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High or low Fidelity? - RDR charges announced

SnowMan
SnowMan Posts: 3,484 Forumite
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edited 22 January 2014 at 9:21PM in Savings & investments
Fidelity FundsNetwork are announcing their new charging structure tomorrow for non-advised investors according to the mainstream press. Hence I am setting up this thread.

I wonder if it will be in line with their advised offering for ISAs and dealing accounts? If so that would be £45 flat charge across dealing and ISA accounts + 0.25%pa. The new Fidelity SIPP seems to be 0.65% pa charge.

Cavendish investors come under advised charging which came in mid-December (with no adviser charge only platform charge) they pay the 0.25%pa but don’t pay the £45.

Hopefully Fidelity Fundsnetwork will do the same as their advised offering and only activate the new charge when you buy a new fund or make a new payment into an existing fund. Might enable some with HSBC retail trackers to stay on platform for another year and a bit (although it will have to change by April 2016 at the latest).

Sharedealing operates under Fidelity ShareNetwork as far as I can tell and I'm guessing that won't be affected (although I've never heard anyone here mention they use it).

If anyone hears anything please post up.

(edit: details of new charging structure now out and can be accessed via this link)
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«1345

Comments

  • Lokolo
    Lokolo Posts: 20,861 Forumite
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    I believe Cavendish get paid via the 0.25% fee, so what could happen is Fidelity remove the middle man and will either a) pocket the additional difference or b) lower the fee by the amount they would give to the middle man

    If b) it could spell trouble for the like of Cavendish.
  • SnowMan
    SnowMan Posts: 3,484 Forumite
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    Lokolo wrote: »
    I believe Cavendish get paid via the 0.25% fee, so what could happen is Fidelity remove the middle man and will either a) pocket the additional difference or b) lower the fee by the amount they would give to the middle man

    If b) it could spell trouble for the like of Cavendish.

    It looks on the surface like Cavendish already negotiated a deal with Fidelity hence why the £45 doesn't apply.

    That could work quite well for Fidelity. It is a sort of differential pricing for them. Savvy investors go to Cavendish and Fidelity still get a good chunk of their 0.25% platform fee and other investors go direct to Fidelity and Fidelity get £45 + 0.25% for them.

    I'm no expert on how it works though.
    I came, I saw, I melted
  • i'd have thought they'd charge at least as much for non-advised as they do for advised.
  • SnowMan
    SnowMan Posts: 3,484 Forumite
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    i'd have thought they'd charge at least as much for non-advised as they do for advised.

    I think of them as predominently an IFA platform. So it wouldn't go down well with their IFA clients if the platform charges for their clients were higher.

    The best we can hope for perhaps is a waiver of the £45 for the first year or something (although I would say that is odds against).
    I came, I saw, I melted
  • jimjames
    jimjames Posts: 17,974 Forumite
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    I thought Fundsnetwork pricing was already on the new RDR model? Are they changing that with their announcement or it is for something else?
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Lokolo
    Lokolo Posts: 20,861 Forumite
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    jimjames wrote: »
    I thought Fundsnetwork pricing was already on the new RDR model? Are they changing that with their announcement or it is for something else?

    Fundsnetwork have yes. But the consumer platform of Fidelity hasn't. Although they don't announce it as such, I suspect the direct to consumer model still uses fundsnetwork, just not through an intermeditary (at a guess).
  • Rollinghome
    Rollinghome Posts: 2,711 Forumite
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    Haven't seen anything yet but as they say no news is, err, no news. Wonder if we'll hear more about this today or will it be so good they can't tell us - like HL?

    "Fidelity secures 'lowest cost' share classes from 75% of key fund partners

    Fidelity Worldwide Investment has secured best price fund deals from the vast majority of its major fund partners after groups agreed to sign up to its recently-unveiled Access programme.

    Investment Week can reveal 15 of Fidelity's top 20 fund partners, ranked by assets across its UK platform business, have joined the Access programme and agreed to provide the platforms with their lowest cost share classes." http://www.investmentweek.co.uk/investment-week/news/2318501/fidelity-secures-lowest-cost-share-classes-from-15-of-20-key-fund-partners
  • dunstonh
    dunstonh Posts: 118,021 Forumite
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    Pricing is out:
    http://www.citywire.co.uk/new-model-adviser/fidelity-stokes-exec-only-price-war-with-new-charging-structure/a729594?ref=new-model-adviser-latest-news-list

    0.35% on first £250k.

    Dont read too much into the superclean details as AMC could be getting mixed up with TER/OFC. Plus, until we know what deals all the platforms and distribution channels get, you wont know the value of the discounting.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • So am I right in thinking that if I have an active monthly plan with Fidelity (via Cavendish) in unclean funds, mostly trackers, it is cheaper to let this keep going until it has to be transferred to clean?

    And that for any new investments I make, the cost of tracker funds will now be higher, with less differential between managed funds.
  • SnowMan
    SnowMan Posts: 3,484 Forumite
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    edited 22 January 2014 at 12:49PM
    So am I right in thinking that if I have an active monthly plan with Fidelity (via Cavendish) in unclean funds, mostly trackers, it is cheaper to let this keep going until it has to be transferred to clean?

    And that for any new investments I make, the cost of tracker funds will now be higher, with less differential between managed funds.

    There seems to be a divergence between the advised and non-advised Fidelity FundsNetwork charging structures.

    Cavendish comes under the advised fee structure (albeit they don't give advice) of 0.25%pa + £45 but the £45 doesn't apply to Cavendish customers. So Cavendish (via Fidelity) is just 0.25% for ISAs and dealing accounts.

    Fidelity Fundsnetwork direct looks like it will be 0.35%pa.

    So it looks like Cavendish via Fidelity customers (they don't have a SIPP) will have lower charges (0.25%pa) than Fidelity Fundsnetwork direct customers (0.35%).

    For Fidelity advised charging (which includes Cavendish) the switch to clean pricing doesn't happen until new investment into a fund triggers it, continuing a dirty regular contribution at the same level doesn't trigger it (but by April 2016 at the latest the switch to clean charging will have had to have happened).

    With HSBC trackers being 0.1% cheaper clean than dirty (and there being no commission rebate from Cavendish) then the longer you can stay on dirty pricing the better if that is what you are regularly investing in.

    With Legal and General trackers you need to compare the rebated commission % plus 0.25% against the amount by which the clean class is cheaper (requires a calculation)
    I came, I saw, I melted
This discussion has been closed.
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