The Lemon Fool

Does anyone else hold cash in their investment account specifically to cover the account fees? It annoyed me that Fidelity & Vanguard would sell some shares to cover my monthly account fees, as it made keeping track of how many shares I was holding at any point harder to track, so I now keep some cash in each account which they take the fee from instead. Apologies for the newbie question, but I'm interested in how other people manage this.

Hi iambic

I'm with Hargreaves and there is a cash account that sits with my SIPP from where charges are deducted. As I only hold individual shares, Investment Trusts and ETFs, the fees are capped at £200 a year (taken monthly). This monthly fee of £16.66 is well covered by dividends that flow into the cash account at different times.

Cheers, OLTB,

I use Barclays and AJ Bell, with SIPP, ISA and Trading accounts spread across each.
Barclays allow you to chose where fees are taken from; I prefer to pay via DD from my current account to minimise payments from inside a tax sheltered account.
AJ Bell only allows payments to be made from funds within the accounts, selling to cover if necessary. As OLTB, dividends cover the payments without issue however it annoys me to take funds from sheltered accounts that are otherwise funded to their maximum. I would far prefer to pay from a source of my choosing.

Cheers,

Juan.

JuanDB wrote:AJ Bell only allows payments to be made from funds within the accounts, selling to cover if necessary.

In practice I've found AJ Bell are happy for the fees to take the account "overdrawn" (i.e. with a negative cash balance) until the next dividends come in to cover it. I always keep my ISA with a zero cash balance and it's never caused a problem.

Scott.

My share ISA is with the Lloyds branded version of the Halifax ISA. They take it from my current account.

TJH

There are brokers that don't deduct monthly or annual fees, at least for ISAs and unsheltered accounts. iWeb for example only charge dealing fees.

JuanDB wrote:AJ Bell only allows payments to be made from funds within the accounts, selling to cover if necessary.

From AJ Bell FAQs :
We’ll collect the charges for your ISA from the cash you hold within it. But if you prefer, we can collect your ISA’s custody charges from the cash in your Dealing account instead.

https://www.youinvest.co.uk/faq/can-i-p ... ide-my-isa

I am with Interactive and they take the fees from a nominated bank account (other options available)

Thanks everyone for your replies, it's helpful to understand the different ways people cover the account fees.

OLTB wrote:This monthly fee of £16.66 is well covered by dividends that flow into the cash account at different times.

This is a good idea - for accurately recording returns, do you record the account fee as a deduction from the dividends, or just from the overall holding?

hiriskpaul wrote:There are brokers that don't deduct monthly or annual fees, at least for ISAs and unsheltered accounts. iWeb for example only charge dealing fees.

I've opened an iWeb ISA this tax year & have been considering moving my Fidelity ISA holdings over to them, which would remove the fees issue from one account at least.

JuanDB wrote:I prefer to pay via DD from my current account to minimise payments from inside a tax sheltered account.

This is a good point, I hadn't thought about the fact that adding cash to my ISA which then goes out to pay fees is reducing my ISA allowance unnecessarily. I'm not yet able to use the full ISA allowance but hope to in the near future, so this will be more of a consideration. My Vanguard fees are held in a non-tax-sheltered account but Fidelity aren't, so think as mentioned above, I will look to transfer my Fidelity holdings to iWeb soon.

Cheers,
iambic.

EmptyGlass wrote:

JuanDB wrote:AJ Bell only allows payments to be made from funds within the accounts, selling to cover if necessary.

From AJ Bell FAQs :
We’ll collect the charges for your ISA from the cash you hold within it. But if you prefer, we can collect your ISA’s custody charges from the cash in your Dealing account instead.

https://www.youinvest.co.uk/faq/can-i-p ... ide-my-isa

That is very useful, thanks EG.

JuanDB wrote:

EmptyGlass wrote:

JuanDB wrote:AJ Bell only allows payments to be made from funds within the accounts, selling to cover if necessary.

From AJ Bell FAQs :
We’ll collect the charges for your ISA from the cash you hold within it. But if you prefer, we can collect your ISA’s custody charges from the cash in your Dealing account instead.

https://www.youinvest.co.uk/faq/can-i-p ... ide-my-isa

That is very useful, thanks EG.

Email sent to AJ Bell and confirmation received within the hour that future charges for my SIPP and ISA will be taken from my dealing account. Thanks again EG!

JuanDB wrote:Email sent to AJ Bell and confirmation received with the hour that future charges for my SIPP and ISA will be taken from my dealing account. Thanks again EG!

Note that (unless the rules have changed) per-transaction charges (i.e. dealing charges) have to come from within an ISA.

Scott.

swill453 wrote:

JuanDB wrote:Email sent to AJ Bell and confirmation received with the hour that future charges for my SIPP and ISA will be taken from my dealing account. Thanks again EG!

Note that (unless the rules have changed) per-transaction charges (i.e. dealing charges) have to come from within an ISA.

Scott.

To clarify, I'm referring to platform fees as opposed to dealing charges.

iambic wrote:Thanks everyone for your replies, it's helpful to understand the different ways people cover the account fees.

OLTB wrote:This monthly fee of £16.66 is well covered by dividends that flow into the cash account at different times.

This is a good idea - for accurately recording returns, do you record the account fee as a deduction from the dividends, or just from the overall holding?

Ahh, you mistake me for someone who is accurate

No, I just note what income flows in, what the capital position is at the end of the year and compare that to the previous year. If it's up, great, if it's down, that's annoying - I'm pretty ambivalent and assume that things will sort themselves out without too much action from me.

Cheers, OLTB.

iambic wrote:Does anyone else hold cash in their investment account specifically to cover the account fees? It annoyed me that Fidelity & Vanguard would sell some shares to cover my monthly account fees, as it made keeping track of how many shares I was holding at any point harder to track, so I now keep some cash in each account which they take the fee from instead. Apologies for the newbie question, but I'm interested in how other people manage this.

Yes - now. On one occasion, I forgot about this and went into the red. Fortunately my SIPP operator (AJ Bell) wasn't bothered, but I don't count on this. It doesn't need a huge amount amount of cash lying fallow and I would positively hate to have a few shares sold just to cover costs.

77ss wrote:Yes - now. On one occasion, I forgot about this and went into the red. Fortunately my SIPP operator (AJ Bell) wasn't bothered, but I don't count on this. It doesn't need a huge amount amount of cash lying fallow and I would positively hate to have a few shares sold just to cover costs.

I do it all the time. I run my AJBell ISA with no cash balance, so every quarterly fee takes it into the red, until the next divided comes in, usually within a month.

Never caused a problem.

Scott.