S&S ISA Transfer Form - Checking Terminology

amandajc

I'm wanting to transfer my S&S ISA and am currently in the process of researching the best platform (this table seems very useful - thanks again to the poster who provided a link in a previous thread: http://www.telegraph.co.uk/finance/personalfinance/investing/isas/10611058/Tables-cheapest-fund-supermarkets-for-Isa-investing.html)

In the meantime I have a question about the transfer form and what will happen during the process.

I understand that I fill in the form provided by the platform I choose who then contact my current provider for me. But there is a question on the transfer form that I am a little unsure about. It asks how I want the transfer to be made - "Cash" or "Shares and Residual Cash". What is "Residual Cash"?

My aim when I have transferred over is to re-invest the money in a different fund/s from the one in which it is currently invested. I presume I therefore need to tick "Cash"? When the cash arrives in the account is it still protected in the ISA wrapper? But I presume I have to get on with re-distributing into funds pretty quickly?

Thanks in advance for any help. Anyone with previous experience as regards how long this all takes and anything else I might need to know would be great.

barak

amandajc wrote: »

.....In the meantime I have a question about the transfer form and what will happen during the process.

I understand that I fill in the form provided by the platform I choose who then contact my current provider for me. But there is a question on the transfer form that I am a little unsure about. It asks how I want the transfer to be made - "Cash" or "Shares and Residual Cash". What is "Residual Cash"?

My aim when I have transferred over is to re-invest the money in a different fund/s from the one in which it is currently invested. I presume I therefore need to tick "Cash"? When the cash arrives in the account is it still protected in the ISA wrapper? But I presume I have to get on with re-distributing into funds pretty quickly?

Thanks in advance for any help. Anyone with previous experience as regards how long this all takes and anything else I might need to know would be great.

"Residual Cash" means any un-invested cash you may have in your S&S ISA. If you tick "Cash" your existing manager will sell all your holdings and transfer 100% cash to the new manager. If you tick "Shares and Residual Cash", provided both managers allow transfer of shares/funds "in specie" [as it's called], the existing holdings will be transferred together with any residual cash.

Time taken for transfers is supposed to be faster these days, but if transfers "in specie" are allowed, you'll have to decide whether to switch funds before or after the transfer.

amandajc

Thanks barak. I've decided to go with Interactive Investor and I posted off my transfer form today. I have asked for the ISA to be transferred "in specie" (thanks for explaining this) so that I can move the money into other funds when the transfer has taken place. Now I just have to work out the process involved in setting this up complete with a regular monthly investment and finalise the funds I want to go with :-)

badger09

amandajc wrote: »

Thanks barak. I've decided to go with Interactive Investor and I posted off my transfer form today. I have asked for the ISA to be transferred "in specie" (thanks for explaining this) so that I can move the money into other funds when the transfer has taken place. Now I just have to work out the process involved in setting this up complete with a regular monthly investment and finalise the funds I want to go with :-)

I'm not sure you have understood - or maybe I'm misunderstanding what you've said here

If you've asked for an 'in specie' transfer, then your current provider will transfer whatever investments are in your S&S ISA now, plus any uninvested cash. If you intend to invest in something different with your new provider, you will have to wait until the transfer is complete, then sell your current holdings and buy the new funds. Interactive Investor charge £10 to buy/sell, though you do get 2 free trades per quarter. Depending on how many investments you already hold, those buying & selling could mount up. Obviously II's buying/selling charges could be less than those of your current provider, in which case ignore me

Had you transferred in cash, it would almost certainly have been quicker and you could have bought your new funds as soon as the transfer completed, and possibly with lower costs.

amandajc

Thanks badger09. I did hesitate a bit about this but decided in the end that I was happy to go with transferring over the investment as it was, and then selling when the transfer was complete and I had done the necessary research into exactly how I wanted to move forward with investing.

I have only one fund in my S&S currently (IS UK Growth) which is not doing too badly at the moment so I'm not absolutely desperate to ditch it, (although I do want to do so pretty soon, in favour of some passive tracker funds) and as Interactive Investor seem to be offering a "transfer" deal until the end of Feb which means I may be able to do some selling and buying for free I wanted to move fairly quickly with the transfer form.

I'm not entirely sure what their offer means in real terms but I'm hoping to sell my CIS fund and buy into 6 trackers (or maybe a Vanguard lifestyle fund) with initial lump sums and ongoing regular investments. I hope I've understood the process and costings correctly as this is all very new to me. Any help and clarification very welcome. :-)

Watsy

I'm very much in the same boat as yourself amandajc and also very much a novice at these things. As it happens I'm likely going to choose Interactive Investor too.

As you happen to mention the transfer offer they currently have on from my limited understanding I think you done the right to transfer your holdings over 'in specie' as the terms and conditions state:

11. A transfer of cash will not count as a transfer for the purpose of this offer.

Thats what I'll be doing anyhow and hopefully the offer will help negate any charges I get.

amandajc

Thanks Watsy. I hadn't seen that clause. Hopefully things will become clear when the transfer is complete.

Do you know what they mean by clause 2 Each unique investment line transferred will qualify for a £10 cash incentive up to the maximum of 12 lines ? If I only have one fund to transfer do I only get £10?

Watsy

I'm not entirely sure but I'm guessing if you had a portfolio with say 7 different shares/trusts/funds or whatever you would get £70 up to a maximum of £120 even if you had more than 12.

The total transfer amount seems to be a minimum of £3000 but within the transfer you could have investments of a minimum of £10.

badger09

amandajc wrote: »

Thanks badger09. I did hesitate a bit about this but decided in the end that I was happy to go with transferring over the investment as it was, and then selling when the transfer was complete and I had done the necessary research into exactly how I wanted to move forward with investing.

I have only one fund in my S&S currently (IS UK Growth) which is not doing too badly at the moment so I'm not absolutely desperate to ditch it, (although I do want to do so pretty soon, in favour of some passive tracker funds) and as Interactive Investor seem to be offering a "transfer" deal until the end of Feb which means I may be able to do some selling and buying for free I wanted to move fairly quickly with the transfer form.

I'm not entirely sure what their offer means in real terms but I'm hoping to sell my CIS fund and buy into 6 trackers (or maybe a Vanguard lifestyle fund) with initial lump sums and ongoing regular investments. I hope I've understood the process and costings correctly as this is all very new to me. Any help and clarification very welcome. :-)

Ok - as long as don't want to buy into all 6 trackers at once with your new provider Obviously one of the Vanguard Lifestrategy Funds would cost less in charges to buy, but might not be what you want.

Have you compared the cost of changing your portfolio to what you want now - especially as II will effectively give you £10 per stock transferred - up to £120 as Watsy correctly says.

amandajc

Thanks badger09 but I buy directly from the fund manager at the moment (Royal London - who now manage the CIS funds) so buying any other funds before moving onto ii isn't an option (or at least I don't think it is - I'm so green at this I could be mistaken :-))

I've been blindly paying into my S&S ISA for several years now without understanding what I was doing but now seems a good time to educate myself and try to do things properly. From what watsy says I will only get £10 extra (on top of the quarterly £20) to deal with when the transfer is complete so I may have to move over to the funds I ultimately want gradually (although I'm not sure whether the extra £120 cash for new customers will be payable which would help?).

I suppose I will have to wait and see how it all pans out. Maybe I would have been better transferring in cash. :-(

But apart from the Feb offer Interactive Investor looked liked the best deal for me given that I just want to buy a few funds and hope not to have to switch them very often.