HL to III

Geoffo_M

Confused a little here - I have 21 funds (£80k) invested in a Vantage Stocks and Shares ISA. As I understand it, do I have to sell 9 of them and leave them in cash in the ISA before filling in III's transfer form - I read that it's a maximum of 12 funds that can be transferred from HL. Is that the best way for me to do it, I mean transfer both cash & the 12 funds from HL to III - presumably then I can buy the new funds from the cash once with III? Many thanks

Sillychuckie

Geoffo_M wrote: »

I read that it's a maximum of 12 funds that can be transferred from HL

I think you are getting your wires crossed. No such restriction exists that I know of, but this thread has covered ISAs and SIPPs (and I have only looked into SIPPs so far in any close detail).
However, my guess is that the limit of '12' you have seen is one we we are discussing earlier. This is that a maximum of 12 funds are considered when III give new users £10 per fund, as part of a transfer incentive (i.e a max of £120). You can transfer more, but won't qualify for the £10 rebate on the rest.

Geoffo_M

Sillychuckie wrote: »

You are getting your wires crossed. No such restriction exists.
The limit of '12' we are discussing, is that a maximum of 12 funds are considered when III give new users £10 per fund, as part of a transfer incentive (i.e a max of £120).

Thank you, yes I was getting that wrong - so if I transferred all 21 funds then as they were, would that then cost me £525 in exit fees (at £25 a fund) - that wouldn't be a good idea would it? If so would you sell them all in HL & transfer as cash to save the £525?
Thank you for your help

Sillychuckie

Hi Geoffo. My queries have all been SIPP related, where HL do not charge the £25 fee (yet). However, I just had a quick glance at their charges for ISAs, and come to the conclusion that you may indeed be best off cashing them all in and transferring it as cash (at no cost).

However, I can't say say/nay for sure, as it depends on the costs incurred with the sale of the shares and eventual repurchase on the III side.
HL may not charge you to sell funds, but your funds might have a Bid/Offer spread, or dilution levy etc. If your holdings are significant, this could work out more expensive.

You need to do the maths, and then keep in mind the III charge to rebuy (not sure what this is - probably tapers but starts around the £10 per deal mark). It may be cheaper to pay the £25 per holding to transfer 'in specie'.
Hard to give you a yes/no without all the facts.

Geoffo_M

Sillychuckie wrote: »

Hi Geoffo. My queries have all been SIPP related, where HL do not charge the £25 fee (yet). However, I just had a quick glance at their charges for ISAs, and come to the conclusion that you may indeed be best off cashing them all in and transferring it as cash (at no cost).

However, I can't say say/nay for sure, as it depends on the costs incurred with the sale of the shares and eventual repurchase on the III side.
HL may not charge you to sell funds, but your funds might have a Bid/Offer spread, or dilution levy etc. If your holdings are significant, this could work out more expensive.

You need to do the maths, and then keep in mind the III charge to rebuy (not sure what this is - probably tapers but starts around the £10 per deal mark). It may be cheaper to pay the £25 per holding to transfer 'in specie'.
Hard to give you a yes/no without all the facts.

Thank you, sorry I wasn't aware yours was just for SIPP & that there were different procedures/charges for funds. I must find someone who is considering just transferring their ISA funds and even if indeed it is worthwhile. I calculate it's going cost me £360pa (i.e. £80k at 0.45%) to leave them with HL.

Sparky47

Geoffo_M wrote: »

Thank you, sorry I wasn't aware yours was just for SIPP & that there were different procedures/charges for funds. I must find someone who is considering just transferring their ISA funds and even if indeed it is worthwhile. I calculate it's going cost me £360pa (i.e. £80k at 0.45%) to leave them with HL.

You are right it is going to cost you £360pa to stay with HL whereas III charge a fixed fee of £80pa which includes 2 free trades per quarter.

