Query Halifax S&S ISA-Regular investment 31 August 2019 at 6:41PM edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings 9 replies 826 views

C_Mababejive

I notice within the above platform that you can set a regular investment program for a once only purchase or regular/monthly and the price is £2.

Why then do they charge a one off charge of £12(?) for dealing?

If i set a regular investment/one off for a fund or share will i be charged £2 or £12?

Im not sure their website explains very well..

Thanks

Alexland

[FONT=&quot]Well the argument for a reduced price on a regular trade is that Halifax can batch up multiple customer orders into the same trade. In reality their underlying cost of trading is negligible and people are willing to pay more for the convenience of an instant trade and expect the cost of a regular trade to be less.[/FONT]

[FONT=&quot]If you setup a regular trade and cancel it after the first occurrence you will only be charged £2[/FONT]

[FONT=&quot]Alex[/FONT]

londoninvestor

Alexland wrote: »

If you setup a regular trade and cancel it after the first occurrence you will only be charged £2

For just this reason I like to think of it as a "pooled investment discount" rather than a "regular investment discount". (Almost all platforms call it the latter, which isn't entirely helpful.)

The saving comes not from the amount of business you do, but your willingness to have it done non-instantly at the same time as the other customers.

It's a Groupon rather than a BOGOF (or something - might need to work on that metaphor )

C_Mababejive

So this includes funds too ? This seems a little crazy. I bet lots of people just are not aware of this and do the trade for £12 a pop.

Alexland

Yes the £2 trade includes funds. Similar to platforms that cap prices for exchange traded investments they are just using pricing strategies to address different types of investor and they are hoping to build a mix of both high paying and price-sensitive customers. There is less profit in the price-sensitive customers but given they have the mostly fixed cost of running the platform anyway it's better to have them onboard than elsewhere. They are not going to draw your attention to the one-off regular investment possibility as it might stop people paying the higher price.

londoninvestor wrote: »

For just this reason I like to think of it as a "pooled investment discount" rather than a "regular investment discount". (Almost all platforms call it the latter, which isn't entirely helpful.

Well you might never find out if your trade has been pooled as there might be no other platform users making the same regular investment. Some platforms have a restricted set of regular investments (e.g. HL) to make this pooling more likely but with HSD you seem to be able to select anything you could normally trade. Not that I have systematically cross matched their entire list of investment options...

Alex

Tom99

Alexland wrote: »

[FONT=&quot]If you setup a regular trade and cancel it after the first occurrence you will only be charged £2[/FONT]

You can set for 'once only' no need to cancel.
You get about 4 days a month when the deal will take place. This month it's 5th, 17th, 20th and 27th.
There seems to be no upper limit on the size of trade you can do for the £2 fee.

Alexland

Tom99 wrote: »

There seems to be no upper limit on the size of trade you can do for the £2 fee.

Have you tried a regular £2 trade above £100k? When I have tried that with a normal trade HSD made me call the telephone dealing.

Tom99

Alexland wrote: »

Have you tried a regular £2 trade above £100k? When I have tried that with a normal trade HSD made me call the telephone dealing.

Yes I have used the once only £2 deal to make a couple of individual fund trades each of £100k+.
Obviously at that level the next trading day needs to be quite soon as being out of the market for anything more than a few days would not be worth the saving of £10.50.

C_Mababejive

How do we know when the trading days are? Im presuming they are published somewhere on the site ?

Alexland

HSD offers you a drop down list of when to start the one off or monthly regular investment when you set it up. Today it is offering me 10 Sep, 17 Sep, 20 Sep, 27 Sep, 9 Oct, 17 Oct, 22 Oct and 29 Oct.