Muitl platform vs single

mika_dm

ChilliBob said:

This is interesting @Albermarle
I need to break it down a bit to make sure I've understood (I'm sort of doing about 8 things not very well this morning). From Fidelity's site:

"The same service fee is charged across all of your investments. So, if you hold £300,000 - the fee would be 0.20% across the full amount. For exchange-traded instruments, this portion of the fee is capped at £45 and there is no service fee for these investments when held in the Fidelity Investment Account. There’s also no fee for investments held in a Junior ISA or Junior SIPP."

0.2% on £300k = £600.

For exchange-traded instruments, this portion of the fee is capped at £45 and there is no service fee for these investments when held in the Fidelity Investment Account.

What does this actually mean though?
Say you have an SS ISA with them, for arguments sake, and it's got £300k in it, does that mean you can buy and sell ETFs willy nilly with zero cost each time and you pay just £45 on top of the £600?

No, it means the broker charge will be max £45, not £600 if you hold only ETFs, shares or ITs. 
You will still pay transactions costs(if involved) and ETFs/ITs costs(if involved).
Hargreaves Lansdown has the same cap of £45 brokerage fee for ETFs, shares and ITs for ISA. For SIPP the cap is £200. You will still pay the trading and ETFs fees as usual.

ChilliBob

Cheers, right, so two separate things here:
1. Imagine a pot comprised of only ETFs, are they saying basically you can buy and sell as frequently as a day trader might and it's £45 per year, end of? (I'm not going to do that, but to understand the extremities here).
2. The moment you add one fund, no matter how small a holding (say £25) you'll pay a percentage on the account. Either 0.35 or 0.2 depending on the size of the pot.

So, if you held just one fund, at the minimum investment, of say £25, in that 300k pot you'd be paying £600, but if you skip it then it's £45 for 300k invested. 

Ironically, famed for higher charges than competitors HL seem to offer similar - £45 for ETFs within an SS ISA.

I'm interested in how II charges of say 120 vs Fidelity of £600 stack up with a 50:50 split of funds/ETFs though, I think I'm missing something key here.

AlanP_2

ChilliBob said:

Cheers, right, so two separate things here:
1. Imagine a pot comprised of only ETFs, are they saying basically you can buy and sell as frequently as a day trader might and it's £45 per year, end of? (I'm not going to do that, but to understand the extremities here).
2. The moment you add one fund, no matter how small a holding (say £25) you'll pay a percentage on the account. Either 0.35 or 0.2 depending on the size of the pot.

So, if you held just one fund, at the minimum investment, of say £25, in that 300k pot you'd be paying £600, but if you skip it then it's £45 for 300k invested. 

Ironically, famed for higher charges than competitors HL seem to offer similar - £45 for ETFs within an SS ISA.

I'm interested in how II charges of say 120 vs Fidelity of £600 stack up with a 50:50 split of funds/ETFs though, I think I'm missing something key here.

1) NO - You will be charged for each and every trade at their normal rate.

2) NO - Your ETFs / ITs and Funds are all charged for at the relevant percentage, so 0.35% or 0.2% in your example. The 0.3 / 0.35% charge for ETFs / ITs / Shares is capped at £45, for funds it is uncapped.


So for £300k equally split betwen Funds and ITs then (150k * 0.2) + £45 would be the annual platform charge = £345.

ChilliBob

Okay I think I'm getting closer... however to address your last point.. 

So for £300k equally split betwen Funds and ITs then (150k * 0.2) + £45 would be the annual platform charge = £345.

150k *0.2 = £300, I get that, but then the £45... surely based on your 1. it's £45 + however many trades you do?

See 1. in your reply makes me think (as I originally did when I woke up this morning, and for a while!) that if you purchased 2 ETFs you'd be charged £20, then platform fee of the cap of £45, regardless of how much money was in the pot. So, year 1 expenses - 65 quid. 

