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Post by bob2010 on Sept 29, 2024 20:02:27 GMT
It makes little sense to initiate regular small ISA transfers even without a fee. The ISA is flexible, so make ordinary £1 withdrawals into an external interest-bearing account, pay it all back to your ISA just before the tax year ends and transfer it all out in one go (and for one fee). Surely thr point of the transfer is to avoid using your current year's allowance.
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Post by Ace on Sept 29, 2024 20:32:13 GMT
It makes little sense to initiate regular small ISA transfers even without a fee. The ISA is flexible, so make ordinary £1 withdrawals into an external interest-bearing account, pay it all back to your ISA just before the tax year ends and transfer it all out in one go (and for one fee). Surely thr point of the transfer is to avoid using your current year's allowance. It would. You can remove any amount of funds from a flexible ISA and replace them back in the same account before the end of the tax year that they were removed in without affecting the current years ISA allowance. (With the very small caveat that it wouldn't work for Kuflink's ISA because they didn't fully/correctly implement flexibility).
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morris
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Post by morris on Sept 30, 2024 6:08:32 GMT
Surely thr point of the transfer is to avoid using your current year's allowance. It would. You can remove any amount of funds from a flexible ISA and replace them back in the same account before the end of the tax year that they were removed in without affecting the current years ISA allowance. (With the very small caveat that it wouldn't work for Kuflink's ISA because they didn't fully/correctly implement flexibility). When you remove funds from a flexible ISA does the provider provide a running total of funds withdrawn so you know how much to pay back in at the end of the tax year?
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Sept 30, 2024 6:35:00 GMT
It would. You can remove any amount of funds from a flexible ISA and replace them back in the same account before the end of the tax year that they were removed in without affecting the current years ISA allowance. (With the very small caveat that it wouldn't work for Kuflink's ISA because they didn't fully/correctly implement flexibility). When you remove funds from a flexible ISA does the provider provide a running total of funds withdrawn so you know how much to pay back in at the end of the tax year? Yes, normally they will tell you the total amount you can contribute. Normally this is the current year allowance plus what you have withdrawn so you just have to deduct £20k to get the replaceable sum (assuming you havent made current year contributions) As AC arent taking new subscriptions then they just show how much you have withdrawn and can replace.
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Post by bob2010 on Oct 1, 2024 13:15:12 GMT
My complaint to the FOS about the withdrawal and ISA fees has just been assigned to case handler/investigator last week. I submitted it to them in early June which fits within the FOS current timescales of around 2-3 months. AC answered my complaint in stock fashion blaming that the lending fee wasn't enough to cover the increased withdrawals being made and it was unfair to increase them as not all investors withdraw frequently enough. As Rscal has said; I have not totally opposed the withdrawal fee or ISA transfer out fee; rather asked for 1 free withdrawal per month and one free ISA transfer out per year. AC declined to comment and said their stock answer was final. The direct costs for the withdrawal specified by AC in their response amounts to 52p and not £1 so I am asking the FOS to look into this. Along with Barclays fixed fixed withdrawal fee of 52p, AC are charging for the technical work required for implementing the change on their website (20p), a contingency fee of 22p (for a future event which has not occurred yet) and finally 6p for AC finance team to wave a their magic wand which is specified as a AC Finance Team cost. Similarly the ISA transfer fee has direct 3rd party cost of £30 but AC add a further of £5 for their tech and finance teams to process it. I don't think it's fair that us investors pay to have this feature implemented neither contribute to a contingency fund for some event which may never happen. We should only be charged the direct costs as stated. I have also asked what work the tech and finance teams do for each transfer considering they already pay a third party a large fee to process it; but they declined to answer this too. We shall see what the FOS make of it. I have pointed out to them that I have no way of terminating my contract and rejecting these fees and stressed that I believe the current front loaded lending fee is sufficient to cover the free schedule I proposed. Allowing free monthly withdrawals will suit most investors and one free ISA transfer per year would allow investors to fully take advantage of the flexible ISA rules. (which would allow them to transfer the funds out of AC each month into another interest bearing account and then return them to AC once per year to transfer the ISA out and avoid any fee)
Just because the FOS have currently allowed the lending fee to be charged, shouldn't mean that AC get a free pass to charge any future fees that they see fit. At least not without being challenged.
The FOS will side with Assetz, because in their view Assetz can do whatever they like in order to continue trading, even if it's against the law. I received a response to my complaint today and it comes as no surprise that they sided with Assetz.
