Trading Unit Trusts

earlgrey_3

After transferring my wife's ISA to Hargreaves Lansdown I'm in the process of of selling off £5K chunks of a couple of very big UT holdings she had and reinvesting them in separate trusts rather than doing the whole lot at once. I'm a bit surprised at how slow the whole business is.

It's bad enough not knowing the price due the forward pricing system but it's then taking 2-3 days to sell a tranche, get the cash, then to complete a buy. Can barely do a sell/buy cycle in a week. During this period transactions are just shown as "pending" and stuck down the pipe somewhere while the markets bob about. Compared with trading shares it seems to be in the dark ages.

I'm doing it on-line and placing the order well before noon. Is it quicker doing it by phone or should I be doing it a better way than my cack-handed system?

Ian_W

I'm fairly new to HL myself, my previous ISA are still with Fidelity FundsNetwork and when I opened this years with HL by Debit Card online I was surprised that some purchases showed as pending for 4-5 days [all smaller fund houses like Ruffer] whereas others with larger co's, like Newton, showed the next day. However on checking the "delays" the purchase date and unit prices showed them to have been purchased on the same date as the Newton one, they just didn't show up for a while. I assume this may be more to do with the specific fund house than HL.

The HL site isn't as helpful as FNs in that you can actually click through on theirs to the details of each switch sell/buy and they include the deal date so you know when you sell and then buy. Assuming it isn't over a weekend then usually you sell one day and buy the next due to forward pricing points, I imagine HL do the same so you won't be out of the market other than for 1 day - but I've not done any switching with them yet and it doesn't seem you can check anywhere as to where "pending" is up to.

You may also not be doing yourself any favours with the timing of your switching, FN's cut-off point is an hour before the fund pricing point IIRC whereas HL's T&Cs on switching say:

All instructions received by 8.00am will be dealt at the next available valuation point. Instructions received after 8.00am will be dealt as soon as reasonably practicable. All fund deals are dealt on a T+4 settlement date.

HTH.

earlgrey_3

Thanks for that Ian, I hadn't noticed that bit in their T&Cs. Perhaps I'd better read them.

Jeez, they need 4 hours advance notice to follow client instructions and after 8 am no way of knowing whether you get today's price or tomorrow's.

Hope their share-dealing service is a little more urgent than that. So there's no way even to see how the UK market opens and the price you'll get has to be guessed from the markets almost a full day before at best. On Mondays the only indication is from the previous week. Could be 1-2% or more difference.

Last time I bought UTs for my wife I dealt directly with the fund manager and got the day's price just a few minutes before the fix. In some cases it might be worth weighing up the costs and where possible cutting out the middle man to deal at a more predictable price. Or sticking with ITs.

Ian_W

earlgrey wrote: »

Jeez, they need 4 hours advance notice to follow client instructions and after 8 am no way of knowing whether you get today's price or tomorrow's.

Well, not quite. Most funds price at noon but quite a few have other pricing times, typically I've seen 8am/10am/4pm. This Ruffer one is a 10am example but I know that some of the larger fund managers available through FN use different times though I don't have the paperwork to hand to say which.
As for going direct the drawbacks to me outweigh the benefits. You've got the initial comm which isn't usually discounted so you're paying effectively for IFA advice without getting any and, for an ISA at least, all the funds for that year have to be with the same manager.
I don't use ITs so couldn't comment but they may be better if you want more instant dealing.