HMWO dividends via AJ Bell

george4064

I have held HSBC MSCI World ETF GBP (HMWO) within an AJ Bell SIPP for a few years now, and I have been receiving the quarterly dividend payments as expected.

I can see from the cash statement that dividends are paid in USD and AJ Bell convert them into GBP, however I noticed that Q1 2020's dividend incurred a 0.50% FX charge. I am thinking this is either; 1) AJ Bell are simply explicitly reporting the FX charge with its own 'transaction' whereas before it was an implicit cost factored into the FX rate used. 2) AJ Bell have added this new levy to any dividends that require converting back into GBP.

Welcome any information other people have on this, I'm sure there are other HMWO holders here with AJ Bell.

bowlhead99

https://www.youinvest.co.uk/sites/default/files/AJBYI_DA_charges.pdf
"foreign exchange charge when we have to convert any dividends or corporate action payments into sterling: 0.50% (no vat)"

I don't hold HMWO but AJ Bell have been showing fx on dividend received separately as its own 'transaction' on the cash statement for a while.  

For example last year 1 July, I had a USD dividend receipt from a US company processed as £9.54 credited to my SIPP cash and then on 3 July, a £0.05 fx charge debited to it - if I click on the link for the fx charge it takes me to the dividend voucher, which does not mention the charge but is the gross amount of declared dividend per share showing an fx rate to get to the 9.54 amount.

Then a week later a £245.61 receipt on 9 July from a different dollar investment, and on 11 July a £1.23 charge captioned "FX CHARGE (0.50%)". The link for the fx charge takes me to the dividend voucher where the £1.23 is not mentioned; again it just shows the calculation of the £245.61.

If I go back to July 2018 I had dollar and euro investments treated the same way; however if I go back to July 2017 where I still held one of the dollar investments, there was no separately itemised fx charge, I assume all fx fees and commissions they wanted to charge me were blended in to the fx rate at that time. 

As an fx rate can change by over 0.5% between days and even intraday, it is hard to 'prove' whether you got a fair rate other than by reference to dividends processed the same time of day on other accounts you hold, and of course the exact time it hits your statement may not be the exact time they processed it, and impossible to see with hindsight as the dividend vouchers or 'corporate action detail' documents don't have a timestamp.

george4064

bowlhead99 said:

https://www.youinvest.co.uk/sites/default/files/AJBYI_DA_charges.pdf
"foreign exchange charge when we have to convert any dividends or corporate action payments into sterling: 0.50% (no vat)"

I don't hold HMWO but AJ Bell have been showing fx on dividend received separately as its own 'transaction' on the cash statement for a while.  

For example last year 1 July, I had a USD dividend receipt from a US company processed as £9.54 credited to my SIPP cash and then on 3 July, a £0.05 fx charge debited to it - if I click on the link for the fx charge it takes me to the dividend voucher, which does not mention the charge but is the gross amount of declared dividend per share showing an fx rate to get to the 9.54 amount.

Then a week later a £245.61 receipt on 9 July from a different dollar investment, and on 11 July a £1.23 charge captioned "FX CHARGE (0.50%)". The link for the fx charge takes me to the dividend voucher where the £1.23 is not mentioned; again it just shows the calculation of the £245.61.

If I go back to July 2018 I had dollar and euro investments treated the same way; however if I go back to July 2017 where I still held one of the dollar investments, there was no separately itemised fx charge, I assume all fx fees and commissions they wanted to charge me were blended in to the fx rate at that time. 

As an fx rate can change by over 0.5% between days and even intraday, it is hard to 'prove' whether you got a fair rate other than by reference to dividends processed the same time of day on other accounts you hold, and of course the exact time it hits your statement may not be the exact time they processed it, and impossible to see with hindsight as the dividend vouchers or 'corporate action detail' documents don't have a timestamp.

Perhaps it was just a blip on my account, as previous HMWO dividends I have received didn't have the FX charge explicitly stated.
Anyway, not a major concern I was just interested to see if anyone else had the same experience or noticed a change.

Sailtheworld

Their charging structure is quite simple and I'd never seen this before until 0.5% of a dividend was taken and I re-checked. I think it's a new additional charge rather stating an existing charge in another way but not 100% sure. I prefer income but this will make me consider accumulation funds/ ETFs.

Alexland

Our AJ Bell investments are accumulation but at least they are being are clear by showing how much you are paying.

We also recieved a dividend on HMWO today in one of our Fidelity accounts and although I expect they charged the 1% fee from their "Doing Business with Fidelity" document the FX rate and charge is not detailed anywhere on the cash statement. I did once send them a secure message asking where FX charges are shown but they never responded. We get around £10k pa of non-GBP dividends via Fidelity so their 1% FX charge is about the same as the two £45 pa base platform fees.