Intermediary and Platform charges

Bradders43

Hi All,
I have a few shares and Isa's with Cofunds and at some stage must have got involved with Commshare too, presumably when they were offering to refund a % of the yearly commission (apologies if this is the wrong terminology). But now i find i am paying a sizeable fee to both Cofunds and Commshare, since i cannot deal directly with Cofunds i have to go via Commshare. From what i can see they are not doing a right lot for me, as i don't indulge in share dealing etc, but just my purchase of a yearly shares ISA.
Is there a cheaper more reasonable option i could go for just to hold my finances? i'm not a major player in the financial market, but would just want a cheaper option to hold my finances.

Is it easy to break away form Commshare and Cofunds, i suspect there would be some fees to pay? and could i take control back myself?

Any comments and advice greatly received.

Kindest Regards
Graham

ColdIron

You could plug your numbers into this to get some idea of potential platforms to research

http://www.comparefundplatforms.com/

Rollinghome

The best platform or broker for you will depend on factors such as how much you have invested, what you invest in, how often you trade, and what level of service you want to pay for.

A good place to start comparing charges is SnowMan's spreadsheet here...

Commshare's combined charge seems very much top end. Those with larger sums to invest will likely look to flat fee charges, those with smaller sums may be as well with percentage, ad valorem, fees. Most, but not all, platforms charge exit fees though some will cover those fees for transferring to them.

dunstonh

But now i find i am paying a sizeable fee to both Cofunds and Commshare, since i cannot deal directly with Cofunds i have to go via Commshare.

Cofunds highest charge is 0.29% (it is tiered lower after that). That is not high (HL are 0.45% by comparison)

Cofunds transferred all accounts to non-commission paying share classes nearly 5 years ago. Cofunds is meant to be used with an IFA or FA. However, some companies set up back in the commission days (which ended in Dec 2012) to share commissions. Commshare effectively had their model broken at that point so they had to introduce a fee on top of the Cofunds charge. It appears they have negotiated a slightly lower cofunds charge but commshare are taking 0.24% explicit charge on top. That is around half what a typical IFA would take for giving advice. In theory, that 0.24% should be VATable as well as they cannot claim the VAT free status that intermediaries can. So, Commshare is expensive as you are not getting the benefit of advice or a decent DIY service but paying somewhere between the two.

Also, the commshare website is a little misleading when it comes to initial charges and it still refers to commission share classes as a comparison.

, i suspect there would be some fees to pay?

what does your contract with commshare say?

Bradders43

Thank you all for your quick responses, they are all appreciated. I think i need to leave both Commshare and Cofunds, as it looks like i'm paying twice for the same service. Do you know if the FSA or any other bodies are looking into the practices of intermediataries and Platform companies over pricing, as it seems to me as not being very transparent. Perhaps i was just naive when i signed up. Has any one any advice what my options are? Can i get my shares on investments back under my own control, as i only signed up to Commshare when they were offering a rebate on their yearly commissions?

Kindest Regards

Graham

Rollinghome

Bradders43 wrote: »

Do you know if the FSA or any other bodies are looking into the practices of intermediataries and Platform companies over pricing, as it seems to me as not being very transparent.

The FSA/FCA recently had a very thorough look at platforms and intermediaries - RDR, the Retail Distribution Review. Huge changes to the industry have been successfully forced through resulting in far greater transparency and overall lower charges. The review is ongoing.

Has any one any advice what my options are?

Your options are to move wherever you please. Commshare say: "Termination fee. There is no termination fee. You are free to leave our service at any time without charge." If correct that's unusually generous compared to many others. Most platforms charge fees to transfer away.

You now just need to select the best option and ask your new platform or broker to arrange the transfer. No platform offers every investment so you need to look for the service you want at the price you want to pay. That's likely to be a platform if you hold shares and/or funds, or possibly a broker if you hold only shares.

As you can see from Snowman's default example, on £210k you could pay anything between £15 pa with IWeb to £912 pa with Hargreaves Lansdown. The actual numbers will depend on the investment details and some with still higher charges, such a Chelsea Financial Services, have been ignored.

If you wanted a more detailed response from someone, you'd need to give full details of the investments involved.

Bradders43

Rollinghome, thank you for your invaluable feedback, its very much appreciated that you took the time and effort to reply.

Cheers

Graham

Bradders43

Rollinghome - As i am not an active investor and approaching retirement. I have few shares, ISA's, PEP's and Unit Trust/OEIC's in Commshare / Cofunds and was thinking of changing my accumulation shares into income shares and get some monthly income and perhaps cashing in a few shares. But what i am paying Commshare / Cofunds in yearly fees seems to outweigh what service i get from them, basically as far as i can see, they are making more money than me, just for holding my investments in one place. Sorry to go on, but its come a bit of a surprise how much i am paying, when i have better uses for such amount.

Kindest Regards

Graham

dunstonh

Do you know if the FSA or any other bodies are looking into the practices of intermediataries and Platform companies over pricing, as it seems to me as not being very transparent.

The Food Standards agency has nothing to do with it You mean the FCA. And, no, there no plans to look at things at that level as they are very transperant on charges. Why do you think they are not.

Perhaps i was just naive when i signed up.

Not really. I suspect you bought prior to the RDR when commission still existed. So, back then, getting a bit of a rebate was a good thing. However, when things became transparent at the end of 2012 and moved to fee basis, that is perhaps where you switched off.

i only signed up to Commshare when they were offering a rebate on their yearly commissions?

Which verifies the above as there hasnt been any commission for 5 years.

Cofunds is the platform. As mentioned, it is a platform aimed to be used with an IFA or FA. Commshare is neither of those but prior to 2012, they would pretend to be one on paper to allow a commission rebate to be made. However, since the RDR at the end of 2012, their model became broken. You can transfer out of Cofunds at no cost. The intermediary doesnt matter. There should be no barriers to exit with intermediaries.