Hargreaves Lansdown v Brookes MacDonald

dunstonh

That these things became scandals was not because of purchasers deciding which ones they'd like to buy, nor was it because circumstances changed to make the outcome of people's decisions look poor with hindsight. It was because the sellers of these products knew they were flawed at the outset and the institutions selling them had a strong incentive not to disclose this.

I would agree and disagree.    Endowments had never failed to hit target until around 2000 and complacency had set in.  If this site had existed back then, it would have had a best buy endowment article just as Which (Consumers Association at the time) had a best buy endowment and told you how to buy it without advice which in turn prevented people from complaining about it later.

The changing economics from a high inflation, boom/bust economy where mortgage debt was eroded quickly by inflation and returns before inflation were double digits and considered the norm.     Towards the end of the endowment retail period, there were some pretty good endowments available.  You could get 4% target growth rates which would now be hitting surpluses.    However, there were still some that allowed double digit target growth rates.

Complacency also hit pension transfers.    The big increase in life expectancy was not predicted.  Aids was going to wipe out loads of people but didn't.   And like endowments, the changing economy was not predicted.     Hindsight makes it clear but back then it was not clear until around 1992.  However, some stragglers were still doing it up to three years later.   

Complacency is responsible for the beginning of these issues.    However, there are always stragglers that seem to carry on even when it is obvious that things have moved on.   Most people considered endowments to be obsolete between 1995 and 1997.  Yet the last mainstream provider held on retailing them until 2004.      The direct to consumer retailers were worse and they carried on selling them for another decade after that (ironically boasting that "no salesman will call".  Of course they wouldn't as it would have been a missale under advice).

The current batch of DB pension potential missellers do seem to have a lot to answer.   I cannot recall the figure but something like just 18 firms are responsible for the bulk of the DB pension transfers.  Some were doing thousands and thousands of them a year.   Whereas most firms were either not doing any or perhaps just one every few years.     Factory line companies set up to make hay and then shut down and dump liabilities on the FSCS is how I view it. Leaving the good to pay for the bad.

In addition, there are plenty of people who have done DB pension transfers that the FCA may consider a missale but the individuals got exactly what they wanted.

Things are not as black and white as you suggest.   Its shades of grey.

Donnymad

threlkeld53 said:

Donnymad said:

Many thanks to you guys! Any suggestions what I should be doing in regards to a different investment strategy? At an age of 77, I am somewhat risk averse, but if I can find some funds/unit trusts, etc, that offer a reasonable return at a lower cost then I can relax for my remaining years! 😀

If the funds that you are currently invested in can be done through iweb, you'd save a lot of charges, presuming that you'd be able to transfer to iweb.
If you are risk averse and want to invest in Vanguard, what about VLS20, VLS40 or VLS60?

Thanks, threlkeld. Not too sure about iweb as existing clients have very mixed reviews:
https://uk.trustpilot.com/review/iweb-sharedealing.co.uk

NottinghamKnight

Donnymad said:

threlkeld53 said:

Donnymad said:

Many thanks to you guys! Any suggestions what I should be doing in regards to a different investment strategy? At an age of 77, I am somewhat risk averse, but if I can find some funds/unit trusts, etc, that offer a reasonable return at a lower cost then I can relax for my remaining years! 😀

If the funds that you are currently invested in can be done through iweb, you'd save a lot of charges, presuming that you'd be able to transfer to iweb.
If you are risk averse and want to invest in Vanguard, what about VLS20, VLS40 or VLS60?

Thanks, threlkeld. Not too sure about iweb as existing clients have very mixed reviews:
https://uk.trustpilot.com/review/iweb-sharedealing.co.uk

trustpilot is not a reliable guide, if you find only full 'five star' reviews on there it's probably a scam company. iweb is fine, basic but very cheap.

Donnymad

NottinghamKnight said:

Donnymad said:

threlkeld53 said:

Donnymad said:

Many thanks to you guys! Any suggestions what I should be doing in regards to a different investment strategy? At an age of 77, I am somewhat risk averse, but if I can find some funds/unit trusts, etc, that offer a reasonable return at a lower cost then I can relax for my remaining years! 😀

If the funds that you are currently invested in can be done through iweb, you'd save a lot of charges, presuming that you'd be able to transfer to iweb.
If you are risk averse and want to invest in Vanguard, what about VLS20, VLS40 or VLS60?

Thanks, threlkeld. Not too sure about iweb as existing clients have very mixed reviews:
https://uk.trustpilot.com/review/iweb-sharedealing.co.uk

trustpilot is not a reliable guide, if you find only full 'five star' reviews on there it's probably a scam company. iweb is fine, basic but very cheap.

