Fidelity promises to refund the difference if investors find funds priced more cheaply on rival platforms

2nd March 2014

Fidelity Personal Investing says that if their retail investment customers find funds priced more cheaply on another platform it will refund the difference for this year at least.

The move may be seen as a bid to take on Hargreaves Lansdown which made its big price changes this weekend past, and comes as part of an ongoing price war among the wrap platforms. Fidelity says that if a retail investor finds 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 0.2% on all investments in all accounts. Fidelity Personal Investing says it will not charge any service fee at all on investments above £1m and has no additional fees.

Mark Till, head of personal investing, says: “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.

Fidelity however says it is not just making a price play. It argues that its 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 adds: “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.”

The platform has also set out some of the conditions and details about the offer.

Investors can claim their cash refund during the period 1 January 2015 to 28th February 2015 (the “Claim Period”) by completing the online claim form at [ Investors can request a paper claim form by calling us during the Claim Period. When an Investor has requested a paper claim form they will need to complete and return the form to us before 15th March 2015.

The offer runs between 1 March 2014 and 31 December 2014. The offer is only open to customers with less that £1m of assets in f unds on the Fidelity Personal Investing platform. A cash refund will be equal to the price paid by Investors for holding and Eligible Investment less the price of holding the same investment on a competitor platform rounded up to the nearest whole £1.

The offer is based on the cost of an investment over the period held calculated as: the share/unit Annual Management Charge (‘AMC’) plus the applicable platform charges and product charges (such as ISA charges or investment account fees) and any customer wide rebate negotiated by the competitor.

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