Question
Thanks for your brilliant and informative website which I have only just discovered. I have substantial (for me) ISA and SIPP investments on the H-L Vantage Platform.
My ISA is in 9 different funds, as is my SIPP. I can see from your website that I am no longer getting the best value from using this platform. It would appear that as things stand that I would be better off using Cavendish for my ISA, not so sure about my SIPP.
However, is it worth waiting to see what H-L have up their sleeves as far as RDR is concerned or should I just take the jump and move to a cheaper platform like Cavendish now. Cavendish seem to have been good value for some time now and one would perhaps expect this to continue.
Anyway, keep up the good workAnswer
Thanks for the kind words, glad you like the site.
Cavendish online is very good value for ISAs provided you're comfortable with a straightforward no-frills service.
The main issue moving your ISA away from Hargreaves Lansdown (HL) is their steep £25 per fund charge (the previously charged VAT has recently been removed) to move your investments 'as is' (called 'in-specie') to another platform such as Fidelity FundsNetwork (as used by Cavendish) - on your 9 ISA funds this means a £225 bill. You can avoid the charge by selling the funds and transferring cash, but this means being out of the market for maybe a week or more.
HL has already said they'll likely charge a percentage fee of some sorts when they finally introduce their RDR charging (which must be by 6 April 2014 at the latest). Given their commission margin (after the loyalty bonus) averages about 0.6% a year it's not unreasonable to expect the average fee under the new charging to be similar.
This gives HL a big potential headache - customers may view the cost as too high once laid out in black and white. HL's response appears to be trying to negotiate lower fund charges than rivals, so they can add their healthy fee and not end up excessively expensive overall. Whether they manage to pull it off remains to be seen. But I suspect that even if they do negotiate rock bottom fund charges competitors will demand the same deals from fund managers and HL could still end up looking relatively expensive.
Since Cavendish Online (and underlying platform FundsNetwork) will also have to amend their charging I'd sit tight for now, especially given the high in-specie charge HL will impose. Provided Cavendish Online can negotiate the same current ISA deal via explicit fees - that is you'll pay 0.2% to FundsNetwork, 0.05% to Cavendish and 'clean' fund charges - the proposition should remain very competitive and well worth considering. But for the sake of a few months probably better to wait until the platforms and discount brokers have announced their new charging structures so you can compare the whole market.
Cavendish Online's SIPP proposition is a bit clunky and less appealing than some other rivals - take a look at my comparefundplatforms site to compare costs for the specific funds you hold.
Thanks for your brilliant and informative website which I have only just discovered. I have substantial (for me) ISA and SIPP investments on the H-L Vantage Platform.
My ISA is in 9 different funds, as is my SIPP. I can see from your website that I am no longer getting the best value from using this platform. It would appear that as things stand that I would be better off using Cavendish for my ISA, not so sure about my SIPP.
However, is it worth waiting to see what H-L have up their sleeves as far as RDR is concerned or should I just take the jump and move to a cheaper platform like Cavendish now. Cavendish seem to have been good value for some time now and one would perhaps expect this to continue.
Anyway, keep up the good workAnswer
Thanks for the kind words, glad you like the site.
Cavendish online is very good value for ISAs provided you're comfortable with a straightforward no-frills service.
The main issue moving your ISA away from Hargreaves Lansdown (HL) is their steep £25 per fund charge (the previously charged VAT has recently been removed) to move your investments 'as is' (called 'in-specie') to another platform such as Fidelity FundsNetwork (as used by Cavendish) - on your 9 ISA funds this means a £225 bill. You can avoid the charge by selling the funds and transferring cash, but this means being out of the market for maybe a week or more.
HL has already said they'll likely charge a percentage fee of some sorts when they finally introduce their RDR charging (which must be by 6 April 2014 at the latest). Given their commission margin (after the loyalty bonus) averages about 0.6% a year it's not unreasonable to expect the average fee under the new charging to be similar.
This gives HL a big potential headache - customers may view the cost as too high once laid out in black and white. HL's response appears to be trying to negotiate lower fund charges than rivals, so they can add their healthy fee and not end up excessively expensive overall. Whether they manage to pull it off remains to be seen. But I suspect that even if they do negotiate rock bottom fund charges competitors will demand the same deals from fund managers and HL could still end up looking relatively expensive.
Since Cavendish Online (and underlying platform FundsNetwork) will also have to amend their charging I'd sit tight for now, especially given the high in-specie charge HL will impose. Provided Cavendish Online can negotiate the same current ISA deal via explicit fees - that is you'll pay 0.2% to FundsNetwork, 0.05% to Cavendish and 'clean' fund charges - the proposition should remain very competitive and well worth considering. But for the sake of a few months probably better to wait until the platforms and discount brokers have announced their new charging structures so you can compare the whole market.
Cavendish Online's SIPP proposition is a bit clunky and less appealing than some other rivals - take a look at my comparefundplatforms site to compare costs for the specific funds you hold.
Read this Q and A at http://www.candidmoney.com/askjustin/878/transfer-from-hargreaves-lansdown-to-cavendish-online
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