HL SIPP Block on Trades > 25 pa

Sobryma

JonWB wrote: »

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.

To be fair to HL I have been shifting stuff around but it has been an unusually volatile year.

EdInvestor

Sobryma wrote: »

To a degree they have missed a trick as they could have offered to help me reconstruct portfolio for long term.

I'd have thought that's what they mean by this:

5. They will give me time to revise my portfolio to a more long term view

Sobryma

EdInvestor wrote: »

I'd have thought that's what they mean by this:

Yes maybe that's what they meant - I've just revisited portfolio from a year ago and I'm only very very slightly ahead, so they've probably got a good point!

jamesd

robgwalker, you might see if putting the money in one fund to hold the balance and then using sell switches would count as a single transaction for each selling event. Something like BlackRock UK Absolute Alpha could be a decent holding fund with likely gain for you compared to cash and a revenue source for Hargreaves Lansdown from the trail commission.

It's interesting that their guidance to investors - use purchase cost averaging in uncertain times and use diversified investments - conflicts with their commercial desire to limit the total number of trades. I wonder if this is treating investors like you fairly or not - giving correct guidance and then saying we won't let you follow it isn't great even if it is fair.

I see that they offered a phased investment option for new SIPP contributions at the end of the last financial year. For a price of 25 if I recall correctly it'd invest a lump sum regularly over several months. Would you be interested in using this if it was available for your situation?

Clearly there are regular trades that they can and do accept as reasonable so it's perhaps a case of encouraging them to offer suitable options so that things can be done in ways that they seem to find more cost-effective and that also let investors follow sound investment risk reduction practices.

meester

robgwalker wrote: »

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.

That seems like BS to me.

There isn't any difference between you buying 30 * £2k than 30 people buying £2k each, or indeed using their regular savings plan. I can understand that they might object to a large number of sell orders in a year, but investing new money is surely something they want you to do.....

diamond9_2

I transferred my personal pension into drawdown with a HL SIPP in April and before doing this I specifically asked the help desk about frequent switching. They said that there was no problem and that they had never heard of any restriction on switching being invoked. I am very disappointed to hear about this.

We need to determine what constitutes a trade. I have my money spilt over 4 funds, roughly 25% in each. If there is a 25 trades rule, I could switch everything 6 times in the year (maybe 3 if a switch counts as a sell and a buy!). On the other hand, if I had all my money in a single fund, I could switch 25 times in a year (or 12 for sell/buy).

Typically, in the past when I was with HBoS, I would hold all money in a single fund and switch the whole lot at once. One of the reasons for moving to a SIPP was so that I didn't have to hold all my eggs in ine basket. However, if "many baskets" means more trades I may have to reconsider.

EdInvestor

Can I ask why you think you should not have to pay for frequent trading of funds when costs are being incurred by your actions?

diamond9_2

EdInvestor wrote: »

Can I ask why you think you should not have to pay for frequent trading of funds when costs are being incurred by your actions?

I accepted their T's & C's after several discussions with their helpdesk. They clearly stated their charges. They did not clearly state any restriction on trading. Quite the contrary verbally from their help desk. I might not have minded if there was a fund switching charge but I was told that there wasn't and nothing about restrictions.

I just expect to get what I was told.

Sobryma

I think it is slightly like moving the goal posts after the game has started. I've had my account with them for 3 1/2 years and have always switched a lot. Ultimately you are in their hands and it's up to them, I do think the letter could have been better worded and a wider timeline given to reduce churning.

EdInvestor

Sounds like you should all complain based on the fact this restriction was not made clear when you opened the account.At least they should have a transition period, but if there are a lot of customers like you, maybe they need to consider a special package?For instance if you want to add share dealing to a basic HL fund package, you have to pay an AMC of around 150 (IIRC) a year.

How many switches are you guys making a year on average?