Investment fees?

george4064

r_i_c wrote: »

Thanks, but monthly?

They're asking for 75 quid - surely this will negate any dividend coming in from the fund?

Please confirm. WOA! Never mind, I just did the maths. Now since we're talking 'money saving' what on earth am I getting from investing in this fund? I have yet to receive any dividend so I cannot easily see whether I am making a plus or a minus here - or just pouring money down the drain?

Advice please - have booked a local IFA but that's not till next week :-o

Maybe you're in a Accumulation fund? Or you're unable high growth/smaller companies fund that doesn't yield any income?

jimjames

r_i_c wrote: »

Thanks, but monthly?

They're asking for 75 quid - surely this will negate any dividend coming in from the fund?

Please confirm. WOA! Never mind, I just did the maths. Now since we're talking 'money saving' what on earth am I getting from investing in this fund? I have yet to receive any dividend so I cannot easily see whether I am making a plus or a minus here - or just pouring money down the drain?

Advice please - have booked a local IFA but that's not till next week :-o

How did you end up with £198K with HL and no idea of their fees? I assume it wasn't via an IFA as they would tend to use their own platforms so presumably you made an active decision to use them? If you were to go to Fidelity you'd pay 0.25% pa. Or if you used iWeb you'd pay £200. Yep, a one off fee of £200 compared to your £230 pa (or whatever shorter period) so a massive saving.

Assuming an average dividend yield from the FTSE for example of 3.5% then you'd get £6930 pa. I don't see that negating a charge of £230.

But it's a good point that this is a money saving site and you've got one of the most expensive platforms that you've chosen to use. Bear in mind though that the charges to leave are high too so the IFA is likely to recommend that but it will cost you.

r_i_c

Thanks Bowlhead99, I indeed followed the links which were kindly provided as you will see from this thread - the links suggested to me that this was an annual charge: I was wrong, no-one is perfect, links could be more straightforward and I am new to investing.

Why confirmation or advice? The title of this site is Money Saving Expert, and so I posted here.

It seems to me that I must sit it out until returns appear - or not - for this fund, and then either continue with it or re-invest somewhere else.

Helpful advice is always appreciated - so far people have been very helpful on this forum - thanks again to all

george4064

steelbru wrote: »

You sound surprised ?? Surely you read the T&Cs before signing up ?
Shares in individual companies are held free, units in funds are charged at 0.45% of the fund value per annum.
So, if all of your £198,000 is in funds rather than shares, you agreed to pay HL £891 per annum - this is charged monthly, so approx £74 per month, depending on the monthly fund value fluctuations.
HL suggest you hold more than the minimum monthly charge in your cash account, but you don't need to.
Many people with funds of your value will move to a cheaper platform

Actually, shares/ITs/ETFs/binds/gilts are charged at 0.45% (capped at £45 per annum), this a separate charge to the % charge on funds in an ISA.

r_i_c

steelbru wrote: »

You sound surprised ?? Surely you read the T&Cs before signing up ?

This fund was the result of a relative passing on. The fund was transferred into my name. I am totally new to stocks & shares, hence my surprise.

Shares in individual companies are held free, units in funds are charged at 0.45% of the fund value per annum.
So, if all of your £198,000 is in funds rather than shares, you agreed to pay HL £891 per annum - this is charged monthly, so approx £74 per month, depending on the monthly fund value fluctuations.

The sooner I see that IFA the better - unless this fund raises more than it charges?

HL suggest you hold more than the minimum monthly charge in your cash account, but you don't need to.
Many people with funds of your value will move to a cheaper platform

Thanks, what sort of platform might that be please?

jem16

jimjames wrote: »

How did you end up with £198K with HL and no idea of their fees?

This thread by the OP will explain.

https://forums.moneysavingexpert.com/discussion/5244566

r_i_c wrote: »

Thanks, what sort of platform might that be please?

Different platforms have different charges. HL at 0.45% is considered one of the dearest.

As well as Platform charges, you will have investment fund charges.

However as I've said on your pensions thread, please see an IFA before making any further decisions.

grey_gym_sock

whether the dividends will usually be greater than HL's charges isn't the main point. though it might be more convenient if they were - so you wouldn't have to add some cash to cover charges every so often (or manually sell a small part of the fund to raise some cash, for which there's no charge; or let HL automatically sell something, for which they'll charge £1.50 extra).

the main point is the total return you'll get from the fund after all charges - i.e. any dividends paid + eventual capital growth in value of your holding (the latter includes the effect of deducting the fund manger's charges, so you don't see those charges separately) - HL's charges.

so if you are losing on the divendends (if any) minus HL's charges, you still may end up ahead if the value of the fund goes up (and if you do have accumulation units, this is more likely to happen).

it's unlikely that HL's 0.45% per year charge will tip the whole investment into being unprofitable, though it could happen if the fund is doing badly anyway. however, their charges for holding funds are higher than most platforms, especially if you have a lot in funds with them. so you can shift the equation in your favour a bit by using a cheaper platform.

depending on what funds you're holding, you may also be able to shift the equation in your favour by using cheaper funds (not that i want to start another active vs passive debate - and how expensive funds are is not only about active vs passive). i mention that because the difference in costs between cheap and expensive funds is probably greater than the difference between cheap and expensive platforms. (i try to use cheap funds and cheap platforms.)

r_i_c

george4064 wrote: »

Actually, shares/ITs/ETFs/binds/gilts are charged at 0.45% (capped at £45 per annum), this a separate charge to the % charge on funds in an ISA.

Thanks, but forgive my ignorance - it is genuine - why do people invest in such funds, charging such fees please?

Unless the funds make it all , at length, worthwhile.

r_i_c

jem16 wrote: »

However as I've said on your pensions thread, please see an IFA before making any further decisions.

Thank you - yes, I suddenly see the blinding light which is an IFA on the horizon, I have now booked an appointment :T

This fee is outstanding till the end of the month, so I have time to get advice and make adjustments. I suppose it was inevitable that there would be a few thrills and spills - if not pit falls - in the early stages of investment but hopefully the IFA will be able to advise. This shock has come at the right time on the eve of my appointment I guess.

Thanks again.

jimjames

jem16 wrote: »

This thread by the OP will explain.

https://forums.moneysavingexpert.com/discussion/5244566

Thanks for that link, it makes the situation more understandable. OP - sorry to hear of your loss, that must make unpicking the costs even more difficult.
There are certainly cheaper platforms but I think the most sensible option as suggested is to see an IFA who will hopefully be able to give some clarity to what is in place.