Up to 5,000 retail customers who invest directly with Jupiter will see their holdings transferred to Hargreaves Lansdown as yet another asset manager pulls out of administering ISAs and investment savings schemes.
Anyone who used Jupiter's ISA scheme to hold its investment trusts will be better off with Hargreaves's Vantage Stocks & Shares ISA as they will pay a slightly lower annual charge at 0.45%. Jupiter used to impose a 0.5% annual plan charge, so someone with a £10,000 portfolio would have paid £50 a year in fees.
Jupiter customers may pay slightly more with Hargreaves to occasionally top up their investment trust holdings as the latter charges £11.95 if you do less than 10 transactions a month. In comparison Jupiter has a 1% charge, capped at £100, to buy its trusts. However, Hargreaves does offer a £1.50 per deal charge if you set up a regular investing scheme, namely putting money in each month.
There is a growing trend for asset managers to withdraw their direct investing schemes, as we explained in this article from May. For example, Standard Life announced in April that its investment trust savings scheme would be transferred to Alliance Trust Savings.
Asset managers originally set up the direct investment schemes in order to maintain a close relationship with customers, many not charging any fees to buy products.
Approximately 10% of Aberdeen Asset Management's managed closed-end fund shareholder base use its direct savings plans. Approximately 12.5% of Baillie Gifford's investment trust shareholder base have their money parked in its three savings schemes: ‘Investment Trust Share Plan’, ‘Investment Trust ISA’ and ‘Children’s Savings Plan’.
Sadly these examples are becoming quite rare in the industry. Asset managers are increasingly focused on what they do best – running investment funds – and leaving customer administration to investment platforms like Hargreaves.
Jupiter is withdrawing its administration services at the end of November. 'In recent years we have become increasingly aware that our investors now expect to be able to access and manage their accounts online, in real time,' says Richard Pavry, head of investment trusts at Jupiter.
'After careful consideration we have concluded that our current administration service is no longer able to meet our clients’ expectations. We have therefore taken the decision to facilitate this transfer in order to give our clients access to the more sophisticated tools fund platforms are able to provide.'