Leaving HL

noggin1980

jimjames wrote: »

£400 - not one off - per year. Every year. So if you hold long term say 20 years that's £8000. When you could have only paid £5 for the same thing (if using iWeb)

Would you prefer an £8000 boost to your portfolio or help swell HL profits? Obviously as someone who holds a FTSE tracker which includes HL shares I'd rather like it if you help boost their profits but I'd also rather like to maximise my own portfolio too.

That that money compounds too, so over 20 years at 7% the £400 a year is actually £17,500 rather than the £8000 it initially appears to be.

Ryan_Futuristics

I think if you're of the investing mindset that simply buying and holding an LS fund, or a UK index, is right for you, there are cheaper platforms than HL

If you want to hold a variety of funds, and want to hold (generally better performing over the long-term Investment Trusts, as well as shares and ETFs), and want free rebalancing on OEICs, HL can be among the cheapest, and fees go down to 0.25% over a certain level

Try it out
http://www.comparefundplatforms.com

Vanguard have also done research showing that investors who are given good advice (even if they have to pay a 1% fee routinely to an advisor) generally do better for it ... While Vanguard are champions of low fees, they show uninformed investor behaviour tends to cost average investors somewhat more ... And I think if HL's level of information, customer service, their magazines and fund research didn't save (or benefit) investors to at least the tune of 0.2% per year, I'd be absolutely astounded

I also use HL because their size, to me, makes them a more reliable, more secure option than many of the smaller firms (knowing someone in the US whose fund platform went into liquidation)

There's a level where HL become expensive compared to other platforms (with capped fees), but at that point I find it usually makes much more sense to invest directly in funds rather than through a fund platform

masonic

Ryan_Futuristics wrote: »

And I think if HL's level of information, customer service, their magazines and fund research didn't save (or benefit) investors to at least the tune of 0.2% per year, I'd be absolutely astounded

As a former customer of HL for several years, I could have done so much better had I not been steered completely away from investment trusts. For those starting out and with very little to invest, perhaps an OEIC only portfolio is best, but with the ability to invest more meaningful chunks of money, there was a lot to be said for ITs, especially in the pre-RDR environment. I think there is better information out there to be had for free, and if you have a budget for a paid for service, something like Morningstar would probably be a better option, especially for someone pursuing valuation. I still have full access to the HL site and still receive the magazines and there's generally nothing there that isn't replicated elsewhere for free and often in a more convenient user interface.

I also use HL because their size, to me, makes them a more reliable, more secure option than many of the smaller firms (knowing someone in the US whose fund platform went into liquidation)

Out of interest, what happens in the US if a platform goes bust? Do they have the same ringfenced nominee account system as we do in the UK? Do they have a compensation scheme?

There's a level where HL become expensive compared to other platforms (with capped fees), but at that point I find it usually makes much more sense to invest directly in funds rather than through a fund platform

Is that practical within S&S ISAs, though? My portfolio has over 10 holdings with hardly any overlap between fund managers. While I am limited to subscribing to 1 S&S ISA per tax year it would be totally impractical to add new money or to rebalance.

jimjames

Ryan_Futuristics wrote: »

I also use HL because their size, to me, makes them a more reliable, more secure option than many of the smaller firms (knowing someone in the US whose fund platform went into liquidation)

There's a level where HL become expensive compared to other platforms (with capped fees), but at that point I find it usually makes much more sense to invest directly in funds rather than through a fund platform

More comments that have been fed by the HL marketing machine. Do you realise how much bigger Fidelity are than HL? HL aren't that big despite claiming to be so.

Out of interest which fund managers are cheaper and at what level? The ones I've seen charged 5% initial and full AMC although AMC may be lower now I'm sure it's full price.

Ryan_Futuristics

masonic wrote: »

As a former customer of HL for several years, I could have done so much better had I not been steered completely away from investment trusts. For those starting out and with very little to invest, perhaps an OEIC only portfolio is best, but with the ability to invest more meaningful chunks of money, there was a lot to be said for ITs, especially in the pre-RDR environment. I think there is better information out there to be had for free, and if you have a budget for a paid for service, something like Morningstar would probably be a better option, especially for someone pursuing valuation. I still have full access to the HL site and still receive the magazines and there's generally nothing there that isn't replicated elsewhere for free and often in a more convenient user interface.

But ... Investment Trusts are definitely for more experienced investors ... and then of course the advantage is it's generally cheaper own them on HL than on a platform like CSD

MorningStar's more use to me, but I think to a new investor, things like the Wealth 150, and the Investment Times, have proven to at least steer people in the right direction

And HL's X-ray analysis and client-only tools do tend to cost if you use them elsewhere

Out of interest, what happens in the US if a platform goes bust? Do they have the same ringfenced nominee account system as we do in the UK? Do they have a compensation scheme?

I've no idea what the system is in the US, but apparently investors were due compensation, but I think it had been at least a year or two since it had gone down, and he'd not had anything yet

I assume because there's a pending legal case of some sort - and I wouldn't be surprised if such an event played out similarly over here

Is that practical within S&S ISAs, though? My portfolio has over 10 holdings with hardly any overlap between fund managers. While I am limited to subscribing to 1 S&S ISA per tax year it would be totally impractical to add new money or to rebalance.