Like you, NK, I also have doubts about trustpilot on occasions, but where iWeb is concerned they have only received 2.6 stars out of 5, which equates to poor. As you say ‘very cheap’ but too much of a risk for me at the moment!

bowlhead99

Donnymad said:

NottinghamKnight said:

Donnymad said:

threlkeld53 said:

Donnymad said:

Many thanks to you guys! Any suggestions what I should be doing in regards to a different investment strategy? At an age of 77, I am somewhat risk averse, but if I can find some funds/unit trusts, etc, that offer a reasonable return at a lower cost then I can relax for my remaining years! 😀

If the funds that you are currently invested in can be done through iweb, you'd save a lot of charges, presuming that you'd be able to transfer to iweb.
If you are risk averse and want to invest in Vanguard, what about VLS20, VLS40 or VLS60?

Thanks, threlkeld. Not too sure about iweb as existing clients have very mixed reviews:
https://uk.trustpilot.com/review/iweb-sharedealing.co.uk

trustpilot is not a reliable guide, if you find only full 'five star' reviews on there it's probably a scam company. iweb is fine, basic but very cheap.

Like you, NK, I also have doubts about trustpilot on occasions, but where iWeb is concerned they have only received 2.6 stars out of 5, which equates to poor. As you say ‘very cheap’ but too much of a risk for me at the moment!

Nearly all banking and investment services where the company has not spent money deploying a 'social media' team to engage with their customers and deliberately seek thousands of reviews will have a score below 3 out of 5 on trustpilot because reviews will naturally skew to the bad end of the scale. People are more likely sign up to trustpilot to complain when they have had what they think is poor service and want to rant or vent, but do not bother to sign up to the system just to say that the service is fine or good if they are not incentivised to do so.  

As there are only 72 reviews over three years of having any reviews at all, the 55% of users posting on that site with a 'bad' or 'poor' review would represent literally 40 people out of many tens of thousands of customers. 99.x% have not felt the need to complain.  

If you look at the 1-star reviews, people are talking about problems in executing real-time sharetrades on the stock exchange or getting out-of-hours valuations for quoted stocks in their portfolio or annoyed about the foreign exchange commissions etc. As someone who holds broadly-diversified open-ended investment funds, you are not a sharetrader looking for a real-time brokerage service and those problems would not be of any relevance to you.   

So, the 2.6 stars out of 5 from an incredibly small fraction of their many customers, complaining about a type of service feature that you're unlikely to even use, can be taken with a pinch of salt and should not be 'too much of a risk for me', IMHO. People here (who engage in proper back-and-forth discussion with other forum members, rather than simply signing up to a review site to make a complaint and disappear again) don't really report any anecdotal deal-breaker issues with them.  

 As you mentioned this morning that: "I wouldn’t be too confident in DIY investment" perhaps they are not for you, because they are designed to be cheap and no-frills and therefore perhaps not the best service to use if you want hand-holding and are reluctant to DIY your investments. They are just an example of how low you can get the platform charges by using a fixed-fee provider, as an alternative to paying 0.45% a year to have fund investments held on HL's platform  (those fees getting on for £1000 a year on £200k of investment with HL).

IWeb's low cost structure is quite compelling for users on a money-saving-expert site, but if you need or prefer an advised / guided solution they are not selling one. However, the reason to avoid them in your situation is simply that they are not selling the sort of service that you'd be confident using. As opposed to avoiding them due to being scared off by a 2.6 trustpilot score sounding 'high risk'. The trustpilot score is essentially meaningless, especially where the vocal complaints relate to service features like real time trading and brokerage which you wouldn't use when buying and holding your investment funds.

ColdIron

When researching financial products, Trustpilot would be close to the bottom of my list of trustworthy resources

Donnymad

bowlhead99 said:

Donnymad said:

NottinghamKnight said:

Donnymad said:

threlkeld53 said:

Donnymad said:

Many thanks to you guys! Any suggestions what I should be doing in regards to a different investment strategy? At an age of 77, I am somewhat risk averse, but if I can find some funds/unit trusts, etc, that offer a reasonable return at a lower cost then I can relax for my remaining years! 😀

If the funds that you are currently invested in can be done through iweb, you'd save a lot of charges, presuming that you'd be able to transfer to iweb.
If you are risk averse and want to invest in Vanguard, what about VLS20, VLS40 or VLS60?

Thanks, threlkeld. Not too sure about iweb as existing clients have very mixed reviews:
https://uk.trustpilot.com/review/iweb-sharedealing.co.uk

trustpilot is not a reliable guide, if you find only full 'five star' reviews on there it's probably a scam company. iweb is fine, basic but very cheap.

Like you, NK, I also have doubts about trustpilot on occasions, but where iWeb is concerned they have only received 2.6 stars out of 5, which equates to poor. As you say ‘very cheap’ but too much of a risk for me at the moment!

Nearly all banking and investment services where the company has not spent money deploying a 'social media' team to engage with their customers and deliberately seek thousands of reviews will have a score below 3 out of 5 on trustpilot because reviews will naturally skew to the bad end of the scale. People are more likely sign up to trustpilot to complain when they have had what they think is poor service and want to rant or vent, but do not bother to sign up to the system just to say that the service is fine or good if they are not incentivised to do so.  

