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Hargreaves Lansdown slashes costs for most fund investors

(Update) The UK's biggest funds supermarket has cut the price of investing in unit trusts and open-ended investment companies. But not everyone is happy. We explain what has happened.

 

by Gavin Lumsden on Jan 15, 2014 at 17:20

Hargreaves Lansdown slashes costs for most fund investors

Hargreaves Lansdown, operator of Vantage, the country’s biggest funds supermarket, has unveiled its long-awaited ‘unbundled’ charges in a move that could herald a new era of cheaper charges for many UK fund investors.

The company claims its new two-charge structure will save money for most of its 520,000 customers. However, a large number of tariff changes makes the situation complicated to understand. Around one in five Vantage users will pay more than before, although the company says the increases are mostly small and can be avoided, for example by moving accounts online.

The main changes for fund investors

The main changes are that from 1 March investors in unit trusts and open-ended investment companies (Oeics) will pay two charges on Vantage where previously they paid a single annual management charge (AMC) on their funds:

  • a new annual fund holding fee for each account they have and;
  • an annual management charge (AMC) on their funds that is lower than they have paid before;
  • The combined effect of these could cut the annual cost of investing in funds on Vantage from around 1.5% to around 1%, a reduction of a third, although there will be wide variations.

In some cases savings could be greater. The company claims a typical customer investing the full ISA annual allowance of £11,520 in unit trusts and Oeics would now pay £33.41 a year under the new tariffs compared to £73.73 previously.

Chief executive Ian Gorham (pictured) said Hargreaves Lansdown had responded positively to demands from the regulator that fund supermarkets and stockbrokers stop taking rebates – or kickbacks – from fund managers and price their services more transparently.

Gorham said: 'We have put our prices down considerably as well as taking the opportunity to negotiate lower annual management charges on funds.'

Extra charges

Most of Hargreaves' customers are smaller investors and Gorham said the company had taken care to ensure they did not lose out. With reference to the so-called 'advice gap' caused by banks withdrawing from financial advice after the abolition of commission last year, he added, 'we see ourselves as part of the answer to that'. 

However, critics accused the company of burying a raft of charges underneath the headline-grabbing rates.

Nick Hungerford, boss of online fund manager Nutmeg, said: 'Hargreaves has missed a golden opportunity to simplify charges for customers. Looking at the new Vantage tariff we see no fewer than 73 lines relating to different charges!'

Among the losers are:

  • customers who want to receive paper statements and valuations in the post. They will have to pay a £20 + VAT a year;
  • investors with big holdings in tracker funds who will see a hike in charges as a small monthly platform fee is replaced by the larger, percentage based account fee.
  • investment trust investors, particularly those holdings shares alongside those funds, as each will be charged separately. This will double the costs for some invetors and has provoked an outcry. See our separate report on this.

Hargreaves' shares slide  

Mark Till of Fidelity Personal Investing (pictured), an arch rival to Hargreaves, said the extra charges would enable Hargreaves to recoup some of the cuts in its headline fees. He vowed Fidelity would undercut Hargreaves with a more transparent offering when it announces its new charges next week. 'We will be a lower cost provider and we will not hit people with lots of additional charges,' he said.

Nevertheless, in the City Hargreaves Lansdown (HRGV.L) shares slid 63p or 4% to £14.45 as shareholders worried about the £17 million hit the changes could cause the company in the next two years. It made over £195 million in pre-tax profits last year.

There may have been an element of profit taking in the sell-off as the stock doubled in value last year and rose ahead of today's announcement. This followed an upgrade by analysts at Morgan Stanley who said the company had a big opportunity to win new business and that this would offset the impact of lower prices. Hargreaves Lansdown agreed, saying it has to attract £3.5 billion in new business over three years to offset the impact of lower fees. In 2012/13 it attracted inflows of £5.1 billion so the target should not be a problem, although the firm does now face stiffer competition from cheaper rivals, which also include Charles Stanley.

What will customers see?

Hargreaves Lansdown customers should have received letters today explaining the charges. There is a good explanation page on its website as well as online calculators for people to assess the impact on their holdings.

Essentially, what is happening is that the current all-in, ‘bundled’ AMC of around 1.5% that customers pay on funds investing in shares (it's lower for bond funds) is being replaced by a new fund holding fee and a lower AMC on their funds.

Stepped account fee

The account fee will apply to each account investors hold on the Vantage platform (eg, ISA, Sipp, Fund & Share dealing account). It will be stepped so that most customers will pay 0.45% a year on money in each account for balances of up to £250,000.

As the money held in an account rises above higher steps the rate of the charge falls: to 0.25% for money between £250,000 and £1 million; and 0.1% between £1 million and £2 million. Money above £2 million will not be charged. Customers with big balances may find it difficult to work out their charge.

In practice investors will need a lot of money to qualify for the lower rates. For example, investors with £150,000 in both an ISA and a Sipp (self-invested personal pension) would find the total £300,000 did not get them the 0.25% rate which requires more than £250,000 in an account.

Lower fund charges

To offset the new account charges, the AMC on the 2,000 or so funds on Vantage will roughly halve to an average of 0.71% a year.

Unit truts and Oeics that are on the Wealth 150 list of recommended funds will benefit from a lower charge, typically 0.65%, says Hargreaves Lansdown.

In addition the company has negotiated special deals with investment groups for 27 ‘favourite’ funds it is labelling ‘Wealth 150+’. For these the average AMC falls to 0.54%, a 0.16% discount to the standard market charge, it claims. The identity of these funds has not been revealed yet.

Mark Dampier, head of research, said there had only been one fund change to the list, which despite its name, only includes 91 funds.

He denied Wealth 150 was clouded by commercial considerations saying it was purely investment led. 'It's not in our interest to put people into poorly peforming funds,' he said.

What do customers need to do?

Strictly speaking Hargreaves Lansdown customers don't need to do anything other than take the time to understand the new tariffs.

It's important to realise that the new discounted deals on annual fund charges apply to new investments only.

However, existing holdings in unit trusts and Oeics are not losing out.

To ensure customers do not continue to pay the old higher unbundled charge on their current investments, Hargreaves Lansdown is boosting the loyalty bonuses customers receive on existing holdings in funds and Oeics. These bonuses could jump from 0.17% of the balance to as high as 0.75%. This isn't Hargreaves just being generous, it is doing this in order to align the overall charges paid on existing and future investments. In this case Hargreaves is taking with one hand and giving with another.

Investors can choose to switch their existing holdings to the new clean, unbundled, shares classes if they wish but they don't have to. However, some of the best deals Hargreaves has arranged will only be available to people on the unbundled share classes.

Perhaps the most eye-catching deal revealed by Hargreaves today was a 0.06% AMC on two tracker funds from BlackRock and Legal & General.

All of this means Vantage customers should pay a lot less for the funds supermarket so long as they are not investors in investment trusts, which are the big losers from the price changes.

An investor with under £250,000 in unit trusts and Oeics outside the Wealth 150 will pay 1.16% instead of 1.5% a year. For funds in the Wealth 150+ list this could fall to 0.99% a year, a reduction of a third.

The repricing comes two months before a deadline set by the Financial Conduct Authority which has ordered direct to investor brokers to stop taking rebates – or kickbacks – from fund managers. Previously, brokers would take between 0.25% and 0.75% of the 1.5% AMC. 

Other improvements

Investors will be able to set up regular savings schemes into shares and investment trusts starting at £50 per month and costing £1.50 a trade instead of the normal share dealing charge which starts at £5.95.

The application of separate charges for investment trusts, however, undermines that benefit.

Reinvesting dividends and investment income will also become easier as the automatic facility will kick in when the income balance hits £10 per holding, rather than the current ceiling of £200 for shares and £50 for funds.

Gorham said: ‘We are pleased to announce that we have negotiated new lower cost funds for our clients; changed our pricing structure to the benefit of the majority of our clients and further improved the excellent service we provide.’

Hargreaves: a bit like Ryanair!

Watch my video comment on the news from Hargreaves Lansdown to hear my initial reaction to its unbundling of charges.

141 comments so far. Why not have your say?

eyeboy

Jan 15, 2014 at 11:35

Did anyone notice their slightly sneaky treatment of Investment Trusts? To quote:

"The annual charge to hold investment trusts in Vantage will be amended so that investment trusts are charged separately from shares."

"We are introducing this fee because although investment trusts are traded on the stock market like shares, investors tend to hold them and treat them like funds. Our charging reflects this. The charges to buy and sell investment trusts reflect the costs of dealing on the stock market which are higher than those for funds."

I don't see why they should be treated separately from shares and ETFs since the costs are exactly the same.

Aside from that, I'm cautiously satisfied with the changes.

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P L

Jan 15, 2014 at 12:43

The biggest problem I suspect, not just for HL, will be the annoyance factor given the continual drip drip of charges which were previously dealt with by someone else are now in your face. Personally I didn't think there was anything wrong with biundling fund and platform together as long as it was made perfectly clear who got what.

Chances are I may now look to move to the Share Centre who charge a fix fee regardless of what you hold. I also have this possibly irrational worry that having units cancelled to pay costs is somehow detrimental give the charge can be applied at the worst time and hence reduce the capital growth going forward.

The key will be how to extract myself. Alternatively I just leave the existing funds bundled for now (but that has to end in 2016 I believe) and the costs are taken from the bigger rebates.

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webber

Jan 15, 2014 at 14:17

This headline is totally misleading!

I can't be the only investor who holds a mix of Investment Trusts and Shares in there ISAs / SIPPs. For us our charges have effectively doubled!

Shocking and cynical manoueuvre by HL to force people out of ITs and into UTs?

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Westwinds3

Jan 15, 2014 at 15:28

Like webber, I hold mainly investment trusts in three bare trusts for my grandchildren. The "Improved services" consist of payng £135 pa instead of £0 for the same facility. I don't think I can take too many more improvements.

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Jim Watts

Jan 15, 2014 at 15:32

"The charges to buy and sell investment trusts reflect the costs of dealing on the stock market which are higher than those for funds."

Is this actually true? This effectively doubles the charging cap on my Sipp unless I decide not to use ITs

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Jim Watts

Jan 15, 2014 at 15:37

Aha - I just spotted the deliberate obfuscation by Hargreaves Lansdown. What they really mean is:

"If you don't want to play ball and buy funds, we will charge you dealing charges for ITs and then lump on an extra charge to cover the fact that you probably won't trade them and we will lose the income stream that we would otherwise have got from a fund manager!!"