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Post by frank121 on Oct 1, 2024 13:22:18 GMT
The FOS will side with Assetz, because in their view Assetz can do whatever they like in order to continue trading, even if it's against the law. I received a response to my complaint today and it comes as no surprise that they sided with Assetz. Disappointing. Was this regarding the withdrawal / ISA fees? Any points to be share, are they saying because their terms allow it they can do what that they want depite us investors having no option to leave?
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Post by bob2010 on Oct 1, 2024 15:17:06 GMT
I received a response to my complaint today and it comes as no surprise that they sided with Assetz. Disappointing. Was this regarding the withdrawal / ISA fees? Any points to be share, are they saying because their terms allow it they can do what that they want depite us investors having no option to leave?
[br ChatGPT summary of their response: The Financial Ombudsman Service (FOS) concluded that Assetz SME Capital Limited's introduction of a £1 withdrawal fee was fair and reasonable. FOS determined that the fee was implemented under the contractual terms agreed by investors, specifically clause 10.4, which allows for charges related to fund transfers. Assetz introduced the fee in response to a significant increase in withdrawal requests, aiming to cover the direct costs of processing these transactions and to maintain the financial viability of winding down the platform. Additionally, Assetz mitigated the impact on investors by allowing one free withdrawal every 90 days, ensuring that those who withdrew infrequently were not adversely affected. FOS found that Assetz provided sufficient evidence that the fee accurately reflected actual costs and that the measures taken were necessary to protect investors’ interests during the platform’s closure.
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Post by frank121 on Oct 23, 2024 12:17:38 GMT
Disappointing. Was this regarding the withdrawal / ISA fees? Any points to be share, are they saying because their terms allow it they can do what that they want depite us investors having no option to leave?
[br ChatGPT summary of their response: The Financial Ombudsman Service (FOS) concluded that Assetz SME Capital Limited's introduction of a £1 withdrawal fee was fair and reasonable. FOS determined that the fee was implemented under the contractual terms agreed by investors, specifically clause 10.4, which allows for charges related to fund transfers. Assetz introduced the fee in response to a significant increase in withdrawal requests, aiming to cover the direct costs of processing these transactions and to maintain the financial viability of winding down the platform. Additionally, Assetz mitigated the impact on investors by allowing one free withdrawal every 90 days, ensuring that those who withdrew infrequently were not adversely affected. FOS found that Assetz provided sufficient evidence that the fee accurately reflected actual costs and that the measures taken were necessary to protect investors’ interests during the platform’s closure.
So I have just received my response from the FOS; as you guessed my complaint was not upheld. No real surprises and much of the response seems to be a copy/paste from the response I have already seen in the main FOS thread. They on one hand say the clauses are unfair but they are justified because AC have provided evidence that they are needed to keep their business afloat.(we have heard this time and time over) They say the withdrawal fees are fair and relate to direct costs (but I disagree that website changes and contingency are direct) and have now provided evidence to the FOS that it's now actually more than £1.  It really seems that the FOS will allow them to charge anything they want... Does anyone know what this 30 day window is? The FOS are claiming we will have 30 days to transfer un-invested ISA cash without a fee? (if I understand correctly) However this is not what AC have proposed; all ISA transfer will attract the fee of £35. Blue section below, do you agree this is incorrect?
Restriction on new fees for ‘funds already lent out’ Within the IFISA terms at clause 9.1, it is stated ‘any amendment that adversely affects you will not apply to sums already lent out’. Assetz have confirmed that section 9 of the IFISA terms covers changes to any fees, including those for transfers out made under clause 7.3. I have considered whether this has any impact on their ability to introduce the transfer fee. We asked Assetz for comment on this. Their explanation was: “IFISA funds “already lent out” are not able to be withdrawn and this is made clear in the IFISA Terms & Conditions as follows… 2.5 you may make withdrawals from your Innovative Finance ISA account; however you cannot withdraw funds which are invested in a loan Only Cash funds (no longer lent out) sat in an Investors IFISA Cash Account can be withdrawn”. My understanding of the term is that it applies to funds which are held in cash, having been previously lent out and repaid. And by allowing a 30-day window where investors could transfer without incurring the fee, this ensured Assetz’ new fee didn’t adversely impact customers in respect of those funds – investors were able to use this time to transfer away their cash balances fee-free.
Cost of the fee
As mentioned, clause 7.3 mentions the price of the transfer fee will be set ‘based on the costs relating to providing the service’. And clause 10.4 specifies that the price of any new withdrawal will be made ‘to cover their direct costs of the funds transfer’.
We have asked Assetz for an explanation and evidence on how they reached the figurework charged to investors.
