Interactive Investor - fees taking me to a negative cash balance

aroominyork

I've just a hair-pulling-out discussion with ii. I placed three fund purchase orders last week to use all my cash balance, expecting they would take their £3.99 fees out of it. Instead they invested the full amount and told me by secure message that I have to deposit funds or sell units to cover a £7.98 negative cash balance. So I phoned them and got into a circular discussion with them talking about fund price movements between the time I place the trade and the dealing time; of course that is irrelevant. What I thought they would do it hold back the £3.99 and send the rest to be traded. What should happen? Do I need to place trades for £3.99 less than my cash balance.

dunstonh

What I thought they would do it hold back the £3.99 and send the rest to be traded. What should happen?

I haven't used them but most platforms either give you a choice or have a set method.   It would have told you which when you made the purchase.

 Do I need to place trades for £3.99 less than my cash balance.

If that is the option, then yes.  

FIREmenow

As a one-off, if you have a trading account you should be able to add cash to that for the fees instead of messing with your SIPP.  On some packages there is a charge for having a trading account though.

When the DD for my ISA fees didn't change over in time they took the monthly fee from cash in my trading account (without letting me know!).

aroominyork

FIREmenow said:

As a one-off, if you have a trading account you should be able to add cash to that for the fees instead of messing with your SIPP.  On some packages there is a charge for having a trading account though.

When the DD for my ISA fees didn't change over in time they took the monthly fee from cash in my trading account (without letting me know!).

I'm not talking about the monthly fee which is taken from my trading account. I'm talking about the individual transaction fee.

EthicsGradient

It's been some time since I bought a fund in ii for which the transaction fee wasn't covered either by it being "regular investing" or fully covered by the trading credit I had. But when that was, in Oct 2018, the amount they took from the cash balance was £30,000, being £29,993.50 for the fund, plus £10 transaction fee, minus the £3.50 trading credit I had. And I'm 99% sure I would have put that in as "buy £30,000 worth", and they worked out the amount to allow for the fee and credit. I would expect the option to still be there to do it that way, but it's possible you have to look for it, and it may not be the default.

aroominyork

Checking recent trades, when I placed this buy order for £19,300 they bought £19,296.01 of units.

I have a hunch (backed by no evidence) that if you place multiple orders at the same time when you have only one available trading credit, their system allocates the credit to each individual order so all except one of the orders pushes you into the red. Just a hunch...

FIREmenow

aroominyork said:

FIREmenow said:

As a one-off, if you have a trading account you should be able to add cash to that for the fees instead of messing with your SIPP.  On some packages there is a charge for having a trading account though.

When the DD for my ISA fees didn't change over in time they took the monthly fee from cash in my trading account (without letting me know!).

I'm not talking about the monthly fee which is taken from my trading account. I'm talking about the individual transaction fee.

I know that. I was suggesting a possible option to pay the owed transaction fee without selling investments or adding to the SIPP.

EthicsGradient

aroominyork said:

Checking recent trades, when I placed this buy order for £19,300 they bought £19,296.01 of units.

I have a hunch (backed by no evidence) that if you place multiple orders at the same time when you have only one available trading credit, their system allocates the credit to each individual order so all except one of the orders pushes you into the red. Just a hunch...

That is feasible - I had a credit that would expire on a Saturday. Early on the Friday, I sold some fund units (putting the order in more than an hour before that day's valuation point, so it should get executed that day), thinking they'd apply the credit to the transaction. But although the Friday midday valuation was used, the transaction wasn't recorded on my account until first thing Monday morning, and they said that was too late for the credit to apply - though when I said that seemed unfair, they agreed to apply the credit as goodwill.

So it does seem possible that they work out the value of each independently at first, and only later apply the credit to one.

chrisw2k

Hi

This has been happening to me too recently aroominyork. Not really sure why either, and I dont think ive been doing anything differently...

Ive just been depoiting a few pounds in by DC when I notice its gone into arrears now.. Ive never had a message from them asking me to pay it though

masonic

Seems likely re-use of the trading credit is what is causing this issue. It would be better for them to assume the trade will be at cost and then leave a £3.99 account credit than put the account into arrears when assuming the contrary. Clearing the negative balance won't always be possible in a tax wrapper account.

LHW99

The trading fee is additional to the £ amount you want to buy (or equivalent price of shares / units). That way if you have a trading credit, you buy / spend the specified amount. If you don't, you have to make sure you allow the additional few pounds within the available cash balance, or pay in a bit extra (if feasible).

AFAIR II have always worked that way.