Low cost Stocks & Shares (Investment) ISAs: The Best Currently Available List!

Aegis

psychic_teabag wrote: »

Looks like Cavendish are changing their model a bit. Losing the one-off £25 fee, in exchange for an ongoing 0.05% from the trail commission. (I didn't see how the one-time-ever fee could be sustainable.) They are providing their own fund supermarket, though still using Fidelity platform underneath, but without the 0.25% switching fee.

From what I can see, they're getting a proportion of the platform fee, not the trail commission. They still say they're rebating the full trail commission.

jem16

Aegis wrote: »

From what I can see, they're getting a proportion of the platform fee, not the trail commission. They still say they're rebating the full trail commission.

It's not entirely clear where it's coming from, although it does not seem to be the trail commission.

How will Cavendish Online earn an income?

An investor WILL NOT pay anything directly to Cavendish Online. The only charge that an investor will have to pay is the AMC (Annual Management Charge). Cavendish Online will then rebate any natural trail commission received back to the client. Cavendish Online will retain a small proportion of the total annual charge payable, equivalent to £5.34 per annum for an ISA valued at £10,680.

http://www.cavendishonline.co.uk/investments/our-service/

Reading that it could possibly be that they have arranged a cut of the £45 platform fee that Fidelity recently introduced. However if that is the case then the rest of that £45 fee would still be payable to Fidelity but it doesn't mention that.

psychic_teabag

Yeah, I got the PM too - did think it was a bit of an intrusion, but it was useful info, so not bothered about it. I guess I did fall for their ploy to get someone else to post about it rather than posting it directly themselves. I also got a direct email as an existing customer.

Okay, maybe the fee is coming from platform part of the fee rather than trail commission - I wasn't quite sure about the details. I think it just says they retain part of the annual fee. I guess on the one hand we wouldn't even to know they had done such a deal with the platform provider to take some of the platform fee, but on the other hand they are being transparent about it.

jem16

psychic_teabag wrote: »

I guess on the one hand we wouldn't even to know they had done such a deal with the platform provider to take some of the platform fee, but on the other hand they are being transparent about it.

I don't think they are being transparent about it at all. They don't mention the platform fee of £45 until you delve into the "Doing Business with Fidelity Fundsnetwork pdf.

FundsNetwork has agreed to pay Cavendish Online Limited an increased commission of 0.05% per annum with respect to all of the available funds, which has been funded by a reduction of FundsNetowork’s normal platform fee (see previous section).

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

Aegis

They're stopping the £45 a month fee, so it's not from that. I meant the platform fee payable as part of the AMC.

jem16

Aegis wrote: »

They're stopping the £45 a month fee, so it's not from that.

Why would Fidelity be stopping the £45 Account Fee? They only introduced it at the end of last year.

I meant the platform fee payable as part of the AMC.

Not the way I read it. Read P5 of that document I linked to and see what you think. However it might be the Platform fee mentioned on P4. To be honest it's not clear and something to clarify with Cavendish. If it's the Platform fee mentioned on p4, surely it's going to fall foul of the Platform Review which will ban payments like this to platforms?

Fidelity's Account Fee did away with initial charges and switching fees in return for the £45 annual fee.

jimjames

jem16 wrote: »

Why would Fidelity be stopping the £45 Account Fee? They only introduced it at the end of last year.

Maybe Fidelity aren't but in my conversation with Cavendish earlier they stated the fee was being scrapped for their fund supermarket.

psychic_teabag

The email I received from Cavendish said

Are you currently paying the £45 FundsNetwork Account fee?

If you are currently paying the £45 FundsNetwork annual account fee this will now be stopped and you will receive free switching without paying this fee.
FundsNetwork will not be able to offer a refund of the £22.50 already paid as you have been able to benefit from no switching charges during this time.

(I wonder if we should move this to a new thread rather than messing up the low-cost S&S thread ? And then perhaps MSE can give the Cavendish user permission to post in that thread.)

jem16

jimjames wrote: »

Maybe Fidelity aren't but in my conversation with Cavendish earlier they stated the fee was being scrapped for their fund supermarket.

Thanks.

If they are taking a percentage of the platform fee, yet hiding it within the amc of the fund, that will surely have to change just like all the other bundled platforms.

Special_Saver2

Hi Folks,

psychic teabag, don't worry about starting a new thread. There have been so many posts in this thread now, we might as well continue discussing it here.

I also received a private message from Cavendish. If they sent these PMs without MSE's permission then that is pretty poor behaviour.

I will update my entry on the first page with the new information.

SS2