High or low Fidelity? - RDR charges announced

koru

SnowMan wrote: »

So there will be a decision at 9th February to make on whether to keep funds on as dirty funds or go clean and pay 0.35%pa and Fidelity will have a calculator on their website to help investors decide what to do.

By April 2016 everything will have to be switched to clean. Fidelity I guess are likely to set a date just before that when the full switch happens.

A potential major problem with Fidelity, hidden away in their Q&A is that if you want to switch to clean, they are doing this by selling your dirty fund and reinvesting the proceeds in the clean version, rather than getting the manager to convert the class. So you will be out of the market for a couple of days, during which time the market could move against you substantially. And if the clean class has initial charge or dilution levy you will incur this too. This could be VERY costly.

Fidelity claim that their version of switching will not trigger CGT. As they are simply selling and buying, I’m not completely convinced they are right.

If I needed to switch to clean, I would not be using Fidelity.

Mattygroves2

Not sure if it's been mentioned yet but within the detail of Fidelity's "Moving your investment" document is the fact that they will refund exit charges of up to £300 by cheque on receipt of proof that you've paid them.

Something else I've noticed in that document is that it looks like if you transfer as cash then there is a 0.25% charge for moving from the ISA cash park to funds. This could be very expensive.

The one thing I don't like is that I've got an ISA with both shares and funds with HL but with Fidelity I'd have to split it between them and Charles Stanley so I couldn't top up both bits in one year (which is what I normally do) as that would count as contributions to two ISAs. Something else to think about.

Lokolo

Mattygroves2 wrote: »

The one thing I don't like is that I've got an ISA with both shares and funds with HL but with Fidelity I'd have to split it between them and Charles Stanley so I couldn't top up both bits in one year (which is what I normally do) as that would count as contributions to two ISAs. Something else to think about.

I don't think this is the case. Your shares will still be with your Fidelity ISA but you will just use the Charles River platform to trade.

Mattygroves2

The fidelity site clearly says that you open a Sharenetwork ISA for the shares and then states that you cannot hold both a Fidelity ISA and a Sharenetwork ISA in the same tax year so I think I'm stuffed.

Anyone got any experience of running a mixed funds / shares ISA with Fidelity ?

koru

Cracking analysis at the langcat:
http://langcatfinancial.co.uk/2014/01/next-please-fidelity-joins-new-world/

That guy is very entertaining:
"Fidelity is very competitive at lower fund values and only really starts to struggle at the higher end – when the fixed fee Jets start to undercut all the percentage-based Sharks by harnessing the unquestionable but majestic power of rudimentary arithmetic."

SnowMan

Imnoexpert wrote: »

My calculations are getting more complicated!

I now have an informed choice to make and can choose a platform from a variety of competitors all tailoring their service to attract a particular market sector. Maybe I always could but wasn't quite as aware as I am now. It's refreshing but challenging.

I see fidelity say they are going to produce a platform comparison tool to help. I am currently using yours snowman -I hope you will update it and make it available as I have found it really helpful. Thanks.

I updated my spreadsheet yesterday to include Fidelity's new charges. There are a couple of things I wasn't sure about which meant I didn't make it available and have been very busy today; only just back home. Anyway as I've been asked the provisional version for download is here which should be correct for funds only portfolios

https://drive.google.com/file/d/0BxA6Przq6KI1YkRWZGFGZkZrRVU/edit?usp=sharing

Any errors spotted plaese let me know (it is a nightmare to try and accurately understand some of the charging structures so bear that in mind)

The issues I wasn't sure about for shares/ETFs with Fidelity were:

1. I think there is only one £5.10pm share custody charge if you open a share ISA and dealing share account but it isn't clear

2. I thought I read somewhere that shares couldn't be held in Fidelity's (main) SIPP account, I was going to try and check that out

3. Fidelity had some odd thing where ETFs could be held in a SIPP but were charged as per funds but then there were dealing charges on top. I haven't checked that out (I'm not even sure what range of ETFs can be purchased).


I will re-iterate my belief that some here are overcomplicating by trying to allow for fund charges also and as a result coming up with completely wrong answers.

If you want to adjust for slightly cheaper super clean pricing or whatever for your chosen funds on a platform then do so at the end after having compared platform costs. I have expressed the platform charges as percentages also so you can see how much cheaper your funds must be for an otherwise expensive platform to actually be overall cheaper.

It is worth saying that the comparison is of clean pricing. In the short term it may be better to remain dirty with Fidelity for example if holding tracker funds such as the HSBC range.

Lokolo

Might be worth noting that Charles Stanley charge for overseas stocks, currently you calculator says nil costs for holding shares.

SnowMan

Lokolo wrote: »

Might be worth noting that Charles Stanley charge for overseas stocks, currently you calculator says nil costs for holding shares.

Thanks.

For the avoidance of doubt I've allowed for a share charge of

- 0.25% pa of the portfolio value (subject to min of £20 and max of £150pa).
- The min of £20 and max of £150 are across all accounts (that is if ETFs are held in each of an ISA, SIPP and trading account the total custody fee across all accounts cannot be more than £150)
- The capped and collared 0.25% custody charge (but not the £120 SIPP charge) is waived if 6 or more sales/purchases of ETFs/shares in a 6 month period.

I've allowed for the waived charge approximately by saying that if there are 12 share sale and purchases in a year then they are assumed to be 6 each 6 months hence a year round waiver.

But you are right I haven't allowed for the £30 per annum per holding of overseas shares, charged annually in arrears.

I'll add something into the comments/warnings on the next version but actually allowing for it is going to make the inputs too complicated.

jamesd

Might be worth mentioning that the cap and discount calculation for Fidelity and cap for Trustnet Direct is across all accounts combined, rather than per sub-account like say HL. That'll make a difference to those with SIPP and ISA say. the Trustnet Direct cap with just £80,000 invested may well be particularly interesting.

Jegersmart

cepheus wrote: »

Has Fidelity always waived dealing fees for open ended funds or is that a recent change? I thought only HL and Charles Stanley didn't charge.

In SIPP it has always been free, in ISA's and non-IAS investment accounts it has been 0.25% from memory.

J