How to pay SIPP/ISA fees painlessly

Oldhand_2

I'm not fond of recurring payments - for anything - being taken from cash or credit/debit cards. Inevitably the time comes when the cash runs out or the cards expire and you're left with a default payment.

I'm looking for a SIPP/ISA provider who 'provides' an easier automatic way of paying fees. As far as I can tell both A J Bell and Fidelity take fees from cash and sell funds if the cash runs out. AJB charges £5 each time this happens.

Vanguard seem to have it sorted. Thay take cash, sell funds with no penalty, or take the fees from your bank account by direct debit. I like Vanguard but I want to try non-Vanguard funds this year.

How do others pay their fees? My wife would never remember to top up cash or update cards, and why should she?

Alistair31

Use iWeb and there are no ongoing fees to worry about  

Oldhand_2

Thanks, but even for iweb there are SIPP charges, and ISA charges if you trade, or buy/sell etc.

Linton

Include an income version of one of the funds in the portfolio.

glennevis

Alistair31 said:

Use iWeb and there are no ongoing fees to worry about  

That's not correct for their SIPP.

Alistair31

glennevis said:

Alistair31 said:

Use iWeb and there are no ongoing fees to worry about  

That's not correct for their SIPP.

Sorry you are quite right. I hold only ISA with iWeb. 

Albermarle

both A J Bell and Fidelity take fees from cash and sell funds if the cash runs out. AJB charges £5 each time this happens.

So with Fidelity there is no issue if there is no cash in your account.

Oldhand_2

Yes, but for the frugal amongst us they are pricier at 0.35% compared to AJB's 0.25% and VG's 0.15%. It's all a bit messy, I would have thought that large financial instiutions would have discovered DD by now.

If I had an income fund I would worry about lean times not providing enough to cover the fees, just as bad.

I suppose one could drip feed payments into the cash component by standing order or something similar, but.... messy.

My first foray into S/S ISA's was with VG, it wasn't until I looked at other providers later that I discovered that not everyone is the same.

ColdIron

Oldhand_2 said:

If I had an income fund I would worry about lean times not providing enough to cover the fees, just as bad.

Dividends are far less volatile than share prices during lean times. Companies cannot control their share price as a rule but they can control their dividend because they decide what it will be, for a while anyway. So the likelihood of 'not providing enough to cover the fees' is very much reduced, probably less likely than your wife remembering to top up cash or update cards. It's a good solution for your problem as it will run itself without intervention

If you think about it, it's exactly the same as selling down a fund, the only difference is that one is performed by the fund manager as part of his routine operations and the other by your platform and it cannot incur any fees. And you won't be selling in down markets or reducing the number of shares or units that you have

Stargunner

Oldhand_2 said:

Yes, but for the frugal amongst us they are pricier at 0.35% compared to AJB's 0.25% and VG's 0.15%. It's all a bit messy, I would have thought that large financial instiutions would have discovered DD by now.

If I had an income fund I would worry about lean times not providing enough to cover the fees, just as bad.

I suppose one could drip feed payments into the cash component by standing order or something similar, but.... messy.

My first foray into S/S ISA's was with VG, it wasn't until I looked at other providers later that I discovered that not everyone is the same.

Barclays charge 0.25% annual fee for their ISA, and funds are free to buy/sell. You can opt to pay the fees from cash/investments held within the ISA or from a nominated bank account or a debit card.

Linton

Oldhand_2 said:

Yes, but for the frugal amongst us they are pricier at 0.35% compared to AJB's 0.25% and VG's 0.15%. It's all a bit messy, I would have thought that large financial instiutions would have discovered DD by now.

If I had an income fund I would worry about lean times not providing enough to cover the fees, just as bad.

I suppose one could drip feed payments into the cash component by standing order or something similar, but.... messy.

My first foray into S/S ISA's was with VG, it wasn't until I looked at other providers later that I discovered that not everyone is the same.

You could have problems relying on dividends to pay the fees if you were investing in individual shares but an income fund is never going to fail to pay any dividends at all. So you could plan to generate dividends more than sufficient to pay the fees and reinvest any large excess that may build up.