Charles Stanley Direct - Paying Fees

irm

Hi all,

I have a S&S ISA (newly opened) with Charles Stanley, with a 0.25% pa fee for each fund held. It's been open just under a month, and got its first charge on 1st May (for less than 50p).

I was just wondering how others normally handle paying these fees? I know you can pay in money via a debit card payment (that doesn't affect your ISA subscription limit), but that sounds like a bit of a faff if you need to remember to do that every month. I wouldn't mind so much if it was only going to be once or twice a year.

Is there no way to handle payment automatically, eg a direct debit? From a brief email exchange with CSD I'm led to believe you could automatically deduct the fees from units of the funds within your account, but I assume that isn't something people would recommend?

Thanks

gterr

Can you not leave a little cash uninvested in your ISA account so that CSD could help themselves to the fees when they arise?


If your fees were ever large enough to warrant it you could pay in a separate amount by debit card specifically to cover the amount levied in fees. You can do this retrospectively - within 6 weeks of the fees being levied, I think.

irm

gterr wrote: »

Can you not leave a little cash uninvested in your ISA account so that CSD could help themselves to the fees when they arise?

I'm not sure if you can do that. When selecting the option to pay-in money for fee payment, it states "payment amount must exactly match the fees amount, otherwise the payment may be rejected".

That suggests you can't hold money just for fees, unless it's paid in as part of the ISA limit and not used to purchase funds. But then you're missing out on an (admittedly small) portion of what you can invest each year.

gterr

irm wrote: »

That suggests you can't hold money just for fees, unless it's paid in as part of the ISA limit and not used to purchase funds. But then you're missing out on an (admittedly small) portion of what you can invest each year.

Yes, you do need to hold the uninvested money as part of your ISA allowance, but if it's only 50p a month is that really an issue? And as I said, you can then retrospectively pay in extra money by debit card specifically to cover the fees, any time within 6 weeks of them being levied. That way you'd get the uninvested cash back within your ISA. Hardly worth bothering though if your fees are approx. £6 per year, but might be useful in the future if your investments increase significantly in value.

guymo

You'd have to say it's a daft system though. Suppose someone maxes out their ISA allowance on day 1, as some do, and get it all invested, so they can no longer pay cash into the account. There will be a monthly fee of about £3 to pay every month and one has to log on and pay it by debit card. For a "set it and forget it" investor this certainly makes the forgetting part difficult/dangerous.

Isn't there another way?

gterr

guymo wrote: »

You'd have to say it's a daft system though. Suppose someone maxes out their ISA allowance on day 1, as some do, and get it all invested, so they can no longer pay cash into the account. There will be a monthly fee of about £3 to pay every month and one has to log on and pay it by debit card. For a "set it and forget it" investor this certainly makes the forgetting part difficult/dangerous.

Isn't there another way?

I can't really see the problem here. When you are investing your ISA funds it's not hard to leave a bit uninvested as cash, in fact it's hard not to if you are trying to balance or rebalance a number of holdings. In your example above you would need to leave just £36 for the whole year. That's hardly going to make a big impact on the return on your investments. Also, if you are in dividend-bearing funds there may be some cash coming into your ISA account during the year anyway (for instance, if you have INC funds), so the cash in your account is likely to be topped-up as you go along. You still have the option of paying the fees retrospectively by debit card if they become sizeable.

Shaolin_Monkey

Yes leaving some cash uninvested to cover fees seems to be a sensible way to do it if you don't want the hassle of manually paying by card or have them sell units to pay fees.

Also are they able to take the fees from a linked account? Lets say you have an ISA and a standard trading account. Are they able to take the fees for the funds held in the ISA from cash in the trading account?

DiamondLil

Shaolin Monkey,
It seems not - I 'phoned CS this morning, and was told the charges will come only from the ISA.....
A tad annoying for me, as I paid cash in to my dealing account a while ago specifically to fund the Charles Stanley fees.

soulsaver

You could have 10+ years of S&S ISAs with them which could make the fees somewhat less insignificant... but you could always go elsewhere and save a few £hundred a year in charges AND the hassle.

irm

Well, for now I've just paid the 40p fee manually. I have 10K invested, and I was waiting until July before deciding what to do with the other 5K of the allowance (drip feed it for the rest of the year or lump sum it) so I'll dither over my fee-paying options in the meantime.

I'm certainly with guymo on thinking it's a daft system though. Yes we're only talking about small sums, and yes it's not too much of a hassle to either pay it manually or leave some money invested, but it really shouldn't have to be that way.

irm

Sorry to dig out this thread again, but I'm now at the point (due to the NISA limits) where I might start some monthly investing (after a few very large lump sums to get things started) and I see no way of setting up a monthly direct debit with CSD?

As far as I can tell, you can set up "monthly investing" that will take the specified sum out of your cash balance each month, but it seems to be up to you to ensure the cash portion has enough in it, which would probably mean setting up a standing order. It just all seems a bit clumsy to me. Guess that's why they're low cost.