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Cavendish Online - any gotchas to beware of ?
Clive B
Posted: 03 February 2013 13:18:11(UTC)
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I have money in a number of Unit Trusts and OIECs, both ISA and non-ISA, purchased through Best Invest using the Fidelity FundsNetwork platform.

I see Cavendish Online quoting "The all new Cavendish Online FundSupermarket will be powered by FundsNetwork™ and
•NO initial charges on all funds
•NO switching fees
•NO Cavendish Online fee
•100% rebate of natural trail commission"

http://www.cavendishonline.co.uk/investments/

Sounds too good to be true. Hence, the reason for me asking if they are any "gotchas" (e.g. hidden charges, or nasty terms/conditions) that others have come across.

Thanks
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Guest on 04/02/2013(UTC)
P L
Posted: 04 February 2013 09:17:57(UTC)
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I think they're the real deal. They've been around for a while.

However, I think all you're getting access to is an online execution only dealing platform. I guess the key question is (if you say assume a portfolio value of 100K) what else you could get elsewhere for the extra £250/year (0.25%). May be a couple of valuations, contract notes, investment analysis.

I have accounts with FN, CoFunds, H-L and use BestInvest & CommShare and I have been tempted to switch however I wanted to wait and see how RDR pans out and see what the execution only RDR related changes will be, which are I believe are due out this year, before making the jump.

I'd be interest to find out how the dealing experience differs from the standard FN account given I can't say I'm that impressed with FN. I think H-L still hold the top platform slot out of the three I use.
Clive B
Posted: 04 February 2013 12:25:24(UTC)
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P L

You're right in thinking that execution only is all you're getting with Cavendish Online, they make that very clear. Even suggest if you want advice, go find an IFA !. Kinda funny given they ARE IFAs.

As to what else you could get for the 0.25%
-Cavendish site suggests I'd get 0.5% trail returned on lots of my funds
-I don't put much store by Best Invest's analysis of my portfolio. I can do that easily enough myself, e.g. with Morningstar tools

Like you, I'd been thinking I'd leave things as they are for 2013, as I'm sure I read somewhere that execution-only and platforms was due to be RDR-d in 2014. Maybe, maybe not.

What prompted me into action was mailshots from BI

-first suggesting BI Select. I'm with their "basic" service, with no trail rebated (bit stupid on my part maybe). However, am reluctant to jump a) because of pending changes and b) I think I read they have an exit fee of £25/fund if you want to leave Best Invest Select

-second suggesting their Investment Advisory, but at a fee. Seems they're trying to re-badge me from an execution-only client to an advised client. Not up for that.

I also had a chat with Fidelity some weeks back. Yes, they have 0% initial and some rebate of trail, but they charge the standard 0.25% transfer fee which I don't pay at the moment (due to paying Fidelity the annual £45 Account Fee, works out lots cheaper if you do a lot of transfers)
P L
Posted: 04 February 2013 14:47:59(UTC)
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When you say you are with BI basic what do you mean. As far as I was aware their own platform is Select and all the other service is/was supported using a 3rd party platform wihether it is via FN, CoFunds or someone else. Unless the agency agreement you signed with them says you will be charged an exit fee then you should be free to get you funds re-registered to another agent. I did just that about a year or so ago, cost nothing. I had the funds I held on the FN platform reregistered from BI to CommShare. In fact assuming you have your funds with FN already then it is exactly the same process to move them to Cavendish. If the transfer is between platforms then that might be where the charges arise.

As it happens the recent RDR changes now allow for ISA funds to be re-registered as well. Before they would have had to have been sold and then the transfered made in cash.

CommShare do slightly more than Cavendish for their money, although not much it has to be said. For that I'm paying 0.125% more (ie they rebate only 75% of the AMC).
Clive B
Posted: 04 February 2013 15:15:55(UTC)
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P L

When I first used Best Invest many years ago, there was no Best Invest Select or rebate of trail commission. Point of using them was simply to discount the initial commission. Funds were administered using FundsNetwork. I believe they moved to Cofunds (as a default ?) years later, but my funds have always been in Fundsnetwork.

Hence, by "basic" I meant the original Best Invest service - uses FN, no rebate of trail commission.. As I understand it (but not by using it !), BI Select DOES rebate some trail commission.

As to exit fees, https://select.bestinves...facts-services-fees.pdf quotes

"Transfer out of an investment to another nominee (to another pension scheme in the case of a SIPP Account): £25 per asset"
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Guest on 04/02/2013(UTC)
CashisKingDave
Posted: 04 February 2013 17:42:50(UTC)
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Joined: 04/02/2013(UTC)
Posts: 2

Remember to consider the company's financial strength, a free tool such as:

http://companycheck.co.uk/company/04045709

If you click the 'accounts' tab it shows the company's cash balances over time. Its not a great trend for them.

Remember this only shows the data from the last set of accounts and you don't get the complete picture, for example, if the directors are currently taking a lot out of the business and could therefore lower their take if things get tough is difficult to determine and hence the cash worry may not have any basis in reality.

