New Fidelity Charges Huge Increase - Better elsewhere?

Tom_Brine

I have today placed an order for £500 worth of Scottish Mortgage IT shares and it is still going through under the original pricing method. I assume this will be the case until my account is moved to the new platform at "sometime in October or beyond".

I will give Cavendish a call in the morning to confirm whats happening. I am now thinking I will retain the shares in the ISA but not purchase any more on a monthly schedule. To make a one off purchase in the future will cost £3.00 through my advisor or £10 if I carry out the buy myself (seems odd the difference and I will confirm how that works with cavendish).

I will switch the regular payments to an accumulation fund where I will not get the transaction charges, probably one of the vanguard life strategies or a cheap FTSE tracker. The SMIT shares will remain held and dividends will be swapped to income to pay the fees. (I didn't buy the shares for income, I brought them for growth prospects)

Ill update if I get any info from Cavendish

choochootrain

From Cavendish customer support:

"Our understanding with Fidelity FundsNetwork was that our clients will pay the fixed £3 dealing charge for ETPs and investment trusts and not the higher £10 but we have only just been made aware of the information in the letter Fidelity FundsNetwork have just sent to clients and so we are getting this clarified with Fidelity FundsNetwork and how this will work. This does not affect the normal funds, i.e units trusts and OEICs.

These changes are due to be introduced when our clients are moved to the new platform at the end of November or early December and have been introduced as they are going to be offering shares next year."

choochootrain

choochootrain wrote: »

From Cavendish customer support:

"Our understanding with Fidelity FundsNetwork was that our clients will pay the fixed £3 dealing charge for ETPs and investment trusts and not the higher £10 but we have only just been made aware of the information in the letter Fidelity FundsNetwork have just sent to clients and so we are getting this clarified with Fidelity FundsNetwork and how this will work. This does not affect the normal funds, i.e units trusts and OEICs.

These changes are due to be introduced when our clients are moved to the new platform at the end of November or early December and have been introduced as they are going to be offering shares next year."

Further correspondence:

"...we have just had it confirmed from Fidelity FundsNetwork that if you make lump sum payments you will pay a £10 dealing fee on ETPs and Investment Trusts rather than the £3 as you will being doing your own investment and it will not be through a broker, as we are execution only brokers and are not allowed to do this for you. You would pay £1.50 for monthly payments or reinvestments.

These changes are due to be introduced when our clients are moved to the new platform at the end of November or early December, we do not currently know the exact date."

Tom_Brine

Ouch. That's a game changer then. They confirmed to the tune of your original message on the phone with me earlier. But your second update means if I want to buy more SMT shares, which I do. I need to move. I would have swallowed a £3 fee every once and a while for a bulk purchase, £10 I won't.

Have to start looking at alternative options. What a shame as I'd found the service really quite good.

greendoor665

That's a real PITA for me as I just opened my ISA with Cavendish and the main reason was that the low platform fee and low dealing charges made it cheapest for holding a mixed fund and ETF portfolio. That's now possibly not the case. I may move my ISA elsewhere before I invest another lump sum... I will need to look onto this more over the next month.

choochootrain

Yep, bit of a bummer. I've already put my deals in for tomorrow and will probably just hold ITs (if any) on a separate platform.

Tom_Brine

It sounds like we have to late November at the earliest to take advantage of the current set up. My £500 was priced yesterday and should complete today. I then have a monthly £125 to go out in October and November which should avoid the change over.

I have been looking at some alternative options and have found the following.

IWeb - £25 to open. £5 per trade no admin fees. Has a from to transfer current ISA. If I opened this I could make two purchases a year for £10 and then only have SMT's fee and stamp duty to pay on top
X-O - Free to open. 5.95 per trade. Can find nothing on transferring current ISA

Deaner666

A_T wrote: »

OP in addition to what you mention you were also paying a 0.1% fee each time you dealt in an IT.

Not if you hold the ISA with Cavendish Online. Historically all dealing fees have been waived.

EDIT: Retracted - just read that as "trusts" not "invesment trusts". ITs do indeed attract the fee as you say.