HSBC Stocks & Shares Tracker ISA - Are fees too high?

[Deleted User]

I thought transaction costs were included in the 0.18%

dales1

Alexland wrote: »

HSD do charge an annual £12.50 fee on S&S ISAs so you would need to maintain a small cash balance to pay it.

Alternatively they will arrange for the annual admin fee to be paid by direct debit from your bank account, rather than using ISA funds.

Linton

newbinvestor wrote: »

I thought transaction costs were included in the 0.18%

I am not an expert in this area and hope that someone who is can clarify things but my understanding is:

The 0.18% basically pays the wages and the other costs of employing the staff and running the fund management business. Transaction costs include external dealing costs, transaction taxes etc. If you were to dispense with the fund manager and directly hold the same underlying investments as the fund you would be subject to the same or more likely higher transaction costs since the fund could be charged better rates for bulk buying.


The calculation of transaction costs appears to be highly problematic - see here. Things like brokers fees are easy. However the rules now require the inclusion of the loss of money if you bought and then sold the investment. So any bid/offer spreads (where the cost to buy the asset is higher than the price you would get if you wanted to sell) for the asset would be counted as transaction costs. It is here you get odd anomolies: it is possible that for a bulk buy from a forced seller the fund manager may negotiate a lower price than the market sale price, so would incur negative transaction costs. The figures may be relatively small for most traded equities, but what about assets like property or private company shares?



One key point to note is that unlike platform charges, all fund management charges are already included in the performance figures. So if two funds produce the same return it doesnt mnatter to you as an investor what the fund charges are. The higher charging fund manager may be sufficiently better at his job at least to pay for his own higher bonus level and more luxurious offices.

Steveswift

I am so glad this post has been made because I have a similar question that I was about to post and was trying to think of how to construct it without appears too dull.

Basically I have an isa I took out with with HSBC some 3 years ago and it the World selection balance A version. I have come into a little Money and was looking at some further investments and as luck would have it my research has bought back to more or less the same product.

I have a Charles Stanley account high I have bought bits and bobs with, so I thought that I would buy more HSBC funds with them, but when looking at the costs they seem dearer than buying direct with HSBC.

So If i i am reading it right is buying via a third party ie Charles Stanley is just putting another cog in the wheel which I end up paying more for, or is the user friendlyness of this platform worth paying a little more. I will rarely buy and sell?

I have looked at the charges on both sites and am confused on why their is a difference , I assume the platform fee paid to use Charles Stanley is a cost I would not have to bear if I went direct to my bank HSBC?

Any thoughts are appreciated.

Regards

AnotherJoe

Steveswift wrote: »

I am so glad this post has been made because I have a similar question that I was about to post and was trying to think of how to construct it without appears too dull.

Basically I have an isa I took out with with HSBC some 3 years ago and it the World selection balance A version. I have come into a little Money and was looking at some further investments and as luck would have it my research has bought back to more or less the same product.

I have a Charles Stanley account high I have bought bits and bobs with, so I thought that I would buy more HSBC funds with them, but when looking at the costs they seem dearer than buying direct with HSBC.

So If i i am reading it right is buying via a third party ie Charles Stanley is just putting another cog in the wheel which I end up paying more for, or is the user friendlyness of this platform worth paying a little more. I will rarely buy and sell?

I have looked at the charges on both sites and am confused on why their is a difference , I assume the platform fee paid to use Charles Stanley is a cost I would not have to bear if I went direct to my bank HSBC?

Any thoughts are appreciated.

Regards

You'll have to pay a platform charge whoever you are with. Each will have their own charges. You'll have to work out which is cheaper manually. Or try Snowmans Spreadsheet.
https://forums.moneysavingexpert.com/discussion/5583030/coolly-comparing-investment-platform-charges-snowmans-spreadsheet

londoninvestor

Platform fees apart, you could also save on fund fees by choosing HSBC Global Strategy instead of the more expensive World Selection.

Alexland

Yes it's often a lower percentage platform fee going direct with HSBC, Vanguard, etc than the more expensive fund platforms such as CSD or HL. However once you get a high enough account valuation then, assuming you continue to hold funds, fixed fee platforms such HSD/iWeb can be cheaper depending on your contribution pattern.