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Mark R - IFA

Jan 15, 2014 at 16:26

Could not agree more with Jim Watts. I have wondered for some time how they are going to continue to bully clients down the fund channel post RDR and this is how. Buy the funds we want you to buy or ELSE! Their charges now need to be deciphered by a forensic accountant....good luck mr investor working out if you are better off or worse off....I certainlty can't at this stage! Got to love the title and the picture heading of this piece by the way. Balanced and measured and not influenced by the HL PR machine at all of course....

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Confused of Cove

Jan 15, 2014 at 16:29

It's striking that there is no cap on the 0.45% annual platofrm fee for holding funds, meaning that a SIPP investor in my position will suddenly have to pay £675 a year. This is exchange for a claimed reduction in funds AMCs which cannot in practice be measured within funds' performance, and may not be (fully) realised if fund managers' recent behaviour of actually increasing their own AMCs on "clean" funds continues, or the "clean" fund is not available via H-L, or not readily identifiable.

The logical response is therefore to shop around for a more cost-effective platform (thanks for the tip, P L), or at least switch from funds to ITs, where there is a £200 cap on the platform fee. Thus one could afford a number of trades a year and still save money on costs, while enjoying frequently superior performance of ITs that mirror their corresponding funds.

Think again, H-L: your funds offering doesn't even compete with your own ITs offering!

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David 111

Jan 15, 2014 at 16:45

Both my wife and I have accounts with HL. The changes to the charges for ITs are truly awful. I shall have to look very carefully into whether I need to move our investments. I find it surprising that they are introducing a new charge for ITs, but leaving ETFs alone.

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kWIKSAVE

Jan 15, 2014 at 16:57

Surely just buy IT's direct from now on .

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gggggg hjhjkl;'

Jan 15, 2014 at 17:06

As A holder with HL I am appalled at these changes!! I have spoken to them and been unable to obtain clarification re the charge split between shares and ITs . I do not believe the bigger cost claim. I hold ITs elsewhere and get charged the same as any other stock based investment.

IMO they are trying to recover the profits they have lost from fund holders, from those of us who do not hold them.

I have E_Mailed them ask for a detailed breakdown for my a/cs of their proposed actions and indicated if not happy, I will move.

I suggest others not happy do the same.

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David 111

Jan 15, 2014 at 17:09

"Surely just buy IT's direct from now on"

I don't think it is that simple. I hold both shares and ITs in my ISA with HL at the moment. Are you suggesting I sell all my ITs in my ISA and go direct to IT providers? I would lose the advantage of the ISA wrapper for my IT holdings, still pay charges for the shares in my HL ISA and pay a new set of charges for the directly held ITs. I would also lose the ability to swap easily between shares/ETFs and ITs within my ISA.

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gggggg hjhjkl;'

Jan 15, 2014 at 17:11

Incidentally, to move a SIPP before the changes will cost £75 + VAT as I understand it after the changes this will be dropped and £25 + VAT per line of stock held will be charged.

If moving you will need to work out which is better for you. For me the former is very clearly better!!!

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Confused of Cove

Jan 15, 2014 at 17:19

David 111: I see what you mean. You may wish to consider TD Direct. I have a Trading ISA account with them, with a mixed holding of ITs and single company shares. If your holdings total more than £15K, there is no platform fee. They also have automatic dividend re-investment at £1.50. Trades cost £12.50, so your trading frequency would need to be taken into account.

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Ayayay

Jan 15, 2014 at 17:22

Totally agree about the new costs for holding ITs. Absolutely disgusting. As far as HL's costs are concerned there is no difference between an IT share and any other. HL's justification is that "although investment trusts are traded on the stock market like shares, investors tend to hold them and treat them like funds". So what? What business of HL is it why investors hold ITs? Complete joke. Existing customers are now trapped and cannot avoid fees. Furthermore, they cant switch providers without accuring exit fees.

.They've tried to use the RDR changes to smuggle through an increase in fees which is completely unrelated and probably breaches their own terms and conditions. According to the client agreement HL can only increase fees for the following reasons. As far as I can see none apply here, "We will only amend these terms for a good reason, including:

• to reflect changes in the costs and charges that we incur or expect to incur in providing our services to you, and/or to take into account changes in the rates of inflation, taxes or interest or other market rates or indices

• to reflect current or future changes in law, Financial Conduct Authority (FCA) regulation, or decisions of the Financial Ombudsman Service

• to meet regulatory requirements or industry guidance or best practice

• to make these terms easier to understand or fairer to you, or to correct mistakes

• to reflect changes in market practice or conditions

• to reflect the way that our services are used and ensure that the costs of those services are allocated fairly among our clients

• to provide for the introduction of new systems or services and changes in technology or products

• to simplify or harmonise the services we offer and/or the charges we apply

• to ensure that we can continue to offer a competitive and sustainable service

• to enable us to provide our clients with a wide choice of investments to meet their need"

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kWIKSAVE

Jan 15, 2014 at 17:45

David 111 .... many IT's allow one to wrap their shares in their own ISA so it would be possible to switch from an existing ISA to the IT's own ISA, without affecting your annual ISA contribution allowance. Have a look at Charles Stanley Direct for non-ISA investments.

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GD

Jan 15, 2014 at 17:53

Glad I moved my SIPP from HL to another provider last year! I always considered their fees to be higher anyway!

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erick davidson

Jan 15, 2014 at 18:01

Due to holding a few Vanguard funds my costs have just gone from £24 to £300. Why should I be asked to pay 0.45% for a tracker fund (or twice the management charge) with no advice whatsoever from HL?

Not offset by loyalty charges as far as I can work out.

Truly very disappointing indeed.

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Maklak

Jan 15, 2014 at 18:06

I am just one more investor cheesed off about the doubling of charges just because I have the temerity to hold ITs alongside shares. If it transpires that I am losing out significantly, I shall be looking for the exit.

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AJMcG

Jan 15, 2014 at 18:17

I will wait until I've seen what fee structure others are offering before I think of doing anything. I suspect that some of the competition will be offering incentives to move to them so this is another good reason to wait.

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novicetrader

Jan 15, 2014 at 18:45

Have I got this wrong?

'...income will be reinvested when it reaches £10 per holding for a charge of 1% (minimum £1, maximum £10) per deal...'

If you only have a small holding, so the income is low, if it's reinvested when it reaches £10, at the minimum cost of £1, isn't this nearer 10% than 1%?

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Jayanti Gandhi

Jan 15, 2014 at 18:51

HL pltform fees 0.45% on first 250k of FUNDS value in each vantage account . IT is NOT based on the value of the vantage account which may have funds,shares,bonds etc

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TJL

Jan 15, 2014 at 18:52

Fascinating that Citywire have had to publish an update - was the 'Hargreaves Lansdown slashes costs for investors' headline a bit premature?

Especially as, from the outset, canny readers were identifying loopholes.

It will interesting to see how this pans out over time.

In a fair world HL will be judged by the market.

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ynys

Jan 15, 2014 at 19:20

My shoot from the hip take on all this is, essentially most funds will have a management charge overall of about 1 percent per annum unless they are certain tracker fund where it may be around 0.5 percent per annum. In practice, investors will see substantial fees taken from their account ulp! which will have to be offset by bigger dividends in the first place. If fee's are taken from funds capital (poor practice imho) then presumably less of the funds internal shares will have to be sold - more share retained - bigger dividends. It will be interesting to see what other fund supermarkets come up with and fund houses such as M&G which sell their own funds. As I say this is shoot from the hip so if I've made any mistakes, sorry.

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omerta

Jan 15, 2014 at 19:24

Simple question from someone who deals in individual stocks only through a non quoted Stockbroker ( advice given).

Lets say, A) I wanted to purchase 1000 Royal Mail @ 600p. What could H.L. charge me?

B) my order was for 5000 of the above.

C) I wanted to buy A) in an ISA/SIPP or split B) between an ISA/SIPP.

Thank you.

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GRC

Jan 15, 2014 at 19:31

I only hold funds in HL and hold shares and ITs in an SVS ISA which I found recommended on Justin Modray's "Candid Money" website - an excellent site for comparing platforms.

SVS charge £5.75 for dealing plus the ususal regulatory charges, There is no platform fee or other charge and they not do funds. The only minor drawback is that you have to have your money paid in before dealing - there is no 3 days to settle. The website is plain vanilla - no frills. GRC

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AJMcG

Jan 15, 2014 at 19:38

I'll add to omerta's questions:

HL's charges are levied each year Can someone advise me as to at what point the fee is levied? If it is levied on a specific date and I happen to buy an investment trust one day before that date and sell it one day after will I be charged a full 0.45% of the value?

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novicetrader

Jan 15, 2014 at 19:41

Is this not a case of the law of unintended circumstances; the legislators wanted to make things 'transparent,' so they banned trail commission. when I invested in a fund, I knew what the AMC was, if I didn't like, I wouldn't have invested; it mattered not to me how much the fund manager gave HL. Now we have a system of charges as complex as the tax system; that's struck a real blow for transparency!

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TJL

Jan 15, 2014 at 19:42

'Another of our important jobs is to represent you in getting the best deal' (HL Best Value Promise).

Why don't they just say 'Another of our important jobs is to maximise profits for the benefit of the company and our shareholders, and we'll do this by charging our customers as much as we think we can get away with, subject to market forces and the need to retain market share.'

I would respect that.

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Bob M

Jan 15, 2014 at 19:57

If you frequently use Stop Loss orders beware of hidden charges when comparing platforms. Typically they are £2 per order which lasts for 90 days, sometimes 30 days, adding £8 or more per fund/share per year. You do however get the fee back if the order is activated through a reduction in the trading charge. HL to their credit do not seem to be charging. Selftrade don't. Any suggestions on other platforms which don't would be welcome

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Franco

Jan 15, 2014 at 20:05

The headline of this article is a lie designed to please a powerful Citywire customer.

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xxxxx

Jan 15, 2014 at 20:19

HL are trumpeting the big savings people will make on holding funds but neglecting to mention the very substantial increase in charges they are making to hold anything else. The anything else being completely unrelated to the RDR. Like Eik Davidson above I hold Vanguard funds and will see the costs increase from £48 a year to £250 - one helluva an increase. Not only that but I hold shares and investment trusts in a SIPP and ISA so I am going to get well and truly stuffed by increased charges. It seems HL are trying to incentivise clients not to hold a mixture of assets but to concentrate on either funds or investments trusts or shares/ corporate bonds to contain costs. So I guess my response will be to sell the Vanguard funds and investment trusts and focus solely on individual shares and corporate bonds.