Yeah, but at the point HL starts to look appreciably expensive, I'd imagine you'd already have quite a lot outside ISAs

If you just want to hold a Vanguard LS fund, I'd have thought it would make more sense to invest direct and not pay a platform fee?

I love the ISA for tax-free rebalancing, so if you held 20% of LS inside an ISA, and 80% outside, most your normal situation rebalancing duties could be done with the allocation inside the ISA

Ryan_Futuristics

jimjames wrote: »

More comments that have been fed by the HL marketing machine. Do you realise how much bigger Fidelity are than HL? HL aren't that big despite claiming to be so.

Out of interest which fund managers are cheaper and at what level? The ones I've seen charged 5% initial and full AMC although AMC may be lower now I'm sure it's full price.

Well I think Fidelity being a bank means there are possibly more potential worst case scenarios ... Which would you rather buy shares in?

It's certainly cheaper with passive funds - it's only about 0.15% to hold a Vanguard tracker, and 0.1% with Royal London, and there you can invest from as little as £1,000

I'm actually surprised this doesn't follow the passive investing ideology around a bit more ... With actives and hedge funds, maybe things will change

masonic

Ryan_Futuristics wrote: »

But ... Investment Trusts are definitely for more experienced investors ... and then of course the advantage is it's generally cheaper own them on HL than on a platform like CSD

It's very dependent on your trading behaviour. If you can make use of HL's regular saving option and LTBH, then trusts can be very cost effective at HL, especially if unwrapped, but having multiple account types (so you have SIPP and ISA fees), real time trading and holding OEICs as well may tip the balance the other way. I wouldn't regard CSD as particularly viable for a portfolio of trusts. iWeb was a much better all rounder, but with the increase in setup fee, it won't be so good for small holders in the future. There are some rules of thumb that can be applied to simple situations, but if the situation is complex, running comparisons (with honest and realistic answers to questions about the number of trades and actual use of regular savings schemes) are really the only way to navigate the options.

MorningStar's more use to me, but I think to a new investor, things like the Wealth 150, and the Investment Times, have proven to at least steer people in the right direction

And HL's X-ray analysis and client-only tools do tend to cost if you use them elsewhere

I do like HL's xray analysis tool for OEICs and I'm glad I still have access to it, although I don't believe it xrays into ITs. For those who don't have an existing customer account, there is the option to have a small unwrapped holding at HL and the bulk elsewhere - less convenient, but it does get you the best of both worlds.

I've no idea what the system is in the US, but apparently investors were due compensation, but I think it had been at least a year or two since it had gone down, and he'd not had anything yet

Sounds quite different to the UK then. My main concern with the UK system is a significant fraud on the collective nominee account. In that situation, the loss and subsequent compensation would be spread between all of the affected customers, so it would have to be a very large loss indeed to saturate the £50k compensation limit per customer. The FSCS has a pretty good record of paying out to date, so it seems like we have a much better system here than in the US.

Yeah, but at the point HL starts to look appreciably expensive, I'd imagine you'd already have quite a lot outside ISAs

If you just want to hold a Vanguard LS fund, I'd have thought it would make more sense to invest direct and not pay a platform fee?

I love the ISA for tax-free rebalancing, so if you held 20% of LS inside an ISA, and 80% outside, most your normal situation rebalancing duties could be done with the allocation inside the ISA

Well I've got over 10 years of annual ISA allowances plus growth rolled up into my current S&S ISA, and only about £10k unwrapped. I think the increased £15k+ limits going forward will mean I'm unlikely to add much to my unwrapped holdings.

For those with large balances outside of an ISA (who use VLS), then direct holding is worthwhile considering. Obviously there is no rebalancing if only VLS is held.

Ryan_Futuristics

Well if the unwrapped £10k's in things you could get through Royal London (who've run some of the best funds I've used) it might make sense to transfer?

If you rebalance by asset class (rather than having per fund allocations) I'd have thought it makes sense long-term to be building up core holdings in platforms with very low charges

masonic

Ryan_Futuristics wrote: »

Well if the unwrapped £10k's in things you could get through Royal London (who've run some of the best funds I've used) it might make sense to transfer?

My unwrapped holdings consist of one ETF and one IT, both of which I also hold within my ISA, so I'm paying nothing to hold these and I can use the ISA holdings for rebalancing if necessary.

If you rebalance by asset class (rather than having per fund allocations) I'd have thought it makes sense long-term to be building up core holdings in platforms with very low charges

That was my original basis for choosing II, although I would have gone with iWeb if I'd known then what I know now about the CS at II. However, I can work with what I have and am reasonably confident in keeping my all in annual platform and trading costs at about the £100 level. Since I am holding an ISA of ITs, some ETFs and some OEICs, I don't think I could do better elsewhere.

jimjames

Ryan_Futuristics wrote: »

Well I think Fidelity being a bank means there are possibly more potential worst case scenarios ... Which would you rather buy shares in?

It's certainly cheaper with passive funds - it's only about 0.15% to hold a Vanguard tracker, and 0.1% with Royal London, and there you can invest from as little as £1,000

I'm actually surprised this doesn't follow the passive investing ideology around a bit more ... With actives and hedge funds, maybe things will change

As per the current accounts thread why are you posting completely incorrect information again. Fidelity are not a bank and never have been. How much do you actually know about them? It seems totally bizarre that someone with so much investment knowledge seems to be unaware of such key facts that are easily available on Google.