H&L "Creation fees" when fund switching

EdInvestor

I think you will find they are all doing it, one way or another. Transaction costs and stamp duty are unavoidable no matter how an investment is wrapped up.

What is infuriating is that most people assume these charges are included in the anniual management charge.They aren't, they are extra charges.

The advantage to holding shares directly is that although you pay these costs, they are transparent and you can choose a low cost broker. You can also minimise the cost by not trading often and of course you don't pay anything on top - no AMC. It makes a big difference over the years.

dunstonh

I think you will find they are all doing it, one way or another. Transaction costs and stamp duty are unavoidable no matter how an investment is wrapped up.

They are not.

I checked my last few fund switches and the only charges i paid were the 0.25% switching fee and on some funds a dilution levy. The amount paid into the new fund was the exact difference after those. Most didnt have the dilution levy and the only charge was 0.25%. Thats very different to the 1% wombat is saying.

wombat42_2

RayWolfe wrote: »

Wombat:
Read my message above; No.16

Yes i read that post. It is incidental who pockets the money, the fact remains I still have to pay it. It seems incredible that it is over and above the bid/offer spread of 5% to 5.5% (which is usually completely discounted by HL). Why do we hear nothing about these extra charges if you went to the UT company and bought from them direct ? The charges seem to differ for each UT there ought to be somewhere information on what these charges are.

jamesd

wombat42, just to be sure: these are bare unit trusts in a Vantage fund account, not in their ISA or SIPP wrapper? If not please say exactly which wrapper and give an example with the quoted bid and offer prices on the day of the purchase or sale, after it happened.

wombat42_2

jamesd wrote: »

wombat42, just to be sure: these are bare unit trusts in a Vantage fund account, not in their ISA or SIPP wrapper? If not please say exactly which wrapper and give an example with the quoted bid and offer prices on the day of the purchase or sale, after it happened.

We are talking unit trusts in ISA/PEP wrappers with HL. Immediately after a switch was done there was a negative percentage displayed against the ISA/PEP on the HL online account which differed for each transaction but tended to be about 1% or 0.8%. I didnt make a note of them so cant remember the exact amounts. It wasnt the movement on that day for the unit trust as the unit trust prices all went up.

The switches were:
1/Jupiter China Acc to Threadneedle China Opps Acc
2/ Threadneedle China Opps Acc to Neptune Global Equity Acc
3/ Neptune Global Equity Acc to Artemis Global Growth Acc

EdInvestor

wombat42 wrote: »

The switches were:
1/Jupiter China Acc to Threadneedle China Opps Acc
2/ Threadneedle China Opps Acc to Neptune Global Equity Acc
3/ Neptune Global Equity Acc to Artemis Global Growth Acc

Perhaps I'm missing something (CGT related perhaps?) but wouldn't it have been easier just to move the Jupiter fund money to the Artemis fund?

wombat42_2

EdInvestor wrote: »

Perhaps I'm missing something (CGT related perhaps?) but wouldn't it have been easier just to move the Jupiter fund money to the Artemis fund?

The switches were separated by a few weeks and I switched as my fund knowledge and the market developed. The idea of moving into Global funds never occurred to me originally and also I only switched 50% of Neptune into Artemis. I plan to stay with Artemis and Neptune for the next 10 years if possible.

RayWolfe

H-L don't update their fund prices until 8 or 9 in the evening as do most of the pricing sites like Morningstar, etc. Are you sure you haven't seen the difference between the price you got and "yesterdays" price which would be shown on the website until the evening?
I do switches with H-L and I promise you that I would not accept a difference of quoted price and bid/offer price of anything approaching 1%; maybe 0.1%.
Here's a way to check: compare the price on your contract note with the historic price on the providers web site ... bear in mind that a deal time of 8 o'clock on the 21st will be the rate at 12 o'clock (or 10 or 11 depending upon when the manager sets the price) the previous day.
Hope that helps.

jamesd

For the Artemis transaction I have the daily prices so if you were to post the dates of sale and purchase and the amounts involved from the transaction notes I could check that. You'd expect a 0.25% lower valuation on the Artemis fund than the money spent because that's the residual difference between bid and offer after their discounting.

I've checked on each buy and sell transaction I've done with HL in their ISA wrapper and have never noticed a discrepancy between the revenue from a sale and the value of a purchase that wasn't accounted for by any residual difference between bid and offer prices after their discount.

wombat42_2

jamesd wrote: »

For the Artemis transaction I have the daily prices so if you were to post the dates of sale and purchase and the amounts involved from the transaction notes I could check that. You'd expect a 0.25% lower valuation on the Artemis fund than the money spent because that's the residual difference between bid and offer after their discounting.

I've checked on each buy and sell transaction I've done with HL in their ISA wrapper and have never noticed a discrepancy between the revenue from a sale and the value of a purchase that wasn't accounted for by any residual difference between bid and offer prices after their discount.

Thanks James I will send the info as a PM to you a bit later.