Scottish Friendly My UK Tracker Options (ISA)

bigadaj

mal48 wrote: »

Don't worry about my social skills, bow. SF claim in their Higher Fund Key Facts that their maximum charge is 1.5%. You're trying to demonstrate that it's much higher than this and this implies SF are making false claims and so are acting unlawfully. I've asked you to put this on the record because you keep evading the question, though interestingly you don't make a denial. Your argument is that SF charges are excessively high because they are much more than given in the literature and SF are making false claims. You're probably being crafty enough to avoid libel, but your arguments are specious.

Right, we'll try an analogy for you.

It's a bit like one supermarket giving you a price including vat, and the next one excluding vat. It's misleading but if you're careful how you describe it then it's not illegal.

Similarly buying a car, you need to clarify what you are paying for and what is additional, the difference with investments is that often these costs can be hidden, though they will impact on the overall returns.

mal48

An all inclusive 1.5% charge as indicated in Key Facts within an ISA wrap. I'd pay .25% on a platform. So effectively 1.25% for the funds. This gives me a tactically managed fund of index funds and a Uk growth fund. I have the flexibility to move between funds. The current annual performance of my portfolio is 24%. The original argument about this being an excessively high cost product with poor performance really doesn't stack.up.

masonic

mal48 wrote: »

An all inclusive 1.5% charge as indicated in Key Facts inclusive of VAT. I'd pay .25% on a platform. So effectively 1.25% for the funds...The original argument about this being an excessively high cost product with poor performance really doesn't stack.up.

Fortunately, the 'other expenses' will be invariant between the two options, so they can be ignored when comparing.

So, 1.50% would be charged by Scottish Friendly vs. 1.25% 1.00%* for the underlying fund and platform fee, based on AMC. So 20% 50%* more expensive through SF.

The performance of the underlying fund is good. It's the extra charges incurred holding it through SF that hit performance.

* I missed your error when I initially responded. The AMC of SVM UK Growth B Fund Acc is 0.75%. This is available through multiple platforms that have a 0.25% platform fee. 0.75% (AMC) + 0.25% (Platform) = 1.00%

Even if you want to argue about it only being 20% more expensive, you've got to admit you'd be crazy to pay even that much more in order to hold this fund through SF. Quantifying the extent of the rip-off really isn't necessary.

This gives me a tactically managed fund of index funds and a Uk growth fund. I have the flexibility to move between funds. The current annual performance of my portfolio is 24%.

The current annual performance of a simple global index tracker is >30%.
https://www.trustnet.com/Factsheets/Factsheet.aspx?FundCode=I1F0J&univ=O

mal48

We've been through this argument many times.The Key Facts are clear that 1.5% is the total charge. Elsewhere, I'd pay .25% for a platform. So, the effective charge for the SF funds is 1.25%. As for returns, I'm diversified, having a UK growth fund, rather than being entirely in a global fund.
But all this is getting beside the point. The original argument claimed excessive fees for the product. That's not the case. It's immaterial that some funds do better. I'd make more with some at the moment, less with others, including L and G multi indexes and the much vaunted Nutmeg. The repeated argument that SF ahre charging far more than they claim is not the case.

dunstonh

The Key Facts are clear that 1.5% is the total charge.

But we know the AMC is not adequate and they should be using OCF like everyone else.

Elsewhere, I'd pay .25% for a platform. So, the effective charge for the SF funds is 1.25%.

You dont have to use a platform. However, even if you do, comparable funds are available at 0.24%.

The repeated argument that SF are charging far more than they claim is not the case.

They are charging more. A lot more.

mal48

All the evidence points to the fact that 1.5% is the total charge and this is clearly given in the Key Facts. This is not a stakeholder fund, but the charges are based on these and they were capped at 1.5%. I also compare the figures given in my online account with SF with those for the underlying funds and they always tally. The figure you gave for an alternative fund did not include a platform charge.

dunstonh

All the evidence points to the fact that 1.5% is the total charge and this is clearly given in the Key Facts.

All the evidence points towards the AMC as not being the total charge. This is a well known issue and has plenty of documentation including FCA thematic review TR14/7 which says "Using the AMC as the headline charge figure on marketing material does not provide investors with a clear, combined figure for charges as it excludes additional charges and expenses that are taken from funds".

Platforms, fund houses, advisers etc all use OCF in place of the AMC. (for completeness, life and pension contracts still refer to the annual charge as AMC but they use an OCF equivalent for those tax wrappers. However, where Unit Trust/OEICs are used, they should use the OCF).

This is not a stakeholder fund, but the charges are based on these and they were capped at 1.5%.

Stakeholder has nothing to do with it. 1.5% was probably used as that was the most common charge used by funds back in the days when fund charges were bundled and OCF disclosure was not required.

The figure you gave for an alternative fund did not include a platform charge.

You dont need to invest on a platform. Most fund houses still allow direct investments.

coyrls

mal48 wrote: »

All the evidence points to the fact that 1.5% is the total charge and this is clearly given in the Key Facts. This is not a stakeholder fund, but the charges are based on these and they were capped at 1.5%. I also compare the figures given in my online account with SF with those for the underlying funds and they always tally. The figure you gave for an alternative fund did not include a platform charge.

[FONT=&quot]This discussion is really weird. You say that the comparable fund fee of 0.24% does not include the platform charge. OK, let’s add a platform charge in. At the expensive end, you could pay a 0.25% platform charge making a total of 0.49% compared to your quoted cost of 1.5%. With a Halifax Share Dealing ISA, your platform fee would be a fixed £12.50 a year, which would be cheaper than a 0.25% platform charge for an ISA above £5,000. Either way it’s demonstrably cheaper than 1.5%.[/FONT]

lpgm

mal48 wrote: »

All the evidence points to the fact that 1.5% is the total charge and this is clearly given in the Key Facts.

Terry Smith is one fund manager who's pretty open about costs. Here's an article he penned for the FT: https://www.fundsmith.co.uk/news/article/2013/04/30/financial-times---keep-a-lid-on-costs-to-protect-your-investment

coyrls

lpgm wrote: »

Terry Smith is one fund manager who's pretty open about costs. Here's an article he penned for the FT: https://www.fundsmith.co.uk/news/article/2013/04/30/financial-times---keep-a-lid-on-costs-to-protect-your-investment

I hold the Fundsmith fund but with a OCF of 0.97% on the I class, it’s not surprising that Terry Smith is keen to draw attention to hidden charges, as it distracts attention from the fact that his non-hidden charges are very much at the high end.