Questions on fund charges - Fidelity ISA

RASKOLNIKOV967

Apologies if these are obvious questions, but I'm becoming increasingly confused by all the post-RDR changes.


I have a single stocks & shares ISA fund currently worth around 14k. I've been investing just around a few hundred per month over the last 3 or 4 tax years.


The ISA is with Fidelity & I invest in the following HSBC trackers - the total expense ratio for each fund is shown:
HSBC American Index Fund TER 0.26%
HSBC European Index Fund TER 0.31%
HSBC FTSE 250 Index Acc TER 0.27%
HSBC FTSE All-Share Index Acc TER 0.27%


My questions are:


1. There doesn't seem to be any platform charge listed (on Fidelity's website) in addition to the TERs shown above. Am I right in thinking I am only paying the TER & no platform charge, or am I not looking in the right place for the platform charge?


2. If the answer to question 1 is that there's no platform charge right now, will there be one from April 2014? Will the TERs also change to be in line with the "clean class" funds?


Any help would be much appreciated.

Lokolo

http://www.bloomberg.com/news/2014-01-15/hargreaves-drops-as-broker-cuts-fees-pressuring-rivals.html

Fidelity are announcing their charging structure next week.

grizzly1911

Lokolo wrote: »

http://www.bloomberg.com/news/2014-01-15/hargreaves-drops-as-broker-cuts-fees-pressuring-rivals.html

Fidelity are announcing their charging structure next week.

I wonder how big a difference that will be for Cavendish? They have only recently switched to clean class only with a 0.25% platform fee.

It would be nice if their was a cap or reduction in platform fee over certain fair thresholds

Rollinghome

RASKOLNIKOV967 wrote: »

My questions are:

1. There doesn't seem to be any platform charge listed (on Fidelity's website) in addition to the TERs shown above. Am I right in thinking I am only paying the TER & no platform charge, or am I not looking in the right place for the platform charge?

2. If the answer to question 1 is that there's no platform charge right now, will there be one from April 2014? Will the TERs also change to be in line with the "clean class" funds?

Any help would be much appreciated.

Fidelity have details here including a booklet "New investment options and simpler charging" to download on how the new fee structure will work. Final details are expected next Wednesday.

A very small platform charge is currently included within the AMC of the funds you've listed. To conform with RDR, Fidelity are already offering the 'clean' versions, class C. For those, the AMC is about 0.10% with a TER around 0.18% but you will then be charged an additional and separate platform fee of 0.25% on all funds.

westy22

As you can see 0.18% + 0.25% = 0.43% which is more expensive than the 'dirty' version. AFAIK you can continue to add to the old version provided you already have a DD regular investment in place - at least you can until 2016 at which point you will be forced to convert.

The secret is not to amend the regular investment or that will trigger a change into 'clean'.

bugbyte_2

westy22 wrote: »

As you can see 0.18% + 0.25% = 0.43% which is more expensive than the 'dirty' version. AFAIK you can continue to add to the old version provided you already have a DD regular investment in place - at least you can until 2016 at which point you will be forced to convert.

The secret is not to amend the regular investment or that will trigger a change into 'clean'.

I found this last night when I was shovelling some money into my S & S ISA on Cavendish. Previous 'Dirty' TLR was 0.3 for Fidelity World Index, now 0.15 TLR +0.25 service. Trackers appear to have become more expensive, but managed funds might have reduced in costs - need to have a proper look when I get time.

Perelandra

westy22 wrote: »

As you can see 0.18% + 0.25% = 0.43% which is more expensive than the 'dirty' version. AFAIK you can continue to add to the old version provided you already have a DD regular investment in place - at least you can until 2016 at which point you will be forced to convert.

The secret is not to amend the regular investment or that will trigger a change into 'clean'.

The above also represents my understanding - I'm leaving my trackers with Fidelity (bought through Cavendish) untouched, including the Monthly Savings Plan, for as long as possible.

Deneb

Lokolo wrote: »

Fidelity are announcing their charging structure next week.

I thought I was coping with this quite well, but now I'm confused. I've already received communications from both Fidelity and Cavendish which state the new charging structure to be Clean Class AMC plus 0.25% service charge plus advisor commission and a £45 per year platform fee.

Cavendish confirmed this and added that for their customers the advisor commission will be zero and the Fidelity platform fee will be waived.

This has already been implemented for new investments - I made an investment into one of my funds last week which had to be in the new clean fund as the bundled fund is no longer available via Fidelity for new lump sum investments, although as mentioned monthly savings plans can still go into bundled funds until 2016 as long as the existing instruction and amount is not changed.

Are you saying that this is all now changing again, or is this completely separate to the Fundsnetwork charges? :huh:

Hooloovoo

westy22 wrote: »

As you can see 0.18% + 0.25% = 0.43% which is more expensive than the 'dirty' version. AFAIK you can continue to add to the old version provided you already have a DD regular investment in place - at least you can until 2016 at which point you will be forced to convert.

The secret is not to amend the regular investment or that will trigger a change into 'clean'.

This is what I intend to do also. I currently fill my ISA allowance with a monthly plan. I was going to update that plan to reflect the increase in ISA allowance, but now I am going to leave well alone until forced to convert. It means I wont be able to completely fill my ISA but that will be more than compensated for by not having to pay the extra charges.

As usual, state meddling to make things "more fair" just ends up costing everyone more!

talexuser

Hooloovoo wrote: »

As usual, state meddling to make things "more fair" just ends up costing everyone more!

I sympathise with your situation but I think the changes will mean generally that small investors (and people in trackers) will pay more, middle size investors will pay much the same, and large investors may pay less... That seems to be the price for transparency!

Lokolo

Deneb wrote: »

I thought I was coping with this quite well, but now I'm confused. I've already received communications from both Fidelity and Cavendish which state the new charging structure to be Clean Class AMC plus 0.25% service charge plus advisor commission and a £45 per year platform fee.

Cavendish confirmed this and added that for their customers the advisor commission will be zero and the Fidelity platform fee will be waived.

This has already been implemented for new investments - I made an investment into one of my funds last week which had to be in the new clean fund as the bundled fund is no longer available via Fidelity for new lump sum investments, although as mentioned monthly savings plans can still go into bundled funds until 2016 as long as the existing instruction and amount is not changed.

Are you saying that this is all now changing again, or is this completely separate to the Fundsnetwork charges? :huh:

Yes, you only need to go on to Fidelitys website to see that depending on whether you are a private investor or invest through an intermeditary to see that you get taken to 2 different sites/platforms. One is Fidelity, one is Fidelity FundsNetwork