Fidelity advisory

poli123

Hello, does anyone have any personal experience using fidelity’s ‘ advisory ‘ service , good or bad ?

dunstonh

Their initial charge is 1% subject to a minimum of £1000 and maximum of £10,000 for investment advice.
1% is low, and their minimum is in the ballpark of expectation (for cap and collar fee structures) but their maximum is quite high.  Many IFAs have £3000 or thereabouts as their cap.  (greedy firms have no cap)
They have a 1% charge for technical advice.
IFAs will not usually differentiate.  i.e. advice is advice, whether its investment or technical.  So, a slight difference there.

Their ongoing charge is 0.5%.  IFAs tend to float between 0.25% to 1.00% (larger values getting lower %).
With most IFAs, ongoing advice includes all future advice (caveats apply) and topups with no initial charge.  That does not appear to be the case with Fidelity.  However, that is unclear.

Fidelity are restricted FAs and will not give advice in all areas and will only use fidelity platform and fidelity OEIC/UTs or their in house DFM.
I have several Fidelity funds in my portfolio but they are not the best in every area (no fund house is). So limiting yourself to Fidelity products and funds is a restriction.

So, the fee structure is not dissimilar to good value IFAs (its better than the worst value IFAs).     So, you need to decide whether its better to pay about the same for a restricted advice option as it is independent advice.     

poli123

dunstonh said:

Their initial charge is 1% subject to a minimum of £1000 and maximum of £10,000 for investment advice.
1% is low, and their minimum is in the ballpark of expectation (for cap and collar fee structures) but their maximum is quite high.  Many IFAs have £3000 or thereabouts as their cap.  (greedy firms have no cap)
They have a 1% charge for technical advice.
IFAs will not usually differentiate.  i.e. advice is advice, whether its investment or technical.  So, a slight difference there.

Their ongoing charge is 0.5%.  IFAs tend to float between 0.25% to 1.00% (larger values getting lower %).
With most IFAs, ongoing advice includes all future advice (caveats apply) and topups with no initial charge.  That does not appear to be the case with Fidelity.  However, that is unclear.

Fidelity are restricted FAs and will not give advice in all areas and will only use fidelity platform and fidelity OEIC/UTs or their in house DFM.
I have several Fidelity funds in my portfolio but they are not the best in every area (no fund house is). So limiting yourself to Fidelity products and funds is a restriction.

So, the fee structure is not dissimilar to good value IFAs (its better than the worst value IFAs).     So, you need to decide whether its better to pay about the same for a restricted advice option as it is independent advice.     

We had a call with the advisor and I had assumed it would not be limited to just fidelity funds. The platform itself has access to many Funds (HSBC etc ) so fee seemed reasonable but you say it’s restricted to just their Funds? 

dunstonh

poli123 said:

dunstonh said:

Their initial charge is 1% subject to a minimum of £1000 and maximum of £10,000 for investment advice.
1% is low, and their minimum is in the ballpark of expectation (for cap and collar fee structures) but their maximum is quite high.  Many IFAs have £3000 or thereabouts as their cap.  (greedy firms have no cap)
They have a 1% charge for technical advice.
IFAs will not usually differentiate.  i.e. advice is advice, whether its investment or technical.  So, a slight difference there.

Their ongoing charge is 0.5%.  IFAs tend to float between 0.25% to 1.00% (larger values getting lower %).
With most IFAs, ongoing advice includes all future advice (caveats apply) and topups with no initial charge.  That does not appear to be the case with Fidelity.  However, that is unclear.

Fidelity are restricted FAs and will not give advice in all areas and will only use fidelity platform and fidelity OEIC/UTs or their in house DFM.
I have several Fidelity funds in my portfolio but they are not the best in every area (no fund house is). So limiting yourself to Fidelity products and funds is a restriction.

So, the fee structure is not dissimilar to good value IFAs (its better than the worst value IFAs).     So, you need to decide whether its better to pay about the same for a restricted advice option as it is independent advice.     

We had a call with the advisor and I had assumed it would not be limited to just fidelity funds. The platform itself has access to many Funds (HSBC etc ) so fee seemed reasonable but you say it’s restricted to just their Funds? 

I took my information from their terms of business which was published on line.   The platform itself may allow access to more funds but the advice service does not include non Fidelity funds (outside of their DFM).

Beddie

We had a call with the advisor and I had assumed it would not be limited to just fidelity funds. The platform itself has access to many Funds (HSBC etc ) so fee seemed reasonable but you say it’s restricted to just their Funds? 

Ask the adviser if they offer more than just Fidelity funds. They probably do, as Fidelity runs a fund platform as you say.

dunstonh

Beddie said:

We had a call with the advisor and I had assumed it would not be limited to just fidelity funds. The platform itself has access to many Funds (HSBC etc ) so fee seemed reasonable but you say it’s restricted to just their Funds? 

Ask the adviser if they offer more than just Fidelity funds. They probably do, as Fidelity runs a fund platform as you say.

their terms of business says they don't (although their DFM service will)

https://eumultisitev4prod-live-eb461540d2184169bb77db2b062d9318-f268f99.s3-eu-west-1.amazonaws.com/PI UK/pdf/WEB 61705-5 WS Fideity Wealth Management 32775.pdf

page 12

Malthusian

poli123 said:

We had a call with the advisor and I had assumed it would not be limited to just fidelity funds. The platform itself has access to many Funds (HSBC etc ) so fee seemed reasonable but you say it’s restricted to just their Funds? 

The whole point of running a vertically integrated tied advice business model is that you can collect fees on the whole arrangement: advice fee, platform charge and fund charges. We know for certain Fidelity are charging you for the first two. It would be unusual for them to recommend other companies' funds for the third when they can recommend their own. Fidelity have a wider range of funds which will cover the vast majority of investors' needs, and they are not independent so there is nothing stopping them.