Invested in wrong fund

jimjames

If it's just one payment can you not just leave as it is and change all new payments to the correct fund? Income will be negligible for just one investment

Dh6

By the sounds of it my mistake might actually make it better/cheaper for me. If the fees are taken from the cash side the growth will cover those and any other growth I’ll reinvest manually once a year with my additional lump sum. Many thanks Dh6 

bowlhead99

Dh6 said:

By the sounds of it my mistake might actually make it better/cheaper for me. If the fees are taken from the cash side the growth will cover those and any other growth I’ll reinvest manually once a year with my additional lump sum. Many thanks Dh6 

You mean the income will cover those (the 'growth' is not something that arrives as a cash lump) 

As the dividend income is a pretty small amount in the grand scheme of things - so as the other people said, you're not missing out on much by letting it sit idle, and it means you will have a little bit of cash on hand to cover fees. When you add that extra lump sum you can simply decide how much cash float (if any) you want to leave in the account (depending how far away you are from the next dividend payout) and push all the rest into a new purchase.  If the dividend is a couple of percent, then the effect of missing (say) 5% growth on that couple of percent by not having it invested for on average half a year before the new money arrives, is only a few basis points and not really worth getting too frustrated about. 

homestraight

You can send them a message asking them to take the custody charge from your dealing account and put some cash in there. Means you're keeping the maximum amount you can in your tax sheltered LISA account. 
Reinvest your dividends with your next lump sum or LISA contribution

Alexland

homestraight said:

You can send them a message asking them to take the custody charge from your dealing account and put some cash in there. Means you're keeping the maximum amount you can in your tax sheltered LISA account. 

Yup but only really worth doing if you are using the full £20k ISA allowance each tax year.  Otherwise it's better to have the fees deducted from within the LISA account (less money tied up until age 60) and put your spare cash in a S&S ISA.

DireEmblem

What is the issue here, can you not just switch from the Acc to the Inc line without being out of market?

dunstonh

DireEmblem said:

What is the issue here, can you not just switch from the Acc to the Inc line without being out of market?

Not all platforms support conversions.  Many only allow fund switch.  If conversion is available then that would be a potential solution.

bowlhead99

DireEmblem said:

What is the issue here, can you not just switch from the Acc to the Inc line without being out of market?

Unfortunately AJB don't support that, if you want to switch from one fund/ class to another they won't pre-fund it for you, so you need to exit the first holding and only when you know what cash that's free'd up (and waiting to get to the pricing point and see the result of that and then place the next order is going to use up at least a working day) can you deploy it in an order to buy the other fund/ class.

There's also a pretty immaterial £3 of purchase and sale transaction fees, but that's usually inconsequential compared to potentially losing a few percent in market movements while out of the market a day or so in choppy times. I suppose that's the problem with economising on fund platform fees by using a DIY 0.25% platform rather than a 0.3%, 0.35% or 0.45% platform that would support a 'switch'.

Notepad_Phil

I'm not with AJ Bell any longer but they certainly used to allow you to convert between Inc and Acc without the need to sell and buy - I think you used to have to send them a secure message asking them to do this, so depending on what was in your message you might find out that the conversion has already been made.

delpetra

Alexland said:

In your position I would probably do nothing and just wait a few years as with AJ Bell once the LISA gets big enough (after 3-4 years of £4k pa) it makes sense to sell the fund down and reinvest in ETFs/ITs for the capped platform charges. Still if you are obsessive enough that it bothers you it's only two lots of £1.50 and a bit of time out the market (when it could go up or down) to sell it down and rebuy the ACC units.

Thanks for this -- could you expand on what you mean on "selling the fund down and reinvesting for the capped platform charges"? I thought it was a 0.25% fee on the first £250k of funds?