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xxxxx

Jan 15, 2014 at 20:24

Btw I emailed HL to ask whether my understanding is correct of how their charges would affect me. To paraphrase their response was they are not going to communicate with clients on how their new charges will affect them individually. It is up to the client to determine that. I found that a very odd response but it led me to conclude that in the best tradition of the financial sector their plethora of charges is designed to confuse me into not questioning too closely what they are really up to.

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Pat Stubbs

Jan 15, 2014 at 21:08

I hold ITs in both my SIPP and Share Account so will be hit by an additional charge of £245 pa

I intend to contact HL and ask exactly how much my charges are currently and what they will be post the March changes.

A bespoke illustration would have been helpful.

HL's letter today headlines 'lower fund charges and a new charging tariff' which is a clever bit of marketing that suggests we will be saving money when in fact we will be paying more. A shame really because to date I have been happy with the service. Now I feel quite badly treated.

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Linda Green

Jan 15, 2014 at 21:10

I have been trying to make sense of the horrendously complex documents I have received in the post. I may be wrong, but it looks to me as if charges have massively gone up, not down for small investors like me, and that we will be subsidising millionaires. Reinvestment charges will be 10%, not 1%, because as soon as there is £10 in the account it will be reinvested with a minimum of £1 charge. However as soon as it is invested one of the charges for having the funds there at all will come up, meaning that funds may have to be sold to pay it, this incurring a charge as well.

I've got an ISA that contains funds, investment trusts and one corporate bond. Currently there is one charge, capped at £45 per annum. Now there will be separate charges for each of the categories, i.e. three separate sets of charges, each capped at £45 - so I could have a 300% increase in the charges.

In addition I have a Sipp, £30K which only has Unit trusts/Oeics, producing an income of not much over £1000, currently no charge, now it will apparently incur an annual charge of .45% of the value of the funds, eating massively into the potential income of the fund. How does any of this represent a low charging structure - unless I have misunderstood the whole thing.

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mike dimarco

Jan 15, 2014 at 22:00

The charges will seem sensible once the hysteria has subsided. The only tricksy bit seems to be separating shares and ITs to give a new max charge of £45 + £45

The drip charges are unappealing and I will still just collect the divis in the income acct.

I also have an Interactive Investor account for UK shares only, it is good value at £80pa (set against trades) and drips at 1%- no min charge

HL will likely continue their rise because of their fantastic telephne service and the extreme variety of what you can invest in- if it is not on their website you can ask and they will likely add it for you ( obscure US etfs) Also if it is not on their websit you prob don't need it

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Nicholas Oglethorpe

Jan 15, 2014 at 22:08

AND in their shares section HL give only skeleton details of Investment Trusts and withhold the full inf. given for all other UK shares.

Checked as an example with their Temple Bar IT entry at 1400 today to make sure this is correct.

Adds insult to injury.

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Pat Stubbs

Jan 15, 2014 at 22:11

Mike, if you hold ITs and shares in a SIPP then the charges are currently capped at £200 pa this will double to £200 for shares and an additional £200 for ITs. Quite an increase !

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yogi bear

Jan 15, 2014 at 22:20

HL have always been expensive and the headline is grossly misleading.

My charges may double because of the investment trust charges. I may transfer

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chazza

Jan 15, 2014 at 22:30

HL trebles fees, more like! As I, my wife and son each have ordinary shares, funds and ITs in both our ISAs and our Vantage share accounts, this is going to cost us much more than anything we might save on funds. ITs are traded like shares (generating dealing fees for HL which are already among the highest around) and there can be no possible justification for putting ITs in a special class for the purposes of a custody fee. It seems to me that this shows that these 'reforms' are half-baked at best. Only a fee structure that is neutral as between asset classes is appropriate. If HL do not have a change of heart, they will lose the majority of my business as I gradually liquidate the investments I hold with HL and move my business to a provider with a less complicated and less expensive fee structure.

It seems that HL has taken the decision to be a funds bucket shop that is uninterested in the more sophisticated investor. Their mistake is to fail to realise that investors tend to become more sophisticated as their wealth increases. I conclude that HL's is not a clever business model. The shares are a clear SELL.

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Outoftown

Jan 15, 2014 at 22:37

Until now, I found that Hargreaves Lansdown offered straight-forward services and pricing that allowed sensible DIY management of investments. News of the separate fee calculations for shares, investment trusts and funds have brought this view to an abrupt end.

This fee structure penalises investors who want to diversify their risk, particularly if you want to hold investment trusts as well as funds and shares. There is no difference for trading and nominee purposes between shares in a company that operates as as an investment trust and shares in any other listed company. As other people have pointed out,It is disingenuous of HL to suggest otherwise.

However, it is obviously attractive for HL to differentiate between these types of company in order to increase its revenue. One has to wonder why HL wishes to discourage customers from holding investment trusts rather than funds.

So HL has now joined the many financial services providers that put their own profits way ahead of the interests of its customers. A prudent investor who wants to hold shares as well as funds and who diversifies his shares with holdings in investment trusts as well as other companies will be subject to multiple fees, and this will be multiplied again by the number of types of account - i.e. regular account, ISA, SIPP.

I suspect there will be a lot of movement between providers once other companies start to publish their fee structures - I am waiting with great interest to see what will be on offer elsewhere.

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Happy Investor

Jan 16, 2014 at 00:27

I note that everyone is complaining about charges.

Has anyone considered moving to youinvest.co.uk. This is run very competently by A J Bell and the charges are significantly lower than these 'new' charges of HL

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Ladysaver

Jan 16, 2014 at 01:20

HL's letter was rubbish. I HATE these "we-love-and-value-you-and-are-doing-something-exciting-to-help-you" letters that actually enclose a raft of fat new charges you will definitely not like. The letter put HL on a par with banks, who specialise in this type of disingenuous c--p. The tone will have damaged their reputation, as their customers are not fools. As for the new charges, it's impossible to work out whether you will save or lose, because HL have provided no information whatsoever about what the lower AMCs will be on any funds, or what the new, allegedly larger 'loyalty bonus' will be, and they won't reveal these until after the new charges kick in. I hold shares and funds in an HL ISA. For the shares, the new charges mean no saving at all - I'll pay the same, as the fee is still capped at £45 p.a. and in my case, the value of the shares means 0.45% instead of the current 0.5% makes no difference. But for my funds, I'll have massively increased charges. These will allegedly be offset by larger 'loyalty bonuses'. But several of my funds pay no loyalty bonuses anyway, so I'll be no better off there. And I have no idea (because HL haven't told us) how much more in 'loyalty bonuses' any given fund will pay, or what the new fund charges will be. So we're all in the dark about how much all this will actually cost us - and HL won't reveal it until after the new charges kick in. At that stage, if you discover your charges are much higher, the raft of other changes mean you will pay more to move your funds out. It may be best to get out now, to a provider who actually publishes its charges for each fund. But you'll pay £25 per holding to move, even now. HL bang on about how they let you in for free, but they've never let you out without extracting a rather fat price. They will now even charge to move cash to a new provider if you decide to go to cash and, if you read the small print, they 'reserve the right' to insist you go to cash rather than transferring funds in specie. One thing though - if you do plan to move, look carefully at what funds other providers offer. As other contributors say, HL offer pretty much everything. I moved to them because I couldn't buy some of the funds I wanted on other platforms. I'll certainly be looking at other offers, as there's a sleight of hand in all this that feels very dispiriting.

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gggggg hjhjkl;'

Jan 16, 2014 at 01:43

There seems to be a lot of confusion here.

Some comments above give the impression that people will pay twice for the same share/IT. Surely if one already holds share A and IT B in a SIPP then currently one would pay 0.5% pa split into 12 monthly payments based on the combined value of share A and IT B at the charging date in any given month.

As I read it in future you will still pay monthly payments on share A and IT B combined but at a rate of 0,45% pa similarly split.

It seems to me the problem lies with the Vantage share A/C where to date no management or other charge has been made to date. In the future as I read it if you hold or choose to hold ITs in your share A/C then a charge of 0.45% split into 12 monthly payments based on the value of all ITs held at the charging date will be made.

Strangely it appears HL do not see VCTs as ITs as they appear to exclude them from charges where ever they are held.

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Fund of Funds

Jan 16, 2014 at 02:25

A very complex charging structure with so many hidden charges. I do not think it fair that each of your 3 vantage accounts , SiPP , ISA and Fund & Share should be regarded at separate funds for the £250,000 cut off for the reduction from 0.45% to 0.24% charge. Also they could combine husband and wife accounts as we are placing our savings with HL as a couple. I think I may be looking for a change of provider. I had hoped that they would bring a dealing charge to pay for the reduction in fees to 0.75%. Any useful information you can obtain from HL is free anyway so why should we pay towards it. It should only be provided to paying customers. The 150 Fund list should really be given a new name as it never contains 150 funds. What happens to fund of fund investments where there will be charges for each fund within the portfolio eg HL Income and Growth fund.

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IainE

Jan 16, 2014 at 06:25

Gavin, how can you say HL is 'slashing costs' in your headline. This seems to be totally untrue and I suspect that this 'untruth' will emerge over time as customers try and work out what the new charging structure will cost them. You would do your own customer reader base a great deal of good by outlining the trickery in these changes rather than falling for HL's PR line. If the new cost structure is not easily established by investors then HL have failed in their stated intentions and have dented their 'we are on your side image'.

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Micawber

Jan 16, 2014 at 07:06

Gavin, I agree wilt lain E. The headline is seriously misjudged.

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TJLamb

Jan 16, 2014 at 07:39

I think Citywire have been caught out basically (shows just how clever HL are when it comes to this kind of thing).

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TJLamb

Jan 16, 2014 at 08:19

http://www.telegraph.co.uk/finance/personalfinance/investing/10573645/Why-investors-should-leave-Hargreaves-Lansdown.html

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eyeboy

Jan 16, 2014 at 08:24

I will be monitoring this situation closely. I have a spreadsheet listing and calculating my portfolio costs and will be interested to see how the new charges affect my personal TER. If I'm not happy, I'll liquidate and transfer. Anyone else notice the £25 charge to close an account?