With regards to the £1 withdrawal fee they explained that the main part of the cost reflects bank charges they must pay on each transfer. Beyond this, there were costs of the work Assetz needed to complete for withdrawals and a smaller element for contingency.
Assetz has also given us a breakdown of the actual costs it faced for each withdrawal in hindsight using real life data and said this actually equated to slightly more than the £1 it charged. However, they maintained the fee at £1, subject to further review.
In reference to the £35 fee, Assetz explained the main part of the costs is a monthly payment to a third-party service provider for administration of their IFISA accounts. The amount paid is based on a percentage of all funds on the platform, plus a licensed fee.
Beyond this, there were costs of the work Assetz needed to complete for transfers, and a smaller element for contingency.
Assetz said they would review the fee moving forwards, based on the actual number of transfer requests being made, to ensure it is still based on the costs of providing the service associated with the transfer out process.
Overall, I consider Assetz have provided a reasonable explanation showing that the £1 withdrawal and £35 transfer fees aren’t arbitrary, and do reflect the costs of transfers.
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Post by frank121 on Oct 27, 2024 23:34:43 GMT
Hi All, After re-reading the above; I now understand that it's referring to the 30 day notice period which must apply to uninvested cash; the terms seem to prevent a fee being applied to sums already lent out but since those funds cannot be sold and transferred, it's irrelevant. This part is now more of a interest: "In reference to the £35 fee, Assetz explained the main part of the costs is a monthly payment to a third-party service provider for administration of their IFISA accounts. The amount paid is based on a percentage of all funds on the platform, plus a licensed fee. "Beyond this, there were costs of the work Assetz needed to complete for transfers, and a smaller element for contingency." "Assetz said they would review the fee moving forwards, based on the actual number of transfer requests being made, to ensure it is still based on the costs of providing the service associated with the transfer out process. " This implies that AC are paying a percentage based monthly fee to a third party to manage the admin of the IFISA accounts; this percentage is based on the amount of funds on the platform. This opens a couple of questions: 1) Since the number of ISA transfers will no doubt drop after the fee is introduced; how is this predicted to cover the monthly cost? Surely they will be months where the fee won't cover the monthly cost... 2) Did AC inform investors that they will review the fee as funds are repaid? (leading to them to pay a reduced fee) I need to check but don't think they did. If anyone has any thoughts then please do share. Cheers, Frank
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Post by bob2010 on Oct 28, 2024 8:42:21 GMT
Hi All, After re-reading the above; I now understand that it's referring to the 30 day notice period which must apply to uninvested cash; the terms seem to prevent a fee being applied to sums already lent out but since those funds cannot be sold and transferred, it's irrelevant. This part is now more of a interest: "In reference to the £35 fee, Assetz explained the main part of the costs is a monthly payment to a third-party service provider for administration of their IFISA accounts. The amount paid is based on a percentage of all funds on the platform, plus a licensed fee. "Beyond this, there were costs of the work Assetz needed to complete for transfers, and a smaller element for contingency." "Assetz said they would review the fee moving forwards, based on the actual number of transfer requests being made, to ensure it is still based on the costs of providing the service associated with the transfer out process. " This implies that AC are paying a percentage based monthly fee to a third party to manage the admin of the IFISA accounts; this percentage is based on the amount of funds on the platform. This opens a couple of questions: 1) Since the number of ISA transfers will no doubt drop after the fee is introduced; how is this predicted to cover the monthly cost? Surely they will be months where the fee won't cover the monthly cost... 2) Did AC inform investors that they will review the fee as funds are repaid? (leading to them to pay a reduced fee) I need to check but don't think they did. If anyone has any thoughts then please do share. Cheers, Frank
At the end of the day, I doubt the FOS will care. Assetz can just say that the fee is needed otherwise they would have to liquidate and as a result complaints won't be upheld, as the FOS would say the alternative is worse for investors.
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scooter
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Post by scooter on Oct 28, 2024 15:44:16 GMT
I thought that charging for ISA trfs started in Q3, but it is still free today. Feels like a bonus....
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warn
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Curmudgeon
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Post by warn on Oct 31, 2024 17:41:17 GMT
I thought that charging for ISA trfs started in Q3, but it is still free today. Feels like a bonus.... Now stated to be applied "Quarter 1 2025 at the earliest".
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scooter
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Post by scooter on Oct 31, 2024 19:10:33 GMT
I thought that charging for ISA trfs started in Q3, but it is still free today. Feels like a bonus.... Now stated to be applied "Quarter 1 2025 at the earliest". At last their incompetence is working in our favour....
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It really seems that the FOS will allow them to charge anything they want...