Here we seek to address some frequently asked questions on the Vantage Service.
If you're unable to find what you're looking for, please do not hesitate to contact us.
We have negotiated terms with fund management companies which allow us to offer savings on initial charges. The way in which this saving is applied depends on whether the fund is a dual priced Unit Trust or single priced such as an OEIC. More information on how this saving works is detailed in the HL Guide to Fund Prices, Savings and Yields.
The vast majority of funds price daily (on working days), mostly at midday. The forward pricing system means that when you place a deal it will be traded at the next available valuation point, typically at midday on the next working day. This means that you will not know the exact price that you will buy or sell at when you place the deal.
To check when your funds value please see the valuation point on the key features tab of our fund factsheets.
The class of unit held will affect the way income generated from the fund is treated. With income units, income is paid into your Vantage account as cash. This is then paid out, held on your account or reinvested depending on how you have instructed us to deal with income in your account. With accumulation units income is retained within the fund, although the number of units remains the same the price of each unit increases and hence the value of your holding rises.
In the past most investors who held funds, such as unit trusts and OEICs, paid a single ongoing charge to the manager of their chosen funds. This charge often included an element of commission which the fund manager shared with brokers, such as Hargreaves Lansdown, to help pay for their service. We call these funds 'inclusive' funds.
Recent FCA rule changes mean ongoing charges of funds no longer include commission to help pay for services such as Vantage. As a result of the FCA's new rules, fund management groups have launched new versions of their funds with lower ongoing charges. We call these funds 'unbundled' funds.
The length of time taken to transfer a holding into the Vantage Service will depend on how quickly your existing manager completes the necessary administration. This varies from manager to manager however on average a transfer of stock (where your existing holdings are brought across as they are) will take approximately 3-4 weeks. A cash transfer (where the existing investment is sold and transferred to us as cash) is likely to take approximately 10 working days. You are out of the market for the duration of a cash transfer however you will retain any associated ISA wrapper.
Many funds offer you the choice between income and accumulation units. If you choose income units the income you receive will be treated as per the income instructions for your Stocks & Shares ISA, SIPP or Fund & Share Account.
The Stocks & Shares ISA and Fund & Share Account can be set up to treat income in one of three ways. The Vantage SIPP and Junior ISA can be set up for reinvestment or deposit only:
Reinvestment - Income will be held within your account and accumulated until it reaches or exceeds £10 per holding, when it will be automatically reinvested, or you can choose your own reinvestment level between £10 and £1,000. Reinvestments are made between the 11th and 21st of each month (or as soon as practicable thereafter). A dealing commission of 1% (£1 minimum, £10 maximum) will apply.
The instruction you give will apply to all holdings within that account.
The way in which you receive loyalty bonuses will depend on when you bought the units in your fund.
Loyalty bonuses paid on fund units bought before 1 April 2014 will be paid as cash. You have the option to withdraw (in the Fund & Share Account and ISA, but not the SIPP), reinvest or hold them on your account where they could be used to cover fees or fund a future investment.
New rules introduced by our regulator, the Financial Conduct Authority, mean that all loyalty bonuses earned on fund units purchased after 1 April 2014 must be reinvested back into further units. We cannot pay this money out to you and it cannot be used to cover fees.
You have three options for loyalty bonuses paid on fund units bought after 1 April 2014:
You can amend your instruction for how loyalty bonuses are treated by going to the 'Cash' tab of the account where the units are held, and then the 'Income and loyalty bonus' section. Next, click 'More detail, options and how to deal' in the 'Loyalty bonus, balance and settings' box. Then click 'Options' and follow the onscreen instructions.
Management fees are charged on a monthly basis and are calculated based on the value of your holdings at the end of each month. They are collected in the next month.
We collect fees and charges from available cash on your account. If there is no available cash within your account, we will try to collect fees from cash you hold in your Fund & Share Account.