As there are only 72 reviews over three years of having any reviews at all, the 55% of users posting on that site with a 'bad' or 'poor' review would represent literally 40 people out of many tens of thousands of customers. 99.x% have not felt the need to complain.  

If you look at the 1-star reviews, people are talking about problems in executing real-time sharetrades on the stock exchange or getting out-of-hours valuations for quoted stocks in their portfolio or annoyed about the foreign exchange commissions etc. As someone who holds broadly-diversified open-ended investment funds, you are not a sharetrader looking for a real-time brokerage service and those problems would not be of any relevance to you.   

So, the 2.6 stars out of 5 from an incredibly small fraction of their many customers, complaining about a type of service feature that you're unlikely to even use, can be taken with a pinch of salt and should not be 'too much of a risk for me', IMHO. People here (who engage in proper back-and-forth discussion with other forum members, rather than simply signing up to a review site to make a complaint and disappear again) don't really report any anecdotal deal-breaker issues with them.  

 As you mentioned this morning that: "I wouldn’t be too confident in DIY investment" perhaps they are not for you, because they are designed to be cheap and no-frills and therefore perhaps not the best service to use if you want hand-holding and are reluctant to DIY your investments. They are just an example of how low you can get the platform charges by using a fixed-fee provider, as an alternative to paying 0.45% a year to have fund investments held on HL's platform  (those fees getting on for £1000 a year on £200k of investment with HL).

IWeb's low cost structure is quite compelling for users on a money-saving-expert site, but if you need or prefer an advised / guided solution they are not selling one. However, the reason to avoid them in your situation is simply that they are not selling the sort of service that you'd be confident using. As opposed to avoiding them due to being scared off by a 2.6 trustpilot score sounding 'high risk'. The trustpilot score is essentially meaningless, especially where the vocal complaints relate to service features like real time trading and brokerage which you wouldn't use when buying and holding your investment funds.

Thank you, Bowlhead, for your very interesting comments! It is true that iWeb doesn’t not offer the service that I am looking for. As mentioned in my original post the main reason for seeking an alternative to H.L. is to reduce my investment charges. If only they were just “getting on for £1000 a year on £200k of investment”!

bowlhead99

Donnymad said:
Thank you, Bowlhead, for your very interesting comments! It is true that iWeb doesn’t not offer the service that I am looking for. As mentioned in my original post the main reason for seeking an alternative to H.L. is to reduce my investment charges. If only they were just “getting on for £1000 a year on £200k of investment”!

The platform service that HL offer is literally priced at 'only', getting on for the £1000 per year per £200k, because at HL it's a standard rate of 0.45%, compared to a few fivers a year of dealing fee to adjust your fund holdings if held on IWeb.  So that's the bit that's directly comparable.

You're also paying advice fees and fund management fees, so of course that 0.45% is not all you're paying at the moment.

As suggested upthread, seek advice independently (local IFA) and that will be the start of a route to get hooked up with a suitable platform - which will be less than 0.45% a year on the amount of money you have - and suitable investments - which should also be cheaper than what you are paying the HL's funds-of-fees (I mean multimanager funds-of-funds).

barnstar2077

Donnymad said:

Thanks, dunstonh. I wouldn’t be too confident in DIY investments so I think that I will investigate the possibility of using an IFA...if I can find one!

Mind you, the service that I have received from H.L. over the years has been good, along with some decent returns...it’s just that I have only now  awakened to the fact that a good proportion of these returns has gone in charges. More fool me! 🤦‍♂️

I understand that about 1.4 million people are invested with the company, so they can’t all be as concerned as me, eh?

Millions smoke, it doesn't stop people dying of lung cancer though.  People are stupid. 

zagfles

The_Earl_of_Streatham said:

bowlhead99 said:

Michael121 said:
2.5% how is that even legal. 

I suppose it's because under capitalism, people are allowed to charge money for products and services, including financial products and services - and the purchasers can decide which ones they'd like to buy.

Is that the same capitalism that mis-sold endowment policies to pay off mortgages; that mis-sold pensions schemes to people who already had perfectly adequate vehicles or that mis-sold payment protection insurance to people taking out bank loans, or is it a different one?
That these things became scandals was not because of purchasers deciding which ones they'd like to buy, nor was it because circumstances changed to make the outcome of people's decisions look poor with hindsight. It was because the sellers of these products knew they were flawed at the outset and the institutions selling them had a strong incentive not to disclose this.

Indeed - it was the massive commissions that encouraged financial advisers, banks and building societies to push endowments to people buying houses and personal pensions with zero employer contributions to people with excellent defined benefit schemes. I got the hard sell on endowments several times in the 90's when house buying, luckily I'd financially educated myself enough to understand what rip-off inflexible rubbish products they were.

Of course when the rest of the world cottoned onto this the next sales push was PPI...