So, then, Hargreaves Lansdown. Has a pricing announcement by a direct investment platform ever been so eagerly awaited? I don't know, and neither do you. But what you do know is what HL expects you to pony up for holding assets on its Vantage service.
HL is launching its offer into a funny old market.
Direct platforms have until April to stop living off rebates from fund managers (in respect of new business, anyway).
Of the top platforms by market share, at least half have still to announce their pricing - and we include Barclays Stockbrokers and Fidelity in that.
A solid performance, and probably enough to avoid big outflows.
Time to get a move on, girls. For the record, we'll only do comparisons here with those who have unveiled their explicit pricing.
Back to HL. It announced its pricing in a stock exchange missive at 7am today, when I was just in the showers at Euston, which was inconsiderate.
That said, everything else was pretty good news. Here's how the pricing breaks down:
First thoughts - well done HL. Analysts (from Barclays - why would they have an axe to grind?) had placed the charging at c. 0.6% or 60 basis points tiering down or 0.5% plus dealing charges.
This obviously beats those predictions, and the Bristolian buddies will be stifling giggles on that, I suspect.
A closer look
Recent press reports put the average SIPP on HL's Vantage service at £47k, the average ISA just under £30k and something like 57% of its clients have less than £50k.
I don't have a figure on the percentage of those with less than £250k, but I'll bet it's the overwhelming, crushing majority of clients. So unless you're a very tubby cat, you're paying 0.45% from now on.
There are no dealing charges on mutual funds, and no wrapper fees. So whereas on most direct platforms you'll pay an additional whack on top of your percentage charge, HL are happy just to stick with what's there. SIPPs don't cost much more to run than ISAs, so I like that. Tick.
A further tick for capping charges at £2m. There comes a point where you've made enough money, and not enough platforms recognise this. In £££ terms this is £4,000 on a £2m fund, which is A LOT, but still the principle is good.
So, what does all this mean? Should you start switching off? The answer is, of course, it depends.
HL has got some funds down to 0.65% instead of a standard 0.75%, and some others (presumably where they have compromising photos of the fund manager) down to an average of 0.54%. That's quite a deep discount. We don't have details of those funds yet, but as we do we'll publish what we find out.
You should look at the Total Cost of Ownership of funds rather than just platform price. However, HL only gets an advantage here if - if - you're happy to be constrained in your investment choice.
Investing in an active fund because it's cheap probably isn't a recipe for riches (bear in mind that passive funds like those from Vanguard won't have discounts normally). Careful analysis is needed here of your own situation - again, get advice if you're unsure.
Commanding a premium?
It's normally at this point that folk start banging on about price vs value, and I have to invoke the Angry Value Pixie.
You get to decide what value HL adds - it doesn't. I do think HL has very good service (I'm a customer) and that might command a premium. It's all a matter of how much that premium should be.
You can pretty much halve your charges by shopping elsewhere for your platform needs. If you're going to use HL's cheapo funds, that differential won't be so big in the real world - then again, if you hardly ever trade, the differential might be bigger.
Generally speaking, though, you can look at Charles Stanley, AJ Bell YouInvest, ATS or Interactive depending on how well-upholstered you are and how frequently you trade, and you might do a bit better.
Finally, HL reckons this will cost them £17m and they'll make it back easily with additional AUA. As I write, the stock market doesn't agree and has treated it much as Little Bunny Foo Foo does with fieldmice and bopped it on the head to the tune of 2.6% or 41p. That still leaves it with about the same market cap as M&S.
The overall lang cat verdict - a solid performance from HL, and probably enough to avoid big outflows. It's up to the others with sharper pricing now to make their case and bring it to the big bad boys from Bristol.
Read Mark Polson's full blog at the lang cat.
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