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Fidelity makes ‘Price Promise’ to all personal investing customers

3rd March 2014 Print

Fidelity Personal Investing has announced the Fidelity Price Promise to all its customers: if they find the same fund cheaper with our key, comparable, competitors, Fidelity will refund the difference.
The offer, which will run until 31st December 2014, follows the recent announcement of Fidelity Personal Investing’s new pricing model, charging direct customers a single one-off fee to access its service. For investments up to £250,000, the service fee is 0.35% and for investors with assets of more than £250,000 and up to £1m, the service fee is just 0.2% on all investments in all accounts – not just those above £250,000. Fidelity Personal Investing will not charge any service fee at all on investments above £1m and has NO additional fees:

No initial charges
No switching charges
No fees for product wrappers, such as SIPPs and ISAs
No fees for using paper or phone
No fees for requesting a paper valuation
No exit fees
Mark Till, Head of Personal Investing, comments: “We are extremely excited by the Price Promise we have made to all our personal investing customers. Following the announcement of our competitive pricing model in January, this latest development further highlights our commitment to delivering both value and investment expertise to the self-directed investor.
“We are confident that in the majority of cases, investing with Fidelity Personal Investing will be cheaper on a total cost basis than our major competitors^. In fact we are so confident that if any of our customers find this is not the case for any funds on Fidelity’s direct to consumer fund supermarket, we will refund the difference.
“We continue to listen to our customers and know that price plays an important part in many people’s investment decisions. However, we believe investors will benefit more from focusing on the resources and skills of the asset manager, as well as individual fund performance, than on securing a small additional discount on their funds. That is why we have made this bold move, to enable investors to find the right funds for their needs without having to worry about which of the leading platforms is currently offering the best deal on their choice of funds.”
Fidelity’s analysis demonstrates why investors need to look at the performance and not simply the price. As the example below shows, the difference in performance can dwarf the difference in price:
The gap between the most expensive and the cheapest fund is only 1.58% p.a. compared to an annualised outperformance of 18.89% by the average of the Top 3 performing funds versus the UK Equity Funds sector average:

5yr Performance (Annualised) - UK Equity Funds

Average for sector 16.71%
Top-performing fund 40.93%
Bottom-performing fund 9.17%
Average of top 3 funds 35.61%
Top 3 vs. Average +18.89% pts

Till continues: “While many of our 250,000 personal investing customers feel confident selecting funds themselves, we know that many can find this task daunting. Fidelity Personal Investing offers guidance to these investors to ensure the best long-term outcomes, by using tools such as Fidelity’s open architecture Select List - 140 funds, that we believe stand out from their peers, chosen by our team of experts from our range of over 2,000 investment options.
“Comparing prices can be extremely complex and time consuming and with our Price Promise we will ensure that Personal Investing customers always get great value versus other leading platforms. Investors can then feel confident they have the best deal available and can focus their attention on finding winning funds.”