Investment fees?

jem16

r_i_c wrote: »

So it's alright to let HL sell shares to raise top up / fees as they see fit, as and when? I was concerned that I was going into some sort of penalty zone by not having this HL 'float' of some £300 instantly available? But its okay to let HL take care of that, no especial need for me to transfer the fee direct from my bank account please? I was about to do that.

It's probably a good idea to contact HL and say that you would prefer to have some shares sold to meet the fees for the moment. As the dividends come through the cash float would be built up.

The relevant bits from their T&Cs are;

http://www.hl.co.uk/__data/assets/pdf_file/0015/37122/Online-Ts-and-Cs.pdf

Section A21

In order to meet any transactional or management fees in relation to the administration of your Accounts we suggest you maintain a Minimum Cash Balance (“MCB”) on each Account you hold with us.
You don’t have to maintain the MCB but doing so will help you to maintain cash to cover fees or other outgoings. Should there be insufficient cash to meet any charges due, we will have the right to sell your assets to pay the outstanding charges, to raise sufficient cash to reinstate the MCB, and to pay the dealing fee which will also be applied when selling holdings to recoup fees owed. Please refer to section A23 for more information.

and Section A23

If you owe us money which we cannot collect from the Account on which the charge accrued, we may transfer money and/or assets between your Accounts, including any amounts which arise as a result of your use of our Classic Share Dealing service or any other services which we are providing to you, to pay the debt. We have the absolute right of sale of investments in your Account (including those held in joint names) to meet amounts you owe to us. If there is insufficient cash in your Account to meet any charges arising in the first three months following the opening of your first Account with us, we will not sell assets in your Account to pay these charges until the first three months following Account opening have elapsed If we have to sell any of your investments to meet your obligations, HLSB will charge dealing commission, per trade, at the rate set out in the Tariff of Main Charges, with the exceptions of deceased client accounts.
Commission on share and fund trades is payable to HLSB on the expected settlement date, however if settlement in the market does not occur on the expected settlement date, then HLSB may choose to treat any commission due as client money until HLSB are able to sell/purchase the stock i.e. until settlement within the market occurs.

Important part in bold if you've just opened the account.

r_i_c

xylophone wrote: »

It would be correct to refer to your Account.

You hold a

Self Invested Personal Pension Account

a Vantage Stocks and Shares Account

a Vantage ISA Account.

You hold Funds in those Accounts.

With regard to when dividends are paid on the Funds in those Accounts you can check the individual funds on the Hargreaves website.

Go into the website - click on Fund prices and research, type in the name of the fund in the space provided and you will find the information that you need.

Have you yet arranged internet access to your HL Accounts? This would make life easier when you see your IFA?

You may also wish to discuss your M&G holding with him and a decision on your Pru AVC?

For completeness you should also advise him of your expected TPS pension and of the Foundation amount information you have obtained in respect of your state pension.

Thanks, the earliest they could fit me in was after next week, but that's a silver lining because it will give me plenty of time to list everything I need and collect all the figures together.

Yes. I have been accessing HL online for some while now, but I still prefer to do business over the phone with them - which makes sense considering the rather basic current understanding I have of stocks and shares :eek:

colsten

jem16 wrote: »

It's probably a good idea to contact HL and say that you would prefer to have some shares sold to meet the fees for the moment. As the dividends come through the cash float would be built up.

You don't need to ring them. If there is not sufficient cash reserve, they will automatically sell enough of your investment to cover the monthly charges. There is a small extra charge for such sales, so it might be cheaper to maintain an appropriate cash balance.

r_i_c

jem16 wrote: »

It's probably a good idea to contact HL and say that you would prefer to have some shares sold to meet the fees for the moment. As the dividends come through the cash float would be built up.

The relevant bits from their T&Cs are;

http://www.hl.co.uk/__data/assets/pdf_file/0015/37122/Online-Ts-and-Cs.pdf

Section A21...and Section A23...

Thank you. Yes, the Ts&Cs were more or less the content of the email they sent me. I queried the fee and they have kindly responded, so I can now ask them if they could have some of my shares sold to meet the fees for the time being.

I cannot understand why mum wasn't receiving similar requests but she (or dad) may have consciously opted for HL deductions some time ago, so the issue was never raised. And as you say, when they started their accounts the fees may have appeared in a different guise. Anyway, we must worry about the present now - and what faces us in the future.

Oh, one thing: all my accounts are 'Income' so they won't go into the float will they - if they do come in - they'll come into my nominated bank account? Is that correct please?

