Platform fees and ISA subscriptions

verybigchris

Daft question: Do payments towards a platform fee on an S&S ISA count as subscriptions against that year's ISA allowance?

It feels to me like they shouldn't. However, the recent changes at HSBC suggest that the platform fee charges will be taken from the Uninvested Cash account within the S&S ISA, and any transfers into that account count as a subscription. That could mean a small platform fee payment could prevent someone opening a new ISA that year, or could push them over their annual ISA allowance.

watcher13

Good question - I would think not, as the contribution less the platform fee would be applied to the ISA

Linton

With iii they take the quarterly charge from the cash in your ISA. If you havent got enough there is a £25 penalty. You cant pay extra in if the ISA is no longer current.

To add to the annoyance, fund charge rebates are paid outside the ISA so you cant use those. This is because of HMRC rules.

SnowMan

verybigchris wrote: »

However, the recent changes at HSBC suggest that the platform fee charges will be taken from the Uninvested Cash account within the S&S ISA, and any transfers into that account count as a subscription. That could mean a small platform fee payment could prevent someone opening a new ISA that year, or could push them over their annual ISA allowance.

Reading through the documents that the HSBC Global Investment Centre sent, I don't see anything to indicate that the charge will be taken from the uninvested cash account within the S&S ISA. The documentation seems to be quite clear that is NOT the case.

The Account Fee will be calculated separately for your Funds Portfolio and if applicable your ISA Funds Portfolio. Both amounts will be taken from your HSBC current account or savings account which you have nominated as your default settlement account for your Funds Portfolio. The charge will be taken on a monthly basis in arrears.

verybigchris

SnowMan wrote: »

Reading through the documents that the HSBC Global Investment Centre sent, I don't see anything to indicate that the charge will be taken from the uninvested cash account within the S&S ISA. The documentation seems to be quite clear that is NOT the case.

The problem is that two pages later, that same leaflet says "For an ISA Funds portfolio, your settlement account will always be your Uninvested Cash Account".

Previous to the recent GIC changes, the settlement account for an ISA was your bank account, but that changed in the last month or so. It's as if they've brought in the platform fee and the GIC changes at the same time without realising how one affects the other.

SnowMan

verybigchris wrote: »

The problem is that two pages later, that same leaflet says "For an ISA Funds portfolio, your settlement account will always be your Uninvested Cash Account".

Previous to the recent GIC changes, the settlement account for an ISA was your bank account, but that changed in the last month or so. It's as if they've brought in the platform fee and the GIC changes at the same time without realising how one affects the other.

The Settlement Account for the ISA account is indeed the uninvested cash account.

But the account fee for the ISA Funds Portfolio is taken from the Settlement Account for the Funds Portfolio (not the ISA Funds Portfolio Settlement Account), see my earlier quote. So the account fee is not taken from the Settlement Account for the ISA Funds Portfolio.

verybigchris

SnowMan wrote: »

The Settlement Account for the ISA account is indeed the uninvested cash account.

But the account fee for the ISA Funds Portfolio is taken from the Settlement Account for the Funds Portfolio (not the ISA Funds Portfolio Settlement Account), see my earlier quote. So the account fee is not taken from the Settlement Account for the ISA Funds Portfolio.

Thank you! I'm not sure how I managed to read that quote so many times without understanding it properly

I'd still be interested to learn how other providers manage these charges; if some (like iii) take from inside the ISA and some from outside then that's something that should be added to any comparisons.

Linton

Linton wrote: »

With iii they take the quarterly charge from the cash in your ISA. If you havent got enough there is a £25 penalty. You cant pay extra in if the ISA is no longer current.

To add to the annoyance, fund charge rebates are paid outside the ISA so you cant use those. This is because of HMRC rules.

From further investigation iii do operate the same as HSBC. They try to get the money from the Trading Account (outside the ISA), then from the ISA, and finally from your registered bank account.

jimjames

verybigchris wrote: »

Thank you! I'm not sure how I managed to read that quote so many times without understanding it properly

I'd still be interested to learn how other providers manage these charges; if some (like iii) take from inside the ISA and some from outside then that's something that should be added to any comparisons.

HL take the platform charge from the rebates aka Loyalty bonus applied to your account if it will cover it.

Jupiter allow you to pay the management charge by Direct Debit so it isn't coming out of your ISA subscriptions.

grey_gym_sock

jimjames wrote: »

HL take the platform charge from the rebates aka Loyalty bonus applied to your account if it will cover it.

actually, that's not the first place they try. if the charges relate to an ISA, they first take it from any cash in the ISA itself, then from any cash in the funds & shares (i.e. unwrapped) account, then from the loyalty bonus account.

but you can ask them to make the funds & shares account the first place they try, which lets you pay with cash outside the ISA.