Fidelity windfall ISA closure
Fidelity has decided to close its windfall Individual Savings Account (ISA) scheme, after the number of accounts dropped from 200,000 to 34,000.
Many windfall ISAs were created in 1997 when investors received shares in return for their membership of mutual building societies.
Fidelity is not the first group to close their windfall ISA accounts. Many demutualisation shares have not been particularly successful, with some even going bust in the recent financial crisis.
Investors with a Fidelity windfall ISA account have to decide what to do with their money by 1st October 2010. They can transfer out in cash to another ISA manager or invest in funds with Fidelity FundsNetwork.
Those who do not make a decision by 1st October will see the value of their ISA accounts invested in the Fidelity MoneyBuilder UK Index fund. This fund aims to achieve long term capital growth by closely matching the performance of the FTSE Actuaries All Share Index. It is a low cost tracker fund, with an Annual Management Charge (AMC) of 0.1% and a Total Expense Ratio (TER) of 0.3%.
Unfortunately, investors do not have the option to retain their demutualisation shares by transferring their ISA account holdings in-specie to another ISA manager.
The 34,000 people with a Fidelity windfall ISA account should use this as an opportunity to review their overall investment strategy.