Question
I have just read a review on Cavendish Online and am interested in trail commision discounts. I deal with Hargreaves Lansdown and wondered whether they give a discount on their trail commision?Answer
Hargreaves Lansdown (HL) does give generally give trail commission rebates on funds held either directly or within ISAs, but not those held within its SIPP (i.e. pension).
The rebates are called a 'loyalty bonus' and typically amount to about half the annual trail commission. So if a fund pays trail commission equal to 0.5% of the fund value, HL would likely rebate 0.25%.
By comparison, Cavendish Online rebates all the trail commission, so 0.5% in our above example, in return for a one-off £25 fee if the funds are held via the Cofunds or FundNetwork fund supermarkets.
There's no doubt Cavendish Online is cheaper for the vast majority of investors, but they simply offer a no-frills transaction service. If you actively use HL's fund research and information you might feel it's worth the extra 0.25% a year but, there again, you might not (views seem to be divided based on feedback via this site).
You can view a comprehensive list of discount brokers in our Guide to ISA Discount Brokers, so take a look and try and gauge which blend of discounts and service would best suit you.
Personally I'd be very happy using Cavendish Online, as given my background I don't feel much need for fund research and marketing bumf (in any case, there's plenty of freely available fund information on the web - see my answer to this question). But if I were a novice investor I might feel differently and opt for a discount broker offering more information and hand-holding, albeit with lower discounts.
I have just read a review on Cavendish Online and am interested in trail commision discounts. I deal with Hargreaves Lansdown and wondered whether they give a discount on their trail commision?Answer
Hargreaves Lansdown (HL) does give generally give trail commission rebates on funds held either directly or within ISAs, but not those held within its SIPP (i.e. pension).
The rebates are called a 'loyalty bonus' and typically amount to about half the annual trail commission. So if a fund pays trail commission equal to 0.5% of the fund value, HL would likely rebate 0.25%.
By comparison, Cavendish Online rebates all the trail commission, so 0.5% in our above example, in return for a one-off £25 fee if the funds are held via the Cofunds or FundNetwork fund supermarkets.
There's no doubt Cavendish Online is cheaper for the vast majority of investors, but they simply offer a no-frills transaction service. If you actively use HL's fund research and information you might feel it's worth the extra 0.25% a year but, there again, you might not (views seem to be divided based on feedback via this site).
You can view a comprehensive list of discount brokers in our Guide to ISA Discount Brokers, so take a look and try and gauge which blend of discounts and service would best suit you.
Personally I'd be very happy using Cavendish Online, as given my background I don't feel much need for fund research and marketing bumf (in any case, there's plenty of freely available fund information on the web - see my answer to this question). But if I were a novice investor I might feel differently and opt for a discount broker offering more information and hand-holding, albeit with lower discounts.
Read this Q and A at http://www.candidmoney.com/questions/question568.aspx
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