Funds Charges - Fidelity & HL

baldbloke_2

I have invested in funds through Fidelity in the past. I am now considering a reasonable investment of £30k across a number of funds and have on this occasion considered investing through Hargreaves Lansdown.

I simply can not get my head around the difference in initial charges and would appreciate confirmation of some sort that all is as it seems. It would appear that an 'average' fund charging 5% initially can cost 2.25% on Fidelity or 0.25% on HL with their respective savings. This is a generalisation of course but it seems to apply acros the range of funds I have selected. That could mean a saving of £600 on the full investment! Is there a reason for not going with HL when the benefits would seem to be so clear - at least on the cost basis?

Thanks.

purch

Is there a reason for not going with HL when the benefits would seem to be so clear

No...........not on initial cost basis anyway. If HL offer the funds you wish to invest in, and their initial discount is better then there is no reason

The other thing to look at is the annual management charge of each fund, and if there is a difference between HL and Fidelity (or any other platform) in how much (if any) of the AMC they rebate. The savings you might be able to make on the AMC over a long period might outweigh the initial saving

hyposmurf

I have noticed that on some fund supermarkets they offer free or very low initial charges but then charge an exit fee should you leave within a few years.This may not be the case with HL.

dunstonh

Buying direct from Fidelity is daft. Their charges are more than those levied by the average IFA using Fidelity, let alone discount IFAs.

Aegis

I have noticed that on some fund supermarkets they offer free or very low initial charges but then charge an exit fee should you leave within a few years.This may not be the case with HL.

It isn't the case. I've moved some units around and have withdrawn some money from the site. There doesn't appear to be any charge associated wth either process.

EdInvestor

baldbloke wrote: »

It would appear that an 'average' fund charging 5% initially can cost 2.25% on Fidelity or 0.25% on HL with their respective savings.

Are you perhaps confusing the initial charge with the annual managment charge?Typically HL has zero initial charge and gives you a discount of 0.25% on the annual management charge (typically 1.5%), so you pay an AMC of 1.25% only.

Is there a reason for not going with HL when the benefits would seem to be so clear

No, their popularity is deserved.

oldfella

Cavendish rebate 0.5% pa - less an annual fee - maybe £10-£20 from memory

RubyBish

My situation is similar.
I have added Cavendish as my ifa on my Fidelity account so that I get the renewal commission rebate, but I have started using HL for new investments because of the difference in the initial charges. However with Cavendish/Fidelity over a much longer period you could potential save more money because of the higher commission debate.
The thing I miss about Fidelity is the portfolio x-ray tool.
HL seem to have a better selection of funds, Fidelity is slow to add new ones.

Ian_W

RubyBish wrote: »

The thing I miss about Fidelity is the portfolio x-ray tool.

Don't know whether you're aware - but you have access to the same tool [well, slightly less info but not very much] if you sign up free for their portfolio manager at the MORNINGSTAR site.

oldfella

HL for new investments because of the difference in the initial charges.

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not sure I understand - Cavendish rebate all or most of the Fidelity initial charge on most funds

baldbloke_2

Ian_W wrote: »

Don't know whether you're aware - but you have access to the same tool [well, slightly less info but not very much] if you sign up free for their portfolio manager at the MORNINGSTAR site.

I use this as well and it is simply indispensible. It's easy to register for. When I have been trying to work out the recent proposed purchases I have had internet tabs open for fidelity, morningstar, HL and now bestinvest - all at the same time and I've been jumping from one to another like a madman. This DIY fund investment business is not easy - I can see why for larger amounts people use an IFA and their diagnostic tools. But it is interesting - and fun ... if you can genuinely afford to risk the amount you are investing.

ps. Thanks for the Bestinvest recommendation. I had not visited there before and have been quite impressed.

Thanks
Alan