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Ian Lees

Jan 16, 2014 at 08:32

Mark Till of Fidelity has a nerve . . .. with his malicious allegations - given that Fidelity is administered and controlled by Standard Life . . . .see previous comments. Still what can one expect form the Americans . . .too late again . . .I say . . . .seems they are still severely lacking . . . . . ! ? ! Fiddling . . .Fidelity Fiddle ty sticks . . . .

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David 111

Jan 16, 2014 at 08:47

To gggggg hjhjkl;'

I think it is you who are confused.

Consider an ISA account holding £40,000 shares and £40,000 investment trusts. At present this pays £45 a year (£400 capped to £45). In future this will be £90 a year (£180 capped to £45 and £180 capped to £ 45). In other words your charges have just increased by 100%.

The situation is even more dramatic for SIPPs because of the higher cap and for the Vantage Fund and Share Account, which has no charges at present.

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Dennis .

Jan 16, 2014 at 09:55

No doubt HL have put a lot of thought and analysis into creating this model and they have decided where they want to be and have taken a view that they will lose some customers as a result but probably be more profitable as a result. They already know what proportion of clients will be pi**ed off and leave.

It's bit like Brittany Ferries, if you decide to take a sailing that costs more then you will find that you need to spend less on an overnight B&B hotel at the other end. They have already done the calculations

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Dennis .

Jan 16, 2014 at 10:14

Just a thought but no one ever talks about the OCF expenses charges that most funds apply on top of the annual management charge. I wonder if they will creep up to offset any reductions?

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Forestbhoy

Jan 16, 2014 at 10:40

Anyone else notice the introduction of the "recommended" amount of cash that HL would like you to keep in your individual accounts.They say that this amount is tailored to each account.......is this sum the new running (approx) cost we will now have to pay ??

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eyeboy

Jan 16, 2014 at 10:50

Forestboy, I believe that is the implication, yes.

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Jai

Jan 16, 2014 at 10:59

Enough been can be read about their charges & prices on their network Just

only to

What is Wealth 150 funds?

In my experience it is nothing but Hippocratic term used by HL to mislead the customers to promote the list of these funds which are mainly- to deep discounted to Hl , have dual price( ie bid & offer) ,partly discounted initial charges, & other hidden charges at some stage or the other, with poor return funds. Only 15-20 % constitute the good funds which have been recommended by all the other platforms, brokers & fund advisers & published from time to time. They are just to promote the to customers (indirect way to advise the clients). Now my folio have only 10-15% of these the funds of Wealth 150 but my returns of my investment have gone up 7-8 times what it used to have when it consisted majority out of that group.

As far as their research report of funds is published from time to time it is published far behind than it has already published far ahead in Trustnet as HL is based on EFTrustnet

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Dennis .

Jan 16, 2014 at 11:15

This "recommended amount" (£100) appeared on my wife's account a few weeks ago, she has over £120K in shares plus UTs but not on my account which has about £160k with a similar spread of investments. None of these are in SIPPs.

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a mcf

Jan 16, 2014 at 11:34

I spoke to HL about these sums which appeared on mine but not the other linked account

I was told it was a trial that would be helpful but could be ignored and eventually every account would have them. They would not elaborate as to why the were introduced but I assumed that it was so that they could get at money easily and you may not notice the odd couple of quid disappearing.

I have just checked out FD and they appear to have no hidden charges for holding ITs but I will wait and see if that changes

Having brought all the parts under one roof I will be looking to seperate them out again

Next years ISA will not be with HL as I keep a mix of shares /IT and funds in the ISA

As I bank with FD then it is linked to an account - but I just need to seek guidance on if they choose the account or can I

Easy enough to move cash around with FD so slightly cheaper dealing and if costs remain as they are then they look a decent option

Anyone got any observations

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Forestbhoy

Jan 16, 2014 at 11:38

Thanks eyeboy. Looks like its going to cost about 20% more a year. Looking around at other sites, some of the new charges look cheap though. You pays your money,takes your choice I suppose....

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William Phillips

Jan 16, 2014 at 12:17

Hargreaves Lansdown has bombarded me with unsolicited mail shots over the years. The tone of its copy (it's so simple to move... free gifts... here's a nice shortlist of unit trusts, so you needn't think too hard what to buy... Bolton takes China, etc) indicated that this was a mass-marketing business: aimed squarely at the fashion-besotted, ignorant, lazy and gullible saver, not the serious investor.

The RDR has 'outed' such operations-- though what the result has to do with transparency, far less an honest attempt to match the provider's costs to the tariff, only a financial services regulator could say.

As usual, the Law of Unintended Consequences governs this alleged level playing field. Things will be costlier and more complex, not less.

Or is that the real story? A cynic would say they were all too intended; that competition had driven dealing and holding costs in the internet age down too far, under the pressure of competition from across the pond for British players. The RDR's vaunted 'unbundling' is a blind that lets the moneyhandlers of 'Treasure Island' restore their margins with statutory backup.

And all this just when desperate savers are looking for better returns than cash or bonds can give in the age of dropsical fiat money creation. Nice timing, chaps! When will the first ex-regulator join HL as a non-exec director?

HL has waxed fat by favouring mostly uninspiring but heavily flogged unit trusts and OEICs which paid continuing kickbacks, while discriminating against superior investment trusts which did not. The new tariff is the latest example of how it purports to be a no-advice, impartial handler of other people's money while building in mutual-backscratching deals with its cronies in fund management.

Most IT holders do not trade their holdings a lot, and ITs rarely shapeshift as open-endeds too. We who prefer ITs are long-term investors because we know churning and chasing every fad enriches the HLs of this world, not their customers. HL's separate fee for those who have the impertinence to prefer investment trusts is a punishment for our sitting still.

I shall wait until the RDR dust settles and see which firm(s) best cater for my kind of investor.

PS: Editorially, news websites such as Citywire have their own vested interest in egging people on to chop and change their portfolios. Telling people that nothing much has happened and that they should sit tight reads dully.

That as much as any advertising benefit explains the ingratiating coverage of outfits which incite switching and vogue-chasing by their costs structures.

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Pat Stubbs

Jan 16, 2014 at 12:23

I have spoken to HL to confirm my calculations. I will be charged an additional £245 pa (£200 for holding ITs in my SIPP and £45 for holding ITs in my share account). HOWEVER they explained that the savings on my ISA account holding about £124,000 in UTs SHOULD have REDUCED charges of approximately £372 ! This was calculated by an average saving of .3% reduction in charges originating from HL's commission from the Fund providers.

We shall see!

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easy life

Jan 16, 2014 at 13:08

Actually I think HL have been quite astute.

I would guess most of their clients hold a large % of their investments in Unit Trusts/OEiC's.

What HL have stated is that all existing funds will receive the full commission that HL used to receive as a loyalty bonus (often 0.75%). Client will then pay 0.45%, or less, monthly to HL. So net result client will receive a much higher loyalty bonus and will still be in pocket after paying HL's management fee. Result many happy clients.

Yes the changes of how IT's and Shares are charged could increase costs but if you are smart and say hold only IT's in ISA and only shares in SIPP then you can minimise the costs.

Also its still free to hold shares in the Fund and Share Account.

For me, HL's new charges will be cheaper than current for my investment mix, however I will look around once all the platforms charging is clear (including the hidden costs such as trading funds which is charged by some)- I already use Cavendish for funds (0.25% fee)as well to spread the risk.

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cornelius newman

Jan 16, 2014 at 13:33

I can't work out whether my Investment Trusts (6 in number) held in the H L Vantage account will each incur an annual charge of £ 45.

Can anyone clarify that for me ?

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Mickey

Jan 16, 2014 at 13:46

£45 is the total cost not singular for each IT.

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Mystery X

Jan 16, 2014 at 13:49

Having read the comments above, it seems there is unnecessary over excitement about the new charges. The charges on a SIPP will be capped at £200 per annum as is now . and the charges on an ISA will be capped at £45 per annum again as is now. The dealing charges remain the same. All that is changing is the Fund charges and the loyalty bonuses. My portfolio is predominantly shares and some selective funds. So I like to remain calm. I receive paper statements but it is silly and I can easily move to electronic ones.. If you guys see something that I don't please highlight it for me. Thanks

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eyeboy

Jan 16, 2014 at 14:02

Mystery X. My understanding is that the current cap of £45 per annum applies to the whole account. The new cap will be £45 for ITs AND £45 for shares/ETFs. This is in effect doubling the potential costs for people who hold a mix.

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gggggg hjhjkl;'

Jan 16, 2014 at 14:13

David111

I take your point, but for me that is not true!!

E.G SIPP

Current Situation = Share A £10000 and Investment Trust B £10000. Current Management charge 0.5% pa Share A charge £50, Investment Trust B charge £50, Total Charge £100.

New Situation (No management Charge) = Share A £10000 and Investment Trust B £10000. New charge 0.45%pa Share A £45, Investment Trust B charge £45, Total Charge £90.

Average Vantage A/c Holder value £25000.

Comment please!!!

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xxxxx

Jan 16, 2014 at 14:22

That is my understanding eyeboy. Unfortunately I also have two passive trackers as well meaning the cost will increase from £48 per annum to £270pa. Taking jnto account all my investments the charges for me will increase from a total of £93 pa to £360 pa. As I don't hold any funds other than trackers there are no savings to offset the increase in charges. I am pondering what to do. - probably ditching the investment trusts and trackers and investing in ETFs. If I do this my costs will fall to £45 pa. This illustrates how important it is to work out how the new charges affect you.

I also have a SIPP where charges will be increasing as well. Again I will probably change my investments to keep the charges down to £200.

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gggggg hjhjkl;'

Jan 16, 2014 at 14:24

Dennis

As you and others have said this new system indicates to me that HL is and wishes to remain primarily a "Fund Supermarket" which would like to subsidize its Fund owning majority off the backs of any Investment Trust owning investors it can persuade to stay.

It is after all a public company looking to make the most profit it can for its shareholders and who can blame it for that.

The marketing spin merely supports that clear objective!!!

