Like the February Correction ?

seacaitch

dunstonh wrote: »

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

It's hard to argue with a business model that has customers queueing up to pay as much as 10-times more in fees for HL Portfolio+ vs. an alternative such as HSBC Global Strategy held elsewhere.

They certainly know their craft and their potential customers well.

It would be a surprise if AJ Bell Youinvest don't eventually attempt to mimic every highly profitable aspect of HL's approach. And perhaps in time we'll also see II treading this path also, once done with acquisitions.

It seems that when it comes to fees, what the Lord giveth, the DIY platforms are ever keener to taketh away!

Malthusian

john5001 wrote: »

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.

When funds are falling in price that's exactly when you want to move them, as you will gain from time out of the market. That said, even in a long bear market, there can be periods of a few days or weeks when market goes up, so you shouldn't assume that if you move funds in a falling market you'll benefit - it's totally random.

Sod's Law dictates that if markets have been falling for the last month or two, the moment you decide to transfer funds is when the market will start going back up, or will have a dead cat bounce.

Naturally this applies only to cash transfers - for in-specie transfers it makes no difference either way.

If the exit fees are a percentage then again you want to do it in a falling market as you will pay less in pounds and pence. If the exit fees are in pounds and pence then it makes no difference.

john5001

Thanks for the valuable input.
Maybe my monthly outgoing DD £1660 into the adventurous funds should be curtailed for now?? Before making any decisions.

As although I see buying in would be at a cheaper price, the fund looks like it will continue to drop.

MK62

seacaitch wrote: »

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.

I think your maths is a little off......£400 isn't 5% of £20000, it's 2%.
I did say there are cheaper platforms if cost is a primary concern (though you didn't quote that part). The OP did say though that he was impressed with HL's website - and it's certainly better than iWeb's - probably the cheapest platform at the moment, but you pay your money and take your choice.
I use iWeb myself, and it's good for buy&hold investing due to the low charges.
The website itself is a bit primitive though - it does the job, but it's a long way off HL's website (not that HL's is perfect).

If you are regularly investing though iWeb is perhaps not quite so appealing - a few times a year is one thing, but 3-4 transactions a month would soon mount up.

If a low-cost fund was chosen, the additional savings in management charges would be considerable.

He could choose the same low cost fund on HL too though, so there would be no additional saving in fund management charges. He may in fact save a little on those with HL if he bought a discounted fund.

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).

Yes, he could do that too, and as long as there aren't too many transactions, he should save some money. You may be right about the number of transactions, but it's an assumption.

Nobody's going to argue that HL is the cheapest platform around, but for portfolios of the OP's size, being used as the OP is using it, it won't be the dearest either.
Sure, the OP could change his investments and investing behaviour so that other platforms become more attractive......or he could do as ColdIron suggested and reduce his HL charges (again by changing his investments and investing behaviour).....
As I said in the earlier post though, the funds the OP has are expensive, accounting for around 75% of the charges - that would be where I would focus attention first....the platform can come later if necessary.

coyrls

john5001 wrote: »

As although I see buying in would be at a cheaper price, the fund looks like it will continue to drop.

How can you tell that it "looks like it will continue to drop"?

AnotherJoe

john5001 wrote: »

Thanks for the valuable input.
Maybe my monthly outgoing DD £1660 into the adventurous funds should be curtailed for now?? Before making any decisions.
As although I see buying in would be at a cheaper price, the fund looks like it will continue to drop.

Humour me. How can a fund "look like" it will continue to drop?

If you are able to determine through some 6th sense when a fund will drop and (presumably) when it will rise, why arent you already a mega millionaire?

john5001

AnotherJoe wrote: »

Humour me. How can a fund "look like" it will continue to drop?

If you are able to determine through some 6th sense when a fund will drop and (presumably) when it will rise, why arent you already a mega millionaire?

I cannot, but sentiment ( listening to various reports ) would determine that this is likely.

dunstonh

john5001 wrote: »

Thanks for the valuable input.
Maybe my monthly outgoing DD £1660 into the adventurous funds should be curtailed for now?? Before making any decisions.

As although I see buying in would be at a cheaper price, the fund looks like it will continue to drop.

An investor would say that now is the time to be investing into them as they are 10% or so cheaper than a month ago. They would also know that they cannot say whether they will continue to fall or not. However, they always knew that investments go down as well as up and that you are not investing for a few months.

An economic cycle is around 10 years. In that period you get good years, nothing years and bad years. You never know the order. So, knowing this before you start, why are you suddenly nervous of an event you knew was coming and would come again and again and again. Some of them being 2 times worse than now and occasional ones being 4 times worse than now.

seacaitch

MK62 wrote: »

I think your maths is a little off......£400 isn't 5% of £20000, it's 2%.

Ha ha, I'll grant you that beauty, but disagree with the gist of the rest of your post re HL's platform fee, which I view as one of two pieces of low hanging fruit available here - the other being the OEIC charges.

Taken together, the savings over 5 years from platform-fee avoidance and management fee reductions could be as much as ~£1500, amounting to ~7.5% of the £20,000 john has allocated to HL's Portfolio+ balanced income option. That's before considering john's other lump of money...

Comparable savings might be achieved on the other Adventurous allocation too, but the specifics would depend on how many more months john intends to feed the inheritance in for before he's got it all away; in any case the "3-4 purchases per month" comment is a red-herring as with sums of this amount a single fund would seem appropriate.

As an HL shareholder, I'm all for customers as a whole to continue throwing their money at HL (ie. me), but I'd suggest to acquaintances that they carefully consider other options if this could simply save them material sums of money - as appears to be the case here.

Other than that, I suspect we're roughly on the same page. Forum posts tend to magnify what may be fairly subtle differences in position or in emphasis. The bottom line is john could save himself a lot of money over the coming years if he chose to, with the amount dependent on exactly which steps he chose to make. If he went the whole hog, per my example, he'd likely save more than the entire unsettling drawdown he's experienced to date.

AnotherJoe

john5001 wrote: »

I cannot, but sentiment ( listening to various reports ) would determine that this is likely.

They would not determine that at all. All that would tell you is that various reports think its likely. Which bears zero correlation as to what will happen.


https://awealthofcommonsense.com/2018/10/the-psychology-of-sitting-in-cash-part-deux/