Questions about ISAs and Platforms

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
1 reply 1.1K views
sc00by-d00sc00by-d00 Forumite
13 Posts
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
I have been doing a lot of reading up on here about the different ISA platforms and had some questions I hoped someone could answer for me.

I currently have about £24,500 (will be approx £29,000 by end of March) in a S&S ISA with BestInvest. I have been choosing the funds myself based upon research that I have done, however I know the ISA could be managed better.

I also have approx £30,000 in a cash ISA with Halifax that is maturing in August. I was hoping to transfer £21,000 of this to my S&S ISA to reach the magic £50,000 at which point I believe I would qualify for a managed portfolio service from BestInvest.

My questions therefore are:

1. If I start using BestInvest's managed portfolio service and for some reason the market crashed and my funds went below £50,000 would I have to revert to managing it myself?

2. I have read a lot about online platforms being secured to the tune of £50,000 by FSCS. However, why is this? I would have thought that since your money is tied up in the chosen funds, if the platform provider was to collapse then your money would still be tied up in the funds and you will therefore have lost nothing or am I wrong?

3. I was thinking of transferring the remaining £9,000 balance on my cash ISA to a S&S ISA on another platform such as Hargreaves Lansdowne. Whilst I'm sure this is legal, is it common for people to use more than one platform for ISAs or is there an economic reason why we shouldn't??

Thanks in advance.

Replies

  • jimjamesjimjames Forumite
    14.5K Posts
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    ✭✭✭✭✭
    sc00by-d00 wrote: »
    1. If I start using BestInvest's managed portfolio service and for some reason the market crashed and my funds went below £50,000 would I have to revert to managing it myself?
    .

    Some very logical questions.

    You may want to check with BI but I'd expect that it was the amount that you put in - if their management effectively cause it to drop below then they should continue to support that.
    sc00by-d00 wrote: »
    2. I have read a lot about online platforms being secured to the tune of £50,000 by FSCS. However, why is this? I would have thought that since your money is tied up in the chosen funds, if the platform provider was to collapse then your money would still be tied up in the funds and you will therefore have lost nothing or am I wrong?

    You are correct. Nothing would be lost if the platform collapsed and the underlying funds would still be there.
    sc00by-d00 wrote: »
    3. I was thinking of transferring the remaining £9,000 balance on my cash ISA to a S&S ISA on another platform such as Hargreaves Lansdowne. Whilst I'm sure this is legal, is it common for people to use more than one platform for ISAs or is there an economic reason why we shouldn't??

    The reason for not using more than one platform would be so that you benefit from any volume discounts so for example the fees may be lower above £50k so splitting across platforms may stop you getting the best deal. There may be other reasons for using multiple platforms to get the funds you want that aren't available on all of them.

    I use Cavendish and HL as they do have different funds. Once the new pricing models are clear I will review that situation.
    Remember the saying: if it looks too good to be true it almost certainly is.
This discussion has been closed.
Latest MSE News and Guides

A guide to council tax bands

Lower your band & save £1,000s

MSE Guides

Cinema MoneySaving tips & tricks

Including year's 2for1 movies for £1

MSE Deals