rplan discounts fees to 0.25% p.a.

talexuser

waiax73 wrote: »

What if the numbers are right once again?

I'd like to understand the assumptions since on clean funds costs are £80 a year, and on bundled funds you get the full rebate of £750 a year.

waiax73

ok, just waiting for a reply from rplan about one piece I wasn't 100% sure about. Will post a full explanation as soon as I hear back from them.

P.S. It looks that the figures are right. Stay tuned!

hyposmurf

Going by Rplan's comparison I'd be better off with Charles Stanley Direct, which I thought anyway.The comparison though seems to be quite basic and not offer many variables.

waiax73

Sorry for the delay in following this up. Let's break it down to pieces:

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,

- Investing your full isa allowance every year, doesn't necessarily mean that you have 100 funds after 10 years. If you top up your portfolio every year, then every 12 months you buy the same 10 funds. The III charge applies per trade.

conveniently ignoring the £600 worth of free trades over that period,

- I wouldn't think that this comparison was designed specifically to undermine III. Of course, if someone invests regularly through a direct debit, then this would not apply - I think the idea is not to give you the exact amount of charges on investments, but a fair comparison across the majority of the market.

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.

- I see ozzage's point and it seems that this indeed would make a big difference IRL, perhaps not in a comparison though (where you want to apply the same rules to everyone).



In terms of the lump sum ongoing provider charge - assumptions as per your example: 150k for 10 years with 2 funds. Reading what is on the site and in this thread:

1) They used the bundled shareclasses for the comparison, as most of the funds were not available at the time when they were putting it together (see their email above)

2) According to their calculations, III refund the 100% of the trail commission (with 3 exceptions - lazard, jupiter and m&g) and keep some of the platform charge (which is included in the AMC). On average, this is 0.269% - see their email above and the spreadsheet below.

3) Looking at the comparison, the 'Ongoing Provider Charges' row includes:

Any provider charges required to create and maintain an account - such as quarterly or annual fees, account opening fees, admin fees, platform fees etc.

Therefore, you could work out the calculation for these figures:

Step 1) £4835 - £800 = £4035 - the £800 here is the £80 annual fee multiplied by the number of years (£80*10=£800)
Step 2) £4035/10 years = £403.5 of platform/trail charges a year
Step 3) If £403.5 is the platform/trail charge per year, then:
£403.5 = £150,000
x = £100,000
Step 4) 403.5*100,000 = 150,000x
Step 5) 40350,000=150,000x
Step 6) x=£269 (amount of commission they keep per year on £100k)
Step 7) 269/100,000 = 0.269%

I emailed them to find out how did they work out the 0.269% and I received this spreadsheet representing the figures per fund. It seems that for these funds, III keeps 0.06% of the commission for 1 fund, 0.11% for 5 funds, 0.61% for 2 funds and all 0.75% for 1 fund. HTH

P.S. Apparently, they will be running a monthly update of the figures soon, as more clean funds become available and some providers changed their pricing so it is likely that the figures for III will go down even further.

talexuser

So they are comparing bundled funds with unbundled funds on the basis that "some" funds may not be available yet, instead of including those which are.

It is not surprising the figures for iii will go down even further, when funds are clean - they will be hugely less expensive for large portfolios without much churning required. It would be interesting to see iweb included, probably not there because even cheaper still.

talexuser

Magically the page has now been changed to show the iii charges as £900 rather than the original £4835, so perhaps it was misleading and false after all.