Investment fees?

r_i_c

r_i_c wrote: »

...the best I could going through our statements to make sure we were going in the right direction. Unfortunately, the fees she must have been paying for her HL funds were not immediately apparent, and so I missed out on that aspect of the equation, and hence my shock at receiving the fee request.

Mum held an HL Vantage Fund & Share Account so she must have incurred fees. My guess is that by this stage they were being deducted automatically, so I was completely unaware of them.

jem16

r_i_c wrote: »

Thanks - again, I find the links confusing: I see for example "Account inactivity - No charge", but then the percentages appear beneath this. I have received no HL requests for SIPP fees as far as I am aware.

There's no charge for the SIPP itself but you still have the platform charge at 0.45% and the fund charge. So how much is in the SIPP? Is this in addition to the £198k or included in that?

jem16

r_i_c wrote: »

Mum held an HL Vantage Fund & Share Account so she must have incurred fees. My guess is that by this stage they were being deducted automatically, so I was completely unaware of them.

If there's not enough in the cash account to cover the fees, units will be sold off to cover them.

grey_gym_sock

assuming your SIPP is in funds, there is the same 0.45% per year fee inside the SIPP. perhaps they don't send you messages because there is enough cash in the SIPP to pay the fees.

note that if you have held the same funds with HL since before march 2014, then they will usually be old, "inclusive" units, which means the units pay a commission to HL, which might be as high of 0.75% or 0.85% a year, and now HL will be crediting your SIPP with at least nearly all* the commission, which will usually generate enough cash to cover the 0.45% charge.

this is a change from the old system (before march 2014), under which HL only passed on a little of the commission, i.e. kept most of it, but didn't have the 0.45% charge.

*in some cases, HL still keep a little of the commission, though they will have to stop doing this from 6 april 2016.

r_i_c

jem16 wrote: »

If there's not enough in the cash account to cover the fees, units will be sold off to cover them [& previously] There's no charge for the SIPP itself but you still have the platform charge at 0.45% and the fund charge. So how much is in the SIPP? Is this in addition to the £198k or included in that?

Thanks, yes, I gathered (at this thread) that the fees were deducted if not paid up front. I wonder if dad was aware of all this? Unfortunately, he was not a great communicator, even to his spouse on such matters.

The SIPP is separate, it currently stands at some 30k.

The Fund is 198k, the ISA 14.8k. There is a static drawdown residue of some 7k

r_i_c

grey_gym_sock wrote: »

assuming your SIPP is in funds, there is the same 0.45% per year fee inside the SIPP. perhaps they don't send you messages because there is enough cash in the SIPP to pay the fees.

note that if you have held the same funds with HL since before march 2014, then they will usually be old, "inclusive" units, which means the units pay a commission to HL, which might be as high of 0.75% or 0.85% a year, and now HL will be crediting your SIPP with at least nearly all* the commission, which will usually generate enough cash to cover the 0.45% charge.

this is a change from the old system (before march 2014), under which HL only passed on a little of the commission, i.e. kept most of it, but didn't have the 0.45% charge.

*in some cases, HL still keep a little of the commission, though they will have to stop doing this from 6 april 2016.

Thanks, my SIPP definitely dates back to well before March 2014, quite a few years, well before that date.

r_i_c

So the return on the Fund is going to be crucial in determining the wisdom or otherwise in maintaining it. That is going to be a long wait - I doubt (my) dividends will be paid out - if dividends arise - before next month some time.

One of the holdings which makes up my Fund seems to be offering an overall return of 3.7% which would (?) more than offset the fee incurred?

Can't see a date for dividends though - am sure it is there somewhere.

http://www.hl.co.uk/funds/fund-news-and-investment-ideas/fund-news--and--alerts/hl-multi-manager-income-and-growth-trust-research-update-2015-06-30

bigadaj

However you hold your investments there will be fees.

The ifa you see will need to be paid, his starting point may well be 3% initial and 1% annual, so there you immediately have £6k upfront and around £2k annually. On top of this will be platform charges and fund costs, though they may well be cheaper than you can get if you diy.

People and companies rarely work for nothing, these charges have always been there it's just that historically they were hidden as fees and commissions or bundled up in single charges.

jem16

r_i_c wrote: »

Can't see a date for dividends though - am sure it is there somewhere.

Dividend date is 1st September. Payment date is 30th September.

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hl-multi-manager-income-and-growth-trust-accumulation

jem16

bigadaj wrote: »

The ifa you see will need to be paid, his starting point may well be 3% initial and 1% annual, so there you immediately have £6k upfront and around £2k annually. On top of this will be platform charges and fund costs, though they may well be cheaper than you can get if you diy.

Any IFA taking 3% initial and 1% annually on a £250k portfolio would be best avoided.

0.5% annually would be more the norm on this size and the OP should be aiming for advice of no more than £2k.

At the moment we have a very inexperienced investor using one of the dearest platforms and their own in house multi manager funds which have fairly high ongoing charges. It's quite likely that an IFA would be able to reduce the platform charge and fund charges which may go quite a way to making up for that 0.5% servicing charge for ongoing advice.

Yes it would be cheaper to DIY with the right platform and fund but at the moment I don't feel the OP is up to that. There is tax to consider plus Bed & ISA and Bed & Pension from April onwards. For someone who was not aware of fees and charges, this might be step too far for the moment.