To transfer your 21 funds in specie will cost £525 in HL charges or you can sell them and transfer as cash which is free before the 1st June. This will mean you are out of the market for a time and prices could go up or down.

An alternative is to consolidate your funds with HL into a smaller number thus reducing your transfer cost. You can always split it up again over time after you have transferred.

Geoffo_M

Sparky47 wrote: »

You are right it is going to cost you £360pa to stay with HL whereas III charge a fixed fee of £80pa which includes 2 free trades per quarter.

To transfer your 21 funds in specie will cost £525 in HL charges or you can sell them and transfer as cash which is free before the 1st June. This will mean you are out of the market for a time and prices could go up or down.

An alternative is to consolidate your funds with HL into a smaller number thus reducing your transfer cost. You can always split it up again over time after you have transferred.

Thank you Sparky, definitely worth me then going entirely to cash within my HL ISA and then transferring the cash across with the ISA wrapper isn't it, should save quite a lot that way. Thanks for confirming my £360pa fees with HL & the £525 exit fees, that's handy to know

masonic

Geoffo_M wrote: »

Thank you Sparky, definitely worth me then going entirely to cash within my HL ISA and then transferring the cash across with the ISA wrapper isn't it, should save quite a lot that way. Thanks for confirming my £360pa fees with HL & the £525 exit fees, that's handy to know

It's not quite that simple as you have to factor in the cost of repurchasing the funds at the other end (£10 per trade) and the fact that you'll get £10 cash and £10 trading credit per line of stock you transfer (up to 12) from II.

If you want ultimately to end up with the same funds at II, the ideal strategy would be for you to reduce your number of holdings to 12, so you will pay HL £25, but get £20 back from II (net loss £60) and you would need to repurchase the 9 funds at II (costing £90). That would leave you £150 down overall. You could then convert any funds you wanted over to clean class gradually using free trading credit.

If you go entirely cash, you would pay £10 per holding to repurchase (so £210 down overall). But the benefit would be that you could convert everything to clean class at that stage.

Geoffo_M

masonic wrote: »

It's not quite that simple as you have to factor in the cost of repurchasing the funds at the other end (£10 per trade) and the fact that you'll get £10 cash and £10 trading credit per line of stock you transfer (up to 12) from II.

If you want ultimately to end up with the same funds at II, the ideal strategy would be for you to reduce your number of holdings to 12, so you will pay HL £25, but get £20 back from II (net loss £60) and you would need to repurchase the 9 funds at II (costing £90). That would leave you £150 down overall. You could then convert any funds you wanted over to clean class gradually using free trading credit.

If you go entirely cash, you would pay £10 per holding to repurchase (so £210 down overall). But the benefit would be that you could convert everything to clean class at that stage.

That's excellent, I understand that & will do that now, thank you so much for your help and advice

Freecall

Sillychuckie wrote: »

Ok, last question - I hope.

I want to transfer a SIPP from HL to III, and apply next week in order to get in in time for the III incentive ending Feb.

However, I just chucked 5k into the HL SIPP to top it up before moving, forgetting all about the fact that HL send a request off for 20% back from HMRC, and apply it in March/April.

Is this going to get too messy? Has anyone got experience of how they deal with it?
Can you transfer providers in between contributing, and waiting for your basic rate tax relief?
I guess I'll risk it, since it will ultimately be their responsibility to sort out.
Worst case scenario, I can record it on my tax return as a pension contribution (which didn't automatically receive basic rate relief).

Thanks.
SC

I see that nobody commented on this. My own thoughts are that there must be lots of people in this position (think about those who contribute monthly) so there must be a system.

I agree that it could be a little 'messy' but I would imagine that it will all sort itself out ok.

The fact is that at one time pensions were a long term product intended for life whereas now consumers are having to shop around like any other purchase. I can see a time when the FCA (or whichever regulator is flavour of the month) clamp down on the charging of exit fees and we are all able to move pensions as we do other suppliers without all this hassle.