Holding all investments with one service (in this case HL) - good or bad idea?

ColdIron

I don't know if I'm honest, perhaps they figure their core business is funds. Different companies apply different charging strategies, iWeb don't make an annual charge for either, just transaction charges, CSD charge for both

Alexland

DennisTenus wrote: »

Wow the fees you pay them a month must be quite a bit!

OldMusicGuy is also heavy on cash for which HL do not charge a fee.

My view is the amount of money you risk above the FSCS limit depends on your overall wealth position and what you can afford to lose if things went unexpectedly pear shaped.

In terms of why platforms cap their fees for Shares, ITs and ETFs then Andy Bell (of AJ Bell) explained in his book that it's simply a function of what the market is willing to pay for holding those assets (remember you can turn shares into certificates and pay nothing) and they hope to make the money on the higher trade fees which people are also generally willing to pay.

iWeb is a quirky exception as the only platform I am aware of offering funds in ISAs (but not SIPPs) with no ongoing fee (other than some direct fund managers such as M&G, Orbis, etc) so HL, etc are probably hoping not too many people find out.

Alex

Audaxer

The FSCS limit is going up to £85k in April next year, so if you have wife/husband you could have £170k between you covered on one platform. If substantially more than that I would use a second platform.

I know the risks are low but the impact is high if it happens to you and all your investments are on the one platform, even if it just means a delay in getting any money out of your only investment platform.

seacaitch

With investments, I prefer to get "paid" to take risk, not shoulder risk unnecessarily without reward. Very low probability events are easy to dismiss as not so important, but (i) if the impact of an event - should it occur - is very high and (ii) the risk can be easily mitigated against, then prudence indicates I should do so.

Like OldMusicGuy, I'm happy to hold many multiples of FSCS limits at one provider, but that's only because I'm holding comparable amounts at other providers also.

By choosing to diversify my holdings across multiple providers rather than park them all in a single place, I'm consciously increasing the likelihood of suffering a problem due to provider incompetence/fraud/failure, while reducing the chance of suffering a catastrophic impact from such an event should it ever occur.

Think of it as a preferring a plane to have multiple engines rather than just one engine.

That's a trade-off I like, and if I'd outsourced the oversight of my portfolio to someone else, that's the sort of prudence I would expect them to exercise on my behalf, particularly where the risk mitigation is available for minimal effort and zero cost, as it is with the way I've structured things.

We are all different though, so it's interesting to see how people approach things like this in their own way. Mine is a sort of "safety systems engineer" approach that others may view as OTT, but gives me a warm fuzzy feeling and will serve we well should the 5h!t ever hit the fan in a big way, how ever low the chances of that happening are.

Alexland

seacaitch wrote: »

Think of it as a preferring a plane to have multiple engines rather than just one engine.

Yup and accepting it would be impractical to have an engine for each bank of seats.

Alex

chucknorris

I will have to think about this, both my wife and I have virtually everything apart from property invested with HL. This thread has caused me to consider investing somewhere else in addition to HL.

Chickereeeee

seacaitch wrote: »

Think of it as a preferring a plane to have multiple engines rather than just one engine.

Not really. It is more like running (say) 4 smaller single engine planes rather than one big one. With multiple engines, you don't lose anything if one fails. With several smaller planes, you increase the chances of a partial loss.


C

seacaitch

Chickereeeee wrote: »

Not really. It is more like running (say) 4 smaller single engine planes rather than one big one. With multiple engines, you don't lose anything if one fails. With several smaller planes, you increase the chances of a partial loss.

The most apt analogy would depend on the type of event that occurred. Bit pointless arguing about analogies, but the sort of thing I had in mind as the most likely of these low-probability scenarios would be one where something untoward occurred at a broker/provider that warranted FCA intervention and resulted in customer accounts being locked for an extended period of time while investigations were performed and the reality of (customer) positions was established.

The blocking of account access might cause someone a great deal of problems and distress if the lockout (a) lasted for a long period of time, as is very possible with a forensic accounting investigation, and (b) if this was someone's sole investment account that they relied upon. The problems/distress would manifest even if no losses (haircuts) were subsequently imposed. In my analogy, this would be akin to an engine (one of several on the craft) going down for several hours in-flight, but perhaps restarting later in the flight (no lossues imposed). Clearly, on a single engined aircraft, an engine restarting several hours later wouldn't be much consolation.

short_butt_sweet

since we're doing plane analogies ... some platforms are more like a small single-engine plane (beaufort securities), others are more like a big state-of-the-art multi-engine plane (hargreaves lansdown).

you might be more sanguine about temporary loss of access to platform investments (air traffic control computers hacked by russia) if you also have cash savings (a car) and other sources of income (access to train network).

some people also like to put a bit in p2p (wacky races).

seacaitch

short_butt_sweet wrote: »

some people also like to put a bit in p2p (wacky races).

:T

Chapeau, but you must mean "Stop the Pigeon".

Who knew it was actually titled "Dastardly and Muttley in Their Flying Machines"?
https://en.wikipedia.org/wiki/Dastardly_and_Muttley_in_Their_Flying_Machines