Virgin S&S ISA - worth switching?

Seamonster_2

I've had a Virgin S&S ISA for 12 years. It's now worth £18K, which is less than my contributions so I'm far from impressed with the performance.

I understand Virgin's management costs are high too, so I'm wondering what my options are regarding a switch to another ISA provider. I currently pay in £100 per month, £50 of which is invested in their All Share Tracker and £50 in the Virgin Climate Change Fund.

Could anyone recommend a course of action that would give me a chance of better returns? I'd obviously want to avoid incurring any losses as a result of switching to another ISA provider, if possible.

I'm not particularly clued-up on stocks and shares, but I'd like to learn a bit about it and would consider switching to a self-select scheme.

Any thoughts would be welcome.

newfoundglory

Yes, the management charges are at least 1% - for a tracker thats expensive. I use HSBC tracker funds through the HSBC Global Investment Centre, with charges which are around 0.30% I believe (you can check online). So on a large sum, you can definitely save by switching elsewhere.

You will likely have to approach a new ISA provider, ask them to sell the funds and transfer the cash over so that it can be used to purchase a (hopefully cheaper) tracker wrapped in ISA.

Climate change - again expensive (says 1.75% on the website!) - not great performance - the word gimmick comes to mind for this one; not something I would personally invest in, but then you have to decide for yourself where to invest your cash.

By switching to a different investment platform, you will have a greater choice of funds to choose from.

innovate

My two favourite links for S&S are atm:

http://monevator.com/category/investing/passive-investing-investing/

and

http://monevator.com/the-slow-and-steady-passive-portfolio-update-q4-2012/

I like the more cautious approach to investing - not least because, around the same time you started yours, I got lulled into thinking it's hip to have a Virgin ISA. I did lose faith in it in 2007, bowed out at a painful loss and started a self-select ISA. This one didn't always go as well as it could have, I made quite a few mistakes but I am happy that my Virgin ISA wouldn't have yielded anything like my self-select one.

Good luck with your plans!

jimjames

Switch to cheaper tracker funds with Cavendish and you'll get at least 0.7% better performance from reduced charges - it may not sound a lot but over time makes a massive difference.

It is really easy to switch an ISA but you will be out of the market while the transfer takes place.

http://cavendishonline.co.uk/investments/our-service/

Seamonster_2

Thanks for the responses. I've done some further investigation and things still aren't 100% clear.

HSBC doesn't appear to be an option as you need to be an existing customer. I've looked at transferring my holding to Cavendish or HL, but neither lists Virgin in their examples of platforms/brokers from which you can transfer. Does this mean that my ISA is not the type that these companies will accept?

I realise that I could just sell up and re-invest the cash from scratch, but I'm reluctant to do that as the value is currently low and I'd rather keep my Virgin equities in the hope that they will increase in value.

If I can't transfer what I've got, perhaps another option would be to keep the existing holding where it is but stop the monthly payments to Virgin, and open up a completely new S&S ISA with a different (hopefully better-performing) company and pay monthly into that instead.

innovate

My Virgin ISA only offered funds that they had created themselves and were not transferrable. Horrible lock-in, no direct and open competition, little incentive to keep charges down etc etc etc

So one obvious choice is to sell-up and buy something that looks more transferable and competitive. Which is what I did - - as I said, painful at the time but I am glad I did bite the bullet.

Whether you can go with the other option - put the Virgin ISA into dormant state and start a new one elsewhere - would also depend on whether there are any charges if you stop your regular contributions. I can't recall any on my Virgin ISA but obviously you need to check your T&Cs. If there are no charges, this may well be an option that suits you best - only you can decide.

grey_gym_sock

you have more chance of your investments going up if you switch to better funds. especially with a tracker, a cheaper 1 is going to be better.

a transfer to HL or cavendish should be possible in cash (i.e. sell the current funds, cash is transferred across, and then you buy new funds with HL/cavendish). it may not be possible in specie (i.e. transfer the funds across without selling them). but it may be a good idea to switch funds anyway. you would be out of the market for a few days during the switch, but i don't think there's much you can do to avoid that.

i think with HSBC you can become a customer by opening a simple deposit account with £1, and then you qualify. i haven't tried this, though.

Seamonster_2

I contacted Cavendish regarding a possible ISA transfer. Their reply was as follows:

"At the moment if you want to transfer this ISA to our platform powered by Fidelity FundsNetwork then you would have to sell the units and then re buy them but from next week you should be able to do a re-registration where the funds are just moved over provided they are accepted by Fidelity FundsNetwork. The forms to do this will be on our website from next week."

innovate

well that sounds promising! Apart from the "provided they are accepted by Fidelity FundsNetwork".....but may be at least the All Share tracker is?

jimjames

To be honest it really doesn't matter if they can transfer as units or cash as you'll be selling the Virgin fund and buying something better value - won't you? Far easier to transfer cash and then buy the funds you want at the other end. When I transferred I was only out of the market for 5 days.

DietIrnBru

Firstly, you have admitted you are not clued up on shares and how to run a portfolio - then again seems Virgin aren't either. I'd stick to an unsexy tracker from a cheaper provider - even the Economist last week advised readers to go for trackers, albeit instead of expensive fund managers.

Secondly, I transferred my shares ISA from Virgin months ago, and I didn't have to go through anything as complicated as the posts above suggest. One form - 2 weeks - transfer to new ftse tracker provider done.