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eyeboy

Jan 16, 2014 at 14:39

I've been shifting more towards ITs and individual shares over the last twelve months, and as a result have moved significant sums of money away from HL as they have always been very expensive for stock market listed instruments. The changes in open ended fund costs and this discussion has made me reevaluate where I should hold my funds. Charles Stanley Direct only charge 0.25% platform fee for non-pension investments. 0.2% may not seem much, but if you have a 6 figure sum invested it makes a difference. I think I'll be moving my taxable account elsewhere and get that account closed before they try to charge me for that. It's a shame as I've always been very pleased with the service HL offer.

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Gerald Watson

Jan 16, 2014 at 14:47

If you trust your own judgement and do some research then Self Trade is the place to be with no AMC just a flat rate charge of £12.50 per deal. If you dont buy or sell for 3 months there is a small flat charge of around £8.50.

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Mystery X

Jan 16, 2014 at 14:59

My understanding is that an ISA account (built over as many years) is ONE account and whatever is in it will have a cap of £45 per annum. The SIPP will have a cap of £200 - whatever is in it. This is what the situation is NOW. No change proposed for this.

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Pat Stubbs

Jan 16, 2014 at 15:11

Mystery X

A SIPP holding shares will have a charge of £200. If you also hold ITs in the same SIPP you will be charged an additional £200

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David 111

Jan 16, 2014 at 15:12

Mystery X - I believe you are wrong, as eyeboy comments above. After all, if there was just one cap per ISA account, why would HL need to introduce the separate charge regime for investment trusts?

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Ian Lees

Jan 16, 2014 at 15:28

Once again it is ALL about Charges - and the faiure to review the BENEFITS provided . . .you get what you pay for ! There is no price on Peace of Mind ! ? ! let the bean counters beware ! ? !

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Mystery X

Jan 16, 2014 at 15:29

I was not bothered about ITs as I don't hold any although I was going to move out of Funds into ITs. I need to check on the extra charges for the IT. Thanks for highlighting it. If the charges on ITs and Funds are going to fall anyway what is the point of charging extra and separately for ITs. HL will not receive any kick backs from either - so what is the point. Am I missing something again !!

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peter hart

Jan 16, 2014 at 16:40

The new charges dont seem too frightening to me. As long as they stay efficient I can live with them.

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Mark R - IFA

Jan 16, 2014 at 16:43

Mystery X - the reason is that HL can bully fund managers into creating cheaper super clean share classes for them so that they can be cheaper on their platform when compared to others as a whole. They cant do this with an IT or a share as there is no ongoing cost for it on its own which is why they hate you holding them.

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Ayayay

Jan 16, 2014 at 17:31

I have an ISA, SIPP and two accounts for the kids with I.Ts. So I'm stung 4 times over for fees on the I.T issue.

I see, that presumably in response to the publicity, HL have prodded their eager suppliers into putting out some propaganda on their behalf .

http://www.fundweb.co.uk/news-and-analysis/investment-trusts/investment-trust-providers-welcome-hargreaves-regular-savings-move/2005365.article

Given HLs muscle they are hardly likely to be critical.

I'm writing to HL to formally ask them to waive the costs of me exiting from I.Ts either by dealing or transferring out. Let's see what they say.

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gggggg hjhjkl;'

Jan 16, 2014 at 17:37

After much study, phone calls and e-mails to HL plus the comments on this Discussion Board I have come to the conclusion that I will save some £25 a year (HLs model say £19 something).

There will continue to be no charges on my HL Share A/C as it contains only shares and VCTs and I will save on my SIPP A/C as this only contains Investment Trust ( an happy accident).

I have signed up for paperless statements etc as the paper versions were not needed anyway ,as I keep my own records, saving the new additional £20 + per year.

My only other concern was the need to keep money available for charges, but as this only applies to my SIPP A/C and dividends build up over time anyway, this will only need watching when I invest which only happens three or four times a year.

All in all a reasonable conclusion for me, although I could have done without the exercise necessary to understand the information contained in the 48 page booklet HL sent.

Best of luck to everyone else battling with this so called "beneficial charging structure change".

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Bryan Jefferson

Jan 16, 2014 at 17:46

AJMcG - very sensible idea. HL wanted to be last to announce their new range of charges but I suspect they have been forced to come clean (perhaps not the best terminology if you hold ITs in one of their Vantage accounts) a little earlier than they wanted to. This leaves the door open to other providers to tempt IT holders to move to them.

If there is a better offer over the next few weeks, I will close my Vantage Fund & Share account by selling and re-buying at the next dip with another investment house.

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douglas gordon

Jan 16, 2014 at 17:47

I have used HL for many years and, whilst I at times get annoyed with some aspects, such as inability to buy & hold certain investments in my accounts, I am mainly very satisfied with the service I receive. I am fortunate in comparison with some in that I only hold two accounts – an ISA and a Fund & Share Account – consequently I’ll only attract charges individually capped at £45 per year.

Like many of you my holdings include Funds, Company Shares & Investment Trusts (as well as ETFs and VCTs). At present my charges are limited to £45 on my ISA plus platform fees for certain funds in both accounts, such as a favourite of mine CF Lindsell Train UK Equity Income (each fund charged at £12 or £24 per year). Under the new charges I could be hit with three times £45.

Like you I am annoyed about the way they are going to treat Investment Trusts and consider it to be unjustified – we buy shares just like in any other companies – but I’m not really considering jumping ship. If I move all of my company shares into the Fund & Share Account (no charges) and all of my ITs into my ISA then my charges will continue to be capped at £45 per year (for the ITs in my ISA) and I won’t have to pay the platform charges which are being abolished for funds. I know that this will mean costs in moving some investments between accounts but that’s a cost that I may be willing to pay – and, hey hoh, maybe I’ll save on my funds (in addition to the abolished platform fees)!

I must say, however, that I really feel for those of you with SIPPs – you’re being hit pretty hard. A couple holding ITs in ISAs, F&S A/Cs & SIPPs really need to look around for better.

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Mystery X

Jan 16, 2014 at 17:53

T o gggggggg

Please revisit your calculations as I discovered that Funds will have an additional charge of 0.45% aside from the platform charge of 0.45% capped at £45. In an ISA holdng £50,000 of Funds (units) there will be a ISA platform charge of £45 PLUS 0.45% of the value of the Funds ie £225. In addition there is separate charge for Invest trusts. Ridiculous - in my opinion. I think HL will lose a lot of clients who deal in Funds.

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xxxxx

Jan 16, 2014 at 18:40

Douglas Gordon

I have some bad news for you. The platform charge of £2 a month on the lindsell train fund will be abolished. It will be replaced with an HL charge of 0.45% up to £250000. No cap applies. Your charges for holding this fund are going to increase considerably.

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Pat Stubbs

Jan 16, 2014 at 21:18

My understanding is that an ISA account already carries a .45% charge in addition to the Fund management fees of say 1.5% on average. This will be split from March when the Fund management fee will be reduced to say an average of .75% and the balance of the fee will go to HL as their commission. HL will keep .45% of the total fee and refund the balance eg .3% to the client.

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AJMcG

Jan 16, 2014 at 23:47

The many and varied interpretations placed by clients on HL's literature and PR statements concerning their new charging structure just goes to show how badly they fared in getting their message across to their clients and commentators - or could it be that it was deliberate?

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gggggg hjhjkl;'

Jan 17, 2014 at 00:50

Mystery X

Thanks for your comments but I am happy that my conclusions are right.

If by platform charge you mean Annual management charge (on my SIPP currently 0.5%) then this will be abolished from 1 March 2014. Checked with HLs very competent staff by telephone.

If it were to be the case that this unnecessarily complex charging structure threw me an unforeseen googly, then the back up plan would be move my SIPP before the 2 July 2014 which is when the cost of transfer to another provider goes from £75 + VAT to £25 per line of stock. I would be happy to continue my Vantage Share A/C as the rules here are absolutely clear for me I.E no charges apply now or under the new conditions.

I have set all this out in e-mails to HL and will keep their replies on file.

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gggggg hjhjkl;'

Jan 17, 2014 at 01:18

Mystery X

I have just received a reply from HL to my e-mails confirming all that I said in my last two comments.

On the question of Investment Trusts and the new charges this is what they had to say :-

"I am sorry that you feel the new charging structure is unfair; we have worked hard to ensure that the new charges mean that the financial costs of running the Vantage service is spread fairly across investors. Regulatory changes charging clients directly in order to cover the costs of running the platform. For those clients who largely hold investment trusts this means an increase in charges without a corresponding reduction in annual management charges or increase from loyalty bonuses which makes them harder to accept but we are committed to providing an excellent service at a sustainable price and do not believe the same service could be delivered for less."

In the end I suppose you pays your money and makes your choice!!!

For me HL will continue as my SIPP provider and secondary share trading A/C, subject to the back up I previously mentioned. A £25 a year cost saving and top quality level of service warrant that.

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Anonymous 2 needed this 'off the record'

Jan 17, 2014 at 05:20

For what its worth, fellow bloggers, here is the text of my correspondence with HL today:

=====================

"Up until now, I have been very happy with the HL service all-round: on-line and by personal contact.

.

However, I have just studied your new charge regime and am unhappy with your treatment of ITs and Shares. I am also unhappy that you charge separately for each Vantage account rather than collating the total sum invested with you.to determine the stepped charges.

My immediate reaction (unless you can convince me otherwise) is that:

1. My Fund and share account (which contains a good number of OECS) will be cashed, with all funds withdrawn and the account closed. The cash will be invested elsewhere at no annual fee and actually cheaper dealing commission plus the freedom to invest equally in ITs and shares. This will save me an annual fee on these investments and some dealing costs.

2. My ISA and SIPP will have the ITs changed to funds as you obviously want to bully investors into.doing

3. No more funds will be added to my ISA - I will be investing in ITs elsewhere. This includes the 2014 full allowance and a cash ISA with significant funds which would have been transferred to you in April

4. I will be seriously considering moving my SIPP in July when I have fully assessed your new Draw-down charges..

I see you need 3.8 billion more investments to make up for the decrease in your revenue through the new charges. Well you will be able to add just a little more to that:

1. One less Vantage account

2. Lost new ISA investments of full annual allowance each year and a significant cash transfer-in.

Only a drop in the ocean for you I know, but I am sure I won't be the only one of your customers to be so disenchanted and this will probably eventually also be reflected in your FTSE share price.. You are now set on a course just to become a funds bucket-shop rather than the excellent investment platform hitherto...........

