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Alliance Trust - New Fees
Posted: 11 January 2014 16:23:15(UTC)

Joined: 22/12/2011(UTC)
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I am in receipt of the latest table of charges in relation to my Investment Trust holdings held within Alliance trust.
As expected charges are up with a quarterly admin charge of £18.75 + VAT applied to both ISA and Dealing Accounts.
Worse still the dealing charges are £12.50 applied to Purchase and sales, which in the past had been reduced due to my holding of Alliance Trust shares has been removed.
The only good news is the application of a loyalty bonus, which after 20 years reduces the trading charge to £9.38.
The bad news is that at my advanced age another 20 years could prove challenging.

For a fund holding of £150,000 the cost works out at 0.6%, which is ok for me and may even be better than the industry norm.
However, somebody with just £1,000 invested this becomes a staggering 9%.

I am mindful that a holding in Alliance Trust shares may not be the best fund holding.

Any thoughts?
Posted: 11 January 2014 20:42:25(UTC)

Joined: 14/01/2012(UTC)
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I'm in the same position as you. I dont think in 20 years time I'm going to be bothered, assuming I live that long! I also use The Share Centre and find that some parts of that are cheaper and other bits dearer, so I doubt overall there is much difference.

I must admit I've never held Alliance Trust shares, always considered there were better options out there.
Posted: 11 January 2014 20:58:56(UTC)

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Firstly if you take a look around at the other fixed price offerings you will see that a lot are charging more, up to £200/year for the custody (admin) on each account. However they tend to have a slightly lower real time dealing cost of around £10 but a similar regular monthly dealing cost of £1.50. In some cases its linked to the total account value, others its only charged on OEIC/UT funds.

The cheapest share only broker is about £5/deal but you have to factor in what you might be missing. I use X-O for shares but they don't do auto dividend reinvestment or regular purchases for instance (plus have a website that makes RyanAir look positively frilly)

So from a non user perspective they still look reasonably competitive, albeit it is annoying when the cost albeit smallish increases by such a large percentage. I have an account with the share centre which has gone from £3/qtr to £1.80/month. I spent at least a week fuming over it.

Given they've also been around for a while they must be doing something right. Also now isn't necessarily the best time to jump ship. Until we get past April and everyone shows their hand wrt RDR clean funds and unbundled platform costs you don't really want to be jumping out of the frying pan.

As I said in other post there is no ideal one size fits all platform/broker. Your dealing habits / preferences are unique and the best fit can only come from understanding them and then crunching the numbers. I realised not so long ago I didn't really have any understanding of how I operated.

Q1. How many account types (ISA, Invesment, SIPP, JISA etc) do you hold
Q2. Are you mainly a buy and hold or day trader. How many Real time deals
Q3. Do you follow an asset allocation strategy/rebalance. How often
Q4. Do you buy in a few Lump sums or do regular deals or a mix
Q5. How big are you Purchases/Sales
Q6. Do you reinvest dividends
Q7. Are you holdings subject to a lot of Corporate actions
Q8. Do you hold a mix of Funds, ITs , shares etc. Are they active or passive
Q9. Do you prefer hard copy documents
Q10.... and the list goes on

Write it down and then cost it. When you picked yourself off the floor, go back over a few years accounts and see if the pattern is correct based on the real world. Chances are you'll have to then average and/or give youself extra margins to account for the variability you might need (the candid money website has a calculator that covers some of the factors).

Once you have this information you're ready to do battle. At which point you will check the cost of moving, decide it is hugh and decide they're not so bad after all.

3 users thanked P L for this post.
No name 2 on 13/01/2014(UTC), Andrew Mayo on 14/01/2014(UTC), Guest on 17/01/2014(UTC)
richard tomkin
Posted: 13 January 2014 17:42:04(UTC)

Joined: 15/09/2013(UTC)
Posts: 2

It is amusing to reflect that Alliance Trust Savings was originally devised as a cost-effective way for investors to hold shares in Alliance Trust PLC.So far as I know,ATS has never made any money for the trust and it is hard to see its raison d'etre: far too much management time is wasted on this 'platform'.They would be far better engaged in addressing the dismal performance of the Trust,whose shares trade on a 12% discount at a time when average discounts are at their lowest since 1970.A better course still would be to hire an investment management team who could breathe life into it.It would take more than reduced sharedealing costs to persuade most folk to become shareholders of the trust.Equally,at age 63,I am not sure that I will be actively dealing in shares in 2034 to qualify for the tiny discount.
Linda Green
Posted: 14 January 2014 11:05:21(UTC)

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This article is relevant - lots of companies will be changing their charges soon: http://www.investorschro...TV4U0gRROJ/article.html
Posted: 14 January 2014 11:38:45(UTC)

Joined: 10/08/2008(UTC)
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Interesting. However doesn't all this now basically mean we will have wholescale investor paralysis until April.
I've recently moved a large chunk of dirty funds to Cavendish online basically on the grounds of the simple 0.25% fee and no transfer costs. Since then Fidelity/Cavendish have announced they now only sell clean funds so any further transactions will result in explicit platform charges on those funds resulting in unit cancellations. I've now stop all dealing with them until the smoke clears
Posted: 19 January 2014 09:34:08(UTC)

Joined: 13/03/2012(UTC)
Posts: 1


I have some excellent news for you. On a portfolio of £150,000 the Alliance Trust account is only costing you .06% or 6 bps not 0.60. Good value by anyone's reckoning - worth it for the £5 reinvestment of dividend charge, IMHO.
richard tomkin
Posted: 19 January 2014 11:10:54(UTC)

Joined: 15/09/2013(UTC)
Posts: 2

Now there is even less reason than before to hold shares in Alliance Trust.They have been a pedestrian investment,in no way comparable with other global growth trusts,and the removal of shareholder dealing discount for ATS customers is another kick in the teeth.The Trust is too big,too complacent,too bureaucratic,and badly needs a radical rethink.
S Dobbo
Posted: 19 January 2014 17:07:40(UTC)

Joined: 24/01/2013(UTC)
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Glad to say nothing seems to be changing at Interactive Investor, we got an email on Friday:-

Dear xxx

In response to press speculation and customer enquiries following the introduction of new charges by some other investment platforms, we are pleased to confirm Interactive Investor will not be increasing our current pricing, introduced in 2012, and we have no plans to introduce any additional fees.

As our pricing is already transparent, fair and straightforward, it is fully compliant with the forthcoming regulatory changes. You can continue to invest for a straightforward, fixed fee - regardless of investment choice. You can still hold both an Investment account, as well as an ISA account, for the same £20 quarterly fee, with its £20 quarterly commission credit. Our pricing also ensures you will always know exactly how much you will pay in charges.

If you have additional holdings elsewhere you may want to consider transferring them to us. This straightforward process takes just a 15 minute investment of your time, and we will look after the rest of the process for you. All the transfer forms you need can be found within the Account Admin section. You will also get £120 in trading credit (terms apply).

Yours sincerely

Adam Seale
Interactive Investor Trading Ltd
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