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  • FIRST POST
    • 123mat123
    • By 123mat123 14th Jun 19, 5:25 PM
    • 81Posts
    • 20Thanks
    123mat123
    Understanding Hargreaves Lansdown costs
    • #1
    • 14th Jun 19, 5:25 PM
    Understanding Hargreaves Lansdown costs 14th Jun 19 at 5:25 PM
    ...it seems the general consensus is HL is a good platform, but expensive...

    I have tried to understand this, but am struggling...

    I have been on HL for years

    120k ISA
    50k SIPP

    OK the headline cost of .45% is high - but it's capped at 45 per year ?

    I appreciate it depends how much you hold, but 45pa seems reasonable.

    ..but then when I look at the costs I am being charged it's about 8.4pcm (100.80pa)

    Is this because I have SIPP and ISA, so am hitting 2 x 45pa caps.
    (+ maybe VAT to explain the rest)

    Is the "expensive preconception" for buying and selling (I don't do much of either).

    I have failed to convince myself to transfer to Interactive Investor or Iweb ...

    Am I missing something...? Probably !

    Many Thanks for any pointers...
Page 1
    • AnotherJoe
    • By AnotherJoe 14th Jun 19, 5:31 PM
    • 16,021 Posts
    • 19,221 Thanks
    AnotherJoe
    • #2
    • 14th Jun 19, 5:31 PM
    • #2
    • 14th Jun 19, 5:31 PM
    Your analysis is not quite right.
    ISA is capped at 45 a year if all your investments are shares of one type or another. Are yours?
    SIPP is capped at 200 a year, again based on shares.
    If you have funds then there is a 0.45% charge.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • 123mat123
    • By 123mat123 14th Jun 19, 8:57 PM
    • 81 Posts
    • 20 Thanks
    123mat123
    • #3
    • 14th Jun 19, 8:57 PM
    • #3
    • 14th Jun 19, 8:57 PM
    Thanks Joe,

    What exactly is a "fund"...

    I can now see:


    Fundsmith Equity & HSBC FTSE All World Index are charged as funds,

    ...but in my ignorance I thought Fundsmith was broadly equivalent to Scottish MortgageIT, and HSBC broadly equivalent to Vanguard funds, but it seems both these are included in the capped charge and not itemised/charged separately.

    I am slowly selling "everything" and moving to Vanguard, so it seems HL is not too bad for Vanguard Funds ?

    I do appreciate your comments....
    • AnotherJoe
    • By AnotherJoe 14th Jun 19, 9:08 PM
    • 16,021 Posts
    • 19,221 Thanks
    AnotherJoe
    • #4
    • 14th Jun 19, 9:08 PM
    • #4
    • 14th Jun 19, 9:08 PM
    Vanguard is much better for Vanguard funds than HL. HL are quite expensive for funds.

    However Vanguard despite the rumours they would have one last year, still dont have a SIPP and there seems to be no real sigh they will have oe this year.

    If you will only have vanguard funds i think you'd be better off with a vanguard ISA. Is vanguard your long term plan?
    However there are also Vanguard ETFs. They would cheap to hold with HL as they are treated as shares.
    What vanguard products are you looking to buy?
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • 123mat123
    • By 123mat123 14th Jun 19, 10:23 PM
    • 81 Posts
    • 20 Thanks
    123mat123
    • #5
    • 14th Jun 19, 10:23 PM
    • #5
    • 14th Jun 19, 10:23 PM
    ....at the moment, in HL, just 10k "Vanguard FTSE Developed Europe ex-UK UCITS ETF ".

    I do have a Vanguard ISA with other Vanguard products in it, was investigating cost/viability of transfer from HL to Vanguard or II.

    There is a significant cost in liquifying or transferring HL contents, which was the reason for wanting to understand the costs.

    I was contemplating selling Fundsmith anyway, partly because of its high internal costs, now I understand extra HL costs, and maybe they are a little overpriced - so maybe time to sell...

