Scottish Friendly My UK Tracker Options (ISA)

bowlhead99

bigfreddiel wrote: »

When you tell most people that charges are 0.1% they don't actually understand what you mean.

Firstly they don't know what a percentage is!

Speak for yourself. Percentages are taught to all children in their fifth year of compulsory education: nine-year-olds.

Secondly they tink you mean 1% not 0.001 of the fund value.

Unlikely if he says 0.1% or 0.06% that he means 1%. Especially when he only discusses it in the context that the expensive 1.5% management fee is more than 20x the amount he pays. He could not possibly be talking about him paying 1%.

In fact I would guess that the majority of people would think a category of 1.5% was a good deal.

Unlikely as over 90% of funds available to investors via fund platforms have fees below 1.5%, and the fact that 1.5% is a full quarter of the 6% or so they might reasonably expect to get as a nice gross return for a medium-risk fund.

bigfreddiel wrote: »

How can I say such a thing?

Well let's take RDR for starters thst was forced upon the finance industry a few years ago, to try and convince us punters that we weren't going to be ripped off anymore with hidden charges.

OK lets take that.

As a result of the retail distribution review and the platform review that followed, all investors using DIY fund platforms now face lower management charges in the products they can buy today, and separate explicitly-charged fees for using the platform provided by the intermediary/distributor and separate explicitly charged fees for advice if they choose to use an advisor.

As a result, they can better see and understand the components of what they are charged and what is paid to whom.

Ah well that's okay then it's all good now isn't it folks?

It does seem better, yes. The retail distribution review has improved transparency of charging for those firms who did not voluntarily publish the full information and are caught by RDR and the subsequent platform review.

However, as customers of Scottish Friendly's My Choice ISAs are not using advisors and not using a fund platform they have not really benefited from those particular industry improvements in recent years.

The SVM customers are simply told that they will incur high 1.5% management fees with no feeling where it is going unless they dig very deeply. Scottish Friendly do not wish to tell their customers that they could instead pay some nominal platform fee (e.g. £12.50 a year with Halifax) and buy the equivalent fund from the same investment manager (e.g. the SVM UK Growth B product) for a little over 1% including ongoing charges, instead of via Scottish Friendly at 1.5% not including ongoing charges.

Regardless of whether 1% is a reasonable price to pay for a fund of the quality of the UK Growth funds that are managed by SVM, which is something that would be a matter of opinion, it is clear that Scottish Friendly's offerings are expensive compared to direct competitors. As the thread shows, they are not transparently priced, which we speculate is as a result of the firm not seeking customers who care about transparent pricing because they are unsophisticated and naive; and unsophisticated naive investors are more the ideal target customer that has become the bread-and-butter of a high price firm such as SF.

This entire thread exists because of the misunderstanding by one or two SF customers that the SF products are good value and the good intentions of other unbiased forum users to tell them that they are not good value.

However, it does not follow they are not poor value and un-transparently priced simply because they are a financial product (to your comment: "this is a financial product so it is not going to be simple and clear is it"). By contrast, they are an outlier, that stands out as a provider NOT to use, because they are not simple and clear, UNLIKE the typical modern DIY investment product which is simpler and clearer.

Cheers fj

Cheers. I guess you are you drinking too? :beer:

mal48

Lot there. Keep it simple. My Choice Key Facts. FCA regulated. What are the charges ? 1.5% per annum. This includes the cost of fund management for the underlying fund. What are the deductions for? The deductions include expenses, charges and ANY other reductions. You are clearly given the effect of charges on returns.You have your transparency. As for the Latin geek-de gustibus non disputandum, Mal

bigadaj

mal48 wrote: »

Lot there. Keep it simlple. My Choice Key Facts. FCA regulated. What are the charges ? 1.5% per annum. This includes the cost of fund management for the underlying fund. What are the deductions for? The deductions include expenses, charges and ANY other reductions. You are clearly given the effect of charges on returns.You have your transparency. As for the Latin geek-de gustibus non disputandum, Mal

Have we been drinking again?

Malthusian

mal48 wrote: »

As for the Latin geek-de gustibus non disputandum, Mal

Whether Scottish Friendly has higher charges than more modern products (it has) and has outperformed its peers long-term (it hasn't) are matters of objective fact, not matters of taste.

Even if it was a matter of taste, and even if it's impossible to argue about matters of taste (which is also nonsense in any language), what have you been doing for the past 8 pages?

"That's just your opinion!" is how a bad loser concedes an argument.

jimjames

Malthusian wrote: »

"That's just your opinion!" is how a bad loser concedes an argument.

Maybe it's Donald trump in disguise producing "alternative facts" that are actually lies.