Fidelity ISA

Sunf

I opened a Fidelity stocks and shares ISA last year and am being charged 0.35% fee which is fine, but they will only accept payment by selling off my fund units! Is this normal?

dunstonh

Sunf wrote: »

I opened a Fidelity stocks and shares ISA last year and am being charged 0.35% fee which is fine, but they will only accept payment by selling off my fund units! Is this normal?

There are two main ways a platform will cover its charges.

1 - via the cash account
2 - by sale of units

When using a cash account, some only do it from the cash account of the ISA whilst some will allow the charges to be paid outside of the ISA (debit card or general cash account within the platform but not within the ISA)

Fidelity's platform is a bit long on the tooth compared with more modern options. It is long overdue modernisation and is not strong on features/options and administration. They have been changing some things but its very slow (and costly to them no doubt).

So, if you want a platform with a certain option, such as a cash account, then you should eliminate those that do not operate that way from your research.

digannio

If you want to trim your costs, you could carry out a change of agency to Cavendish Online which would reduce your platform fee from 0.35% to 0.25%. It's free and you'll continue to go through the Fidelity FundsNetwork.

Sunf

Thank you to both of you for your replies. As you can tell I am new to the Stocks and shares Isa, but I am stunned at the principle by which this process follows. It is almost the same as if the banks demanded that I sell off a few bricks in my house to pay off my mortgage! And in all my research no one mentioned that some platforms will not accept cash as payment for their management fee.


As it happens I was looking at Cavendish Online, but I'm not sure how to switch. Will I need to sell my existing funds in the Fidelity ISA and buy it again in a Cavendish ISA? Thanks

Chickereeeee

It gets worse. Fidelity take their charges by selling units from your largest fund, in each account, MONTHLY!

I manage 4 accounts (trading and ISA for both spouse and self). I like to keep a close watch on transactions and costs, so I have to update EACH account in MSMoney (the platform I use to keep track) with TWO (sell, pay fee), transactions every MONTH. Thats 96 transactions per year!

Bad enough they take money from my ISA account, but why not quarterly?

I think this may drive me to YouInvest....

C

digannio

Take a look here for change of agency. There's no selling of funds involved.....
http://www.cavendishonline.co.uk/investments/move-your-investment/currently-with-fidelity/

Chickereeeee

digannio wrote: »

Take a look here for change of agency. There's no selling of units involved.....
http://www.cavendishonline.co.uk/investments/move-your-investment/currently-with-fidelity/

Sadly, doesn't change the way Fidelity take their fees though.....

C

digannio

No, but it will save the OP money on the current arrangement.

Malthusian

Selling fund units is usually better than having to leave money in the cash account, for the simple reason that money in the cash account is just sitting there, not growing. I wouldn't use a platform that couldn't sell off fund units automatically and forced me to leave money in cash and/or sell units manually on a regular basis.

Chickereeeee

Malthusian wrote: »

Selling fund units is usually better than having to leave money in the cash account, for the simple reason that money in the cash account is just sitting there, not growing. I wouldn't use a platform that couldn't sell off fund units automatically and forced me to leave money in cash and/or sell units manually on a regular basis.

Maybe, but for many, a flow of dividends would cover the fees. My main complaint is they do it monthly rather than quarterly, however they do it.

C

jimjames

Chickereeeee wrote: »

Maybe, but for many, a flow of dividends would cover the fees. My main complaint is they do it monthly rather than quarterly, however they do it.

C

It doesn't cost you any more to do it monthly. 3% of 0.25% for a month is small and if they did switch from monthly it's more likely to be paid in advance so you'd lose out more paying quarterly.

It's seamless using Cavendish as your manager for a Fidelity plan. That's how mine is done. Seems crazy paying nearly 50% more for exactly the same thing by going direct to Fidelity!

Some managers allow you to pay fees by DD from outside the product which would be my preference as it doesn't then impact the value of the ISA but it's not a deciding factor for me. If it is for you then maybe look to one of those managers but bear in mind the fees are probably higher.