ISA confusion help please

[Notnowjo]

I am confused about stocks and shares ISAs and hoping for some general advice please.

way back when I invested the general idea was you found the fund you wanted went to some kind of investment company and put your money into a stocks and shares ISAs through them. That company got a small amount of ongoing commission (for doing nothing) and your fund went up.

i have a couple of small Fidelity funds, they seem to be going up well, I pay a commission to my ‘advisor’ the original company seems to have been sold 3 or 4 times I have never heard of the current one (or any of the previous ones except the first!) I pay a fund management fee and I also pay to sell some units to cover the fees.

I think my main question is whether I can hold the unit trusts directly without having to pay my ‘advisor’ since that would save me a bit each year?

I feel like everyone know buys parcels of shares and holds them directly am I right? Some Boots, Barclays Bank, power, water etc etc
what about the selling (bits of) units to pay the dealing fees? It seems inefficient.

i’m aware very few funds outperform their index so I need to check where we are at, they did really well initially seem to have lagged over covid but now seem to be on the up again.

I keep seeing EFT’s on line any comments on their popularity would be appreciated too.

I am grateful for any general ISA advice as well thanks.

I’m looking to move the kids from cash to stocks and shares so lots to work on!

thank you

All fund managers charge a fee. They aren't doing nothing, they are managing the fund. Even if it's a passively managed and, there are costs involved.

All platforms charge a fee. You need a platform to hold your funds or shares.

Commission on investments hasn't been a thing for over a decade, and if you chose your own funds, why do you have an advisor? You definitely should not be paying commission to an advisor for something they haven't done.

So you do have to pay some fees, but you don't need to pay an advisor. You can hold shares directly but that is generally cconsidered more risky than a fund - a fund invests in multiple companies so one company falling in value doesn't wipe out all your holdings. It's still a case of choosing an investmt platform and buying the funds/shares through them.

This is a very helpful link to the platforms, and a guide to investing: www.moneysavingexpert.com/savings/stocks-shares-isas/

You can ring up Fidelity to ask them what would be the difference in management fees if you remove the broker. I did this years ago. Removed the broker from a long term S&S ISA (which had been set up by a broker to help pay off a mortgage) and now pay fidelity directly. The investment still grew and we paid off our mortgage.
Am now directly paying into the ISA, instead of a mortgage. I have to choose which fund to invest each month, but I just pick the same one.

Thanks @digitalgirl and @LordEmsworth I havn’t read the link yet but I will. I’m happy to pay the manager of course but I had no idea I could remove the ‘advisor’ I spoke to Fidelity the other day and they didn’t say anything so I will do that on Monday. Originally it was presented as the ‘cost’ of investing if you like called ‘trail commission’ I think. It was all so new we had to agree to it to invest!

Appreciate your responses thank you

Blimey. I didn't realise that if you bought your investment before commission was banned, you'd still be paying trail commission. Very sharp practice on their part... https://www.fca.org.uk/consumers/trail-commission

@LordEmsworth Thank you for that I had no idea it had been banned how did I miss that?

will be stopping it tomorrow!

pretty sure this ISA was taken out the first year we were able to!

@LordEmsworth InvestEngine don't charge a platform fee.
Neither do Trading 212 (though they do charge FX fees).

Invest Engine is a simple, low cost platform. There are no platform fees for holding the investments; all their ETFs are denominated in pounds sterling including index funds (so no additional FX fees).
You can switch investments without a fee, (Fidelity charge for each transaction - so every time you buy or sell).

I have tried several platforms and this one I found to be the simplest and cheapest.
If you have investments worth over £32K you might also look at the Vanguard platform - it's charges are lower than most. It charges a minimum of £48 per year even if the investment is small which is why it's worth looking at for larger investment amounts. It only sells Vanguard investments, but it's simple to navigate and to compare past performance of the investment funds.

@LordEmsworth I’ve had a long and very interesting chat to someone from Fidelity, turns out this company added itself to my ISA as an advisor in 2017.

I have contacted them to ask for a refund, will be asking Fidelity and possibly financial ombudsman as well if I don’t get anywhere.

thank you so much for your comment, they have taken over 3k so far!

This is interesting Fidelity told me today there is no charge for buying or selling or exit fees if you move completely!

A financial advisor can't just add themselves without your consent. You say the firm changed names over the years, so did this happen when they were bought out? If so it is legal for them to be linked to your account until you ask for them to be removed. Not saying it is moral of course.

Fidelity don't charge dealing fees for stocks and shares funds, but looks like they do on shares, which includes etf's. If you only asked them about your existing stocks and shares funds, they gave the correct answer. Every company needs to make money, so every platform will be charging someone somewhere. You should look at who will provide the best value based on how much you have and what type of investment you want.

Hi @HarryVanderspeigle I’m still working on what’s going on with the finance company they replied to my first set of emails instantly, have since asked for my phone number to ring me for a ‘chat’ and since I told them to keep it in writing have gone silent on me!

Fidelity make money with a very transparent 0.35% fee which has been well explained to me at the moment I am trying to consolidate things and tidy them up before I look at moving but the answers on here have seen so helpful.

Thank you so much for this have had great chats with Fidelity and set up a few things which will hopefully make a big difference in the future.
honestly thanks for taking the time to respond. 👡(no flowers anymore so here’s a nice party shoe by way of thanks!)