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Simplifying
our service

We’re simplifying our service and the funds we have available

Most funds offer unit types that we call inclusive and unbundled units. There are more details below, but in summary, after taking account of our discount (our loyalty bonus), the charges for each unit type are broadly the same.

We’ve been offering both types of funds since 2014 but we are now planning to remove the older, inclusive units from our platform. We’ll also be removing older and sometimes more expensive unbundled units. By doing this, we can simplify our service and as a result clients will benefit overall because it will be easier to find, research, deal and hold funds – with fewer versions of the same fund, you’ll find it easier to find the fund that you are looking for.

This is not a personal recommendation. Tax rules and charges can change, and benefits depend on personal circumstances.

What happens next?

Over the next few months, we’ll be instructing fund managers to convert your units to the unbundled equivalent. The conversion will happen across a series of events during this time.

This is how it will work:

  1. We’ll contact you at least 30 days before your investments are due to be converted – this could be anytime between now and into the new year
  2. On the date specified in our 30 day communication, we’ll send an instruction to the fund manager who will convert your holding – we expect this to take a few working days, but it may take longer depending on the manager
  3. Finally, we’ll contact you again to let you know your new units are on your account. Any monthly investments will be automatically updated to invest in the new units – you don’t need to do anything

There are no changes to any of HL’s charges, the fund’s manager, objectives, or risk profile and you’ll remain invested throughout.

More about fund conversions

  • The new version of the fund will have a different price per unit to your existing one, meaning the number of units you hold will change but the value will remain the same. There are no changes to the fund manager, objectives, or risk profile
  • As you’ll be fully invested throughout the conversion process, the value of your holding will be subject to market movements as normal
  • While the conversion takes place, you can’t trade in the fund but we expect a fund conversion to take only a few days to complete
  • If you currently receive loyalty bonus as cash, after the conversion you may still receive loyalty bonus but it wont be paid as cash like it is now. Loyalty bonus will instead be reinvested back into your largest fund holding, unless you instruct it to be invested otherwise
  • There’s no charge to convert and no tax liability either. There are no changes to any HL charges

Why are there different versions of the same fund and why now?

Unbundled units were introduced following changes to regulation in 2014.

We have always offered clients the choice between inclusive and unbundled units, as well as free conversions between inclusive and unbundled units.

Since then, inclusive units have become less common, many fund managers are no longer offering them, and the number of clients buying and holding inclusive units has fallen significantly. Most clients buying funds today choose unbundled units.

Given this, and the fact that the units are the same in almost all regards, we now believe the benefits of removing inclusive units and simplifying our service outweighs the benefits of offering both types of units.

Not just inclusive units

Most of the of the units we’ll be converting are inclusive units, but you might notice that some of your investments due to be converted are already unbundled. This is because since you’ve bought them, newer, often cheaper versions have been introduced by the fund groups. Where there is a cheaper unbundled equivalent available we’ll convert you to this fund.

Your questions answered