Charles Stanley Direct to increase fee to 0.35%
Comments
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The thing with a percentage based fee is that the amount of money the platform receives will naturally increase with the value of investments under management (so it's pretty well inflation-protected), so there shouldn't really be much need to increase them. Unless, the original price was a loss-making promotional rate to build market share. It seems less likely HL would increase based on their profitability figures. They might need to raise the £45/year cap on platform fees for shares, ITs and ETFs though.DennisTenus wrote: »I suppose it's possible HL could put their price up at any time too?
I would second iWeb as a credible alternative.0 -
Already have IWeb but i like buying more when there is a dip and every now and then whenever I please and also IWeb don't have all the funds I want.... eg. LTGE is a big one.0
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The thing with a percentage based fee is that the amount of money the platform receives will naturally increase with the value of investments under management (so it's pretty well inflation-protected), so there shouldn't really be much need to increase them.
Unless the investments held are index linked. There's no guarantee of that. People expect excellent customer service, software updates etc. All has to be paid for. Then there's the increased regulatory burden as well.
Might decide to change their target market as well. To discourage smaller investors from opening accounts.0 -
These factors primarily translate into salary, software and infrastructure costs, and are counterbalanced by increases in efficiency, assets under management and economies of scale. Assets under management will grow not only due to investment growth, but also due to increases in the disposable income of their clients.Thrugelmir wrote: »Unless the investments held are index linked. There's no guarantee of that. People expect excellent customer service, software updates etc. All has to be paid for. Then there's the increased regulatory burden as well.
Unless the cost of doing business increases for them more rapidly than clients' invested assets for a sustained period, they should be able to maintain their profit margin without hiking their percentage based fees. A change should be relatively rare, compared with hikes in the fees of those who charge a fixed amount per account.
This IMHO is much more likely. HL cross-subsidises small investors to a high degree, presumably because of the inertia of them switching when their portfolios grow. This is another example of a loss leader and it would make most sense to address this imbalance in profitability.Might decide to change their target market as well. To discourage smaller investors from opening accounts.0 -
The thing with a percentage based fee is that the amount of money the platform receives will naturally increase with the value of investments under management (so it's pretty well inflation-protected), so there shouldn't really be much need to increase them. Unless, the original price was a loss-making promotional rate to build market share. It seems less likely HL would increase based on their profitability figures. They might need to raise the £45/year cap on platform fees for shares, ITs and ETFs though.
I would second iWeb as a credible alternative.
However, if it the investment was for a SIPP then iWeb use AJ Bell so I’m not sure that would be more cost effective. I use Fidelity for my SIPP but only hold IT’s and the platform charges are capped at £45 per annum. I believe there is no charge for IT’s with ISA’s and GIA’s.0 -
Yes, holding ITs, ETFs and shares changes the balance - HL becomes a cheap option (although still rather expensive for a SIPP). To answer your question, AJ Bell is cheaper than iWeb in most scenarios for holding a SIPP, especially if you take advantage of the regular investing rate when buying.However, if it the investment was for a SIPP then iWeb use AJ Bell so I!!!8217;m not sure that would be more cost effective. I use Fidelity for my SIPP but only hold IT!!!8217;s and the platform charges are capped at £45 per annum. I believe there is no charge for IT!!!8217;s with ISA!!!8217;s and GIA!!!8217;s.
I'm rather settled holding the bulk of my portfolio with II, but I won't recommend them as are lots of caveats associated with investing with them.0 -
This IMHO is much more likely. HL cross-subsidises small investors to a high degree, presumably because of the inertia of them switching when their portfolios grow. This is another example of a loss leader and it would make most sense to address this imbalance in profitability.
Peter Hargreaves pretty much admits this in his book 'In For A Penny' where his original idea was to get a penny from everyone in the country so HL has a deliberately low barrier to open an account and get started.
Alex0 -
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