

If you buy investments every year, then you would have 10 investments every year + 8 rebalance trades/year. A total of 18 transactions.

18 trades - 2 free trades per quarter = 16 paid trades each year (they assume investments and buys in the same quarter, which IMO is fine for most investors).

16 paid trades per year * £10 = £160/year; over 10 years that's £1600


So, once again: the comparison is correct, the numbers are true and it is certainly not "misleading". Once you understand the methodology behind it, it's actually pretty straightforward and reflects behaviour of a regular investor quite well.

Let me know if you need any more clarification.

talexuser

Thank you. OK, I see now where they get the extra charges from but to me that is a stretch if you end up with 100 funds, plus rebalancing, which you could do just as well as you buy funds each year, let alone conveniently ignoring the £600 worth of free trades over that period, which a savvy investor would not necessarily do, so for me a set of circumstances I would never use.

For my portfolio history over the last 20 years or so the savings with iii are pretty substantial compared to a .25% charge, more than a grand a year, let alone with iweb which would be even cheaper than iii, and which they don't include in their comparison, presumably for that reason.

However perhaps the lesson is that the new charges need careful comparison for each individuals' circumstances and buying patterns, so a blanket recommendation, even for a range of portfolio values remains difficult.

ozzage

The whole trading cost discussion is a bit stupid anyway. If you are rebalancing, then you don't care about the exact day the trade happens. Therefore you should be able to use the £1.50 "portfolio builder" trade instead of paying £10! All of the comparison sites seem to ignore this cheap trading capability but for buy and hold investors it makes a MASSIVE difference to their overall annual portfolio cost.

This is all assuming it works like it does with Halifax, where you can set it up to happen "just once" and not every month.

talexuser

I still can't see how the iii figures are worked out for lump sum examples. Take 150,000 lump sum for 10 years at 2 trades a year.

The rplan result for provider charges is £5250, which is 0.35% a year for 10 years. Fine, this is their normal %.

If you select Alliance Trust the charges are £900 which is a custody charge of £90 a year for 10 years. Fine.

If you select Interactive Investor the charges are £4835, which is wrong since they are actually cheaper than ATS at £80 a year, so £800 for 10 years?

roxannafy48

that was easy - thank you!!!

talexuser

talexuser wrote: »

I still can't see how the iii figures are worked out for lump sum examples. Take 150,000 lump sum for 10 years at 2 trades a year.

The rplan result for provider charges is £5250, which is 0.35% a year for 10 years. Fine, this is their normal %.

If you select Alliance Trust the charges are £900 which is a custody charge of £90 a year for 10 years. Fine.

If you select Interactive Investor the charges are £4835, which is wrong since they are actually cheaper than ATS at £80 a year, so £800 for 10 years?

Any explanations for this one?

Porcupine

Had a quick play with r-plan's website:

No Vanguard funds (they're listed as a possible fund manager, but when you select them no funds show up).

Virtual portfolio doesn't allow you to input the price you paid for things - so no idea if something went up or down. I can't tell if the real portfolio interface also does this without opening an account.

So not for me.

talexuser

No response to the last example. Maybe the figures are false and misleading after all?

waiax73

Sorry, life happened Had literally no time to look at this over the past couple of days - 8-month old boy crawling around the house isn't helping!

Still don't think this will be the case. Will look at this in detail at lunch tomorrow. What if the numbers are right once again?