New HL fee structure from 01/03/26

Rollinghome

https://forums.moneysavingexpert.com/discussion/comment/81885145#Comment_81885145

SW/Iweb also got away with charging for re-investment, but that has now been rectified with free regular (or irregular) investing. But I have always been more than happy with that, which I've never used, in return for paying peanuts compared with HL on quite a large sum. Automatic withdrawal of divis has always been a choice.

So I'll be moving the remaining lump of my and Mrs R's ISA's from HL to SW as soon as the messing with Smithson is completed (despite continuation of a reduced HL platform fee arrangement which in practice is worth zilch). I decided the few benefits of using two platforms wasn't worth the extra hassle or HL's fees.

masonic

https://forums.moneysavingexpert.com/discussion/comment/81885145#Comment_81885145

This is a copy of the letter the FCA wrote to firms at the end of 2023.

I would say based on this they are still potentially at risk, but have a couple of mitigating factors that make them less of a target for action:

• SWSD clearly state that they do not pay interest on cash balances. This is one of a small number of key bullet points mentioned on the sign up page and is also detailed on the costs and charges page.
• SWSD are not retaining interest and also charging a platform fee

Contrast this with HL:

• HL state that they do pay interest on cash balances but do not state that the account balance excludes the income sub-account. This can mislead consumers into thinking they are earning interest at the published rate when they are not.
• HL are retaining interest and also charging a platform fee.

In the case of HL, it is much more likely that consumers could be misled and/or disadvantaged, and if someone feels this is the case, they should make a formal complaint, citing HL's failure to act in good faith and meet their information needs according to the Consumer Duty. They may wish to use a copy of the linked letter to support their claim.

disgruntled1234

https://forums.moneysavingexpert.com/discussion/comment/81885059#Comment_81885059

I'm also interested to know if this is the case as I've now changed my income instruction with HL to auto-reinvest (due to the upcoming £1.95 fee), but I tend to still move my money from the cash to the capital account as dividends are paid.

GeoffTF

https://forums.moneysavingexpert.com/discussion/comment/81885242#Comment_81885242

The letter says:

We also have serious concerns with the practice of some firms which both retain
interest and take an account charge or fee on customers’ cash (‘double dipping’).

That does not cover failure to pay interest on the income account.

I am happy with SWSD not paying interest and charging huge currency conversion fees on buying and selling overseas investments. I do not leave significant amounts of money in my account, or trade investments that are not denominated in GBP. (SWSD does not charge currency conversion fees on foreign dividends.) If SWSD paid interest and cut their FX fees they would have to put up other charges or introduce new ones.

masonic

https://forums.moneysavingexpert.com/discussion/comment/81885296#Comment_81885296

Double dipping is just one part of the FCA's concerns and it may apply to HL. My understanding is that HL calculates the platform fee in arrears based on the end of month position. In the examples discussed above that would include a charge for the full month on money held in the income account and used to buy investments part way through the month. The larger issue as I see it is that HL is leading customers to believe they are receiving interest in circumstances when they are not. They are also charging a substantial platform fee purportedly to cover the costs of managing customers' accounts while also retaining interest generated by cash balances (both the 0% they are paying on the income account and the low rates they are paying on smaller balances). All of this will lead to a lack of consumer understanding, fuelled by a failure to act in good faith on all three of the metrics (clear communication, transparency, honesty and integrity).

At SWSD, the currency conversion fees would probably be considered fairer by the FCA than rolling into a general platform fee, as that would load costs onto customers who do not trade foreign currency securities. While trading as iWeb they have explained that this is a direct pass through of upstream costs they incur when asked.

SWSD might be criticised for paying zero interest and cross-subsidising customers who minimise their cash balance. However, they are being transparent and providing customers options to deal with platform cash accumulation. Most importantly, they are not hiding money in a sub-account under different treatment and leaving customers the task of figuring out a workaround.

phlebas192

https://forums.moneysavingexpert.com/discussion/comment/81885350#Comment_81885350

Double dipping is just one part of the FCA's concerns and it may apply to HL. My understanding is that HL calculates the platform fee in arrears based on the end of month position. In the examples discussed above that would include a charge for the full month on money held in the income account and used to buy investments part way through the month

HL don't charge for holding cash.

The larger issue as I see it is that HL is leading customers to believe they are receiving interest in circumstances when they are not.

That's the more significant point and as comments here show many people don't understand that the income account amounts don't get cash. Took me a good year or more before I realised. https://www.hl.co.uk/charges-and-interest-rates does say it, but I guess most people aren't used to the income / capital account distinction so it should be spelt out more clearly IMO.

Anyway, since we're talking about brokers' sneaky methods, at least HL round dividend payments to the nearest penny (whether up or down) whereas the likes of AJ Bell and ii always round down. The amounts are trivial to an individual but it must add a decent chunk to their profits.

masonic

"HL don't charge for holding cash."

Are you saying that they pro-rata their monthly fee to account for the gap between cash being held in the investor's account and invested later in the same month? Because my understanding is that if an investor is holding a cash balance in the income account on 1st Feb, and that money is reinvested in a fund on 16th Feb, at the end of the month they'll be charged a platform fee on that sum for the full month, including the part of the month it was in cash (so as well as earning zero interest for the first 15 days, the platform fee would be charged for the same period because it had been reinvested before month end).

phlebas192

https://forums.moneysavingexpert.com/discussion/comment/81885459#Comment_81885459

Ah, I see what you are getting at. I don't know how the timing works out with when reinvestments take place and the cut-off for fees. Not something I have any experience of. But if there wasn't any reinvestment then the cash in the income account would not impact the amount of fees charged.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81885242#Comment_81885242

Thank you for that. It had seemed odd to me that an outfit which did pay interest on (some) cash was getting hauled over the coals while an outfit that didn't was flavour of the month. I now understand.

My GIA will probably be making its way from HL to SWSD but I'll wait a bit to see what actually changes in March/April. And maybe by then the flow of other defectors will have slowed down a bit.

redux

I haven't decided yet, as my HL account is now much smaller than a few years back, so not much impact

For those who have switched away, do you still have account access even though empty, and can thus see history?