L&G funds transfer to Fidelity

RM

I received a letter from L&G stating their funds are being taken over by Fidelity.

I mainly use their Global Technology fund.

What do the gurus here advise: stay and move to Fidelity or collect the money and run for the hills?

Thank you.

george4064

Really down to you to read through the documents, compare both platforms (or more importantly compare Fidelity with other platforms) and make a decision from there.

There are certainly cheaper platforms than L&G, with more features too. So maybe treat this as a good opportunity to consider your options and transfer your portfolio to a better value platform?

dunstonh

I received a letter from L&G stating their funds are being taken over by Fidelity.

That isn't what is happening.  L&G are selling the administration side to Fidelity. They are not selling the funds.  

Like many fund houses needing to upgrade their administration, the choice faced by them is to either pay to build their own in-house platform to modern standards, buy a third party platform restricted to their own funds or just give up being a distributor and sell that part to another distributor.   In this case, L&G have decided to sell the distribution side to another distributor, Fidelity.

This will have no impact whatsoever on the investment funds.

Nanpy

Thanks dunstonh! Knew someone would already be on this but wanted to confirm what it was saying in the bumbf. 

Albermarle

You will remain in the same L&G Technology fund . 
L&G and Fidelity have different charging structures .
L&G just had one charge ( usually around 0.6% I think) and they only offered their own funds.
Fidelity is an 'investment platform'  That means there is a charge for using the Fidelity platform and a separate charge for any funds you hold .
They have said L&G customers will not be charged more overall and could be less, but its is not clear exactly how they will implement this .
With Fidelity you can buy lots of different investments ( not just L&G ones ) if you wanted to, and the website is much better than the L&G one .

Alexland

Did you get this booklet?

https://www.legalandgeneral.com/landg-assets/personal/investments/files/fidelity/important-information-booklet.pdf

dunstonh said:

This will have no impact whatsoever on the investment funds.

The booket confirms they are switching customers to cheaper fund classes (rather than reducing the OCF on the existing fund classes) however for those funds where the new charge is not low enough to cover the new platform fee they are promising to cap the new platform fee for 12 months so that the overall cost is not more than the customer would have paid before. So it really depends on the fund on if the new account will cost more, less or even possibly the same over the long term.

Albermarle

The L& G global technology fund was available on the Fidelity platform before this 'takeover' .
Cost is 0.32 % - Normal Fidelity platform fee is 0.35% , so 0.67% in total , so I guess very similar to what was being paid with L&G.
Interesting to note that The L& G index/tracker funds on Fidelity are around 0.1% , so quite competitive . Surprising they do not get mentioned more often. 

Alexland

Albermarle said:

The L& G global technology fund was available on the Fidelity platform before this 'takeover' .
Cost is 0.32 % - Normal Fidelity platform fee is 0.35% , so 0.67% in total , so I guess very similar to what was being paid with L&G.

It's was 0.70% so the OP will save 0.03% assuming they won't apply the dilution levy when switching classes.

https://fundcentres.lgim.com/uk/Private/fund-centre/Unit-Trust/Global-Technology-Index-Trust/

Albermarle said:

Interesting to note that The L& G index/tracker funds on Fidelity are around 0.1% , so quite competitive . Surprising they do not get mentioned more often. 

L&G do good trackers and we use them in our workplace pensions however most people here tend to want global trackers and their International Index Trust fund (that I used to hold in our old L&G ISAs) is missing both UK and EM exposure and their LGGG developed world tracker ETF isn't really big enough to have adequate liquidity.

Yorkshire_Pud

Just a prompt to anyone in this situation L&G to Fidelity.

Fidelity had the protected maximum charge period ending January 31st 2023 after which their usual charges will be applied but they have all increased so there is a capped £90 annual service charge for any holder with funds under £25,000 UNLESS they have a Regular Savings Plan in place minimum £25 per month direct debit to buy more funds then the £90 fee is waived and the standard service fee 0.35% of holding per annum applies.

I have one plan with five trackers in it, well under the £25,000 threshold, wanted to divide the £25 into fifths as was told this was possible by CS but in the event there is a minimum purchase per fund of £25 so had to choose one of the five for all the £25 Regular Savings per month. If I wanted an equal amount in each it would be £125 per month which I don’t want to do. 

Does anyone know if there is a minimum cash amount to buy more funds within my tracker isa with fidelity? Say £10 apportioned between five trackers so £2 each? Took half an hour to get through the other day on the phone so asking here for anyones experience.

It also appears I can switch funds online between the five index trackers without charge? Am I missing something here, will there be  charges levied by L&G themselves if I switch funds around.

Hope this makes basic sense! I am obviously not that well up on all this share malarkey which is why I liked the old L&G format as I could ignore it but now have to be more active or possibly cash out as I’m not dealing in large amounts of funds value.

Notepad_Phil

Yorkshire_Pud said:

Just a prompt to anyone in this situation L&G to Fidelity.

Fidelity had the protected maximum charge period ending January 31st 2023 after which their usual charges will be applied but they have all increased so there is a capped £90 annual service charge for any holder with funds under £25,000 UNLESS they have a Regular Savings Plan in place minimum £25 per month direct debit to buy more funds then the £90 fee is waived and the standard service fee 0.35% of holding per annum applies.

I have one plan with five trackers in it, well under the £25,000 threshold, wanted to divide the £25 into fifths as was told this was possible by CS but in the event there is a minimum purchase per fund of £25 so had to choose one of the five for all the £25 Regular Savings per month. If I wanted an equal amount in each it would be £125 per month which I don’t want to do. 

Does anyone know if there is a minimum cash amount to buy more funds within my tracker isa with fidelity? Say £10 apportioned between five trackers so £2 each? Took half an hour to get through the other day on the phone so asking here for anyones experience.

It also appears I can switch funds online between the five index trackers without charge? Am I missing something here, will there be  charges levied by L&G themselves if I switch funds around.

Hope this makes basic sense! I am obviously not that well up on all this share malarkey which is why I liked the old L&G format as I could ignore it but now have to be more active or possibly cash out as I’m not dealing in large amounts of funds value.

£25 is the minimum contribution per fund regardless of whether you're purchasing via a regular savings plan or via cash that is already in your account.

As to the switching, yes Fidelity does not charge for switching funds (it's included in the monthly service charge), but your question on whether L&G charges is more complex to answer.

The easy answer is that you won't suffer any more charges than you would have had when you were with L&G and there won't e.g.be a £5 cost that you'll need to pay - the more difficult answer would involve discussions of 'swing pricing' which you can read about here if you feel you want the full answer:
https://www.legalandgeneral.com/existing-customers/investment-support/prices-and-reports/single-swing-pricing/  

Albermarle

I think the problem is that even £25 is a rather small amount for the admin involved.
Same reason that Fidelity have a minimum charge for smaller customers.
It is much more profitable for them to have  customers with bigger funds.