Like the February Correction ?

TBC15

Sea_Shell wrote: »

....and the winner is.....-0.03%. This is a crude figure as i've just literally taken this years net worth and last years, and calculated the difference (ex house). We're down 4.5% from end August though.

Ouch, sorry about that I thought I’d bid low. TBIO https://forums.moneysavingexpert.com/discussion/5719527/great-british-invest-off-or-passive-v-active-updates should be interesting tomorrow, for formatting challenges if nothing else.

short_butt_sweet

john5001 wrote: »

Except the exit charges are high:(

first work out where you want to end up, whether that is cheaper investments held on a cheaper platform, or cheaper investments held with HL (allowing that it can be cheaper to hold ETFs and ITs with HL, instead of funds).

then work out how to get there.

exit fees are not going to be an insurmountable problem.

it may just be worth paying them. you can compare the on-going annual savings from where you want to end up (as a %) to the cost of moving (as a %). you may find you'd recover the cost of moving very quickly.

you could also reduce exit fees by, before leaving HL, consolidating your portfolio down to a smaller number of funds (with larger amounts in each fund). which reduces the number of £25 per investment exit fees.

badger09

short_butt_sweet wrote: »

first work out where you want to end up, whether that is cheaper investments held on a cheaper platform, or cheaper investments held with HL (allowing that it can be cheaper to hold ETFs and ITs with HL, instead of funds).

then work out how to get there.

exit fees are not going to be an insurmountable problem.

it may just be worth paying them. you can compare the on-going annual savings from where you want to end up (as a %) to the cost of moving (as a %). you may find you'd recover the cost of moving very quickly.

you could also reduce exit fees by, before leaving HL, consolidating your portfolio down to a smaller number of funds (with larger amounts in each fund). which reduces the number of £25 per investment exit fees.

john5001 will have to sell all his current funds as they are unique to HL. Transferring in cash will incur relatively small costs, which he will almost certainly recoup in a short time

MK62

john5001 wrote: »

I have a final salary pension from Lloyds and a state pension next year which I topped up to correct the SERPS issue. Not full state pension, around $600 a month. No debts and house paid off.

My main concern is five years down the line, I could find myself with funds which I originally thought would grow over this period not doing anything and racking up charges.

HL charge ( so I thought ) a bit higher, for experienced fund managers for novice investors.

Looking at my funds now, I just wonder if the current performance, is a sign of broader issues rather than the fund being not well managed thus dropping.

Indeed if this is the case, then it would be logical to assume the switching/selling will not make much, if any difference to the outcome.

There are two issues......switching funds from the expensive HL MM funds you currently have, and possibly switching platforms too. You don't have to both at the same time - the biggest drag is currently your fund charges, so I'd sort that out first (unless you are happy to switch both funds and platform at the same time - it probably sounds more daunting than it really is tbh).

As to the MM funds themselves, there is nothing wrong with them as far as funds go - if you look under the lid there are some highly rated fund managers at work there - it's just that the charges are too high.
You could actually replicate the MM funds yourself using the underlying funds directly, but you'd end up with probably 50+ funds, which is far too many, especially for a £50k portfolio - but if you did, you could probably half your fund charges just doing that.
Of course I'm not suggesting you actually do this, just pointing out the level of charges you are paying for the HL "fund of funds" wrappers.

As to pension, up until you are 75, everyone can pay at least £2880pa into a pension each tax year. This includes pensioners such as yourself. The government will add £720pa in tax relief to make £3600.

Fair enough, it's taxable when you withdraw it, so if your current pensions use all your personal allowance, the whole withdrawal would be subject to tax......but 25% of each withdrawal from a pension is tax free (or you could take 25% of the whole pot tax free when you first decide to withdraw), and so even the minimum benefit is effectively £180pa of free money. If you have a wife/partner, they can also do this.

However, if you decided to look into this option (assuming you aren't already doing it), you'd have to re-assess which platform you use, and possibly whether to switch platforms at all.
You can have an ISA and a SIPP (pension).....on the same platform or split across several (though one is usually cheaper).

seacaitch

badger09 wrote: »

john5001 will have to sell all his current funds as they are unique to HL. Transferring in cash will incur relatively small costs, which he will almost certainly recoup in a short time

HL charges the same £25 fee for one in specie ISA xfer out as for a cash xfer out. Therefore, per my example posted yesterday and SBS's post above, the absolute cheapest option fee-wise would be to first consolidate to a single fund at HL, involving no transaction costs now and skirting a future transaction cost post-transfer, then perform an in specie transfer out. This has the benefit of avoiding holding cash during the xfer, which is a coin flip as to outcome, but one people generally prefer avoiding...

The reality is john's probably going to do none of the various fee-reduction suggestions posted here, and we're all just bantering amongst ourselves for "fun", because what's trivially easy for more experienced investors like us to envision and quickly implement can often appear like an insurmountable wall of difficulty for beginners. Hence HL == Kerching!

The key post on the thread is dunston's reiterated point re people paying more to DIY at HL than they might pay for an IFA. Testimony to HL's savvy. Juice that by also having the punters in funds that aren't transferable, thereby increasing the customer's stickiness. Kerching! Kerching! Kudos to HL.

But perhaps not so great for john who, having paid advised-like fees, might currently benefit from a bit of professional hand-holding.

AnotherJoe

john5001 wrote: »

Except the exit charges are high:(

Even if you convert everything to cash and then transfer ?

le_loup

AnotherJoe wrote: »

Even if you convert everything to cash and then transfer ?

£25 Transfer + £25 Closure.

ColdIron

£25 + VAT closure :cool:

john5001

I think some consolidation is a good idea so the process of transferring to another platform can be considered. I have to say that this site
( not the forum ) did recommend HL as a good provider.

Just spoke to my neighbour whilst fixing his PC.

He has lost 80k in DIY investing with HL, Sirius and Lloyds shares. I could not live with that!!


Another issue re pension, is that I did not think a final salary pension could be added to??

AlanP_2

john5001 wrote: »

I think some consolidation is a good idea so the process of transferring to another platform can be considered. I have to say that this site
( not the forum ) did recommend HL as a good provider.

Just spoke to my neighbour whilst fixing his PC.

He has lost 80k in DIY investing with HL, Sirius and Lloyds shares. I could not live with that!!


Another issue re pension, is that I did not think a final salary pension could be added to??

There are many definitions of good though aren't there, a 2nd hand car is good to some whilst for others it would need to be brand new Range Rover. Capitalist economies provide opportunities to offer consumers a range of products at different price points.

Sounds like your neighbour has invested in individual company shares which is a different thing to fund investments entirely. You need to carefully manage your own diversification and amount exposed with each share.

Not sure what you mean as regards final salary pension, what you can do to increase it will be down to scheme rules. For example you can buy additional years service in LGPS scheme as you could when it was a fs scheme.

What you can also do is run a private DC scheme to supplement your DB pension.