Does fidelity price promise trump HL 'deals' with fund managers?

Imnoexpert_2

I see Fidelity have a price promise which ensures that they will refund if you could have bought and held clean funds cheaper with any of the leading 4 platforms (HL, Barclays,Td,Best invest). It includes fund charges, platform fees and discounts negotiated with fund managers.

This must be worth a look for those who are looking at paying a percent platform charge, or who are fed up with Hl. interesting that interactive investor isn't included.

Those who use an adviser are not included.

SnowMan

The comparison is with 4 platforms (all percentage based platforms) so it is mainly relevant to those with medium to smaller amounts invested. It only applies to (clean) funds and not to shares and ETFs.

For those with larger amounts ATS and Interactive Investor work out much cheaper (not forgetting iweb and Halifax) but aren't part of the guarantee. So I'll stick to smaller amounts in what follows.

So based on headline rates (which are almost the same as actual rates in the low to medium fund clean class fund scenario) the comparison is between

Fidelity: 0.35%pa

vs

Best Invest: 0.4%pa (ISAs and dealing accounts) and 0.3%pa (SIPPs)
Barclays: 0.35%pa
TD Direct: 0.35%pa
Hargreaves Lansdown: 0.45%pa

Given those figures you can see that the guarantee (which applies up to 31st December) is not a major one in most cases.

The super clean share class has to be at least cheaper on the other platform for there to be any chance of the guarantee biting (except for Best Invest SIPPs where the starting point is they are already 0.05% cheaper). But even if the super clean share class is cheaper then a higher platform charge such as the 0.45% with HL can stop the guarantee biting.

But anyone with a SIPP with Fidelity has a good chance to claim under the guarantee (citing Best Invest) to get a small reduction in charges in the region of 0.05%pa up to 31st December 2014.


So in summary there isn't much, in £ terms, to the guarantee (and it only applies up to 31st December 2014).

-But it does cater for those investors who might fall for the marketing spin about super clean classes on other platforms, not realising that any slightly lower fund charges where applicable are usually wiped out by higher platform charges.

- And there could be a few scenarios (such as SIPPs and a few super clean and unit rebate scenarios) where it might make a small difference.

- And with the lack of exit fees with Fidelity it does give out the message 'we are at least as cheap as the other 4' without all the extra charges.