Yours disappointedly;"

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douglas gordon

Jan 17, 2014 at 06:45

xxxxx

You state "I have some bad news for you. The platform charge of £2 a month on the lindsell train fund will be abolished. It will be replaced with an HL charge of 0.45% up to £250000. No cap applies. Your charges for holding this fund are going to increase considerably".

Well, that depends on how much I invest in the fund, doesn't it? A modest holding of £5000 will attract a charge of £22.50 instead of £24.00.

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douglas gordon

Jan 17, 2014 at 07:04

I really think a lot of people are making knee-jerk reactions to the changes. Don't panic! Sit back and calmly look at your situation. Consider your options. Problems exist to be solved. By making changes you may well end up making savings.

The new charges won't come into effect until March. By that time you'll be able to see what your options may be. The new unbundled fund charges will be available, as will the fees being charged by HL's competitors (who've all been sitting on the sidelines, waiting .... > that may be to our advantage, as well as theirs - we'll see.)

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eyeboy

Jan 17, 2014 at 07:28

I spent half of yesterday calculating the difference on my annual TER based on current charges and new charges and it looks as if I will be broadly no better or worse off than I am now. I'll save a little on some funds (active) and lose a little on others (passive). All the ITs and individual shares I have are held with another broker anyway. I currently have some income units that have dividends automatically reinvested, but if I switch them to accumulation units, it'll move me roughly yo break even. What all this has done though it make me look at other fund platforms and the charges they make. I'll have to wait and see how things look when HL finally reveal the detail of their new fund charges.

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Ian Lees

Jan 17, 2014 at 10:00

@Anonomous 2 . . . I think your decision to leave your product provider is great news. This will leave the product provider to look after the remaining good clients - better. The service of producing one administration system - where all investments are held usually appeals to the many - who wish to have their investments in one place - and the massive time savings - and effort required and the information provided - is charged for in their services. For those who do not wish to pay charges or fees for work - they can adopt the DIY version . . .collecting their information from various places - and the difference will be the actual returns you obtain. Many people overlook the massive advantage of having a company like Hargreaves Lansdowne - conducting administration - on your behalf - for your benefit - and allowing you to make your own investment decisions. However, if you do not like iit you can always go elsewhere .

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Gavin Lumsden (Citywire)

Jan 17, 2014 at 13:15

Thanks everybody for your comments, they are very helpful. Just so you know, this morning I've published a story on the big price increase for investment trust investors.

http://www.citywire.co.uk/money/hargreaves-hits-investment-trusts-with-higher-fees/a728716?ref=citywire-money-latest-news-list

I've also updated this article to make the references to the investment trust problem more prominent and to make it clearer that what is broadly good news about the cut in charges only applies to unit trusts and Oeics, not investment trusts.

As you know all too well it's a really complex situation so I am trying my best!

Thanks again.

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TJLamb

Jan 17, 2014 at 14:14

Thank you Gavin.

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Jayanti Gandhi

Jan 18, 2014 at 10:57

If communication eith HL & clients is through online, E mail ( i.e NOT by Post or telephone),surely there should not be any charge for like of corporate actions because permission from client can be received by HL through send message or special electronic form created suggesting client to tick one of the options and send to HL. This reply form automatically be loaded into HL system.

Electronic format form can also be created for transfer of stocks between HL account( Link accounts) to avoid transfer cost.

I my opinion HL will do or aware about e communication & forms but wil charge to make profit with little or no cost

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Jayanti Gandhi

Jan 18, 2014 at 11:21

Stepped up account fees: HL booklet clearly says there is NO account fees for fund and share vantage account. However there is a fund charge of .45% of fund value in this account. So charge is for investment categories with in the fund and share account NOT the total value of investments with in this account.

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jon smith

Jan 18, 2014 at 11:59

it must be easily possible for hl to determine where each client stands in relation to their holdings with hl and inform them whether they are a winner or a loser under the new arrangements.they obviously used client accounts to accumulate data so why not say?. i expect they may be saving face by not doing so.ill ask them about mine and ,depending on the answer, stay or move!!!

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Rightcharlie1

Jan 18, 2014 at 12:10

Well guys, it just shows how great the fees previously generated where. At least now it is transparent. It is time to vote with your feet, move away, there are far better deals to be had and SHORT HL shares if you can!!!

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Mark C Digby

Jan 18, 2014 at 16:20

My wife and I both have all categories of shares/funds/etfs/ITs with this company, and, as 'Fund of Funds' said above, my wife and I are BOTH using HL for this spectrum.

Fortunately we have another STOCKBROKER where we have kept a substantial portfolio for years before moving to HL, they treat us well and we will go back to them for our ISAs and all IT/share investments after this tax year, and may well move some holdings across to the other company in time, it will be helpful to know just how the new tariff works out.

It is obvious that HL are no longer STOCKBROKERS but FUNDBROKERS. We have been loyal and highly satisfied fans for many years but it appears they do not want clients who invest across all sectors of investment. Really sad to have to leave them, they HAVE been so good all round, super staff!

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david ogilvy

Jan 18, 2014 at 17:09

last months investment times from hl with article from from peter hargreaves reads: SIMPLIFY YOUR LIFE. well peter your right ,been nice knowing you!

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mo khan

Jan 18, 2014 at 21:16

Cynical and Grovelling behaviour is what, I have come to expect from the Finance industry over the, for the past dozen of years, I have been indepedently, looking after my own investments with pluses and minuses and choices I make into investments directly. so losses and gains have true shared value.

If you use middle men to speculate, prepare to pay them and suffer the consequeces for decisions, often the middle are no better at it, They are in it for themselves to expolte your position, it's your money lookafter it yourself, or pay some one to do it...Expect No free lunches....if you can't afford it... it Get Out..!

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Ian Holmes

Jan 19, 2014 at 04:50

Maybe one of our more erudite and analytically astute contributors will put me right on this, but say (for the sake of simplicity of calculation) an investor has 100,000 (invest & hold) in a fund and share account with HL .

The tariffs at http://www.hl.co.uk/lowcharges seem to indicate that -

If this is invested only in Wealth 150, the charges would be as follows:

Holding an account - No charge

Buy/Sell - No charge

Annual charge - 100,000 x 0.45% = 450.00

Annual Fund Manager's Chargee -100,000 x 0.65% = 650.00

Loyalty bonus refund - 100,000 x 0.75% = 750.00CR

TOTAL ANNUAL FEES = 350.00.

If the total sum is invested only in 5 Investment Trusts equally the charge would be as follows:

All account set-up etc as for funds only = No charge

Annual charge - 20,000 x 0.45% x 5 (Capped at 45.00/ IT) = 45.00 x 5 = 225.00

TOTAL ANNUAL FEES = 250.00

In fact it would take a fund and shares account of 8 ITs to exceed the annual charges for holding just funds.(8x45 = 360 Annual Fee). Additional dealing charges and stamp duty apply of course when first setting up the ITs, but these are a one-off and no different from now. Also if some of these 8 trusts are sub-10,000, the 360.00 is reduced accordingly.So 4 @ 5,000 and 4 @ 20,000 for example would be 4 x 22.50 + 4 x 45.00 = 270.00;

If investing in funds only and outside the Wealth 150, then the fees would certainly exceed the 8 IT holdings.regardless of each IT holding size

Have I missed something here?

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Ian Holmes

Jan 19, 2014 at 07:36

Maybe I HAVE missed something in my previous post........I am not clear on whether the 45.00 cap applies to the total holdings in ITs or whether it is applied to each individual holding.

If it is on the total of all holdings then 100,00 invested all in ITs would be 45.00 per annum as opposed to 360.00 for a 100,000 funds-only investment. This suddenly makes an account heavily balanced towards ITs look rather attractive.

Can anyone clarify for me how the 45.00 will be applied please?

.

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douglas gordon

Jan 19, 2014 at 08:57

The £45 cap is per ACCOUNT - for example 1 charge for an ISA and 1 for a fund & share account (regardless of how many ITs you hold in the account); but remember you are also paying the IT company management fees which will generally be greater than the new fund fees payable to the fund manager.

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Dennis .

Jan 19, 2014 at 09:15

A lot of comments on this forum stem from the fact that people either haven't read the documentation from HL or don't understand them so I wouldn't bother asking here. You might not get the correct answer.

Perhaps when HL publish the new IT charges they will be able to put on their website the costs that you will incur with our individual portfolios.

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chazza

Jan 19, 2014 at 10:00

Dennis.,

If my experience is any guide, I wouldn't bother asking HL either! . You might not get the correct answer. Unless, of course, you already know the correct answer and can winkle some of it out of HL by getting them to agree with you. It seems the new charges are so complex and the reasons for some of them so specious that their own staff don't understand them… If you want a real treat, listed to the HL spokesman interviewed on BBC radio 4 Moneybox yesterday He seems to think that if you can speak fast enough nobody will question the truth of what you say. I think he must have an MBA....

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Ian Holmes

Jan 19, 2014 at 10:26

Thanks Douglas. That does help clarify things somewhat and is much more reasonable..... and yes, the AMC will be largely returned to investors through the loyalty bonus as far as I can see. So it would seem that the total annual charge for a fund-only account would be around 0.45%, uncapped, on the total amount invested. Would that be your assessment also? If so, using this "rule of thumb", it should then be possible to roughly compare costs with IT AMCs.

Just to note though Dennis - HL has published its charges - there's a large banner ("Important changes to the Vantage Service") on the home page. I think your point about understanding what has been read is very valid though! There is a calculator, but it only shows what you would save over 10 years which is all very well, but how that is calculated would be much more useful and help with one's understanding.especially when we as investors need to make sure there are sufficient funds each month to pay these charges. If not, I understand there will be a penalty suffered through HL force-selling units to meet the charge.. Admittedly, it won't be possible to calculate accurately until individual fund management charges are published. (Interactive Investor has its version published already in PDF format.)

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peter hart

Jan 19, 2014 at 10:29

I think the guide published by HL does explain the new charges and how they are to be levied but they could have made it easier to understand. It we all sell our funds and replace them with ITs what happens then I wonder. HL should not have differentiated between ITs and shares, bonds etc. I shall stay with them though.