    ...and will in future take care what I put in HL ISA...

    Thanks for your assistance in helping me focus on this....
    • AnotherJoe
    • By AnotherJoe 15th Jun 19, 6:35 AM
    • 16,021 Posts
    • 19,221 Thanks
    AnotherJoe
    • #6
    • 15th Jun 19, 6:35 AM
    • #6
    • 15th Jun 19, 6:35 AM
    ....at the moment, in HL, just 10k "Vanguard FTSE Developed Europe ex-UK UCITS ETF ".

    I do have a Vanguard ISA with other Vanguard products in it, was investigating cost/viability of transfer from HL to Vanguard or II.

    There is a significant cost in liquifying or transferring HL contents, which was the reason for wanting to understand the costs.

    I was contemplating selling Fundsmith anyway, partly because of its high internal costs, now I understand extra HL costs, and maybe they are a little overpriced - so maybe time to sell...

    ...and will in future take care what I put in HL ISA...

    Thanks for your assistance in helping me focus on this....
    Originally posted by 123mat123
    So your vanguard is an ETF not a fund. So minimal costs from HL and no point in transferring that. In any case it's in a SIPP so you cant transfer ut to Vanguard.
    Why you would sell Fundsmith on account of its "high internal costs"? Have you looked at its performance ? Look at the big picture first. By all means if it falters you might decide to go passive with the money but for the time being that seems a big call to sell a fund that's doing so well.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • jamei305
    • By jamei305 15th Jun 19, 7:18 AM
    • 461 Posts
    • 570 Thanks
    jamei305
    • #7
    • 15th Jun 19, 7:18 AM
    • #7
    • 15th Jun 19, 7:18 AM
    I think you need to go back to basics. Decide what investments you want (whether active, passive or a mixture), decide how you want to hold each one (ETF, Fund, Investment Trust), decide how often you will trade (e.g. monthly savings, annual rebalancing etc)...only then should you calculate which platform is the cheapest and best for your needs.
    • Aminatidi
    • By Aminatidi 15th Jun 19, 8:39 AM
    • 122 Posts
    • 75 Thanks
    Aminatidi
    • #8
    • 15th Jun 19, 8:39 AM
    • #8
    • 15th Jun 19, 8:39 AM
    I tend to be with jamei305.

    I use HL and I hold Fundsmith on it.

    Remember fund returns are usually quoted net of fees so you can either obsess around every bps or you can sit back and think that if a fund has made you 10% and you're happy with that, do you really care if the fees are 0.7% or 0.9%?

    The argument is that fees matter more in a harsh environment as if you're only making 1% or even making a loss fees matter more.

    I wouldn't compare Fundsmith to SMT. Different beasts.
    • AnotherJoe
    • By AnotherJoe 15th Jun 19, 9:39 AM
    • 16,021 Posts
    • 19,221 Thanks
    AnotherJoe
    • #9
    • 15th Jun 19, 9:39 AM
    • #9
    • 15th Jun 19, 9:39 AM
    I would compare those two but not to vanguard as its a different philosophy. Do you want active. or passive with that money.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • 123mat123
    • By 123mat123 15th Jun 19, 12:43 PM
    • 81 Posts
    • 20 Thanks
    123mat123
    Thanks for all the comments.

    I was "active" but not particularly knowledgable so although done very well with Fundsmith/SMT/Monks over the last few years, have also picked up some howlers (Vodafone/National Grid/Persimmon/IsharesPLC), being lured by dividends.

    As I get older I am feeling more comfortable with Vanguard funds/trackers and fully accept the fact that I was doing little more
    than gambling.

    Fundsmith have done very well but I question how much growth these big US techs have left in them, and its lack of diversification.

    Many Vanguard trackers also give high exposure to USA tech giants.

    Fundsmith may also be victim of "Cult of Personality"...?
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