Like the February Correction ?

Alexland

john5001 wrote: »

I think my timeframe is around five years so with that in mind, I will monitor but try and not panic unless I have to sell because of something urgent that may crop up.

So you are going to continue to invest in expensive funds which are likely to be above your risk tolerance when you do not have a medium or long term investment horizon? And you're going to do this 10 years into a bull market? Is there any way we can make it clearer that goes against all good practice?

Alex

coyrls

john5001 wrote: »

Yes aware that HL are expensive. At the time of investing, there was a lot of publicity regarding how they are the leading fund manager company and was impressed by their website.


I think my timeframe is around five years so with that in mind, I will monitor but try and not panic unless I have to sell because of something urgent that may crop up.

HL are not a leading fund manager, they are a platform that provides some HL badged funds of funds on the side. They are the leading retail platform if you measure leading by Assets Under Management, customer numbers and profitability.

snowqueen555

john5001 wrote: »

Yes aware that HL are expensive. At the time of investing, there was a lot of publicity regarding how they are the leading fund manager company and was impressed by their website.


I think my time frame is around five years so with that in mind, I will monitor but try and not panic unless I have to sell because of something urgent that may crop up.

It's going to be a long 5 years if you are already worried about how it is going now.

I would re assess your risk appetite, 2% of 30000 is £600, sounds like a lot to me, and over 5-10 years it does add up.

I would certainly look at some other fixed fee broker, you might save money that way.

Investing is no different to buying food in the shop, you are paying for a service. Shop around and save money. I figure you could cut that 2% fee down to 1%, and that would be £300 savings a year x 10 years = £3000

john5001

snowqueen555 wrote: »

It's going to be a long 5 years if you are already worried about how it is going now.

I would re assess your risk appetite, 2% of 30000 is £600, sounds like a lot to me, and over 5-10 years it does add up.

I would certainly look at some other fixed fee broker, you might save money that way.

Investing is no different to buying food in the shop, you are paying for a service. Shop around and save money. I figure you could cut that 2% fee down to 1%, and that would be £300 savings a year x 10 years = £3000

Problem is, moving funds that are falling in price and paying exit fees doesn't seem like a good idea.

Hoping for a recovery of sorts that would soften the management fees incurred.

seacaitch

HL is a slick business offering high levels of service, which it markets very effectively to potential customers, particularly those with limited time or experience to explore suitable alternatives that might be less expensive.

You may have made a few mistakes here, john, but it's all fixable if you choose to by putting in a bit of effort and with help from posters here, so not the end of the world (and it'd be a rare investor who's not made plenty of mistakes along the way, particularly early on). 'Mistakes':

- choosing a higher-fee platform for OEIC funds than some of the alternatives available
- choosing investments that may be riskier or more volatile than your intended investment horizon
- chosen higher charging OEIC funds than comparable alternatives
- chosen platform-specific funds that cannot be transferred in specie to another platform, serving to tie you to the platform


But hats off to HL for the effectiveness of its strategy at first attracting and then tying customers in. It seems pretty effective.

MK62

It's not so much the platform tbh......at £50k, and given your investment pattern (appears to be 4 regular fund trades per month), HL are fairly competitive tbh.
There are cheaper though if cost is the primary driver, but if comparing, remember to include all the costs....some platforms can appear cheaper at first but when you add on the whole range of costs, they may not be.

The expensive funds are another matter though.
TBH, the mix isn't particularly well diversified, and the overall performance isn't all that good, especially considering the fees (though that could probably be rephrased as "because of the fees", at least in part).

I wouldn't make any rash decisions from here though.

If it were me, I'd first divert the monthly investment away from the current MM funds, most likely into global multi-asset funds.
There are plenty to choose from.....with varying asset mixes to suit your desired risk level.
Things like Blackrock Concensus (passive) or Baillie Gifford Managed (active).

After that, then I'd look at moving away from the MM funds and into the chosen alternatives, at a time of your choosing.....