Our system will look to collect fees in this order:
If you choose not to hold cash within your account or do not wish to use cash from within a tax wrapper (ISA/SIPP) to pay fees, you can choose to have all fees collected from the Fund & Share Account.
To choose this option:
If there is insufficient cash on your account and in the Fund & Share Account to pay, we will sell sufficient holdings to cover the amount owed and restore the suggested minimum cash balance. There will be a charge of £1.50 per deal if an automatic sale is required.
We provide a notification service to let you know if you have insufficient cash on your accounts to pay fees due and your investments are at risk of being sold. You will then be able to add money (allowances permitting), or sell holdings of your choice to raise money, and therefore avoid your investments being automatically sold. This is an opt-in service so please set an email alert now.
The Suggested Minimum Cash Balance is designed to give you an idea of the amount of cash you should hold to meet the next few months’ fees, and other outgoings. However, it is just a suggestion and you can ignore it (or amend it) if you wish.
The Suggested Minimum Cash Balance provides a good guide to how much cash you could hold, but as the value of your holdings will rise and fall, so will your fees. You may wish to adjust the cash balance you hold if there is a significant change in the value of your holdings.
You can view the management fees and charges which have been applied to your account by logging in and going to the Account Administration section of each account you hold. You then simply need to click on the ‘view history of fees charged’ link.
Funds often levy an initial fee when you invest, up to 5.5%, and an ongoing charge, typically around 1%. Many brokers, including Hargreaves Lansdown, have negotiated savings on the initial charges for their clients.
Our charge is tiered within bands and will be 0.45% per annum on the first £250,000 of funds within each Vantage account, 0.25% per annum on the value of funds between £250,000 and £1m, 0.1% per annum on the value of funds between £1m and £2m, and no charge on the value of funds over £2m.
The charge is based on the total value of funds (such as unit trusts and OEICs - not investment trusts or ETFs) held in each Vantage account. Please note these charges apply to each account separately.
Fund fees are calculated based on the values of holdings on the last day of the month.
There is no charge to place fund deals online, by telephone or post.
Online share dealing starts at £11.95 per deal, or as low as £5.95 per deal for active traders. For regular savings, pay just £1.50 per deal. View our share dealing charges.
Our charging structure aims to be competitive, simple and to be fair, to reflect the work done.
Our Vantage Service charge aims to cover the services that people use day to day and then apply separate fees for certain services that not everyone uses. Otherwise, some people end up paying for services they never use. A separate fee for those clients who want to receive paper statements is fairer to all of our clients because only those clients who use the paper service are charged for it.
The paper supplement charge is made on a per client basis, not per account. Junior ISAs and Junior SIPPs do not attract the paper fee, even if they are not set to paperless.
No. The only way to avoid the paper supplement is to select the paperless option and receive all reports and contract notes online.
The charge for sending paper statements and valuations in the post recognises the costs of production, postage and processing applying to all aspects of administering paper accounts, and includes contract notes, corporate actions and share offer confirmations.
Unfortunately it is not possible to receive some correspondence electronically and some through the post.
We believe our paperless service offers clients who are comfortable using our online service significant advantages over our postal service. Contract notes, income schedules, corporate action notifications and six-monthly investment reports are available to view (and print if you wish) from our website and we send you an email as soon as they are ready. There is no need to wait for the post.
Your important documents are stored safely and securely within your online account. They can be found quickly whenever you need them, there is no danger of personal documents going astray in the post and no need to shred confidential papers when you receive them.
To sign up for the paperless service simply:
The cost figures shown for investments held within the Vantage Service are based on the total number of units/shares held, multiplied by the average cost price (including dealing charges and stamp duty) of all purchases in the stock. The average cost price is calculated by reference to purchases only; it makes no reference to sales.
The gain/loss figure shown on your investment report is the difference between the cost of your shares or units (calculated in line with the above method) and their market value on the valuation date of your report (31 October or 30 April).
Please note that equalisation can alter the way the average cost price is calculated, as will the sale of the entire holding. Please contact us if you would like further details.