H&L "Creation fees" when fund switching

wombat42_2

I have done quite a lot of fund switching with H&L and have found that the fund price of the fund I have just switched to tends to decline by about 1% for no apparent reason as HL discount the unit trust bid offer spread. I have queried this with HL and it is irritating. They say it is something to do with "creation fees".

oldfella

I have had the same discussion with fundsnetwork - its a cost from the funds provider for buying units - you will find it buried in the T&Cs. Fundsnetwork claim the charge is 0.25% for a switch, carefully omitting this additional charge.

Mike

wombat42_2

oldfella wrote: »

I have had the same discussion with fundsnetwork - its a cost from the funds provider for buying units - you will find it buried in the T&Cs. Fundsnetwork claim the charge is 0.25% for a switch, carefully omitting this additional charge.

Mike

Well at least I get absolutely no switch charges which my Merchant Investors pension portfolio. I am tempted to cancel by pension switch from Merchant Investors to H&L.

H&L are sending me an example in writing of the charges made.

Stompa

So what is their normal charge for a switch - just a single dealing fee?

wombat42_2

Stompa wrote: »

So what is their normal charge for a switch - just a single dealing fee?

I am just switching unit trusts here. Usually the entire bid/offer spread is discounted by HL but mysterous charges of about !% are still applied.

They most likely apply dealing fees for shares but I know nothing about that.

dunstonh

pension funds are mostly single priced so you wouldnt get one on the MI pension. Its one of the advantages of picking pension funds instead of unit trusts.

A switching charge is one thing but if the fund has an initial charge of 1% or 0.5% or a bid/offer spread, then you will still be hit for those.

I just checked my own personal fund switches on the Cofunds platform and only paid the 0.25% switch charge but no other charges. The units bought price matched the units sold price bar the 0.25% switch charge.

wombat42_2

dunstonh wrote: »

pension funds are mostly single priced so you wouldnt get one on the MI pension. Its one of the advantages of picking pension funds instead of unit trusts.

A switching charge is one thing but if the fund has an initial charge of 1% or 0.5% or a bid/offer spread, then you will still be hit for those.

I just checked my own personal fund switches on the Cofunds platform and only paid the 0.25% switch charge but no other charges. The units bought price matched the units sold price bar the 0.25% switch charge.

Thanks. Can anyone find anything on the HL website about "initial charges" ?

EdInvestor

More info on implicit charges here:

http://www.pensionscommission.org.uk/publications/2004/annrep/chapters/ch6.pdf

from page 14.

wombat42_2

EdInvestor wrote: »

More info on implicit charges here:

http://www.pensionscommission.org.uk/publications/2004/annrep/chapters/ch6.pdf

from page 14.

OK but my comments about Initial charges with HL equally apply to PEP/ISA investments.

dunstonh

With HL, it wont be the wrapper but their platform. They use unit trust/oeic and SICAVs unwrapped or wrapped in pension, ISA and PEPs.

wombat42_2

dunstonh wrote: »

With HL, it wont be the wrapper but their platform. They use unit trust/oeic and SICAVs unwrapped or wrapped in pension, ISA and PEPs.

Yes i appreciate that the "initial charge" is wrapper independant. I was trying to make that point myself.