Leaving cash in Fidelity platform for fees

lewisp91

Hi
I have a sipp, AVC, ISA with fidelity. I notice they sell find units of their choice to pay for charges and fees and there are fees on those small sales also. It's it more first effective to leave cash in the 3 accounts to pay these fees or just let them sell units? If i leave cash out will be out of the market and i have to try to calculate how much i should leave with a safety margin on a regular basis. It seems i need to l leave cash in all of the 3 accounts. I have ETFs and unit trusts.

Lokolo

Chances are, they do take cash first, then if no cash balance, then sell units. They may also take from one account rather than each of the 3.

I always leave ~£100 cash in my accounts to cover platform fees. The fees should be a very low % of your portfolio, so having that in cash and "out of the market" should make negligible difference.

Alexland

No point paying trade fees to make small regular sales to pay account service fees.

With my active accounts I always leave enough in the account to last until my next contribution with a margin of safety of when that might be and how much the fee might be until then.

For accounts where I just park money with no new or very infrequent investments then I just have a regular payment to add enough cash to pay the fee again with a small account cash balance and margin of safety.

I generally prefer fixed or capped fee accounts as it's easier on my brain.

Fidelity is particularly good at capping on exchange traded assets.

Alex

firestone

if you look in your transactions on Fidelity you can see what day they use for each account ISA,pension etc and roughly how much it costs you could then top up every couple of months using your debit card or bank transfer in smaller amounts(but watching your ISA limit)

foofi22

My monthly direct debit into my ISA includes a small extra to cover the fees. Whilst I realise this eats into my ISA allowance it is of no concern as I am nowhere near putting in 20k a year.


Doing this did highlight my main bugbear with the Fidelity platform - it is not possible to assign fixed sums to each fund investment from your monthly payment, you can only assign a percentage.

Tom99

I have a SIPP with Fidelity and pay in £2,880pa 99% invested 1% cash.
If you don't have cash available they will sell fractions of a fund unit to take the monthly fee.
Whilst you probably don't lose anything by not holding cash, the large number of transactions makes the transaction reports very messy.

Terry98

I am still trying to get my head around the cash payment for fees. I originally put some money in the Cash Management Account thinking that would pay them but it does not.

Also if you put cash in your ISA account to pay fees the money is taken off your ISA allowance for the year. It's no big deal if you intend to open your ISA with Fidelity for that year but if for some reason you don't want to use Fidelity for your stocks and shares ISA in the same year you would not be able to.

talexuser

I have a SIPP with Fidelity through Cavendish and also put in £2880 a year but invest the lot. Since selling doesn't cost anything the ~£5 a month subtraction is not worth bothering about one way or the other, so I don't keep back any cash.

Reluctantpensioner

Each account has separate fees, so if you have SIPP, ISA and IA you need cash in all three.
If there is no cash to cover fees they sell something, fractions of a share if relevant: I have no idea how they chose which fund.
There is no charge on the fund sell (but if you have an account with only: shares/ETF/IT, then there would be).
It would be nice if fees could come from one account but I assume SIPP and ISA are regulatory controlled (paying fees could be considered exceeding the £20K ISA limit for example).
They do consider the accounts together for the discounted fees; and will even include relative's accounts.

Sea_Shell

Terry98 wrote: »

I am still trying to get my head around the cash payment for fees. I originally put some money in the Cash Management Account thinking that would pay them but it does not.

Also if you put cash in your ISA account to pay fees the money is taken off your ISA allowance for the year. It's no big deal if you intend to open your ISA with Fidelity for that year but if for some reason you don't want to use Fidelity for your stocks and shares ISA in the same year you would not be able to.

We initially tried the Cash Management account route too, and soon realised that it didn't work (for what we wanted), so we now leave some uninvested cash back in our ISA's to cover the fees. Although it does count as part of your annual ISA contributions, it can always be invested at the last minute, if you have a surplus at the end of the tax year. Although we only had £18 left, so didn't bother.

I agree that selling shares to cover the fees also make your transaction history very messy. It's much easier to keep track of your units holdings without fees muddying the water, so to speak.

Sally57

Reluctantpensioner wrote: »

They do consider the accounts together for the discounted fees; and will even include relative's accounts.

Are you sure about that? My husband and I both have SIPP's with Fidelity that together total over the £250K limit for the lower discounted platform rate of 0.20% but we don't get that.