ColdIron

john5001 wrote: »

Problem is, moving funds that are falling in price and paying exit fees doesn't seem like a good idea.

If you switch a fund that is falling into another one that is also falling because they invest in similar things there isn't much in it. Obviously you can't transfer the HL funds elsewhere but if you want to avoid the exit fees you could review what you are investing in at HL

Nothing really wrong with those funds, the problem with the HL multi manager funds is the double layer of fund charges, those levied by the actual fund managers in the underlying funds and those levied by HL for packaging them up and marketing them. You could switch them into similar non HL funds and cut out a layer of charges. HL MM funds seems to be in the range of 1.30% and 1.45%, you could reduce this to closer to 0.75%. You would still be paying the 0.45% platform charge but if you were prepared to put in a bit of effort you could replace them with investment trusts and maybe ETFs which cap the 0.45% at £45. So lower OCF and no platform fees after £10,000. It could cut your annual fee on £20,000 from £350 odd to £45 ish. Maybe something to consider?

MK62

ColdIron wrote: »

If you switch a fund that is falling into another one that is also falling because they invest in similar things there isn't much in it. Obviously you can't transfer the HL funds elsewhere but if you want to avoid the exit fees you could review what you are investing in at HL

Nothing really wrong with those funds, the problem with the HL multi manager funds is the double layer of fund charges, those levied by the actual fund managers in the underlying funds and those levied by HL for packaging them up and marketing them. You could switch them into similar non HL funds and cut out a layer of charges. HL MM funds seems to be in the range of 1.30% and 1.45%, you could reduce this to closer to 0.75%. You would still be paying the 0.45% platform charge but if you were prepared to put in a bit of effort you could replace them with investment trusts and maybe ETFs which cap the 0.45% at £45. So lower OCF and no platform fees after £10,000. It could cut your annual fee on £20,000 from £350 odd to £45 ish. Maybe something to consider?

Certainly a possibilty, but the OP would need to account for all costs.
Trading in ITs/ETFs isn't free - at £12 a pop it could be prohibitive.
There is a regular investment option at £1.50 a time - the IT choice doesn't look too bad, but the ETF choice is limited (though it could be enough). There's also the bid/offer spread, plus stamp duty on ITs.
Not saying going this way isn't a viable alternative, but the costs won't be just £45pa.

seacaitch

MK62 wrote: »

It's not so much the platform tbh......

It's a number of things, and the high platform fee is one of them.

For example, john has a 20k allocation to HL's in-house variety of a balanced fund. This allocation is receiving no new money. Over 5 years HL will charge ~£450 platform fee on this. Alternatively, switch the holding to a suitable non-platform-specific multi-asset fund and then transfer in-specie to IWeb, saving £400 (450 - 25 xfer - 25 a/c opening) in platform fees alone over the 5 years, being 5% of the invested amount - a material and avoidable sum. If a low-cost fund was chosen, the additional savings in management charges would be considerable.

Similar logic regarding the other allocation, switching that also to a single multi-asset fund (and probably the same one as above), albeit with a few transaction costs to take account of the new money still being introduced until john is done investing the inheritance (the subtext seems to be that this may be soon, so few additional transactions).

Large savings on platform fees, in addition to potentially even larger savings on management fees, with future portability being built-in by avoidance of in-house funds.

dunstonh

For example, john has a 20k allocation to HL's in-house variety of a balanced fund. This allocation is receiving no new money. Over 5 years HL will charge ~£450 platform fee on this. Alternatively, switch the holding to a suitable non-platform-specific multi-asset fund and then transfer in-specie to IWeb, saving £400 (450 - 25 xfer - 25 a/c opening) in platform fees alone over the 5 years, being 5% of the invested amount - a material and avoidable sum. If a low-cost fund was chosen, the additional savings in management charges would be considerable.

That example also makes it more expensive than using an IFA. It is a good example though as two of HL's cash cow funds are in their top 10 selling funds.

The point of DIY is to save money. If DIY is going to cost you more then there is little point doing it.