Contesting BestInvest closure fees for Junior ISAs

cmnoblin

Hello everyone

I have decided to transfer my daughters' JISAs from Tilney BestInvest to a new provider (which happens to be my employer).

My dilemma is that their extortionate fee of £50+VAT for closing an account - surely it doesn't actually cost them this much - represents more than 10% of the value of each of their funds, both worth around £500. In my opinion, this is a lot of money to take out of a child's fund and it has succeeded in making me think twice about transferring. As someone who works in the industry, I see this as a post-sale barrier to switching providers, which contravenes the FCA's initiative on Treating Clients Fairly (TCF).

I am interested to know whether anyone thinks I have a leg to stand on with this, especially that few other providers charge this sort of fee?

Many thanks in advance for any advice or opinions offered!

dunstonh

My dilemma is that their extortionate fee of £50+VAT for closing an account - surely it doesn't actually cost them this much

What makes you think that £50 is an extortionate fee?

represents more than 10% of the value of each of their funds, both worth around £500.

That is irrelevant. Why should someone with £1,000,000 pay more than someone with £1,000? Fixed fees are cleaner and fairer for things like this.

In my opinion, this is a lot of money to take out of a child's fund and it has succeeded in making me think twice about transferring.

It is. However, you need to blame the person that chose a provider that had the fee.

As someone who works in the industry, I see this as a post-sale barrier to switching providers, which contravenes the FCA's initiative on Treating Clients Fairly (TCF).

No it does not.

I am interested to know whether anyone thinks I have a leg to stand on with this, especially that few other providers charge this sort of fee?

Quite a lot of providers make explicit charges. There are two main models. The annual percentage model that tends to have few or none explicit charges for events and the other (which you have here) which is a lower annual cost but explicit charges for a range of admin events.

As you (or someone else) bought this contract without advice, you lack some of the consumer protections that exist. However, the key thing is whether you agreed to this contract term or not. If you did then its too late to complain about it later on down the road. If you did not agree to it then you have grounds for complaint.

Archi_Bald

If your employer is keen to get the business, perhaps they'd pay any transfer fees?

As an aside, how much does your employer charge for transfers?

eskbanker

cmnoblin wrote: »

their extortionate fee of £50+VAT for closing an account - surely it doesn't actually cost them this much

If financial services companies only charged customers exactly what it cost them to provide a service, without making any margin, then you might not have a job!

jimjames

Archi_Bald wrote: »

If your employer is keen to get the business, perhaps they'd pay any transfer fees?

At £500 total investment it's unlikely to be a massive money spinner for them so I can't imagine they're over keen to attract it.

OP, is it really worth moving? You'd need a massive increase in funds or huge reduction in fees to offset such a fee, or even a reduced exit charge.

What does the new vs old annual fee look like?

PeacefulWaters

What are the benefits of transferring?