Platform Recommendations

grumpsthegit

Hi,

I inherited some investments about 5 years ago from my parents all held on the Hargreaves Landown platform. I have over the past years added to these by opening a SIPP and a Stocks and Shares ISA on the same platform for ease and also partly due to lack of confidence in doing anything else - my Dad was fairly shrewd financially so if he was happy with his money with HL I thought I should stick with them.

However the recent upturn in shares has made me look at the performance of my investments overall and now I look in more detail I have to admit I am quite shocked at the charges on some of the investments. Mostly on the funds I inherited. - I am guessing that some of these funds were invested into 10 + years ago by my father when perhaps charges were generally higher? But also on some I have picked :-(.

So I am now kicking myself for not really focusing on charges. Wanting to retire in the next 1-3 years and live off drawdown and my ISA/GIA I need to get these charges down (Averaging 1.42% on my GIA, 1.21% on my ISA and 1.02% in my SIPP (this includes both Platform fee and Fund charges)

So to the point, I could stick with HL and just move my investments into cheaper funds (probably Global Trackers) but that still leaves the platform fee. It's still the easy option though - I have to confess the stress of moving huge sums across from one provider to another gives me pause.

However if I do this does this community have any recommendations? Interactive Investor looks interesting and Vanguard seems to be popular. Any thoughts?

Also one last question, if I want to move my GIA can I avoid selling funds if the Platform I move to deals with the same funds IE can I transfer the investments in the fund to avoid any CGT?

Sorry for the long post!

Many thanks in advance

artyboy

Horses for courses... I've got a substantial amount in an HL SIPP - it's all invested in HMWO, which has a cheap OCF of 0.15%, plus as it's an ETF rather than a trad fund, HLs platform charges are capped at £200/year. 

I'm intending to move more in as well to take advantage of their latest cashback offer. Which means I'm making a significant net profit out of them (ignoring actual fund performance).

I think you need to decide what you want to invest in first before letting the charges make that decision for you. But if you do want to stick with trad funds, then HL is not a cheap platform to hold them on.

On your last point, I'm not certain if an In Specie transfer between GIAs would trigger a CGT event - my instinct would be that it doesn't, but would be interested in the answer myself...

dunstonh

 I have to admit I am quite shocked at the charges on some of the investments.

Do these funds pre-date RDR? (2013)   if so, some of those charges will be getting rebates.   So, make sure you are looking at the net position.

So I am now kicking myself for not really focusing on charges. 

Charges are a secondary concern. Not a primary concern.    Have you compared the performance of the cheaper equivalent.     It may have performed more, net of charges. It may have performed less.  So, you may be kicking yourself for no reason.  Or rather you should be kicking yourself, not about charges but about the structure and understanding on the portfolio.

I need to get these charges down (Averaging 1.42% on my GIA, 1.21% on my ISA and 1.02% in my SIPP (this includes both Platform fee and Fund charges)

Charges at that level suggest pre-RDR old retail class.  So, rebates should be coming in.

Albermarle

Some ball park figures for charges.
Platform fees - from 0.45% to zero ( caveat here is the cheaper platforms tend to have extra charges for some items, like having a SIPP compared to a GIA for example) There are also some odd quirks, such as explained in the first lines of @artyboy post.
Investment fees - from 0.05% to 2 % 

So you can see there is a wide variation in total costs.

my Dad was fairly shrewd financially so if he was happy with his money with HL I thought I should stick with them.

HL are the market leader of retail ( for joe public) investment platforms. They offer a good service but their charges are on the higher side nowadays.

grumpsthegit

artyboy said:

Horses for courses... I've got a substantial amount in an HL SIPP - it's all invested in HMWO, which has a cheap OCF of 0.15%, plus as it's an ETF rather than a trad fund, HLs platform charges are capped at £200/year. 

I did not realise this - sounds like ETF's are worth looking at

dunstonh said:

 I have to admit I am quite shocked at the charges on some of the investments.

Do these funds pre-date RDR? (2013)   if so, some of those charges will be getting rebates.   So, make sure you are looking at the net position.

