ISA charges

dunstonh

Usually, switching an ISA between providers (for example, moving it from L&G to a fund supermarket) would incur no cost.

The problem is most of us dont have the PI insurance in case he swaps and then loses money and wants to sue for his losses so my advice of speak to an investment adviser still stands. There are some on this site who I am sure could help.

Switches and transfers are treated as a regulated transaction and fall under investment classification.

Part of the issues with many of these older PEP/ISA linked plans is that they are invested based on 1980s/90s principles and knowledge. That usually means they are single fund investments with no diversification and in a jack of all trades, master of none fund. Modern investment options offer better potential over the long term.

No investment should be ignored and setting up a 25 year plan without giving it reviews will not lead to the best returns.

PosterBoy77

dunstonh wrote:

Usually, switching an ISA between providers (for example, moving it from L&G to a fund supermarket) would incur no cost.



Switches and transfers are treated as a regulated transaction and fall under investment classification.

Part of the issues with many of these older PEP/ISA linked plans is that they are invested based on 1980s/90s principles and knowledge. That usually means they are single fund investments with no diversification and in a jack of all trades, master of none fund. Modern investment options offer better potential over the long term.

No investment should be ignored and setting up a 25 year plan without giving it reviews will not lead to the best returns.

Well it is good to see you posted a better reply this time than the first time round in this thread!

dunstonh

Well it is good to see you posted a better reply this time than the first time round in this thread!

I had to correct your mistake. "Front ended charges can make it less worthwhile to move".

PosterBoy77

dunstonh wrote:

I had to correct your mistake. "Front ended charges can make it less worthwhile to move".

I don't see it as a mistake? If someone has taken out a fund with very high front ended charges, but very low ongoing charges, as long the returns are reasonable, it may make it more attractive to stay instead of switching.

Mr_helpful

Mikael
You started off seeming to suggest he moved his fund now you seem to be backtracking. This is what happens when we dont know the full facts about the policy.
Giving financial advice is a risky businesss in fact its a criminal offence if you are not qualified
The decision to swap funds should be made on advice from a professional like DunstonH as that is his job. There is a lot more to investment advice than just are my fees too high. We know very little of the original posters investment objectives, time frame or attitude to risk.We also know very little about the fund itself other than its L&G but is it a tracker , Managed ,overseas ,recovery or what?

PosterBoy77

Mr_helpful wrote:

Mikael
You started off seeming to suggest he moved his fund now you seem to be backtracking. This is what happens when we dont know the full facts about the policy.
Giving financial advice is a risky businesss in fact its a criminal offence if you are not qualified
The decision to swap funds should be made on advice from a professional like DunstonH as that is his job. There is a lot more to investment advice than just are my fees too high. We know very little of the original posters investment objectives, time frame or attitude to risk.We also know very little about the fund itself other than its L&G but is it a tracker , Managed ,overseas ,recovery or what?

I don't think I'm backtracking. There are two things being discussed here. The action the OP can take and the more general question about how fund management fees can impact on decision making. My last comments are in relation to the general point. I don't know what the OP's position is nor am I advising what funds are best. I'm just mentioning things to give thought to when trying to reach a decision.

The fees are an issue in their own right. You can invest in most funds directly with a fund manager and pay their standard fees. You can also invest in most funds via a discount broker where you will get a large chunk of the fees refunded. You will still have bought the same funds, but you will be better off if you receive the fee rebates.

The fact remains that if someone had already stumped up lots in initial fund charges, it may make it less attractive to move if the subsequent charging is very low, but would be higher with a new fund. However in relation to the specific original question, the L&G fund is unlikely to be the best possible fund around out of the 1000s there are.

Even if the L&G fund the OP has is the absolute best type of fund for him, he could almost certainly save money by holding it or a very similar fund with a discount broker who will refund a large proportion of the fees which are currently being charged. If you can invest in a fund with high fees or invest in the same fund with most of the fees refunded, it is a simple choice of choosing the avenue with the lowest fees. The fees are a certainty, the fund performance is not.

The type of fund he should or should not choose will be a bit of a black art. If a particular SM Index is going to make good gains over the next few years, a tracker could be very good and cheap. If someone feels a niche market somewhere is going to do very well, then a more market specific fund may be good. However, some of this will come down to what someone feels will do well. We could ask 50 financial advisers and we could probably get 50 different answers. None of us can predict the future, we can only make educated guesses. Statistically amateurs make investment decisions just as well as professionals, so it could be best if the OP decided on what fund he wanted without any advice from anyone!

As to whether DunstonH is a good professional to seek advice from, I'm sure the OP will judge for himself.