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Ian Lees

Jan 19, 2014 at 11:09

It is most disappointing that so many refuse to accept the great service they get from Hargreaves Lansdowne - and over so many decades. those like " Right Charlie 1 ", - who refuse to provide their name . . . . and seem to suspect " they are an influencer", - and for whom if they were any good they would be providing a better service than Hargreaves Lansdowne. The reality is those who slag off this great service - are (a) unable to compete ( b ) provide any reasonable service ( c) any similar service ( which is why they feel they can persuade HL Clients away. The reality is they can not ! ). For those bean counters and claims of charges - HL is entitled to charge their fees - which they have done for decades - for the service chosen by HL Clients - which they are willing to pay for just such a service. Those invested in with profits funds and insurance company policies - have seen ( or not as the case would be ) their charges being used to cross subsidise Directors bonuses and pension contributions. HL can confirm how many clients they have. . . .how much money under management . . . .and demonstrate how they are a huge player . .Independent of insurance companies . . .independent of investment houses . . .and independent of unit trust managers . . . .This is what is required under RDR and the FCA - rather than the tardy tied agents and restricted advisers - who do not provide independent advice - but are agents for their employer ( or Principal in the case of Tenet Connect ) . . . .rather than in the service of their clients. Until IFA's and Tied Agents realise this . . .the client will continue to be abused - and the sale of Products from insurers - will remain tardy - and untrustworthy. No wonder so many people do not like Insurance or Endowments or Pensions . . .the result of fraudulent trading by insurance company Directors - who are not committed to providing ANY service, or reasonable service standards - and make horrendous charges for their sloppy insurance products.

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Ian Lees

Jan 19, 2014 at 11:14

@Ian Holmes . . .I would recommend you speak to Hargreaves Lansdowne direct - rather than listen ( or read ) the spurious and less attractive gossip in these pages based on their information gleaned form wherever. I suggest you speak to HL direct and get the correct answers to your questions - rather than " opinions ".

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Ian Lees

Jan 19, 2014 at 11:36

@Mo Khan . . .you appear to have had the services of a product flogger. An independent financial adviser will take all the relevant information you provide - ask searching questions if the information provided does not stack up - and make a decision to take you on as a client or not. A good adviser will define your objectives - assess your attitude to risk - and provide a solution to your requirements. This may not necessarily require a product - and the adviser will require payment ( because you are asking for Professional advice - and he or she is able to provide this ). Some clients want advice for free ( which is available in the Daily Mail and other financial papers ) however, the advice on offer should reflect your financial requirements now and throughout retirement - to ensure you do not run out of money. Such investments may be in other products and services - outside the remit of the FCA. However, many clients needs can be met by using the correct asset class - in the knowledge they can get out - if required unlike a direct investment in a property - and any relevant taxes income tax capital gains tax and inheritance tax - not to mention refurbishment costs repairs and loss of rental income . . . . Good advice is value for money. Those who do not need advice - are totally responsible for their actions of purchase . . .and I have Dumped clients who have purchased inappropriate products . . .and who wish to make a spurious claim against insurance companies ( e.g pensions Endowments ) for being wrongly sold - referred to as missselling . . . .yet they have benefitted . . .from the sale - but are willing to make an Insurance Claim direct or through the FOS - for short term gain.

I refer to this as Insurance Fruad . . . . . .

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Ian Holmes

Jan 19, 2014 at 12:14

Ian Lees. Thanks for the advice. I have already contacted HL and am still awaiting a reply. The usual response is prompt. Not this time.

Can I ask you a question (based on your comments on this thread, and not intended to be in any way disparaging or insulting, so please don't take offence) Do you work for HL?

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gggggg hjhjkl;'

Jan 19, 2014 at 12:39

Ian Holmes

I asked HL a series of searching questions on their new charges within a series of 4 E-Mails. They replied in two days to my total satisfaction and All in one E-Mail reply. When I have asked other organisations similar muliple e-mail questions ( including my main broker) they have always needed to deal with each one individually. For me this demonstrates unusual joined up thinking, which I appreciate.

I would add however that before getting such a reply it did require me to spend considerable time clarifying in my own mind whay I needed to know. As others have said this was not easy. It required a number of hours study of their 48 page brochure containing some 73 or is 79 changes!!! I do not envy anyone this task.

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alan thorburn

Jan 19, 2014 at 12:51

£8million between 520,000 customers is under £16 a year saving for each customer. Hardly a "slashing of costs" !

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Fellow philanthropist

Jan 19, 2014 at 12:55

Chazza, I listened to that money box interview on R4 as well! Hilarious but actually painful as well. It was like some kind of comedy sketch about politicians who never answer a question directly! Every awkward question was met with a statement about service or...umm er...we are starting a price war...a price war....yeah that's what we are doing! Loved it when Paul Lewis pointed to their 70% profit margin and said "so you are starting a price war but not actually entering it" Lol. Great company but so nice to watch them squirm when finally asked to explain what they are charging people!....they are obviously not used to this....or any bad press!

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Sinic

Jan 19, 2014 at 15:07

A complete pricing review is inevitably going to result in winners and losers. Obviously no one wishes to pay more, but they have the option to move as I understand it, before June without financial penalty. The current negative hysteria seems to be based on individual aspects of the pricing, rather than considering the package as a whole.

I have done a comparison with my wife's ISA on both old and new pricing based on HL's pamphlet. Broadly speaking she has £37k in investment trusts, £25k in normal shares and £169k in a raft of funds. By my calculations under the old pricing the annual cost (excl actual fund management costs) would be around £1280 pa and under the new £846 pa. Now I may have misunderstood something but I don't think so. I will be completing the calculations for my own larger and more complex portfolio before seeking HL's confirmation that my understanding and calculations are correct. At this mid way stage I am cautiously optimistic that I will remain content to stay with HL.

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eyeboy

Jan 19, 2014 at 15:26

My calculations suggest I'll be no better or worse off than I am now. The main place I'll get hit is on the two Vanguard Index trackers in my SIPP and on some of my OEIC/UTs. I've always favoured income units for higher yielders and had the income reinvested - I like to see what the income being generated is - but the new dividend reinvestment charges will mean this costs me more. I know I can switch to accumulation units but I liked having the choice.

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Dennis .

Jan 19, 2014 at 16:12

@ eyeboy Presumably you could just collect the income and reinvest it yourself manually every month as I don't think they will charge for effectively putting new money into OEIC/UTs.

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eyeboy

Jan 19, 2014 at 16:19

That's true, but the minimum lump sum investment is £250 per fund.

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Ian Lees

Jan 20, 2014 at 10:35

Interesting to see claims by " Paul Lewis " of 70 % profit . . .I wonder who challenged him on his Profits from sales of . . . .Did Paul Lewis pay CGT ?

Gine the profits made by Banks such as Barclays HSBC LloydsTSB and RBS . . . .which are significantly higher . . .and people are forced to use them . . . .Paul Lewis failed to bring this to their attention - preferring to chastise a great Financial Institution where people are willing to pay for " SERVICE ". I am one of those people - when Scottish Widows refused to pay out my full cash equivalent ( see Mike DRoss and Trustees of SWRBS ) I placed the remnants of my Financl Salry Pension scheme with Hargreaves Lansdowne. The reason for this is the service - the opportunities - the availability of funds ( Unit Trusts Investment Trusts Equities etc., ) . One reason for this is I have Total Control - unlike Scottish Widows and every other insurance company - where the Trustees have Total control - and who use it and abuse it for their own BENEFIT . . . ( Scottish Widows in Particular - who are owned by their latest owner LloydsTSB - who are trying to offload this insolvent insurance company ). The choice of product provider must include Trust. Trust they will act honestly openly and transparently - and will act in the clients best interests. Scottish Widows were unable and are unable to operate in any open or Honest or in any Trustworthy manner . . . . .For me HL has carried out a great job looking after my pension fund - after the deception and theft of my pension cash equivalent by the Trustees of Scottish Widows - and it is up to me and HL to have the objective to reclaim my full pension benefits . . . . . . I was aiming for as an employee of Scottish Widows - the insolvent insurance company . . . .who have used up the Scottish Widows clients bonuses from with profits - bailed out by insolvent LloydsTSB - who appear unable to sell this insolvent insurer ( and Clerical Medical - Hill Samuel St Andrews Life etc., I may not get the full pension I signed up for under SW employee contract - because as SW Trustees ( Sandy Hogg ) confirms "SW Trustees can do anything they want with my pension fund ". Would anyone trust such a company . . .or any other insurance company - especially Auto Enrolment - the forced company pension by Steve Webb ? I prefer to pay a little extra for the peace of mind and security of a proper professional company like Hargreaves Lansdowne - who will look after my BEST INTERESTS.

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Ian Lees

Jan 20, 2014 at 11:54

@Ian Holmes . . .I do not work for Hargreaves Lansdowne - nor Do I operate on any self employed basis for Hargreaves Lansdowne. Why do you ask ? My opinions are based on fact and service. The poor and tardy treatment fro Scottish Widows and their business owner LloydsTSB - the deceitful strategies employed by the, . . . . Trustees of Scottish Widows Retirement Benefits who ought to know better, but are prepared to commit Insurance Fraud - against pension beneficiaries . . .and I want to alert everyone to their deceit maladministration and failures to redress the situation ( No proper complaints procedures - and as a result employees at Scottish Wiodws alert LloydsTSB bank advises - when our clients are surrendering policies - and LloydsTSB bank advisers contact our clients in an attempt to intercept ). The trust I place in Hargreaves Lansdowne - their service standards their knowledge and their willingness to help clients - has been a revealing and their providing peace of mind - engaging and delivering TRUST. I am most disappointed that the few - who will not or cannot offer such a service . . . should wish to destroy the service that HL delivers - well, and are paid accordingly. No one to date has asked the cost of such a provision EG FCA Fees - FSCS Fees - Professional Indemnity Cover FEES - administrators and employee Wages - or Training Costs - which would allow HL to become as poor as Scottish Widows or other insurance companies or many IFA's who claim they can offer - the same service at reduced costs . . .I call these the Equitable Life consultants . . .misleading - misappropriating - insolvent and now bankrupt . . . . .

For the record I worked for Scottish Widows and found their deceit and dishonesty against IFA's and clients most distressing ( and reported). I have dealt with Standard Life who refuse to disclose their charges - and when pressed - they terminate their agency to new business ( and when I transferred them to Fidelity - Standard Life refused to accept the new business on behalf of Fidelity - as they run and appear to own Fidelity ). These are some of the dishonest activities by insurance companies - and their Directors - who abuse clients abuse agents . . . .who find the business and their refusal to provide any training or service - is disappointing. Scottish Widows Standard Life and Fidelity business - NOW goes elsewhere . . .and I alert others to their on going deceit and destruction of clients investments - because the FCA refuse to act !

Others like Best Invest etc., can provide good service - my experience is built out of personal services - and there is the high level of Financial Planning Advice where paid for if required at Hargreaves Lansdowne. It is disappointing that some IFA's view HL as " Competitiion ", but cannot provide such a service - especially on such a large scale. We must remember Paul Lewis sold out to large Financial Institutions - and is more institutionlised and has been purchased to provide to be a " Nic Cutcitti " ( of Money Marketing fame before it went awry ) to destroy confidence - destroy IFA businesses - to drive the elderly and the vulnerable back into the banks and insurance companies . . . rather than provide Independent Financial Advice. Paul is a Rate Tart - from soggey bottom finance . . . . .courtesy of Financial Institutions who refuse to provide service - or realistic interest rates see current accounts and cash ISA's - and their profits are well in excess of those quoted by Paul Lewis . . . . so why is he not focussing on them if he wishes to be revered as a servant of the PUBLIC ?

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AJMcG

Jan 20, 2014 at 12:22

Ian Lees, I would be interested to know what Paul Lewis sold.

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Ian Lees

Jan 20, 2014 at 12:37

@AJMcG. . . his company !

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R Ellis

Jan 20, 2014 at 15:33

I spent some hours over the week-end working out what I thought would be the impact of the changes on my accounts. My wife and I have an ISA and a SIPP each and I look after ISAs in my (3) kids' names. I documented the impacts in a mail to HL and sent that off asking them to confirm what I thought I would end up paying. The initial response back did not answer my query so I have sent it back and asked for answers.

Overall I believe that I will be better off - I only hold OIECS/ UTs.

But, for the first time I can see what I am paying HL. It looks like I will have an annual bill of nearly £15,000. This will split 1/3 to HL and 2/3 to the fund managers. I have also asked the question as to why I am paying circa £400 a month when I don't use their research.

Like some others I've been reasonably happy with HL. I've no particular desire to jump ship but I will want to ensure that I'm paying over the top. I suspect that it wont be possible to make any comparison until all providers have published their info.

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Mr Chuffy

Jan 20, 2014 at 18:20

Charges have NOT been slashed. ITs are now being charged for. SIPP and ISA charges have rocketed. There is no cap on charges so larger investors are hit hard compared with competitors like Alliance Trust. The tariff is complicated and will catch a lot of people out. AND all these charges are paid out of TAXED income, rather than deducted as an expense from the fund. All these things mean that the new scheme is more expensive for many investors.

It may be slightly off topic but to me RDR is a disaster. It has not made charges clearer, and it has not made them lower.

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TJL

Jan 20, 2014 at 19:12

Mr Lees,

I say this with this the best possible motives, so please do not take offence.

If you are solely responsible for managing your own affairs, especially if they are substantial and/or you are essentially dependant upon them, please take advice or at least get a 2nd opinion.

Regards

TJL

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mo khan

Jan 20, 2014 at 19:46

Dear TJL,

Very well said, you are indeed a wise person.

Kind regards

mo khan

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Ian Lees

Jan 20, 2014 at 20:33

@TJL and Mr or Mrs Mokan . . .wise words indeed ? except for your assumption that I have not already taken advice. As a very successful Independent Financial Adviser - before becoming a Financial Planner - I took the advice of a wise and worldly colleague - who recommended that I employ my own Financial Adviser - to relieve the onerous work and monitoring - and to provide Independent Financial Advice ( for which I pay for as a fee ). The benefit to me being a third party - with different views and a regular discussion every year ( required as part of their Terms of Business ) - for which I have benefitted greatly. Other advice received form Hargreaves Lansdowne - has been very well received and beneficial - especially in my requirement to build a pension pot out of the remnants - as I refer to them as the ashes of corruption and theft by the Trustees of Scottish Widows Funds. My opinion as a Tied Agent Broker Consultant and IFA at BMA Services Ltd etc., is great advisers are difficult to come by, mainly found in the small businesses market place - which has been decimated and destroyed by the stupidity of those in power previously at the FIMBRA, PIA, FSA FCA. Where is Sir Howard Davies Now ? Like you . . . I would recommend everyone to take advice. Unfortunately the regulators - lacking in common sense and many other parts . . .have destroyed Independent Financial Advice - and the old women in insurance companies - who refuse to change - continue to buy IFA practices - but cannot run them in any profitable manner. After decades of purchasing mortgage companies - insurance companies refuse to notice their repeated failures. Insurance companies have failed to notice their fund management going down the toilet. They still try to buy their way out of insolvency - and persistent turmoil - rather than realise the great work of those small IFA practices - who for many were swindled ( Stakeholder pensions - and their clients losing vast amounts of money as a result - of insurance companies - destruction of clients savings and investments and pension portfolios e.g Equitable Life, Scottish Widows. Put simply the TRUST has been removed by the Directors of Insurance Companies. Short term personal gains replaced the long term savings contracts and insurance company Directors prefer to trade " contract Terms and their Breaches of Contracts - to proving decent savings returns. I want an adviser who will be with me long term - looking after my savings and investments - now and through retirement. I can get this form HL and my other product providers - but I cannot get this from any insurance company. I have tried. No service no commitment - little value. At TJL and Mo Khnan you have great opportunities to build a business - Trust has never been in such demand - and Insurance companies cannot be trusted with your wealth or the wealth of your clients . . . . and the FCA - well Mr Wheatley appears to have ridden out already - leaving clients in the lurch - devoid of any Independent adviser . . .and the masses . . . . .have just been abandoned.

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David 111

Jan 20, 2014 at 21:41

Ian Lees - what you say may or may not make sense. Unfortunately I have no idea, as your 'stream of consciousness' style of writing makes it impossible for me to get beyond the first few words.

Haven't you heard of paragraphs?

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Ian Holmes

Jan 21, 2014 at 01:43

Ian Lees.... It does appear that you have had a bad experience saving with insurance companies. I too was caught out by Equitable but managed to escape with only a 10% exit fee before the company finally hit the dust.

I did manage to get the gist of your post (It was quite a challenge!) and it seems that you are making good progress towards repairing your pension pot. At least giving vent to your spleen like that should make you feel a little better :-)

One thing did occur to me though while I was reading your post; do you have any investments in insurance companies?

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Ian Lees

Jan 21, 2014 at 09:17

@Ian Holmes . . .I had a very bad experience as an employee at Scottish Widows - where Scottish Widows forged my signature on my annual appraisal, because I refused to sign it - and when I complained the Scottish Widows management changed it to be " Ian Lees PP ". I resigned form Scottish Widows because of the Fraud the management imposed - misspelling of high charged inappropriate products through Scottish Widows agents - who took the wrap. I resigned because of previous fraud conducted by SW Employees including one Mortgage Adviser who claimed commissions ( Harrow Finance ) - received it - then the policies ceased ( but the new business figures were recorded - and used - and were not reclaimed by SW Directors or Senior Management from the SW Tied Agent / Broker Consultant ) - to the financial detriment of every client, the with profits bonuses - yet Director bonuses remained uninterrupted - and the fraud and the corruption covered up .. . and the broker consultant rewarded by the Directors - and given employment in senior management. Incompetent Directors - abysmal management - lack of any controls - lack of management by Mike D Ross CEO - who walked away with a £ 4 Million pension pot. When I complained SW did nothing. I resigned and requested my cash equivalent - SW Trustees worked with Aegon - to steal my cash equivalent - and to this date have refused to provide my full cash equivalent. PIA FSA and FCA are fully aware - permit such activity - condone such activity and allow these company Directors to continue to deceive clients deceive pension beneficiaries . WHO in their right mind would take a pension out with such tardy, insolvent insurance companies ?

Am I upset yes ! and I wish to alert others to their position when insurance companies have no proper processes in place for complaints. A regulator who does not care ! and a Chartered Insurance Industry members who " claim to act under the CII Charter . Honesty - Integrity - Professionalism is available form many IFA's it is the insurance companies who are out of control - severely lacking . . .and under the protection of the FCA. The masses and the clients remain largely unprotected - their savings - their investments and their pension funds are at RISK . . .and there is no protection for them. For further information write to John Bromhall Scottish Widows 69 Morrison Street Edinburgh( a part of the " Birmingham six " for those in the know !.

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Ian Lees

Jan 21, 2014 at 09:24

@David the third ( 111 ) I support the willingness of HL and the service they provide - their openness and their honesty - unlike the failures of insurance companies who are deceitful, dishonest, insolvent - and have no proper processes in place for complaints - or resolution of issues of FRAUD and other tardy treatments against clients. I have used less words for your benefit and to help you understand . . .so I hope this makes sense.

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AJMcG

Jan 21, 2014 at 09:40

Isn't it time to close this post as it has lost all relevance to the original subject (HL's new charging structure) and, instead, seems to have become a platform for Ian Lees to vent his anger and frustration (justified or otherwise) at certain companies?

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eyeboy

Jan 21, 2014 at 09:56

AJMcG; I agree. It's lost all relevance now. This debate was nothing to do with (dis)honesty of insurance companies and everything to do with HL's new pricing plan.

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Dennis .

Jan 21, 2014 at 09:57

Having looked through the HL documentation I haven't seen a reference to the fact that at the moment, they don't pay loyalty bonuses on holdings of less than £1K.

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Ian Holmes

Jan 21, 2014 at 10:37

Dennis:

If you look at any fund factsheet. For example:

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/r/river-and-mercantile-uk-equity-smaller-cos-income

You will see a superscript "2" alongside the Loyalty Bonus details. If you then page down to the footnotes you will see that it says there "Annual saving (loyalty bonus) only available on holdings worth over £1,000."

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Dennis .

Jan 21, 2014 at 10:47

Ian, my point is that will the same loyalty bonus minimum be true when the new charging regime comes in?

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Ian Holmes

Jan 21, 2014 at 10:56

Dennis.

I know that we shouldn't assume (it makes an ass of u and me!) but I am assuming that it is only the amount of the bonus which is being increased. It won't affect any of my holdings, but if it will yours, then the only sure way to find out is ask HL.

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Jamie J Davis

Jan 21, 2014 at 22:45

Methinks Ian Lees does not know the difference between Paul Lewis and Martin Lewis.

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