Transfers of S&S ISA from HL to II

Chordeiles

le_loup wrote: »

Oh! I think you've got this so wrong.
H-L ARE charging you less than they were, but still more than any of the others.

But I never said you couldn't get a cheaper service elsewhere ! I've used cheaper brokers myself. But none I would recommend (even if they were still in business). I offered my observations because this thread is full of folks who are horrified at H-L's "increased charges", but as you admit, generally they aren't increased.

le_loup wrote: »

One day soon, all loyalty bonuses will stop as they convert you to clean funds, then, perhaps, you will see more clearly what the true comparative costs are.

Now who has it wrong ? In most cases in my own portfolio the loyalty bonuses fall rather than disappear as funds are switched (my choice, not H-L's) to "clean" versions. But the clean funds themselves reflect the fund managers themselves looking more closely at their charges, now that improved transparency means the whole world can see them more clearly. So I will choose to switch to clean funds, and continue to be grateful for the smaller loyalty bonuses that still give H-L the edge over some (admittedly not all) other providers.

westy22

In the post-April 16 era all funds will be the same price/class whichever platform they are held on, other than where a platform has been able to negotiate a slight discount and is offering 'super-clean' versions.

Therefore, the platform charge will be the only cost differentiator and 0.45% will always be higher than 0.25% or 0.20% whatever H-L might like to argue. Of course, there are other differentiators other than cost i.e. reliability, usability, CS etc.

le_loup

Chordeiles wrote: »

Now who has it wrong ?

Ooh, someone is wrong on the internet!
As you now know from westy's reply, all funds will be, as I told you, clean in due course so the only difference will be the platform cost. Oh, and by the way, the reduction in price of clean funds compared to dirty is that the difference was going to the platform. So, for example, a 1.5% charge was 0.75 to the manager and 0.75 to the platform. You will still be paying 0.75 to the manager, they have NOT reduced their charge "due to transparency".

Chordeiles

le_loup wrote: »

Ooh, someone is wrong on the internet!
As you now know from westy's reply, all funds will be, as I told you, clean in due course ...

This time you are right (when you say someone is wrong )
Let's do this with an example:
Psigma Income (GB00B1RQR625) used to pay an 0.75% loyalty bonus at H-L.
The unbundled version is GB00B29LZ803 which still pays an 0.3% loyalty bonus at H-L.

It's a coincidence that I picked an example where the reduction in loyalty bonus happens to be exactly the same as H-L's 0.45% fee, generally it's true (looking at the funds I am interested in) that the loyalty bonus drops by more than 0.45% (but then it's not for us to know what the rate of kickback to H-L from the fund manager was before RDR). But generally the total charges across fund manager and H-L dropped. I am sure you are right that they can be even cheaper elsewhere (but that wasn't my point).

Rollinghome

Chordeiles wrote: »

However I believe that it would pay to spend a few evenings getting to understand the changes that the "RDR" legislation has forced onto the industry (and the specific way that H-L have responded to those changes) before rushing off to a new ISA or SIPP provider, screaming "the H-L charges have gone up unacceptably".

By and large you're right that the people who are worse off are those who held index tracker funds but it is also true that for some holding other funds costs also rose.

For example those who held "inclusive" class O Ruffer funds found that HL stuck their new 0.45% charge on top but didn't rebate anything back to the client to compensate. So the annual cost for holding those funds with HL rose from a TER of 1.55% to 2.00%.

In their presentation to institutional shareholder just before they implemented RDR, HL revealed that their existing margin was a whopping 0.65%. They also reassured investors that this would be almost unchanged under the new rules.

Consequently, when presenting their basic charges, which are highest of all the major players, they also introduced a whole raft of new charges which, while they may have been barely noticed, will impact on each client in different ways in order to maintain that 0.65% margin that their shareholders have come to expect.

The most obvious ones are their new "death charges" of up to £600 that the recently bereaved will be expected to pay, various new charges for minor transactions that an already very expensive service might be expected to do without further charges, and of course the very large fees demanded from anyone who wishes to move elsewhere.

Of course what has also happened is that many people have belatedly realised just how expensive HL have long been relative to to the competition and that was an important aim of RDR.

I know that Fidelity have got headlines for coming up with a charging structure that is cheaper than H-L's, but most comparisons I've seen don't take account of the loyalty bonuses at H-L, which will in many cases tip the balance the other way.

Nor do comparisons often underline that as well as a lower headline charge, Fidelity has none of the HL stealth charges, including no charges for leaving. They have also negotiated lower management charges on many funds (but with less hype than HL) - see https://www.fidelity.co.uk/investor/funds/fund-charges/fund-discounts.page . (There are few as good as HL at grabbing the headlines.)

So for example Aberdeen World Equity will cost 0.625% plus 0.35%, total 0.975% (or just 0.875% via Cavendish) but cost 1.00% plus 0.45%, total 1.45% using HL. There are plenty of similar examples despite all the HL hype about "loyalty bonuses" etc.

So when you calculate whether paying top dollar for the HL service is good value, you need to take into account the total cost and not just the already high headline figure.

Chordeiles

Hi Rollinghome

You make a lot of great points there, even though I hadn't been totally appalled by the RDR changes at H-L, I do agree that they have rather "lost the plot" since they made a name for themselves as the low-cost champion. Was the flotation the point where that happened ?

However, you got me interested in the Cavendish offering, but when I looked up the specific Aberdeen fund you mention on the Cavendish website I just couldn't find the evidence that they will charge less than 1% (Aberdeen) + 0.25% (Cavendish). Which is admittedly 0.2% cheaper than H-L, but not the 0.875% that sounded so attractive ! Please understand that I'm not trying to shoot you down (I can see the 0.975% at Fidelity, and their discounts were not something with which I was familiar, so many thanks for that) I just would like to see what I am missing on the Cavendish website.

Regarding my previous post, no-one seems to have noticed how spurious it was that I should compare the 0.45% drop in loyalty bonus with the 0.45% H-L fee (of course both these values should be on the same side of any equation !). Just posted too quickly, I guess

vectistim

Chordeiles wrote: »

However, you got me interested in the Cavendish offering, but when I looked up the specific Aberdeen fund you mention on the Cavendish website I just couldn't find the evidence that they will charge less than 1% (Aberdeen) + 0.25% (Cavendish). Which is admittedly 0.2% cheaper than H-L, but not the 0.875% that sounded so attractive ! Please understand that I'm not trying to shoot you down (I can see the 0.975% at Fidelity, and their discounts were not something with which I was familiar, so many thanks for that) I just would like to see what I am missing on the Cavendish website.

As a Cavendish customer, logged into Fidelity on the Aberdeen World Growth and Income Fund on the Summary and Charges pages for that fund I can see that it says Negotiated Fund Manager Discount 0.375%

Chordeiles

I already found that on Fidelity. I think I am just starting to twig that Cavendish is just an even lower cost way of accessing the same old Fidelity platform, is that right ?

vectistim

Chordeiles wrote: »

I already found that on Fidelity. I think I am just starting to twig that Cavendish is just an even lower cost way of accessing the same old Fidelity platform, is that right ?

Yes, sign up to Cavendish and you pay 0.25% instead of 0.35% to use Fidelity.

stringer_bell

it has now been 8 weeks since I sent my isa transfer form to II. It is a natwest cash isa to II stocks and shares. I send them a message, and everytime they say they have not received a valuation from natwest..

I ring natwest and they say they haven't received anything from II

anyone got any advice? so close to cancelling this transfer and moving everything to HL

I also have a current s&s holding with II too