Tuesday, 17 August 2010

Bestinvest client centre errors?

I currently have a number of unit trust investments with Bestinvest, but am thinking of moving to HL (or ?) as I have concerns about the quality of their data on the investments, as presented in their Client Centre webpage.

The particular problem is that about a quarter of my recent Sell transactions, as presented in their Transactions History webpage (Fundsnetwork transactions), were missing. This has now been almost put right, but not quite. I asked for the reason for all these mistakes but no explanation has been given to me. I now have considerable doubts about the quality of the other data in their Client Centre. I been with Bestinvest for many many years and like their quarterly summaries of the portfolio so I would be a reluctant mover.

Can you comment on the differences between HL and Bestinvest with regard to the type of data routinely posted to clients and the analyses available via their websites?

[subsequent update]
I have been through the changes in my Transactions Histiry printout in detail and find that whilst some omissions have been corrected, Bestinvest have now inroduced a load of duplicated entries - I despair!Answer
The fund transaction data that really matters is held by the underlying fund supermarkets/platforms, such as FundsNetwork, Cofunds and Skandia etc - or by the fund provider if you buy from them rather than via a platform.

If this information is wrong you’ve got a problem, as it means you don’t actually own what you think you do, e.g. you’ve sold some unit units but the platform hasn’t actually recorded or carried out your instruction. Thankfully these types of errors aren’t that common and if the platform does mess up a deal they should correct their error and ensure you’ve not lost out.

As part of their service fund platforms provide web access to your investments so you can view your holdings and transaction history. Most advisers and discount brokers simply provide their clients with access to these services via their websites, i.e. they display content generated directly by the platform(s).

The downside with this approach is that if you hold funds across several platforms or fund providers you can’t view everything on one screen as the information is held across several different systems - you’ll need to log into each platform/provider website separately.

Bestinvest tries to overcome this shortcoming by using its own system/database to bring together all your fund holdings and transactions from the various platforms and providers in one place, i.e. its client centre.

When it works it’s a good system as it makes viewing your whole portfolio straightforward and provides useful information on how your portfolio is exposed to different company sizes, regions and asset types, using data from the underlying funds.

However, the system relies on a combination of manual updates by Bestinvest and data imported from platforms and fund providers, increasing the scope for error, as you’ve experienced.

The good news is that the error is more likely to be Bestinvest’s, rather than a problem with your actual fund transactions as recorded by FundsNetwork, but nevertheless it’s an inconvenience. At the very least you should receive an explanation as to what’s gone wrong and re-assurance of the steps being taken to prevent a repeat in future. It’s disappointing Bestinvest was unable to provide this to you.

Should you transfer to another discount broker?

While others are catching up, Bestinvest’s online client centre facility is still pretty good (when there are no errors!). If you like this facility and benefit from no-fee investment advice (available on portfolios of £50,000 and over) then I’d be inclined to stay provided you can get re-assurances that they’ll fix the problems you’ve encountered and prevent a future re-occurrence.

Hargreaves Lansdown (HL) won’t give you advice, but because they run their own fund platform (Vantage) I’d expect the likelihood of errors within their client centre to be lower versus Bestinvest. I’m not a client, but feedback from HL clients on this site suggests that when there is a problem/error, HL is usually quick to sort it. You’ll also benefit from a partial trail commission rebate on most funds, typically saving you 0.25% a year.

At the other end of the scale are discount brokers like Cavendish Online, who don’t offer research or portfolio tools but do rebate trail commission in full – saving you up to 0.5% a year. They’ll simply provide links to a fund platform so your online valuations and analysis will be restricted to that provided by your chosen platform(s). A great deal if you want a bare-bones service, but less appealing if you rely on fund research and portfolio analysis tools.

Unfortunately neither Bestinvest nor Hargreaves Lansdown offers access to a ‘sample’ client centre account, so you can’t try before you buy, which seems short-sighted. As I’m not a client of either I can’t give you a detailed comparison, but based on the information I’ve seen via friends who are clients I believe the quality of the fund research and portfolio analysis information offered by Bestinvest eclipses that of HL - but then HL is usually cheaper and probably offers a more robust service.

You can view a comprehensive comparison of discount brokers in our ISA Discounts Action Plan.

Read this Q and A at http://www.candidmoney.com/questions/question262.aspx

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