Hope this helps.
Peter Paddon
Posted: 04 February 2013 22:33:02(UTC)
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Joined: 24/09/2010(UTC)
Posts: 4

Slightly off topic I guess but my question is prompted by this thread.

I'm happy to make my own stock selection and selling decisions and currently use a small-ish stockbroker with a fixed annual fee to manage my ISA. Their biggest draw back is that they do not offer online buying and selling but the annual cost is reasonable. What are the advantages for the private investor of the RDR? Everything I read seems to indicate that my costs will go up due to RDR.
Peterdh2u
Posted: 05 February 2013 00:42:17(UTC)
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I started using Cavendish Online about a year ago using the FN platform and have been very happy with the benefits. It has been particularly pleasant to no longer be paying trail commission to an FA who had cost me dearly and had repeatedly let me down, yet continued to cream an income from my investment decisions without any input to them.

Until RDR, approximately 0.5% of the value of relevant holdings was paid in quarterly installments into my bank account and, from the end of 2012, this was changed to an equivalent purchase of additional units in my largest holding each quarter.

Being a customer of Cavendish Online makes no difference to how FN operates and it remembers that Cavendish is my 'advisor'. However, on new purchases, you do need to check a box to state that you have received advice,despite this not being the case. I made this mistake when purchasing my latest ISA and a separate account was created by FN as a result. It only took one phone call to them for it to be rectified.

I have made additional purchases and several switches since registering with Cavendish Online without incurring any charges. I know they do take a very small cut of the annual management fee and clearly say so on their website. It is equivalent to £5.64 per annum for an ISA valued at £11,280.... I can live with that!

I was concerned to read recently in the Times that FN was now one of the most expensive execution only platforms based on its annual management charges, Interactive Investor being the cheapest. However, when you factor in the benefits of using Cavendish Online, FN become one of the cheapest. My only concern is that FN doesn't offer some of the best performing funds that can be purchased on other platforms, but hey ho... you can't have it all.

In my humble opinion, if you're happy to make your own investment decisions, you can't do much better than registering with Cavendish Online....

..... and no, I don't work for them!!
3 users thanked Peterdh2u for this post.
ynys on 05/02/2013(UTC), Guest on 05/02/2013(UTC), Clive B on 05/02/2013(UTC)
P L
Posted: 05 February 2013 12:19:01(UTC)
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Clive, it sounds like your position is exactly the same as I was in eg FN account using BI as my registered broker/agent. As such BI got all the AMC trail commission. I simply got the agent changed to CommShare whilst keeping the platform as FN. I wasn't charged to do this - suggest you contact BI and ask them if they do actually charge. Agree that if you are on Select or with H-L there is an exit fee for transfering off the platform to another one. However RDR was supposed to make transfers/re-registrations between platforms easier to allow competition in which case excessive fees should be something the FSA should be looking to stamp down on.

Since Cavendish uses FN albeit branded as their own platform there might be a FN to Cavendish FN exit fee I guess. Although I can't see why given FN still gets most of the 0.25% platform fee

Peterdh2u : I would be interest to know apart from the AMC savings what differences exist between FN and the Cavendish FN platform. Is the user interface the same
P L
Posted: 05 February 2013 12:33:48(UTC)
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Did a quick check and came up with this link

http://www.cavendishonli...investment/exit-charges

It implies that a re-registration of funds ISA & non-ISA held to another platform (ie the funds are not being sold and repurchased) is likely to be free if moving between the main platforms.

I think the caveat is that the funds are assumed to be held on the rival platform on an execution only basis.

It looks like Cavendish is setting the benchmark, having a nominal cost breakdown of
0.75% fund AMC + 0.20% platform fee + 0.05% broker fee = 1% with the other 0.5% returned

Invesco Perp Income = AMC 1.5%
= 0.50% rebate from cavendish
= 0.25% rebate from BI Select
= 0.25% rebate from H-L
= 0.25% rebate from CommShare**

** If you hold significant funds with them you can get them to increase it. I get 0.375% after I suggested I would move. The reason I've not moved was I also have funds on CoFunds and up until recently they'd all of had to have been sold and the transfer made in cash
2 users thanked P L for this post.
Clive B on 05/02/2013(UTC), tipping point on 07/02/2013(UTC)
Peterdh2u
Posted: 05 February 2013 16:11:19(UTC)
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PL,

I haven't detected any differences in the user interface between FN and the Cavendish FN platform.

I have just logged in to FN directly as I usually do and again by entering via the Cavendish portal and both appeared to be identical other than a slight difference in the URL where the word "advised" was added when entering via the Cavendish website.

I did a switch after entering FN directly and the Key Features Document confirmed that there would be no initial charges and 0.5% trail commission would be rebated, hence linking the account automatically back to Cavendish. I also did the same via the Cavendish website and there was again no difference.

I recall that last time I opened an ISA, I entered the site directly and was asked to confirm if my adviser was Cavendish.
2 users thanked Peterdh2u for this post.
P L on 05/02/2013(UTC), Guest on 08/02/2013(UTC)
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