Discount Brokers Discussion Area

dunstonh

I read about discount brokers such as Hargreaves Lansdown and compared their charges - so far as I could - with Skandia. My calculations show that Skandia seem to compare well at 2% initial and 0.5% trail. Am I missing something or on these figures do Skandia seem very reasonable? Do HL make any other charges?

If you are 2% initial then the IFA is discounting somewhat. Skandia maximum is 4.5%. intial. The 0.5% trail is there to allow the IFA to provide you ongoing servicing. On the HL contract they rebate between 0.1-0.25% of that 0.5%. They dont give servicing though (as well as no advice). For an advice contract, you are doing fine. If you dont want advice then you can get a bit cheaper.

humbug12

I compared the HL discounts on each of my funds - after the HL discount, their minimum trail commission was 1.13% compared to Skandia's 0.5%.

I was and am still happy with my IFA's choice of funds so I was happy to pay for the advice, though I want to suggest some changes at my next review.

I was looking at discount brokers with a view to investing any new money into some of the same funds but trying to minimise charges in comparison to Skandia. I'll check out some of the other discounters suggested in Martin's article, but would still be interested to hear any views on Life Direct.

Thanks

dunstonh

I compared the HL discounts on each of my funds - after the HL discount, their minimum trail commission was 1.13% compared to Skandia's 0.5%.

Dont compare TERs. The funds are the same but the TERs change frequently so you never get the same figure when you look at different sources (as they may take different data points). The AMC is the thing to look at and that will be the same. Its only the HL discount on ISAs that should be the difference. Typically,the difference should only be 0.1-0.25%.

HL are only cheaper on the ISA. On pensions, they dont discount on the AMC. Skandia can actually be cheaper in that respect depending on the funds used. Although at worst, it would be identical.

trf197

Hello all,

thanks for the excellent discussion here. I am opening my first stocks and shares ISA which will be split roughly 50-50 between a HSBC FTSE 100 tracker OEIC and a few individual shares.

I am unsure whether Hargreaves Lansdown and iii will offer the better option for me. HL will possibly be better from the point of view of the OEIC due to the way it rebates funds but the addition of the individual shares will land we with a 0.5% annual management fee. iii on the other hand offer cheaper trades (£10 v £12.50) but I can't find out how they handle the fund. (iii also a 0.5% bonus on transferring a cash ISA which would net me an extra £20)

Any thoughts from anyone as to which you might choose in my position. HL have a much better website and seem more professional but that is purely subjective.

Thanks in advance,

trf197

leahciM

Hi Trf197,
I can't be a massive help to you, but after a lot of research I decided for iii over HL purely because they have no admin/inactivity fees on their ISAs and they have the free (changing to £1.50 at the end of the month) scheduled monthly trades.

As far as I know this iii offering is better than the HL.

cheerfulcat

Hi there,

trf197 wrote: »

Hello all,

thanks for the excellent discussion here. I am opening my first stocks and shares ISA which will be split roughly 50-50 between a HSBC FTSE 100 tracker OEIC and a few individual shares.

I am unsure whether Hargreaves Lansdown and iii will offer the better option for me. HL will possibly be better from the point of view of the OEIC due to the way it rebates funds but the addition of the individual shares will land we with a 0.5% annual management fee. iii on the other hand offer cheaper trades (£10 v £12.50) but I can't find out how they handle the fund. (iii also a 0.5% bonus on transferring a cash ISA which would net me an extra £20)

Any thoughts from anyone as to which you might choose in my position. HL have a much better website and seem more professional but that is purely subjective.

Thanks in advance,

trf197

Given your choice of investments, iii is the cheaper provider. From memory, HL will charge the 0.5% on trackers, ( and no rebate as there's no initial charge ) because it receives no trail commission from them.

Regarding trading charges - if you use the iii Portfolio Builder option you can buy shares for £1.50 instead of the usual £10.

trf197

cheerfulcat wrote: »

Regarding trading charges - if you use the iii Portfolio Builder option you can buy shares for £1.50 instead of the usual £10.

Thanks,

Am I right in understanding that I can use the Portfolio Builder for one-off share dealings since they say it can be amended/cancelled at any time?

trf197

Rollinghome

trf197 wrote: »

Hello all,

thanks for the excellent discussion here. I am opening my first stocks and shares ISA which will be split roughly 50-50 between a HSBC FTSE 100 tracker OEIC and a few individual shares.

I am unsure whether Hargreaves Lansdown and iii will offer the better option for me. HL will possibly be better from the point of view of the OEIC due to the way it rebates funds but the addition of the individual shares will land we with a 0.5% annual management fee. iii on the other hand offer cheaper trades (£10 v £12.50) but I can't find out how they handle the fund. (iii also a 0.5% bonus on transferring a cash ISA which would net me an extra £20)

Any thoughts from anyone as to which you might choose in my position. HL have a much better website and seem more professional but that is purely subjective.

Thanks in advance,

trf197

H-L do charge an additional 0.5% on some trackers and other funds that pay no trail commission but not for the HSBC or L&G trackers.

AMC for the HSBC FTSE 100 tracker is 0.25%. You might also want to consider an All-share tracker for a wider spread of companies. Their charges for share dealing aren't the best. H-L admin is efficient but they'e a bit strong with the sales patter.

premierfella

trf197 wrote: »

Thanks,

Am I right in understanding that I can use the Portfolio Builder for one-off share dealings since they say it can be amended/cancelled at any time?

trf197

Yes. The iii Portfolio Builder allows you to select monthly or one-off for the trade, and of course you can set up more than one one-off trade.

The main downside is the fixed trading dates, having to schedule the trade in advance and not being able to cancel the trade on the trading day.

leahciM

premierfella wrote: »

The main downside is the fixed trading dates, having to schedule the trade in advance and not being able to cancel the trade on the trading day.

Of course, this is also a nice upside if you are pound cost averaging and want a very cheap way to do it