iii introducing quarterly £20 charge
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Looks up RDR and FSA and thats the reason for the overhaul. The thing is a few companies may be charging the little guys extra because of this.
Ironically we did better with hidden charges because it was a subsidy for low account use I guess
Remember the days when iii allowed free regular share buys for a whole year, that was nice. Halifax doubled some of their charges last December0 -
BBC moneybox have just interviewed me, they will be featuring it and the II issue on this Saturdays show 12pm on Radio 4.0
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sabretoothtigger wrote: »Looks up RDR and FSA and thats the reason for the overhaul. The thing is a few companies may be charging the little guys extra because of this.
Ironically we did better with hidden charges because it was a subsidy for low account use I guess
Remember the days when iii allowed free regular share buys for a whole year, that was nice. Halifax doubled some of their charges last December
Effectively, the small investors have been cross subsidised by the larger ones and index trackers have been cross subsidised by managed funds. That is coming to an end (mostly).
Some of the platforms issued tracker funds as loss leaders because they made their money from the managed funds where they got an undisclosed cut of the annual management charge. Some also kept some or all of the IFA trail commission despite not giving any advice (e.g. HL's SIPP kept all of it and only refunded upto half on the ISA despite also getting the platform cut).
If we move to post RDR and post platform review, there will be no IFA trail commission and there will be no platform commission (after platform review - probably earlier given the number of fund houses issuing clean class now). So, no income for the platforms unless they charge you explicitly. Hence why you are now seeing platforms move to that model.
The positive is that unbundled platforms (the type that do not run on commission) tend to offer institutional class or clean class funds. So, whilst you are paying the platform an explicit charge, you are getting funds at lower cost. The bundled platforms (those getting an undisclosed cut) tend to offer the retail version of funds or promote only commission paying funds. These cost more.
The negative is towards those that only use index trackers as they will now have to pay platform charges or buy direct (not all will allow buy direct or have restrictions). Plus, smaller investors will likely pay more as most of the unbundled platforms have reduced charges for larger investors but higher charges for smaller ones to more reflect workload.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I don't see why we should be held to ransom: pay the quarterly fee or pay the exit fees.
I was looking into the FSA guidelines on this (search for FSA Unfair contract terms: improving standards in consumer contracts)
The iii terms and conditions state that
"We may introduce new charges or change our existing charges".
That's just not specific enough, they don't provide a "valid reason". Also, given that they have changed the terms we should also be "free to dissolve the contract". Important word here being FREE not able.
I sent them a secure message on Friday got a standard response. Its in our terms so tough etc etc. Sent them a more forceful response today including the following points:
Your response did not address the issue of the inconsistency in your terms, namely that new customers in my situation (having less than £5000 invested) are exempt from the new fee. I do not consider this to be fair given that I am also a relatively new customer.
Your response also states that you are not in the position to waive the transfer out fee since the change is in line with your terms and conditions. I accept that a transfer out fee is a part of the Terms and Conditions and that clause 11.1 states “We may introduce new charges or change our existing charges”. However I would like to refer your attention to the FSA’s regulations and guidelines regarding unfair contracts. I believe that the FSA and Financial Services Ombudsman are likely to deem this contract unfair because
1. No valid reason is given for this change either in the terms and conditions or elsewhere. The reason given for the change on the webpage, namely, to “encourage all our investors to be more engaged with their investments” is not a valid reason. You are an execution only service and should not be imposing requirements on trade frequency on your customers.
2. As the change in terms is to my financial detriment, I should be “free to dissolve the contract”. Since you levy a transfer fee this is not the case. In particular FSA guidelines section 3.15 of “Unfair contracts: improving standards in consumer contracts, January 2012” states “we would not regard consumers as being free to dissolve the contract if the terms did not
provide that any exit charges would be waived to remove financial barriers to exiting the contract”
Next complaint goes to the Financial service ombudsman.
Look forward to the BBC feature.0 -
The expectation is that some platforms will go under and many will merge/consolidate.
TBH, that's part of the reason why I recently went with BestInvest: they actually seem to have a business model that stands a chance of working post-RDR.
http://www.bestinvest.co.uk/article/12161/a-taste-of-things-to-come-br
Encouraging?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
This may be a bit petty but ...
Just looked at my share dealing account with III, about to close it and move to HL.
My account shows £3.03 in cash. Have just moved out £0.01
That must be costing them money and it make me feel better ! Perhaps I'll do it £0.01 at a time. Maybe all us leavers should do that...
I know - childish etc...
Cheers, Bob0 -
From iii
We have listened carefully to our customers since we announced the changes to our pricing structure which introduced the following:- We will repay ALL income we get from funds back to customers
- A flat £10 charge for all investments (or £1.50 for regular investments)
- A £20 quarterly fee which includes 2 free trades (or £20 in trading commission)
However, we fully acknowledge that this new plan will not suit all people and we have made the decision to waive fees for customers who wish to transfer to other providers. We will not levy a charge for any transfer out requests we receive on or before 31 July 2012. In some circumstances it can take up to 8 weeks to complete a transfer, but as long as you instruct us in writing before 31 July 2012, the transfer will be free of charge.
In addition, if we receive your instruction before 30 June 2012 the first quarterly fee payment will be waived while your transfer is underway.
We apologise for any undue concern or inconvenience this price change may have caused."The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts."
Bertrand Russell. British author, mathematician, & philosopher (1872 - 1970)0 -
We have listened carefully to our customers since we announced the changes to our pricing structure which introduced the following:
We will repay ALL income we get from funds back to customers
A flat £10 charge for all investments (or £1.50 for regular investments)
A £20 quarterly fee which includes 2 free trades (or £20 in trading commission)
We are confident that our new pricing will be advantageous for most customers, even more so for those who are able to consolidate investments they have with other providers.
However, we fully acknowledge that this new plan will not suit all people and we have made the decision to waive fees for customers who wish to transfer to other providers. We will not levy a charge for any transfer out requests we receive on or before 31 July 2012. In some circumstances it can take up to 8 weeks to complete a transfer, but as long as you instruct us in writing before 31 July 2012, the transfer will be free of charge.
In addition, if we receive your instruction before 30 June 2012 the first quarterly fee payment will be waived while your transfer is underway.
We apologise for any undue concern or inconvenience this price change may have caused.
Yours sincerely0 -
Inevitable - the FSA have 'advised' them today to back down on exit fees.0
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