AlanP_2

It will be £345 plus trading fees yes. I have differentiated between the "holding your investments for you charge" which is the %'age and the £45 as they are consistent whether you do 8 trades a day or 0 trades in a year.

Fixced Costs v Variable Costs if you like. 

Albermarle

So for £300k equally split betwen Funds and ITs then (150k * 0.2) + £45 would be the annual platform charge = £345.

Correct 

. in your reply makes me think (as I originally did when I woke up this morning, and for a while!) that if you purchased 2 ETFs you'd be charged £20, then platform fee of the cap of £45, regardless of how much money was in the pot. So, year 1 expenses - 65 quid. 

Correct 

Plus in the first example , anybody else in your household with a Fidelity account would benefit from the max 0.2% platform charge , regardless of how much money they personally had in invested in either SIPPS, ISA , etc 

Looking at the second example , some people hold only IT's ETF's etc with Fidelity with minimum trading and they get a full SIPP drawdown service for less than £100 pa , with no extra charges for anything .

This is a real bargain and it is often speculated why they offer what must be a loss making proposition, especially when you can transfer a pension in and get a few hundred pounds cashback as well. The answer probably is only a tiny minority of their customers take full advantage of it, and its part of a market share battle with other providers . 

ChilliBob

Thanks, I think I'm there now. Quite mental when you think about it that a 300k portfolio could cost say £45+30 in dealing costs, vs 600 if funds.
Regarding the 150k*0.2, I'm not sure if it would be that or not, as their terms state:

"*Please note that the Service Fee will be charged on the entire portfolio. For Exchange Traded Instruments including Investment Trusts, this is capped at £45. There is no Service Fee for those investments held in the Fidelity Investment Account or for any cash within your account"

So surely that's the sum of the OEICs and ETFs, so 300k = £600, as it includes funds, then £20-30 in dealing costs if you purchased say 2-3 ETFs.. 

It's probably a bit academic as I'm struggling to see how a 300k pot there with OEICs would be cheaper than iWeb or II at the moment (assuming a modest level of purchases/transactions). 

ChilliBob

Albermarle said:

So for £300k equally split betwen Funds and ITs then (150k * 0.2) + £45 would be the annual platform charge = £345.

Correct 

. in your reply makes me think (as I originally did when I woke up this morning, and for a while!) that if you purchased 2 ETFs you'd be charged £20, then platform fee of the cap of £45, regardless of how much money was in the pot. So, year 1 expenses - 65 quid. 

Correct 

Plus in the first example , anybody else in your household with a Fidelity account would benefit from the max 0.2% platform charge , regardless of how much money they personally had in invested in either SIPPS, ISA , etc 

Looking at the second example , some people hold only IT's ETF's etc with Fidelity with minimum trading and they get a full SIPP drawdown service for less than £100 pa , with no extra charges for anything .

This is a real bargain and it is often speculated why they offer what must be a loss making proposition, especially when you can transfer a pension in and get a few hundred pounds cashback as well. The answer probably is only a tiny minority of their customers take full advantage of it, and its part of a market share battle with other providers . 

Considering I'm only 38 I'm not thinking too much about SIPP drawdown! - I am thinking of moving my Scottish Widows pension (from previous employer) over to a SIPP though very much. Not sure if Fidelity is best or what - that's a whole new area to research

I think if you're buying funds though you're probably still best off with a flat fee provider for those sort of sums I'm thinking?

For my partners SS ISA of 20 short to be 40, Fidelity seems a no brainer, likewise my son's JISA.

ChilliBob

I suppose it's slightly short termist though, even though Fidelity is cheap, compare 5 years with iWeb.. 225 before any ETF trades are considered vs 100 before any purchases are considered... 

As much as I'm not keen on iWeb's 1998 vibe!...

Albermarle

I think if you're buying funds though you're probably still best off with a flat fee provider for those sort of sums I'm thinking?

Yes that is true.