Fund \ Share Platforms

[bad company]

I have been using HBOS for share dealing and Hargreaves Lansdown for funds. I read that Cavendish offer much more generous rebate of 'trail commission' than HL so thinking of moving. Then I read this:-

http://www.telegraph.co.uk/finance/personalfinance...

Apparently HL are going to make an announcement soon but at the moment they do seem very expensive.

Any views?

[Cheib]

Can't read that as I have already exceeded my 20 articles per month on the Telegraph paywall.

This whole area is massively in a state of flux post "RDR" (Retail Distribution Review)...HL are very popular but are expensive. Really depends what you want....I use a different platform but it's much more flexible in terms of the assets you can buy and sell within your SIPP's and ISA's...it's not the cheapest but I think the flexibility is worth the money, others wouldn't.

[bad company]

This is most of it:-

'New tax will change fund broker charges'
HMRC announced yesterday that trail commission rebates – or "bonuses" – paid to investors will become taxable from next week. The founder of comparefundplatforms.com predicts a major shake-up in the way fund supermarkets and discount brokers charge their customers.

Fund supermarkets will have to change the amounts they charge investors, says Justin Modray
By Justin Modray
12:20PM GMT 26 Mar 2013
While a handful of fund platforms already offer the public clean, transparent charging, notably Alliance Trust Savings and Charles Stanley Direct, the majority still rely on commissions and undisclosed fees to earn their crust.
Until now that hasn't always been a bad thing, with discount brokers like Cavendish Online offering generous trail commission rebates to give investors a good overall deal. But HMRC's decision to tax such rebates outside of Isas and pensions will undoubtedly prove the death knell for the rebate system.
If we assume a £100,000 portfolio enjoying an annual 0.5 per cent rebate of £500, the new tax will cost a basic rate taxpayer £100 and higher rate tax payer £200 a year. Not a fortune, but probably sufficient incentive for them to avoid this by switching to a platform that offers lower cost "clean" versions of funds rather than rebates.
Platforms and discount brokers offering rebates won't want to lose customers, so will be under increased pressure to shift to the transparent "clean" fund unit model, where cheaper fund versions without commission and platform fees built in are used and customers instead pay an explicit administration fee to the platform concerned.
However, this could prove a big headache for larger platforms. For example Hargreaves Lansdown currently pockets a healthy margin by collecting average annual commission of 0.77 per cent from fund managers before giving a modest rebate to customers.
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This commission, which Hargreaves Lansdown doesn't disclose for individual funds, is effectively an annual fee that most customers probably don't realise they're indirectly paying to Hargreaves Lansdown via fund charges. If Hargreaves tries to maintain this margin under a clean pricing system those customers could be in for a very rude awakening.
Meanwhile we wait for those platforms and discount brokers concerned to confirm that the new tax on rebates will apply to their customers. So far they've been eerily silent