Do I need to ensure money is held in product cash to pay fees (i.e. 2%) and only invest 98% into a model?

We do not insist on a set amount of cash to be held as product cash, but this is a good approach to prevent disinvestment occurring from a model portfolio.

However each firm must make their own choice on cash allocation, whether Product or Model Cash. Being fully invested in a model portfolio will mean monthly auto-disinvestments for fees and charges. Note that assets held within a model portfolio cannot be accessed for a crystallisation to generate a TFC lump sum whilst a model trade/disinvestment is in flight.