Some are likely to - I have not heard about this - would these rebates be automatically issued by HL?

dunstonh said:

So I am now kicking myself for not really focusing on charges. 

Charges are a secondary concern. Not a primary concern.    Have you compared the performance of the cheaper equivalent.     It may have performed more, net of charges. It may have performed less.  So, you may be kicking yourself for no reason.  Or rather you should be kicking yourself, not about charges but about the structure and understanding on the portfolio.

Hmm this sounds easier said than done. But I can see that the funds where the charges are higher, perversely are  some of the ones that have performed worst. Basically any of the HL Funds - So a double Whammy to my mind and I need to cut my losses and switch and just need to decide if I switch platforms as well.

MallyGirl

switching platforms may be worth it depending on the value of your holdings. There comes a point where the fixed fee platforms like II are cheaper than the percentage based ones like HL.

LHW99

However if I do this does this community have any recommendations? Interactive Investor looks interesting and Vanguard seems to be popular. Any thoughts?

Interactive Investor offers a wide range of funds, and is fixed fee, so better if you have a larger amount (say >£50k). You could transfer "in specie" ie without selling anything most likely, though if these are pre-RDR units, they may have to be converted to more modern equivalents (not sure if HL / II would do that for you, or if you should do it before transfer). Or you could transfer in cash after selling on HL.

Vanguard only offers their own funds, so you would haveto sell any non-Vanguard funds and transfer as cash.

There are other platforms mentioned here for DIY - A J Bell, iWeb are mentioned, but are not the only ones.

Or you could ask an IFA to undertake a one-off review, and set you up on a platform you can manage yourself. Costs would be charged, of a few thousand. Others here would be able to give a better guide on that.

Qyburn

grumpsthegit said:

Also one last question, if I want to move my GIA can I avoid selling funds if the Platform I move to deals with the same funds IE can I transfer the investments in the fund to avoid any CGT?

I don't know the sums of course, but wouldn't it be worth triggering some CGT especially as the allowance is due to reduce? I guess I'm also assuming that you'll sell at some point anyway so won't avoid CGT forever.

Albermarle

Hmm this sounds easier said than done. But I can see that the funds where the charges are higher, perversely are  some of the ones that have performed worst. Basically any of the HL Funds - So a double Whammy to my mind and I need to cut my losses and switch and just need to decide if I switch platforms as well.

As already said the HL platform is expensive but you do get a good service. However then investing in their own expensive funds, was probably not the best ever decision your Dad made.

If you switch platforms then with the current investments you will have to switch in cash and then reinvest on the new platform. There is some small risk switching in cash in case markets move during the switch, although it is usually quite quick. Alternatively you can switch investments first on the HL platform to ones that would normally be available on another platform.

artyboy

MallyGirl said:

switching platforms may be worth it depending on the value of your holdings. There comes a point where the fixed fee platforms like II are cheaper than the percentage based ones like HL.

I'm paying more to II currently than to HL on platform costs, despite having double
in II what I have in HL - so what you're saying about fixed fee isn't a given and needs proper research.

That said, switching platforms could definitely be worth it for the cashback that many providers are throwing around at the moment. II is actually offering up to an absurd £5k for SIPP xfrs in, although you would need to move £2m+ for that.

Alternatively Charles Stanley will pay £1500 for a £200k+ xfr, what's more if you can get a referral, the person referring gets £1000 - that's a decent chunk of cash - I'm intending to refer Mrs Arty for exactly this offer... 

dunstonh

Hmm this sounds easier said than done. But I can see that the funds where the charges are higher, perversely are  some of the ones that have performed worst. Basically any of the HL Funds - So a double Whammy to my mind and I need to cut my losses and switch and just need to decide if I switch platforms as well.

Those HL in-house funds are expensive.  It is a bit of irony as people often say they DIY to save money but then go and stick on one of the most expensive platforms using their in-house expensive funds and pay more than they would have done had they used an IFA.    A phrase often used here is that if you DIY well it can save you money. If you DIY badly it can cost you more.