Lloyds stocks and shares ISA

Col_H

Hi , can anyone tell me if the charges I have been paying Lloyds for my stocks and shares ISA are worth complaining about ?.
I have been drip feeding £100 . 00 per month for several years and only £95 . 00 is invested each time !.
I assumed ,wrongly , that this was the service charge . No the service charge is 3.5% per annum on top .
It must be fees for the Financial advisor of that period of time when I opened investment .
Just goes to show that I should have taken closer notice of the small print .

Any advice welcome ,Cheers ,Col H

bowlhead99

I would say there's nothing to complain about really if the fees are in line with the agreement you signed up to and they have not suddenly hiked it without any notice. Of course, that doesn't necessarily mean you should stay with the product.

They currently have two main types of S&S ISA:

1) a 'choose your own investment' Share Dealing ISA.
https://www.lloydsbank.com/investing/ways-to-invest/choose-your-own-investments/share-dealing-isa.asp

With this one you can invest in shares or investment funds from a big range of options. They charge you a fee for maintaining the account (regardless of how much is in the account) and a fee per investment transaction (regardless of the size of the transaction). For a small account it would be pretty inefficient. Charge is £20 every 6 months for account maintenance and minimum £1.50 per transaction if you are buying funds. So if you were doing 12 transactions a year it would cost you £18 for the purchases on top of £40 for the account maintenance, so overall you have spent £58 or very close to £5 per month. If you were putting in £100 a month to fund these regular investment you would basically find that only £95.16 is available to spend on new investments.


2) ready-made limited choice 'Investment ISA'
https://www.lloydsbank.com/investing/ways-to-invest/ready-made-investments.asp

With this one you are buying one of their off-the-shelf funds, picking one from three different risk levels. Instead of a fixed admin fee and explicit transaction fees when you buy something, you pay a percentage based service fee based on the average value of your assets: 0.24% a year. You would also be exposed to the ongoing charges of the particular fund you choose out of the three, the ongoing charge figure ranges between 0.25 and 0.29% per year. Total together of the ongoing charges and service fee is about half a percent a year.

So, those are their 'modern day' options. The first one has an expensive fee structure as a percentage of the new money you are adding if you have a small ISA and are adding only a small amount every month, so you should probably consider some other product instead if that is what you have and are not putting much in. But if what you're paying is in line with the published charges for the product you have, I don't see a ground for complaint. The £58 a year for service fee and purchase costs would be a relatively small percentage of portfolio value on a large portfolio. Whereas for a smaller portfolio, a percentage based structure is better because the percentage can be a pretty small amount of actual pounds.

If you are on an old contract which has an un-discounted 5% fee on all new money added into it and 3.5% per annum on top, then that is expensive. I find the 3.5% pretty unlikely, to be honest, even if you were employing an investment adviser). Are you sure you don't have a decimal in the wrong place and the service fee is really 0.35% instead of 3.5%?

stphnstevey

Halifax cheaper, same group

Alz1986

Swicth to iweb.

EdSwippet

stphnstevey wrote: »

Halifax cheaper, same group

Alz1986 wrote: »

Swicth to iweb.

I don't know what exact setup the OP has with Lloyds, but for balance, the charges you would pay if opening a new account with them directly rather than through an IFA can be entirely reasonable. £40/year flat platform fee, £11 to trade stocks (or £8 if a frequent trader), and a skimpy £1.50 to trade funds.

https://www.lloydsbank.com/investing/ways-to-invest/choose-your-own-investments/charges.asp

For historical reasons, I have accounts at both iWeb and Lloyds. I'm happy with both, and as a passive buy-and-hold fund investor whose trades are almost all just rebalancing and dividend reinvestment, it's a toss up as to which is the cheaper of the two for me. Both are however unequivocally vastly cheaper than if I held these funds through HL, Youinvest, and the other percentage based fee platforms.

george4064

As bowlhead99 has stated, you most likely won't have any grounds to complain because you would've signed up to these terms when you originally opened the account.

Irrespective of whether you decide to complain or not, you should look to move your investments to a more competitive ISA platform. Good place to compare is here: https://monevator.com/compare-uk-cheapest-online-brokers/

Be aware that there isn't a 'best' platform for everyone, because different platforms suit different investors' needs. So you need to consider your circumstances, the investments you hold (or wish to hold), how frequently you wish to trade etc.. to decide which platform you should go with.

SonOf

Hi , can anyone tell me if the charges I have been paying Lloyds for my stocks and shares ISA are worth complaining about ?.

No. Charges are disclosed and you agree to them. Nothing to complain about.

It must be fees for the Financial advisor of that period of time when I opened investment .

Lloyds pulled out of the advice market before the retail distribution review. So, this must pre-date that. Plus, the use of bundled share classes also suggests that. Prior to that, they did not pay any ongoing remuneration to the FA. Lloyds retained the fee.

wmb194

What are you buying? 5% sounds a lot like the rip-off 'entry' fees some unit trusts try to charge or the wide bid/offer spread some of them have.