HL SIPP Block on Trades > 25 pa

Sobryma

Hi

First post.

I've received a letter from HL telling me:

1. I have placed a significant number of trades in the past year.

2. UT/OEICs are long term, and excessive trades increases funds costs, and it will be costing me too.

3. Their Key Features includes a clause against short term or excessive trading.

4. They accept that sometimes changes are needed, and it might be necessary to trade more sometimes, but they consider more 25 a year p.a. excessive (excl. savings plan).

5. They will give me time to revise my portfolio to a more long term view, but after a few weeks they may refuse my trades or ask me to to close my account.

6. Lastly they value my custom :T



What alternatives are there for someone who invest mainly in UT/OEICS/IT but switches regularly? I thought maybe SIPPDEAL or SIPPDEALEXTRA.

Any pointers would be appreciated,

EdInvestor

Sobryma wrote: »

What alternatives are there for someone who invest mainly in UT/OEICS/IT but switches regularly? I thought maybe SIPPDEAL or SIPPDEALEXTRA.

HL is the only one which allows you to invest in funds with no transaction charges, but as you can see, they don't expect you to trade the funds on a regular basis.

If you move to Sippdeal, Alliance Trust or other low cost providers, they will charge you a dealing fee every time you switch.

You could ask HL what they would charge to allow you to stay there and continue trading and see if it's competitive.

Sobryma

Thanks, thats a good idea. I can see their point (I suspect there recent listing is making look at where they lose $). My main concern is that if there was a large market swing I wouldn't be able to trade. I'll drop them a line.

robgwalker

I too have received this letter from HL - two actually since my wife got one as well (I do the fund management for us both) so clearly HL are waging a campaign against what they consider too much buying and selling. Actually I'm extremely dismayed about this. I have been with HL for many years and up till now thought them a good outfit and recommended them to others. I transferred a £150,000 pension fund in as cash last year. My strategy was to get into funds by dribs and drabs, a few thousand at a time, for safety. This naturally takes a lot of trades and limiting me to 25 a year (they don't say if this is per account or over all accounts SIPP, ISA, PEP) is ludicrous. Also they don't define a 'trade'. Simply buying a lot of funds at £1000 a time is not going to be disruptive or costly to anyone.

I notice the words "short-term or excessive trading or whose trading has been, or may be, disruptive..." from their Key Features document occurs in other T&C documents e.g. from Fidelity and F&C (search the web) where it is clearly refering to "Market Timing" fraud by rogue fund-managers and NOT to retail customers with their insignificant £1000 invetments.

Sobryma

Thank goodness I thought it was just me!!!

I think they are probably rationalising after listing. Clearly I must be costing them a bit?

I can't deny I do switch a lot - maybe too much in the past year due to volatility. Historically what I've tended to do is keep each fund around the same level - and switch profits to new funds - but this year I've moved around a lot. Generally in the past I think they've been very good.

That said I am giving serious thought to moving over to BestInvest as it looks like they offer portfolio guidance. They look pretty good, but we will see

purch

I guess their Low Cost SIPP is proving to be too low cost for their P&L :rotfl:

EdInvestor

I remember people ("momentum investors" IIRC) complaining about the same thing a few years ago when Fidelity started charging for switches in its fund supermarket.The usual arrangment is to allow X no of switches per year and then charge for additional ones.

Sobryma

I don't think the letter is particularly well worded - for example I'm not sure "request" mixes well with "we may ask you to close your account"....

but ultimately they are there to make a few bob. The only thing is that it has made me think - yes perhaps they are right I am churning too much and need to seek a bit of advice.

ffacoffipawb

Sobryma wrote: »

I don't think the letter is particularly well worded - for example I'm not sure "request" mixes well with "we may ask you to close your account"....

How can they close a pension account? It's not a savings account or ISA where they can send you a cheque for the balance, is it?

JonWB

robgwalker wrote: »

I transferred a £150,000 pension fund in as cash last year. My strategy was to get into funds by dribs and drabs, a few thousand at a time, for safety. This naturally takes a lot of trades and limiting me to 25 a year (they don't say if this is per account or over all accounts SIPP, ISA, PEP) is ludicrous. Also they don't define a 'trade'. Simply buying a lot of funds at £1000 a time is not going to be disruptive or costly to anyone.

I transferred a pension into the HL SIPP last year (about 75k) and I was also dripping money in every month £1,000 per trade into about 8 funds. I haven't sold many (exited two funds across the SIPP/ISA/FUND Account), but I must have well over 25 trades by now (in a year). But I haven't got the letter you refer to. Thanks for the warning though.

Sobryma

ffacoffipawb wrote: »

How can they close a pension account? It's not a savings account or ISA where they can send you a cheque for the balance, is it?

Well actually if they can send me a cheque!!!!:beer:

I assume they will say go away and take your churning with you. If I can muster energy I may have a review session and see if my churning has really got me an advantage over the last 12 months (rather than thinking it has). To a degree they have missed a trick as they could have offered to help me reconstruct portfolio for long term.