Changing Fund Charges ...

Notepad_Phil

It sounds as though the fund has put in place a soft close - this usually happens when a fund has become very popular and has more money coming in than it can sensibly deal with.

Soft closes are relatively rare but can happen so anyone investing into them does need to keep an eye out for such things if they've gone the DIY route.

Thrugelmir

preston03 said:

Thanks for everyones collective interest - and challenge

It's a general point I'm making - but - "Yes" it relates to a particular fund - and 0% to 5% has happened.

So - the fund was quoted at say 300 ... and you could buy or sell at 300

I'd bought 6k in late Feb

I bought 6k more in mid March and didn't check the Fees and Charges section - my error I agree

Didn't check how many units I'd bought

I get an email from HL saying

On 16 March our website displayed the XXX FUND initial charge as 3%. Unfortunately, this was incorrect, the correct charge is 5%. As a result, you paid a charge of 5%.  

We’re very sorry for this and we’re correcting your trade so that you have the number of units you would have bought should the charge have been 3%.You don’t need to do anything we’ll take care of correcting your account and will be in touch once we’ve done so.

Once again, we’re very sorry this has happened.

So - The initial charge was net zero % in February,

They wanted to move it to 5% - but displayed 3% presumably - so they refunded me the 2%

It's now at 5%.

HL's website is maintained by a third party. Typing errors are unfortunate but at least rare. While using the website frequently myself for quick reference. I always refer to the fund managers own website. As information shown can be out of date. Not least the top ten holdings of the fund and NAV for IT's. 

preston03

Notepad_Phil said:

It sounds as though the fund has put in place a soft close - this usually happens when a fund has become very popular and has more money coming in than it can sensibly deal with.

Soft closes are relatively rare but can happen so anyone investing into them does need to keep an eye out for such things if they've gone the DIY route.

Thanks "Notepad"... that makes sense

Good to know - with the benefit of hindsight obviously.

Again - I come back to the same point... it shouldn't be too hard for the platform - or the fund - or both - to make their existing customers aware "actively" that the charging structures are changing - before they happen.

underground99

preston03 said

Again - I come back to the same point... it shouldn't be too hard for the platform - or the fund - or both - to make their existing customers aware "actively" that the charging structures are changing - before they happen.

You are talking about an 'entrance fee' or 'initial charge' on buying new units. HL have a million customer accounts and offer literally thousands of investment options. If the initial charge on one of those thousands of options changes from time to time, should they mailshot all the million account holders and let them know that if they wanted to buy some units it would cost a different amount than it did last month - 'before they happen'?

HL does send out a lot of junk mail but that sort of noise would soon get annoying. It surely has to be up to the individual customer to check the product page for a fund as part of placing an order.

They do ask you if you have read the fund documents before you buy. It literally says "by placing this deal you confirm you have seen the costs and charges..." with a hyperlink. If you are fibbing and have not read the current documents and just want to make the annoying box get out of the way and hit 'continue' as fast as possible, that is all on you as a lazy DIY investor. Sorry to be blunt.

preston03

underground99 said:

preston03 said

Again - I come back to the same point... it shouldn't be too hard for the platform - or the fund - or both - to make their existing customers aware "actively" that the charging structures are changing - before they happen.

You are talking about an 'entrance fee' or 'initial charge' on buying new units. HL have a million customer accounts and offer literally thousands of investment options. If the initial charge on one of those thousands of options changes from time to time, should they mailshot all the million account holders and let them know that if they wanted to buy some units it would cost a different amount than it did last month - 'before they happen'?

HL does send out a lot of junk mail but that sort of noise would soon get annoying. It surely has to be up to the individual customer to check the product page for a fund as part of placing an order.

They do ask you if you have read the fund documents before you buy. It literally says "by placing this deal you confirm you have seen the costs and charges..." with a hyperlink. If you are fibbing and have not read the current documents and just want to make the annoying box get out of the way and hit 'continue' as fast as possible, that is all on you as a lazy DIY investor. Sorry to be blunt.

Thanks for the comments - and no worries about being blunt

I'm only suggesting they should make the customers who are already in the fund aware of the change ... not every customer ... and I've no idea how many of their "one million" customers are in a fairly small fund - or how often they change the charging structures - but if they sent an email highlighting changes - I'd read it.

The email could even be tailored to each customers holdings - how good would that be ...

I've seen the message you're referring to on the Hyperlink ... but if you're making regulat purchases through a monthly payment plan - your purchases are automated.

dunstonh

I'm only suggesting they should make the customers who are already in the fund aware of the change

But you are a DIY investor.  It is your job to know and decide what you are investing in.      If you want the advised service then that costs extra.

If it isn't a corporate action then HL wouldn't know if the charges change.  They don't get flagged with that information. 

And technically a fund with a 5% initial charge that is normally waived on a platform but then soft closed still reports a 5% charge regardless.