Fidelity ISA

Rollinghome

Chickereeeee wrote: »

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

If it's any consolation, if you don't have enough cash in your Hargreaves Lansdown account when they take their monthly fees, they sell off your investments and then charge you a further £1-50 fee per stock for doing it. Despite being one of the most expensive platforms around they won't allow automatic DDs either.

Chickereeeee

jimjames wrote: »

It doesn't cost you any more to do it monthly.

No, but I have 96 transactions per year I would rather not have to monitor....

C

Sam_J12

I use the Fundsnetwork platform and am overall happy with it, as I'm not really interested in bells and whistles and it does the basic things well enough. Perfectly happy for them to sell off units of the largest fund for fees. I don't really understand the complaint of the poster claiming it is arduous to keep track of all these transactions - I don't see why it would take more than 10 minutes each month?

bowlhead99

Sam_J12 wrote: »

. Perfectly happy for them to sell off units of the largest fund for fees. I don't really understand the complaint of the poster claiming it is arduous to keep track of all these transactions - I don't see why it would take more than 10 minutes each month?

For people like us who are happy to sink time into looking at investment screens or discussing stuff online, maybe 10 mins a month is not a big inconvenience. For some people, two hours a year out of their leisure time is an annoyance. How much do you value your time at? If you're not retired, probably more than minimum wage. If you already give up 60 hours a week between work life and commuting to earn £30 an hour and treasure your free time, probably some multiple of the £30 an hour.

Of course, having your platform manager sell shares or units out of an arbitrary one of your holdings is avoidable with most platforms if you're willing to have some uninvested dividends or unspent ISA contributions just sit dormant in the account waiting to get burned up through the fees, but seems inherently efficient compared to just having them direct debit you for payment as and when.

In my SIPP account I'm happy for them to take money out of the cash reserve I keep on the account because it's an account that's benefited from tax relief and makes the fees effectively cheaper. But in an ISA or unwrapped trading account I'd much rather not have cash sitting there doing nothing as a buffer for when they want paying.

Still, you pays yer money and takes yer choice. I didn't choose Fidelity, so no complaints from me!

dunstonh

Sunf wrote: »

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

There is a historic reason for this. When funds were bundled, the fund houses used to pay a cut of the annual management charge to the platform. So units did not need to be sold. When the regulator decided to end bundling of charges, it meant the platforms had to start charging explicitly.

Most of the more modern platforms used modern software techniques or bought their software (from FNZ for example). So, changes were easy and relatively low cost. For the original fund supermarkets that started 15 years ago with their own software, they are showing their age and making changes is expensive.

Most platforms are not making a profit or are only barely are. 5 platforms are up for sale or under strategic review at the moment. Even the profitable ones are under pressure from their owners as the the level of profit is not as much as they believe they could make elsewhere.

Last year, it was reported that Cofunds were looking to modernise their platform by changing to Bravura (software) at a cost of tens of millions of pounds. Cofunds largely suffers in the same way FNW does with outdated processing.

They cant afford to make big changes and apply sticking plaster methods that are lower cost.

Sam_J12

bowlhead99 wrote: »

For people like us who are happy to sink time into looking at investment screens or discussing stuff online, maybe 10 mins a month is not a big inconvenience. For some people, two hours a year out of their leisure time is an annoyance. How much do you value your time at? If you're not retired, probably more than minimum wage. If you already give up 60 hours a week between work life and commuting to earn £30 an hour and treasure your free time, probably some multiple of the £30 an hour.

I still don't think it should be a major deal for somebody who already feels the need to keep track of everything in his/her tracking software. And it is not harder than keeping track of fees paid in cash, which the poster would also presumably also do.

ChopperST

Sorry for the highjack but for those of you who have migrated from Fidelity to Cavendish is it literally a like for like swap with no time out of the market or do Fidelity sell your funds and Cavendish re-purchase them with cash?

Malthusian

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.

Dividends should be reinvested immediately so they can start growing, not sit in the cash account doing nothing.

oldfella

the only change if for Cavendish to be changed to be your broker on your Fundsnetwork account.

Rheumatoid

Sorry, not meaning to hijack this thread but I asked fidelity if they would offer any incentive to stay and got this response:

"Thank you for contacting Fidelity regarding the charges applicable to your ISA.

I understand you would like to know what we can offer you to remain as a Personal Investor, investing directly with Fidelity.

As a direct client, the following charges are applicable to your investments:

- Ongoing Charges/Total Expense Ratio - Fund charge which is fund specific
- Service Fee of 0.35% for each Clean Fund held in your account

If the portfolio has less than £7,500 consistently across the chargeable period, instead of charging the 0.35% Service Fee, we will charge a flat fee of £45 per year.

As these are our standard terms, we are unable to make an individual exception. From time to time, we have special offers available generally to clients, such as promotions for the tax year end or early investors in a new tax year; information is provided on our website and in marketing mailings.

If you invest through Cavendish Online Ltd, the Service Fee of 0.35% per annum on clean funds will be reduced to 0.20% calculated on a monthly basis against the value of clean share class investments held at midnight on the 1st of the respective month. It gets paid on the 15th of the following month by unit deduction from the adviser fee nominated fund, where one exists, or else the largest holding from the accruing account. Cavendish might set up the adviser ongoing fee with you for managing your investments; you will need to contact them regarding their charging structure.

For any further queries, please contact us..."

I presume it is important to determine whether the funds I hold are clean before changing. Any idea how I can determine whether this is the case?