Thanks again.

r_i_c

colsten wrote: »

You don't need to ring them. If there is not sufficient cash reserve, they will automatically sell enough of your investment to cover the monthly charges. There is a small extra charge for such sales, so it might be cheaper to maintain an appropriate cash balance.

Thanks - underline is mine - bit confused now. To top up or not to top up?

:undecided

colsten

Your decision.

Oldbiggles

bowlhead99 wrote: »

Correct. If you invest in shares in a company, the worst that can happen is that the shares become absolutely worthless.

Whereas if you invest in a fund that holds shares in fifty companies, a couple might become worthless and the others might reduce in value and lower their dividend payouts for a while before recovering.

So investing in the big company is probably no more risky than investing in that company and a bunch of others via a fund.

No, wait....

I said Companies, not a single Company. Anyone with a lump sum to invest could buy into several Companies which effectively would be the same as investing into a fund. Once the share certificate has been received there are no more charges to pay to stock brokers or financial advisers and you will draw dividends until you decide to sell the shares. It means monitoring the stock market on a regular basis but people have been doing this successfully for years without the help of financial advisers.

bowlhead99

r_i_c wrote: »

Thanks - underline is mine - bit confused now. To top up or not to top up?

:undecided

You are going to get pinged for fees £70-80 a month. They recommend you hold a certain amount of cash for fees on your account - rather than being fully invested - as you mentioned in a post above. This ensures you can always pay the fees when they come round each month.

It is your choice if you maintain a buffer of cash (losing chance of a small amount of annual investment growth on that uninvested cash) so you can always afford the fees, which is what they recommend.

Alternatively, don't bother to hold any cash, so that they have to go and take action to dispose of some of your holdings in order to raise cash for you. If you just make cash available to them, by putting cash in the accounts or making 'sell' trades yourself, that's simple and easy. If you make them go through the hassle of selling little bits of your holdings to raise cash to pay their invoices, they will charge you for that extra service. As colsten says, up to you which one you choose.

At the moment, you have hundreds of thousands of pounds of investment funds, which will go up and down in value daily, and you don't know if you even want them or whether they are suitable for your needs as you don't know much about investments and have not yet seen an advisor. So, clearly there is no harm done if you just sell a few units and get £1k cash in your account which will easily cover a years worth of fees and in the meantime not be subject to any investment risk or platform fee on that £1k which is sitting idle. You will then avoid all the charges you might have otherwise incurred if they took it upon themselves to sell bits of your portfolio each month to raise the cash on an as-needed basis.

Personally in your shoes (as mentioned in a previous post) I would sell quite a bit more than £1k worth if I had a lot of investments that I don't know if I want. Thereby reducing my exposure to the ups and downs of the stockmarket, while I figured out what sort of portfolio would be suitable for my needs (which might be very different needs from the portfolio my father had constructed for himself).

bowlhead99

Oldbiggles wrote: »

I said Companies, not a single Company. Anyone with a lump sum to invest could buy into several Companies which effectively would be the same as investing into a fund. Once the share certificate has been received there are no more charges to pay to stock brokers or financial advisers and you will draw dividends until you decide to sell the shares. It means monitoring the stock market on a regular basis but people have been doing this successfully for years without the help of financial advisers.

Clearly, people have done this with success. If you buy into enough companies which operate in enough industry sectors in enough countries round the world, you will be able to have your own virtual fund, but without paying an investment manager.

Then instead of reviewing the periodic fund reports, you can simply review the individual financial reports and news releases which affect any of the companies in your global portfolio and make sure you invest broadly and well and take appropriate action in light of any events in any of the companies amongst your holdings. It is certainly possible for some people to do this competently and they will save fees ; you don't need a platform or an investment manager, you just pay the fee to buy/sell and periodically rebalance and it might come to a lot less per year than you would pay for platform access to an expensive platform.

However what you do need is time and experience. With respect to OP, nobody would accuse him of having investment experience. It is perhaps misleading to new investors to suggest that manually allocating your cash to individual big companies is no more risky than investing in a fund. You will have the same overall portfolio risk as a fund if you construct the same portfolio of underlying holdings, but that is unlikely for a global portfolio and there is plenty to get wrong when determining the investment selection criteria.

colsten

bowlhead99 wrote: »

Clearly, people have done this with success. If you buy into enough companies which operate in enough industry sectors in enough countries round the world, you will be able to have your own virtual fund, but without paying an investment manager.

Although you would look and feel a lot like a real investment manager. And probably quite a bad one at that, as if you were a really good one, you'd probably be a fund manager and make a lot of money from selling your fund to lots of other people :cool: