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Hargreaves pines for Thatcher after savings 'fiasco'

Peter Hargreaves, co-founder of the Hargreaves Lansdown investment 'supermarket', urges the government to follow the policies of former Conservative leader Margaret Thatcher.

 
Hargreaves pines for Thatcher after savings 'fiasco'

Peter Hargreaves, co-founder of Hargreaves Lansdown, the country’s biggest investment ‘supermarket’ has laid into the government over the ‘fiasco’ of its Funding for Lending scheme, which has boosted the mortgage market but punished savers.

A side effect of the government’s provision of cheap finance is that banks are less reliant on deposits to fund their mortgage lending and so they have been able to cut their savings rates and boost margins.

The subsequent fall in interest on Hargreaves Lansdown’s corporate cash account was the only blemish in a strong set of half-year results, which boasted a 30% leap in pre-tax profits to £93.7 million on revenues 24% higher at £140.3 million.

Shares in the Bristol-based firm (HRGV.L) jumped nearly 7% or 50p to 784p. They have soared 75% in the past year.

Hargreaves Lansdown continues to reap the benefit as people turn to its website to start investing and get a better return on their money. Twenty one thousand new customers joined its Vantage investment platform in the second half of the year, taking the total to 446,000. Total assets under administration advanced 30% last year to £30.4 billion. Shareholders, including Hargreaves, get a 24% rise in the interim dividend, up to 6.3p from 5.1p per share.

Business may never have been so good but Hargreaves (pictured)  is furious about the coalition government’s record.

‘It’s the government that took over the regulation of the banks. It’s the government that’s at fault,’ he said in reference to the Funding for Lending scheme.

Hargreaves angrily dismissed the Bank of England’s quantitative easing policy of creating vast amounts of new money to buy UK government bonds in order to lower long-term interest rates as ‘government interference’.

‘The poor saver, who has been trying to make ends meet, gets hit,’ said Hargreaves, who urged the government to balance the books by slashing spending and follow the example of Margaret Thatcher in the 1980s.

‘When Thatcher so called “laid the economy to waste”, the UK rose from the ashes to become one of the strongest economies in the world,’ said Hargreaves.

Describing himself a natural Conservative, Hargreaves said he would not vote for any MP in Parliament. Neither he nor Hargreaves Lansdown made political donations, he added.

Referring to the row over corporate tax dodging, Hargreaves cited a 2011 ActionAid survey showing that Hargreaves Lansdown was one of just two FTSE 100 companies that did not use offshore subsidiaries to cut their UK tax bill. ‘Why do we never hear about that?’ he asked.

As well as paying its taxes, Hargreaves Lansdown is boosting the economy by employing more people. Staff numbers rose by 80 to 717 last year. Many of the new recruits are in IT reflecting the big computer system changes it expects to make if the Financial Services Authority proceeds with plans to stop investment platforms from taking a share of the annual charges of the funds it sells.

92 comments so far. Why not have your say?

The ssinnic

Feb 06, 2013 at 09:31

P H is absolutely right. No wonder the banks make vast profits,,,what other business takes your cash an gives us, the depositors next to nothing in return, and at the same time cheats by artificially fiddling the rates , thieving...yes thieving from honest depositors and businesses. And to cap it all, these people, not contenet with just having an overpaid job for knowing how to cheat then expect to be paid a "bonus!"

You couldn't make it up!

I see Vince Cable is "under the impression" about banking matters this morning...he used the phrase three times in 2 minutes.

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chris leet

Feb 06, 2013 at 10:00

Peter Hargreaves is spot on as usual.I have funds with HL and am also

a share holder and am feeling pretty smug about that right now.

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Alan Tonks

Feb 06, 2013 at 10:31

Well, someone is talking absolute sense for a change, how refreshing. This unfortunately will not move this Government to do anything remotely sensible.

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trieze

Feb 06, 2013 at 10:53

Listening to him this morning talking about RBS I am "under the impression" that vince cable comes from a planet far far away.

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NormaDear

Feb 06, 2013 at 15:27

Nice to see that H and L are doing so well!

But, they will do when they rip off pensioners.

Over £1400 of that £93.7m profit was taken from my pension pot in fee's.

When I arranged my annuity from HL, a slippery rep told me I would pay no charges, but I later discovered they had taken 3% of my hard earned pension.

If PH wants to improve the lot of we poor savers and pensioners, he should look to the failings of his own staff and company.

I bet Peter Hargreaves won't be surviving for the rest of his life on £50 a week annuity on top of his OAP.

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Brian Stafford Garthwaite

Feb 06, 2013 at 15:56

PH is absolutely right. I am a very happy customer of HL and am quite happy to pay their fees. The cost of employing some 700 staff and other overheads must be quite substantial. One cannot expect people to work for nothing.

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chris leet

Feb 06, 2013 at 15:57

I paid a similar amount in fees to HL to set up my pension but I think fees are payable no matter who sets it up.Some no doubt will charge far more.

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LouisV-W4

Feb 06, 2013 at 17:14

Took a punt on HL shares last year, when everyone was saying they would be hit hard by RDR. As I also have my SIPP and a few other odds and sods with HL, the bigger the dividend paid, the bigger the dent in my fees! Thanks for doing a good job, and keep it up.

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Chris Price

Feb 06, 2013 at 17:20

The fee you pay to set up an annuity depends on whether you receive advice or do it yourself. As IFAs we always provide advice and our standard charge is 1%.

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James O'Connell

Feb 06, 2013 at 18:03

Sure.

If you want 15% inflation, then Thatcherism is your best bet.

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Bob saxton

Feb 06, 2013 at 18:11

Please don't put pictures of Thatcher on your site. They bring back nasty memories.

Bob the Electrician

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chris leet

Feb 06, 2013 at 18:21

While I may not have made as much as Peter Hargreves today,his shares are up by millions.My HL shares are up £2013 in two days and I'm overjoyed.

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James O'Connell

Feb 06, 2013 at 18:23

"Where there is disharmony, I will bring peace". Thatcher

"Cuts are necessary but the vulnerable will be protected". Cameron

Birds of a feather perhaps?

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NormaDear

Feb 06, 2013 at 18:31

Hi Brian

I'm glad your a happy customer, (employee?) of HL.

If you think £1400 is a fair price to pay for a 'NO ADVICE' referal that took five minutes, two emails and a letter on a £56k simple annuity, you must be very very rich.

That £1400 took me 168 hrs of work as a catering assistant, I'm just one of those ladies that makes your bacon butties. Some consider us the backbone of the nation. But others prey on us and make vast obscene profits.

The 3% (never stated at the time even though I specifically asked) was daylight robbery. Yes it is reasonable to expect a fee, but it cost me less to buy and sell a house than it did to get an annuity from Hargreaves Lansdown.

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Alan Tonks

Feb 06, 2013 at 18:49

James O’Connell

James how could you say Maggie Thatcher had anything in common with Cameron.

You may not like Maggie but she was a Lion as a Prime Minister, Cameron by comparison a Toad.

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Fiery Jack

Feb 06, 2013 at 19:05

I'm with Normadear.

Norma is entitled to a fair and undiluted annuity, one for which she has contributed a good percentage of her disposable income for many years. Why, when it comes to her wanting an equitable pension payout, this is not an option because she's obliged to fork out so much in dues to those who work within the Finance industry?

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Brian Stafford Garthwaite

Feb 06, 2013 at 21:20

Norma - I am not an employee of HL. and am certainly not rich! I think you wil find these charges apply througfhout the the IFA business. Furthermore you should also consider the anuual management charges you will have paid over the years whilst building up your pension fund,probably a great deal more than £1400. I found the HL service excellent they undertook quite alot of work in my case as I had a recent medical history - cancer and they certainly explored all available options.

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ANTHONY ISHERWOOD

Feb 06, 2013 at 21:41

Peter Hargreaves is a straight talking Lancashire Lad. He will not appeal to everyone but there is a lot of common sense in what he says. As a shareholder and customer I am more than happy to pay the fees, you may not get advice BUT you do get information and the tools to make your own decisions and a platform to monitor your investments.

A solid well managed company that pays it's UK taxes.

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NormaDear

Feb 06, 2013 at 22:19

And Maggie was a straight talking Grantham Gal.

Hargreaves and Lansdown did to me, what she did to the miners...

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James O'Connell

Feb 06, 2013 at 23:58

Yes, Mrs. T was, and indeed is, a kind, gentle and modest lady. She loved the working classes, especially miners. Her dulcet tones were unspoiled by any hint of elocution lessons. She always respected her opponents and, in particular, she always spoke well of Labour and Trade Union leaders. She hated dictators and would have no truck with them, especially General Pinochet.

I think that I need to lie down before I swoon in admiration

As for Mr. Cameron, I believe him to be equally admirable in his honest working class way. His degree in the History of Art only underlines his superb academic brain.

I am also a member of the Flat Earth Society.

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Brian Stafford Garthwaite

Feb 07, 2013 at 10:38

I recall being told by something who moved in political circles, a Labour

supporter, that whilst Lady Thacher demanded very high standards from all concerned and could at times drive her staff almost to distraction, She was actually a very kind and considerate woman. Those with personal problems, even Labour members of Parliament found her to be very sympathetic and if there was anyway way she could help, she would.

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Gavin Lumsden (Citywire)

Feb 07, 2013 at 14:24

Tom McPhail, head of pensions research at Hargreaves Lansdown, has asked me to pass on the following response. 'In response to the comment made by NormaDear, I’d like to make clear that in accordance with the financial regulator’s requirements, Hargreaves Lansdown always discloses any fees charges or commission charged to our clients in advance of a transaction being undertaken.'

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Bob saxton

Feb 07, 2013 at 14:58

I suspect that James O'connel is not quite genuine in his kind remarks for Mrs T. If I was looking for kindness , gentleness modesty and may I add femininity I would go to Mr T ( no I don't mean Dennis)

Bob the electrician

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David West

Feb 07, 2013 at 15:22

I'm also a satisfied customer of HL. However, due to the FSA and RDR it is more than likely that trail commissiion to platforms will be abolished.

With HL, customers currently receive a part of this back as a loyalty bonus. This obviously will stop and presumably HL will have to start charging a yearly admin fee to everyone invested via their platform, for each investment they hold. This is another example of the government trying to fix something that presently works very well and in so doing putting us further out of pocket. There are some that say that we currently pay the fees anyway in the annual management charges levied by the individual funds. However, I bet these will not be reduced if trail commission is phased out.

Regarding Maggie, she's just great in my opinion. This country was in a bad state (I'm old enough to remember unfortunately). We had a three day week under Edward Heath who the unions defeated. After that we had the "winter of discontent" under a Labour administration. The dead could not be buryied and most unions were on strike.

I am not against unions but they became too powerful and held this country to ransom. Maggie stood up to them and stopped their abuse of power. I am thankful that she was in charge and regret deeply that she was knifed in the back by the Conservative Party. I have never voted for them since.

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NormaDear

Feb 07, 2013 at 16:22

Gavin - thank you for your intervention and taking the time to contact Tom McPhail.

Put yourself in my place, as a catering assistant with no financial background, there follows the verbatim conversation taken from a tape;-

Question " What sort of costs are involved?"

HL, "for?"

Q "for doing this".

HL, "for this annuity"

Q, "Yes".

HL, "there actually aren't any costs to you directly"

HL, "the annuity providers have pre-determined commissions they pay us for our services, not you".

Q, "OK,

See if you can discover the bit where I am informed that a £1424 fee will be taken from me

Perhaps I should have guessed, perhaps I am a little nieve.

PERHAPS HARGREAVES AND LANSDOWN SHOULD HAVE FLIPPING TOLD ME DIRECTLY AT THAT TIME

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chris leet

Feb 07, 2013 at 18:02

I am in full agreement with David West regarding Margaret Thatcher,not only did she sort out Scargill and his ilk but she was a patriot.This is not something you could say of the PMs who followed her and the ones who preceeded her,Callaghan and Heath,well I'll moderate my own comments,(expletives deleted)

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Bob saxton

Feb 07, 2013 at 22:50

Thacher was not a patriot, she made war on the working people of this country,

Despite the media campaign( and we know about the non British media barons don't we) against Arthur Scargill, I still feel he was the true patriot and he stood alongside the working people of this country when they were under attack. Her legacy is whole communities with three generations who have never been employed. A divided nation with an alianated police force

I have always been greatfull to the men who worked, became ill and died to provide me with heat and light. I longed for the day when men no longer had to toil in the bowels of the earth and all the pits closed but was it necessary to throw whole communities on the scrap heap,could it not have been done with more humanity? Was it not possible to develop new industries and create employment in the mining areas.

Thacher quoting st Francis's prayer filled me with disgust.

Bob the Electrician

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chris leet

Feb 08, 2013 at 09:34

If Margaret Thatcher made war on the British people,then why did they vote for her on three seperate occasians?

It can't always be because of what they read in the papers.

Its hard to see how the miners benefitted from having Scargill as their leader but easy to see how he benefitted.

If three generations of the same family are unemployed.......Well I'll not go there,I don't want this to turn into a rant.

You've got your view Bob,I've got mine.

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James O'Connell

Feb 08, 2013 at 12:44

Chris Leet.

Chris you are utterly wrong and Bob is absolutely right.

It's not a matter of your view and his view.

What happened in the mining communities is a matter of fact.

It is also a fact that until the Falklands War she was the most unpopular Prime Minister since Ramsey Macdonald.

In those days the British people, egged on by the British media, loved a good 'patriotic' war. Iraq changed all that, much to Mr. Blair's surprise.

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chris leet

Feb 08, 2013 at 15:18

Well James,where do I start.I agree with you about Margaret Thatchers popularity.She was not unpopular with myself because in the early eightys she made it possible for me to buy the council house we lived in.We still live in the same house,the mortgage is paid off and I owe that to her.

There is a big difference between the Falklands War and Iraq,Afganistan,Mali etc.I don't think we have much of a case for the latter but we certainly did for the Falklands and the action taken was right.If you let tin pot dictators push you around then where will it end.

Spain are quite keen on Gibralter,a case could be made I suppose,the French can have the Channel Islands.The Norwegians can send some Vikings over to reclaim the Shetlands and Orkneys and the Welsh will get a sympathetic hearing when they suggest pushing the border back about fifteen miles.I realise the above are not dictatorships but the die is cast.

The trouble with liberal views and policies is that you get a kicking from the left and the right and because your not seen to have any bite then you have to live with it.

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chris leet

Feb 08, 2013 at 17:03

I only came on this blog to comment on HL with whom I have investments.

Their charges are fair,my investments, in a recession,are looking good.If it all goes tits up then I'll be back with a good winge.

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chris leet

Feb 08, 2013 at 17:23

Sorry it should be whinge.

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Bob saxton

Feb 08, 2013 at 22:06

Why did the British people, not me, vote for Thatcher three times. Because of the poor choice of alternatives.I did not vote for them either.

No one is fit for purpose to be an MP in the Westminster system as it is today.

Anyone who thinks that they can run education, the police, defence, agriculture,the health service, transport,and te economy is dangerously deluded. They avoid getting to grips with these complex issues by debating foxhunting badger culls and same sex marrage ad nauseum. 150 years ago almost everyone knew about agriculture,

transport and the rest but this was possible because things were so much more simple then. The parliamentary system needs to change. Move Parliament into a new building fit for purpose with all the IT backup of

a modern big corporate headquarters including an electronic voting system without tramping through the lobbies and eyes to the left nose to the left. MPs should be concerned with the business of representing their constituents. The real decision making should be make by teams of people with real experience in the area they are working on.

Real democracy can be achieved by referenda on the conclusions of these knowledgable planners.

Bob the Elextrician

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chris leet

Feb 08, 2013 at 22:42

Give all MP's a huge pay rise.As Del boy used to say,"you know it makes sense"

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hooligan

Feb 10, 2013 at 08:46

i am as big a supporter of thatcher to remove the corruption and evil that was trade unions as i am of labour in their wish to remove the corruption and evil that was the old boy network. thatcher did one thing that no government had done before and that is do more to balance the books than any other government since the war.

sorry bob, if you find that you should plunge an economy into debt to pay for your petty political rants but making people better off shoudl be the aim of any government.

right now our problem is that rip-ff britain has migrated into banking and investment as it is one of the few areas where those in the industry can hide their corruption and evil.

P H has built a business on offering better value for money than 99% of the fat cat industry. yes the 1% can be improved once we root out the corruption and evil in the 99%, but your attitude supports the perpetuation of corruption and evil. i find your remarks offensive, and don't wish you luck in corrupting others.

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Bob saxton

Feb 10, 2013 at 12:02

Hooligan, The best government we have had since the war was the Attlee

government with Stafford Cripps. they came to power with a massive debt to the Americans because of the war. Their contributions to British life are still benefitting us all today despite the efforts of successive governments to undo them. And they did reduce the Dollar Gap

Bob the Electrician

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chris leet

Feb 10, 2013 at 12:51

Yes they won by a landslide,then the electorate soon realised what Socialism and massive Nationalistion was going to cost them.

We then had years of Tory government with Supermac telling us we had "never had it so good",before we got Wislon (sic) and his watered down pinko version of socialism.

We then get to Sailor Heath alias the Grocer.I'm not going there,I may choke on my Sunday lunch.

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Fund of Funds

Feb 10, 2013 at 14:21

HL have done well with their business model making a fortune out of trailing comission. They are now trying to retain their position with refunding a very small amout to clients. Go to compareplatforms.com and see how much trailing fees cost you by using their calculator. See what others are charging. Many of the new platforms are refunding all trailing annual fees which saves clients a huge amount of money. HL will be losing business this year unless it changes its strategy and makes clear charges for their fees instead of trailing annual renewal fees where most people cannot work out the total actual cost on their portfolio.

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James O'Connell

Feb 10, 2013 at 14:37

Bob

Well said again!

There are some loonies in this blog who can't even make coherent comments.It's probably best to ignore them. Their ignorance is beyond belief.

However, facts are facts, and here is one. When Labour took office in 1997 they inherited from the previous Government of Thatcher/Major a debt of £350 billion equivalent to 42% of GDP. By 2002 Labour had reduced this to 30% of GDP, not by austerity measures, but by growth.

The Atlee government of 1945 was the greatest Government this country has ever seen.

Look at their achievements:

Jobs found for 3 million returning sevicemen.

NHS founded from scratch.

Unemployment down to 250,000.

Inflation (what inflation?)

Nationalisation of the mines, railways, steel, gas and electricity. All modernised and decent working conditions provided.

Productivity at an all time high.

Compare this with what happened after the 1918 war.

If you look at history objectively, you will learn all you need to know about the politics of this country.

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chris leet

Feb 10, 2013 at 15:22

Well James,from where I'm standing you and Bob look to be in the loony camp.

Just one question,if the Atlee government was so wonderfull then why did their massive majority disapear.I'd have thought the British public would have been eternally gratefull to them and voted Labour forever.

Please don't say it's all the fault of the Daily Mail.

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chris leet

Feb 10, 2013 at 15:25

Apologies to Mr Attlee for spelling his name wrongly.

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James O'Connell

Feb 10, 2013 at 15:42

Chris Leet

If Thatcher/Major were so wonderful, why did their majority disappear and Labour gain three consecutive landslides?

This is a circular argument. Governments come and go. The current one is going!

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chris leet

Feb 10, 2013 at 17:29

Well James we almost agree there,Major was a disaster.The only time he went up a little in my estimation was when it was revealed that he was banging Edwina Currie.

I did vote for "call me Dave",I have to confess but its unlikely I'll repeat that error.

I have never voted Lab or Lib

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Rightcharlie1

Feb 11, 2013 at 04:49

I'm with NormaDear, Tom McPhail may well be speaking at verbitim from his employment directive sheet but as we all know that sheet goes in the bin when these FAs go live!!!

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NormaDear

Feb 11, 2013 at 09:00

Thanks Rightcharlie1, Like Maggie, Hargreaves and Lansdown started off with the best of intentions, but got sidetracked. Their systems and customer contact was initially first rate, but corporate greed took over.

Its easy for success to 'go to the head' and the original concepts get lost.

Maggie won the battle against the miners, but she lost the war against the working classes. By imposing hated taxes, she turned around the (once) stigma of claiming benefits into a badge of honour. Now we have a 'them and us' mindset amongst the people.

The Tories are good at running the Country, Labour are good at looking after the population, so we will always be changing from one to the other. Money seems to dictate everything..

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John Osborne

Feb 11, 2013 at 09:55

NormaDear,

You have my sympathies as well.

I wonder if Peter Hargreaves himself is aware of exactly what happened?

It sounds as if he has been let down by his employees.

I suggest you write directly to him, or Gavin passes directly to him just what seems to have happened this time in his (normally excellent) Company.

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NormaDear

Feb 11, 2013 at 12:21

Thank you John, I doubt Mr Hargreaves would have the time and getting a letter into the ivory tower be unlikely to succeed.

I am sure that all that would come back is another of the management speak of we 'complied with the rules'.

My main reason for coming to this blog with my tale of woe, is to warn others of what lies behind annuity comparison websites.

Anyway, I am taking my experience with HL to the FSA and they always side with the underdog don't they?

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John Osborne

Feb 11, 2013 at 13:18

NormaDear,

Good luck with that.

I still think you should at least try to write directly to Hargreaves himself to make him aware of what has gone on in your case.

I would be very disappointed if the letter is screened out as you suggest and do hope you will be surprised with the result.

The success of his Company has been through being fair to customers.

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Bob saxton

Feb 11, 2013 at 13:43

NormaDear, It is no use going to the FSA as they do not deal with individuals. The correct way forward is to put your complaint to the Financial Ombudsman. The complaint is given a number and registered. If it is not dealt with in a certain time( I think it is six weeks or three months ) the organisation that the complaint is against is fined automatically. What you can do,if you feel that there is widespread malpractice, you can send copies of all your relevant paper work to the FSA ,"For Information.

I would start by writing a nice letter to Peter Hargreaves. Always try Mr? Mrs Nice first and then if you do not get anywhere give them Mr Nasty

Bob the electrician

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NormaDear

Feb 11, 2013 at 15:54

Sorry, I meant to put FOS. You are quite right, maybe I will see if that ivory tower has a letter box.

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James P

Feb 13, 2013 at 09:29

I'm late to this party so no one will read this but pray; how much interest does HL put into your accounts you bllind people? None, that's right. Go figure. HL are now after cash savers, "Come and join us"...

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John Osborne

Feb 13, 2013 at 11:43

None of these platforms give much if any any interest on cash. Blame successive governments for financial repression - ie penalising savers to prop up over-inflated house prices and their votes. This latest stupid government scheme for lending billions to the banks has just made the situation worse. Why should the banks give anyone a good interest rate when they can get free printed money from the government?

HL do provide access to quite good research and provide a user friendly web site platform, and one cannot expect this for nothing, however, NormaDear's case above assuming correct leaves a very bitter taste in the mouth indeed. I certainly am considering moving my account, it is a matter of trust and overcharging poor pensioners in this manner does not deserve loyalty.

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LouisV-W4

Feb 13, 2013 at 14:10

I've no doubt 'normadear' has a grievance, but there does appear to be a lack of evidence that HL actually charged her 3% to set up an annuity. It would appear to be a non-standard percentage, and knowing HL's systems compliance accuracy, I cannot see how such a charge could be put through the system by a 'rogue salesman' without being flagged up as non-standard.

We should bring this thread to a close by 'normadear' substantiating her claim, or HL should pipe up and say they have investigated it (it won't take more than a few minutes to look at their records) and admit or deny the claim.

How a supplier deals with customer issues is the true hallmark of good customer service. If HL is proven to have erred, then it is unlikely to cost them that much in the scheme of things to put things right for 'normadear'.

I have been a happy HL client, but my situation means I am contemplating moving away from HL. Their silence is not helping their case.

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chris leet

Feb 13, 2013 at 14:53

I have cash in a HL ISA fund which is due to pay 2% at the end of 2 years.There are people on this blog saying HL pay them nothing,maybe I'm the only one in the country getting this deal.

Normadears phone calls to HL should have been recorded so should be straight forward to resolve.

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Fund of Funds

Feb 13, 2013 at 15:06

I have also been a happy client of HL but contemplating moving as they have become very uncompetitive on charges. In all recent surveys of fund charges they seem to be expensive even with their recent attempt to refund a small percentage of their large trailing annual renewal fees. They should be bringing out clean funds like Alliance without any of these annual renewal charges which add up to a huge amount taken from your funds over a period. I see on the main comparison site where you can compare charges, compareplatforms.com , it simply says that HL will not supply them with data. No doubt because there charges will be seen as high.

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NormaDear

Feb 13, 2013 at 15:47

Evidence you say.

My SIPP pension 'pot' was £56,500 of which I took 25%, (as per the rules). The remaining £42,375 was put into an annuity. Hargreaves and Lansdowns unmentioned fee or cut or commission was £1424.73, which actually works out to 3.36%. I have written several letters to HL and they have maintained I was not deceived or misled.

Recalling throughout that the representative, Tom, had specifically been asked what the charges were and him replying there were none, I asked for a copy of the tape of our conversation. After a bit of prodding this was finally supplied, hence the verbatum quote.

I suspect that having initiated this blog Peter Hargreaves may well be aware of its content. There are a couple of entries above which may even be a non-de-plume.

I am sorry to bore you all with my demise, but hopefully it will save someone the price of a cruise, a modest car, a state of the art TV and VCR, for five minutes work, (even solicitors don't charge this much!!)

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David West

Feb 13, 2013 at 16:44

Artemis Fund Managers say on their website that if you buy direct from them they will no longer charge the initial charge.

HL are still stating on their platform that if you buy Artemis funds through them you are saving the initial charge.However, there is no initial charge to save it would appear.

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chris leet

Feb 13, 2013 at 17:13

Hi Normadear,I get what you're saying,it all seems a bit odd.Why that guy at HL said there was no fee is very strange.

My pension pot transfered to the provider was £112,374 and HLs charges were £2,528,which I agreed to.This was a couple of years ago.

Because I have several health issues I got an impaired life annuity and I got the best pension available to me.

Whether I could have got this deal without using HL,well thinking about it maybe I could but it's to late now.

Anyway good luck Normadear.

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LouisV-W4

Feb 13, 2013 at 17:21

I am increasingly wondering why I am investing in funds with HL or anyone else. The funds hold shares, and if you have a spread of funds, you are likely to hold the same shares multiple times, which are being bought and sold multiple times, at different times, increasing the PTR, and my overall costs.

I switched some funds yesterday (which is 'free' in my HL SIPP), but the market is now closed, and while HL assures me the switches were executed today, they won't know the value of the 'buys' until maybe midday tomorrow but it could be up to 4 days. So, this feels like a large chunk of my cash will have been sitting in someone's bank account for at least 2 days, earning me nothing.

This may be normal for the Industry, but when we have realtime pricing, it can't be beyond the wit of the Industry to be able to price a fund in less than 2 days!

I fully expect to find the buy prices I used yesterday will be higher when the trades go through. Lose/Lose for me!

Maybe I'm just being naive, and should expect to be ripped off at every turn!

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chris leet

Feb 13, 2013 at 17:35

Which funds did you switch into Louis?

Do you know something I don't?

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hooligan

Feb 13, 2013 at 18:05

i have just transferred £200,000 into a HL vantage SIPP where I will be self-directing my own investments in shares of 5 large cap UK companies. The HL charge for this is aroud £12 for each of the 5 purchases I will make, plus custoday that is capped at £200 per annum.

The charge for the purchase of a HL flexible drawdown is £295 + VAT (free for income drawdown).

If I bought units from the industry, I would need to dodge £10,000 in entry costs and up to 2% p.a. fees (£4,000 p.a.) for the next (hopefuly) 25 years.

I prefer to make my own mistakes and save £10,000 up front plus £100,000 in fees.

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James P

Feb 13, 2013 at 18:09

LouisV-W4

Unit based funds can take a while for the manager to issue new units and get the whole deal processed. Directly buying shares is, or should be, the same day. I specialise in Investment Trusts which are collective investments of shares and have many advantages over mutual funds, and to answer another comment earlier by someone else; if you diversify enough you should not be holding too much in the same u/l share. Although there maybe some repetition, this does not add to the cost. Well, not in my world!

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Fund of Funds

Feb 14, 2013 at 02:55

David West

The initial charges 3-5% on funds are refunded by most of the fund platforms. Interesting to see that Artemis are also doing it when you deal directly with them. The main issue with charges however is the trailing or annual renewal charges which you do not see and are taken out of the fund. These can be up to about 2.5% and generally split between the platform and the fund company.So companies like HL will get back half of this fee paid to them each year. HL refund a very small amout of this back to the customer but other fund platforms eg Alliance are refunding it all back to the customer. It may not seem a large % but it makes a huge difference to the outcome of your savings over say 10 years. Other fund platforms have started offering CLEAN funds from most of the fund companies with no charges.

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Fund of Funds

Feb 14, 2013 at 02:55

David West

The initial charges 3-5% on funds are refunded by most of the fund platforms. Interesting to see that Artemis are also doing it when you deal directly with them. The main issue with charges however is the trailing or annual renewal charges which you do not see and are taken out of the fund. These can be up to about 2.5% and generally split between the platform and the fund company.So companies like HL will get back half of this fee paid to them each year. HL refund a very small amout of this back to the customer but other fund platforms eg Alliance are refunding it all back to the customer. It may not seem a large % but it makes a huge difference to the outcome of your savings over say 10 years. Other fund platforms have started offering CLEAN funds from most of the fund companies with no charges.

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David West

Feb 14, 2013 at 13:59

@ Fund of Funds

When you say that "trailing or annual renewal charges which you do not see and are taken out of the fund" - are these not part of the annual management charges which are clearly stated by each fund? Therefore, you may not see them as a separate amount but you do in so far as you see the total annual management charge and TER.

Where platforms such as Alliance refund the whole trail commission back to their clients, I think I am correct in saying, that they charge an annual management fee per each fund held with them. Please correct me if I'm wrong about this.

HL make no secret that they keep a part of the trail commission and say that they do this in order to finance and run their platform. I see nothing wrong with this. I am a very satisfied long standing client of HL and have no argument with them on trail commissions. However, to reiterate my original point, I do think it misleading to say that their clients save the initial charge on Artemis funds when Artemis are no longer charging this if customers buy direct from them.

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Fund of Funds

Feb 14, 2013 at 14:37

David West

Hi David

You may be interested in the following link to the Daily Mail 'This is Money@ website where they are comparing charges on an Artemis fund

http://www.thisismoney.co.uk/money/investing/article-2274059/How-DIY-investor-build-stock-market-fortune.html?ito=newsletter

The overall annual charges for the purchase of an Artemis fund taking all charges into account is 0.79% for Alliance and 1.425% for HL. Based on a £25000 lump sum at 7% over 10years they claim that HL would produce about £2000 less which is quite a lot on a £25000 investment. Other companies are somewhere between. HL come out as the the 4th most expensive out of the 5 platforms compared.

It is an interesting article anyway but it just seemed a coincidence that it was Artemis.

I have always been happy with HL but when you scale up the savings following this RDR review, it come to a lot of money. I am also attracted by these so called new clean funds which Artemis and other fund companies are certainly being sold by Alliance. These are the same as current funds on the market but a different issue without the annual charge.

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David West

Feb 14, 2013 at 15:15

Hi Fund of Funds

Thank you for pointing this out and for the link.

However, as far as I can see from the article, it does not take account of the admin fee charged by Alliance and the fact that HL do not make an annual charge for funds held in thier ISA or Vantage Fund and Share Account - other than for some pure index funds.

Looking at the reasoning in the article, I don't think that the comparison is altogether a very good one. Over a ten year period, surely it is better to look at the performance of the underlying fund and these projections anyway are far from accurate.

I may be completely wrong but I think it is better to use a platform that does not make an annual management charge and return some the the trail commission rather than one that does charge an AMC but rebates the whole of the trail. Even more so where "clean funds" are purchased.

However, to state that there is a saving on the INITIAL charge, when the underlying fund company does not now make one, is confusing to say the least.

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NormaDear

Mar 22, 2013 at 17:23

I just wanted to add a footnote to this blog.

I took the advice and wrote to Mr Hargreaves.

I got a reply from the Chief Executive Officer, Mr Ian Gorham.

It was a well reasoned, polite, sincere letter in which he explained H&L's position. He did find my position 'well considered' and offered a redress payment of a little over half the disputed fee.

I have accepted. As you go through life you live and learn and this was a learning curve for me.

I must admit it was good of the man at the top to converse with a complaining customer and I have had my faith restored in H & L and will continue as a customer.

Thank you all - Norma Dear

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hooligan

Mar 22, 2013 at 17:51

well done, norma

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John Osborne

Mar 22, 2013 at 19:13

NormaDear,

Am not impressed by Hargreaves"generosity"! They should have given you back nearly all, except a reasonable fee (say £100), because they did nearly nothing.

I have put my account with H-L on watch, because as Fund of Funds said above, they make a big noise about their "loyalty bonus" but despite RDR are still only refunding a small proportion (around 0.1%) of the 0.5% trail commission on OEICs. The 0.4% they keep does not sound very much, but for people who are lucky enough to save , say £100,000, this equates to £400 wasted per annum. And this fee is not capped of course.

One reason why good equivalent Investment trusts are often better than OEICs, but there are other brokers who are far more generous.

Even the ITs need watching. There has been a tendency to apply so-called performance fees (for just doing their job), and the director's fees have escalated above inflation to around £25K pa or more for very little work on a monthly basis.

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Fund of Funds

Mar 23, 2013 at 00:17

John Osborne

I am considering transferring my SIPP and ISA from HL. There are more and more new platforms coming along with no trailing annual fees and when you have a reasonable sized portfolio of funds it adds up to an enormous sum of money over 10years. The miserly attempt by HL with their so called 'loyalty bonus' was simply to try and halt the transfer of funds to other companies. They do not want to change their charging model until they are sure that they will be compelled to do so when the next stage of RDR comes in for Jan 2014. Their competitors are already getting in there before them. The FSA have said that from Jan 2013 it should be made easier for investors to change platforms.An article in the Investors Chronicle this week draws your attention to the fact that HL are charging £30 per fund to transfer.

HL may have a reasonably good website but you can still use the facilities and info even if you do not invest with them. I always transfer my fund information into the Trustnet portfolio anyway which gives much more comprehensive information

on my porfolio and the site is first class for fund information.

I notice with interest in the press that a few senior HL staff have moved to other platforms,

I note that in recent press articles where fees are being discussed, there is no mention of HL in comparisons. They always used to be at the top for best value. Come on HL make a move and change your charging structure before your clients jump ship and that will not please the shareholders.

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John Osborne

Mar 23, 2013 at 01:56

Fund of Funds

We are thinking alike!

H-L will continue to bleed customers until they become competitive again.

Their treatment of clients like NormaDear leaves a very bad taste in the mouth, in my opinion, and am getting tired of all their sales literature. Nevertheless all the research they do on funds and shares and above average customer service does cost money which has to be paid for somehow.

SippDea, however,l are looking a better bet at present for mix of shares and OEICs. At present they are offering up to £500 towards costs of customers jumping ship from other platforms and rebate about half or more of the trail commission. £9.95 share dealing charges. I have an ISA account with them and like their online platform. Recently they improved their research. Am tempted to move all my savings but it is a case of putting all eggs into one basket, and as you say, the situation changes yearly.

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NormaDear

Mar 23, 2013 at 10:53

Thank you for your support. I have settled for a little over half the fee's back and am content at that. As mentioned in the comments above I would have had to have paid at least 1% (approx £500). Plus I should have double checked and read the small print. But that's water under the bridge now.

During my saga, being a little miffed at H & L, I did look at other fund managers. There is one called Cavendish Online. I was really tempted by their £35 one off up front fee and all commissions paid into your account. I will let things settle for a while and see how it pans out. But the points you raise have hit home and need serious consideration.

NormaDear

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Fund of Funds

Mar 23, 2013 at 14:33

John Osborne

Interested in the fact that you have already tried out the opposition with SippDeal. Maybe I will try it for my Isa in next tax year. Others I have been looking at are Cavendish, rplan and Alliance. HL does have a good platform and I cannot complain about the service I have had from them in most respects. I did have my SIPP managed by them but decided they were not very active in managing it. Almost all the investment was in their own multi manager funds and I felt that I was being charged for them doing nothing. Also the loyalty bonus does not apply to funds in their managed SIPP so I got out. All the information which I use from HL is available whether you invest with them or not , maybe they should make a range of facilities available solely to investors. I think I have already said that I do not find the HL facility good for analysis of my porffolio on a regular basis, so I put the figures from my HL account into the free Trustnet site. They provide excellent analysis facilities and fund information and recommendations on a daily basis by email. I use their website daily for information.

I agree that HL have to pay for the faciliies they offer and service but this is at a very high cost to the investor with a large fund. Many of the fund management companies are now issuing a 'Clean' grade of fund with no trailing fee. I have heard nothing from HL as to whether they are selling these.

I am sure these trailing fees will be outlawed by the FSA for next year and HL will be forced to introduce a new fee structure which assumes some sort of annual fee for holding a SIPP or ISA and a fee every time you make a sale or purchase. This type of charging I would prefer as I would be in charge.

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dd

Mar 23, 2013 at 15:14

To those who have been investigating: What is your opinion on Bestinvest Select platform? They use these clean funds, for all new purchases, I understand.

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John Osborne

Mar 23, 2013 at 17:23

Fund of Funds and dd

I find Companies like SippDeal (and Natwest Stockbrokers) are good platforms and professional. They both deal in a wide range of international shares as well as OEICs and have very reasonable charges (Sippdeal slightly cheaper).

But for those who wish to stay with mostly OEICs then Alliance Bestinvest or possibly Cavendish (not checked their exact charging structure) might be the best value at present.

Am slowly running down my OEICs for reasons above, the only one I may swap to next year is Fundsmith (directly with them, only 1% pa fee and Warren Buffett type investment style). Of course there are others like Cavendish opps, Liontrust Special sits, OM small cos and Marlborough micro-cap which are excellent and have no IT equivalent.

As you say, what is going to happen to all the brokers fees next year? We might be having a similar discussion then.

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David West

Mar 23, 2013 at 17:41

@ Fund of Funds

Hi

I would be careful of using Alliance Trust Savings. I was with them for many years and because of their petty can't do attitude, together with high admin charges when compared to other platforms and inferior service, I transfered all of my holdings from them to HL. The Alliance website is also 'clunky' to use.

I appreciate everything that has been said about HL, but I must say that I find them OK. I have an ISA and a Fund and Share Account with them. Since I only hold funds as opposed to investment trusts in the ISA, I do not pay any management charges. There are also no yearly management charges for holding investment trusts in their Fund and Share Account.

I am not sure that one will be better off when trailing fees are abolished. This may mean that HL will start charging a yearly admin fee for each security held. I appreciate that they do already do this for SIPP investments and for holding shares in an ISA but not otherwise at present. In my case therefore I will be paying for something that I am presently not being charged for thanks to the FSA!!

Also, clean funds in many cases are charging more in their annual management fees than for conventional funds, even when both types are being offered by the same management companies.

If it were possible to transfer holdings as stock between platforms without them charging for doing so for each investment held, it may not be so bad when trail fees are abolished since presumably there will be some platforms that may not charge a yearly management fee. However, the FSA in their wisdom, although saying that all platforms must now offer transfers as stock, are still allowing them to make a transfer charge per holding. I have a considerable number of holdings with HL and so this would be prohibitive in my case.

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Fund of Funds

Mar 23, 2013 at 18:42

It is very complicated to work out the actual % charge to compare different platforms. If you look at rplan.co.uk and comparefundplatform.com and put in your figures you find that a platform can be the cheapest for one person and the dearest for another. It depends on so many variables specific for each investor.The number of fund buys and sells is very important.

I shall give it a bit more thought before making a move. I though HL might act before the end of the ISA year when they take in a lot of business. Still time yet.

I noticed on comparefundplatforms.com that they say HL would not supply them with data to enable them to compare platforms so they have been left out.

When we see fund charges of say 1.5% it does not seem much on a £100000 fund but over 10years it can add up to £12000 to £15000. depending which platform u use.

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David West

Mar 24, 2013 at 12:29

@ Fund of Funds

When you say "fund charges of say 1.5%" are you talking about the annual charges made by the fund provider or do you mean the annual management fee, if any, charged by the platform provider?

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Fund of Funds

Mar 24, 2013 at 12:57

I am talking about the total charges that come out of the fund by the fund managers. Usually about half is for running the fund and the other half goes to the platform. The total fees can be up to 2.5% for some funds. The FSA is likely to stop these fees from the fund managers to the platforms from next year when they will have to find another way to make their money. Some of the new platforms are already refunding all their trailing fees back to the customer. So for 1.5% total fee, they will refund 0.75% per year.

It all needs to be brought out into the open so we can really see what we are paying.

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Bob saxton

Mar 24, 2013 at 13:32

I am very happy with H-L and I make a hobby of investing. I find their website very useful and keep everything in a nominee account which saves me a lot of time and worrry. Frankly I am unable to keep on top of everything myself.

As I am old I have to think about my executors. If I had assets in many places the executors would have to get valuations for probate for each of them. With charges over £100 per hour + costs for phone calls and letters this could take care of most of my assets. One letter and a copy of the death certificate is all that is required for a nominee account and it can be done by a relative. there is a charge but it is not excessive.

My one gripe is I feel that they push ISAs even to people who cannot benefit from them. I may be wrong but I think that a anyone who only makes small capital gains and is a standard rate tax payer pays more for an ISA to be monaged than they will save.

I would appreciate opinions on this .

Bob the electrician.

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Brian Stafford Garthwaite

Mar 24, 2013 at 14:51

Bob - As a standrard rate taxpayer I gave up on share ISA's, my CGT has never exceeded the CGT allowance and tax on dividends can no longer be recovered.

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Fund of Funds

Mar 24, 2013 at 15:13

If you have savings that are being put away for the long term i.e. retirement then you should either put it away into a SIPP or ISA. I would say always use your ISA allowance if you can. Once in that ISA wrapper it is protected from all current taxes and you cant get your allowance back. ISA makes a good source of tax free income for retirement. Even on cash ISA's we hope to see interest rate increases in the future with savings in tax. I think any advisor would tell you that a golden rule is use your ISA allowance each yeaqr if you have the funds.

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David West

Mar 24, 2013 at 15:26

Hi Bob saxton

An ISA is a good idea for:-

(a)anyone paying a higher rate of tax.

(b)anyone likely to make more than the tax free allowance on capital gains in any one year.

(c) anyone investing in fixed interest bonds.

The 10% tax on dividend income from equities held within an ISA is no longer reclaimable and therefore an ISA does not have an advantage in this respect.

The tax on income from bonds is still recoverable in an ISA.

Hope this helps.

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David West

Mar 24, 2013 at 15:36

Hi Fund of Funds

I see what you are saying but when trail commission to platforms from the fund providers is abolished what makes you think that this will make a difference in the amount charged for management fees that the fund providers?

I suspect you are assuming that they will reduce their annual management charges accordingly. My point is that they may not.

Also, the platform providers may introduce annual charges that are above any reduction made by the management houses. I am not at all convinced that anyone using a platform will be better off and are likely to be worse off.

In the interest of transparancy the FSA is not, I suspect, taking into account that the very people they are trying to protect may actually find themselves being charged more at the end of the day.

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John Osborne

Mar 24, 2013 at 16:06

Bob, I think most of us are in a similar position to you, and are just trying to balance an easy life managing our hard earned savings against the commission agents fees.

RDR is certainly a step forward, but you can be certain the IFAs and retail fund groups will keep the gravy train running as long as possible at our expense.

HL are now relatively expensive, as they only rebate approx 0.1% on OEICs and charge £40 p.a. for their ISAs.

Therefore, partly motivated by reports above, their continual sales plugs for OEICs, their stinginess over trail commission, and in my opinion a change in corporate culture since flotation, I am in process of moving to another slightly cheaper platform which I like and suits my asset mix better.

But am conscious of what David West has pointed out above, that they all may start charging similar platform fees (and custody charges for shares) if the trail commission goes, so we might all be having the same discussion again in a couple of years.

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Fund of Funds

Mar 24, 2013 at 16:34

David West

Some of the newer platforms are refunding all their trailing fees to the customer which account for about 50% of the total fee , say 0.75%. They are then charging the customer an annual charge and a fee when they buy or sell a fund as you would with a share. This system of charging is much more beneficial to the customer and ends up with lower overall fees. These platforms are in fact doing what the FSA will probably require them to do next year.We are also seeing that the fund managers in recent weeks are offering a Clean grade of fund on a lot of the popular funds and they are just charging their basic fee of around 0.75%. There is no trailing fee back to the platform. I cannot see that HL can sell these under there current pricing model. Some investors are already changing their funds over into the equivalent Clean fund.

HL are hanging in there giving back a miserly bonus which I calculate as about 0,1 to 0,15% on my portfolio. They are holding back because they know that they will not get the income that they had in the past once they change to a new charging system. They know they have to change and that when they change they will have to be competitive. I think they are making a mistake in not getting ahead of the pack. Unless I hear some news from them shortly about their future intentions regarding fees then I will jump ship.

I have no issue with there service or facilities but it comes down to a huge saving in fees. Prior to going public HL lead the way in bringing low cost buying of investments to the public now they are one of

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Fund of Funds

Mar 24, 2013 at 16:39

John Osborne

Interested to know what platform you have chosen. As you indicate a particular platform may be good for one person but not beneficial for another.

I am also thinking of changing from HL and have been looking at Alliance , Cavendish, Interactive Investor and rplan.

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John Osborne

Mar 24, 2013 at 17:43

SippDeal

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Bob saxton

Mar 24, 2013 at 17:50

FoF This is the fund managers line even if you wil not benefit and will loose on management fees.

Brian stafford Garthwaite Thank you, you have confirmed my opinions.

Thanks to everybody, I am finding this discussion useful

Bob the electrician

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David West

Mar 25, 2013 at 16:35

@ John Osborne

Hi John

I have an ISA with HL but only hold funds in it not individual shares or investment trusts. I do not (at the moment) pay a management charge. You mention that they charge £40 pa.

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John Osborne

Mar 25, 2013 at 19:59

David,

Yes, only affects shareholdings with HL (ie all shares including ITs), I think 0.5% capped at £40 just for these, OEICs are "free" (actually not and uncapped % as we know). It was capped at higher level £200 but they brought it down. As my ISAs were all shares I transferred them all to SippDeal for reasons above.

All change next year perhaps?

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