Hargreaves Lansdown unveils new Wealth 150+ list

joerugby

planteria wrote: »

it makes you wonder...but is this complexity just while there is a shakeout, and things are going to settle down and be clearer, and simpler?:think:

All the more reason to stay where you are at the moment, wait and see

grey_gym_sock

perhaps the main problem with special fund classes is if you want to switch to another platform which doesn't have the same class. presumably you have to transfer in cash, taking you out of the market for a while, and perhaps incurring an initial charge.

or can they do a fund conversion on the fly, as part of the transfer? i'd be very surprised if they can ...

this is less of an issue for clean vs dirty, because everybody will be clean soon. but it is for clean vs super-clean vs super-dooper-clean, as they're not going away (even if i did just make up "super-dooper-clean").

cepheus

I thought partly the reason for these changes was to make it simpler to compare platforms and providers. Perhaps these special discounts and special private deals etc. should be banned, since prices would reduce anyway due to 'the race to the bottom' induced by transparency, which is precisely what the likes of HL are trying to avoid.

Jonbvn

A good article on this very subject.

http://monevator.com/why-investors-should-be-wary-of-discounted-funds/

Rollinghome

Thanks, good article with a reality check for those who think that a bps here or there doesn't matter:

"Imagine your £50,000 portfolio made a return of 3% that year or £1,500. Hargreaves’ charges would snaffle 20% of that return. Charles Stanley would chomp 15% while Interactive Investor would take less than 7%.

That’s a big difference and it exemplifies why inertia and headline claims of “super low cost” deals are the investor’s enemy if left unchallenged."

Lokolo

Rollinghome wrote: »

Thanks, good article with a reality check for those who think that a bps here or there doesn't matter:

"Imagine your £50,000 portfolio made a return of 3% that year or £1,500. Hargreaves’ charges would snaffle 20% of that return. Charles Stanley would chomp 15% while Interactive Investor would take less than 7%.

That’s a big difference and it exemplifies why inertia and headline claims of “super low cost” deals are the investor’s enemy if left unchallenged."

Can you explain? Maybe its my Tuesday morning head, but 0.45% of 3% is 15%, not 20% for HL. 0.25% of 3% is 8.3% for CSD.

Edit - apologise. I read it at only platform fees only, not including to OCF. That makes more sense.....

zagfles

Rollinghome wrote: »

Thanks, good article with a reality check for those who think that a bps here or there doesn't matter:

"Imagine your £50,000 portfolio made a return of 3% that year or £1,500. Hargreaves’ charges would snaffle 20% of that return. Charles Stanley would chomp 15% while Interactive Investor would take less than 7%.

That’s a big difference and it exemplifies why inertia and headline claims of “super low cost” deals are the investor’s enemy if left unchallenged."

Unless that £50,000 is in a SIPP, in which case HL are likely to be cheaper than both CS and II even without any "superclean" discounts at HL (according to Snowman's spreadsheet v7 assuming 5 funds and 10 trades per year).

armageden

Hargreaves Lansdowns new pricing policy is under scrutiny again on tomorrow's Radio 4 Moneybox programme starting at 12:00 mid-day.
Be interesting to see if HL send someone other than their man Mr Cox , to defend their corner !.

jimjames

armageden wrote: »

Hargreaves Lansdowns new pricing policy is under scrutiny again on tomorrow's Radio 4 Moneybox programme starting at 12:00 mid-day.
Be interesting to see if HL send someone other than their man Mr Cox , to defend their corner !.

Thanks, I'll have a listen to that.

I had the paperwork from HL come through this week with the details of their new Wealth 150+ and proclaiming the hugely lower fund charges on that list compared to the standard prices.

Two things struck me when I read it, one there seems to be a very large number of bond funds on it which maybe not reflective of an average portfolio which generally have lower AMC anyway. One fund has an AMC of 0.15%, take that out and the average goes up to 0.56% so starting to not look quite as good. As the saying goes, damn lies and statistics will let the numbers show anything for them.

I also noticed they are listing the Fidelity Moneybuilder Income at 0.3% as having a 0.1% discount from 0.4% and being good value. This puzzled me as I currently get this at 0.3% standard charge on Cofunds.

gadgetmind

I'm just putting the finishing touches to my ETF+IT portfolios on BestInvest. Including all TERs, my expected annual trading costs (initial is a trifle more), and platform fees, my overall weighted TER is 0.4%. I could get it lower, but I'm holding a fair few property and infrastructure funds, and these typically have fairly high fees.

Oh, and my bond ETFs have TERs of 0.15% for corporate bonds and 0.12% for gilts.

Part time score for Hargreaves Lansdown's "price war" - must try harder.

(Yes, I could hold ETF+IT portfolios with HL, but their annual platform fees would be twice those of BestInvest and trading fees also higher.)