Are you taking advantage of your cash account?

Are you taking advantage of your cash account?

Whilst many clients are choosing to fund their cash accounts with Aegon and Fidelity FundsNetwork, there are still many investors who may not be aware that they can do this. The aim of this article is to explain what a cash account is, how it works and whether it applies to you.

What is a cash account?

A cash account is simply an account that all investors who have investments with Aegon or Fidelity FundsNetwork are assigned and can choose to fund in order to cover charges.

What charges can I cover with my cash account?

If you have investments with Aegon, you can cover both our service fee as well the Aegon platform charge. The cash account with Aegon is termed the 'General Investment Account' cash account.

If you have investments with Fidelity FundsNetwork, you can cover our service fee only. The cash account with Fidelity is termed the 'Cash Management Account'.

What are the benefits of funding my cash account?

Quite simply, so long as there are sufficient funds in the cash account, Aegon and Fidelity will take charges from this cash instead of selling units of your investments. The benefits of this are not just short term either. Units held in a fund will hopefully over the long term grow in value. This potential gain is reduced for every unit that is sold.

How do I know when I need to top up my cash account?

You will receive quarterly statements from Aegon and Fidelity which will show you how much is remaining in your cash account. Alternatively, you can log in to your online account or contact us here.

How much do I need to put into my cash account?

If you are an Aegon investor, the charges you can cover are 0.35% per annum (Elson fee) and 0.2% per annum (Aegon platform charge). For example, if you have a portfolio of £10,000 with Aegon, the charges taken would be £55 per annum (£10,000 x 0.55%). You can fund the cash account to cover charges for 3 months, 6 months, a year or longer - whatever you choose to do. Of course, as the value of the portfolio goes up or down, so will the amount taken in charges.

If you are a Fidelity FundsNetwork investor, you can cover our 0.35% charge. For example, if you have a portfolio of £10,000, then our fee would be £35 per annum.

How do I fund my cash account?

You can fund your cash account one of three ways:

  • If you have a debit card you can login to your Aegon or Fidelity online account and fund it online.
  • Give us a call and we will send you the relevant form which you can return to us along with a cheque payable to 'Cofunds Ltd' in the case of Aegon or 'Fidelity' in the case of Fidelity FundsNetwork.
  • Set up a regular direct debit to fund the cash account monthly. If you would like to do this, please contact us and we can assist you with this.
Posted by Robert Bennett on August 28th, 2019

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Elson Associates does not offer advice as to the suitability of investments. If you are unsure whether an investment is suitable for you, you should obtain expert advice. Past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. You may not necessarily get back the amount you invested.

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