The frustrations of transferring cash between platforms

gterr

This isn't a complaint, or a question - just an observation.

When I weighed up all the pros and cons of moving my investments to new platforms to save money on fees here's something I overlooked:

All my funds were with HL until recently. Now I have my unwrapped funds with iii and my ISA with CSD. We are into a new tax year so I am moving money from my unwrapped account to my ISA to use up this year's ISA allowance. I didn't realise how long this would take, and how long I might have those funds out of the market.

I placed an instruction with iii on 24th April to sell funds. The settlement date for this wasn't until 30th April. I instructed a withdrawal to my nominated bank account on 30th April, but this took three days to action, and the funds have just hit my bank account.

Now I've tried to move the funds into my CSD ISA, but discover that because I haven't paid in any new money in the last 12 months I have to read and agree to their ISA declaration. That's not a problem, but I have to wait now for them to send a confirmation email, which they plan to do within one working day. Until then I can't pay any money in. It's a bank holiday weekend, so the next working day is going to be 6th May, and therefore it's going to be 7th May before I can get the money in. Then there will be the time for the trade to be placed and completed.

All in all, my money is likely to be out of the market for about 20 days (not all of them working days, to be fair.).

I am not into 'timing the market', but I do have this knack of choosing exactly the wrong time to move money and trade. When I first invested my lump sum last November I managed to choose the top of a peak, and my investments dropped nearly 2% in the first couple of days, and are still below their starting price. That's a lot for a lump sum. Now I seem to have chosen a bad moment again: the FTSE has already risen about 1.3% whilst my funds have been out of the market, and may rise further before I manage to get this cash into my ISA and reinvested.

I'm just envisaging this happening every year and wondering if I should have taken this into consideration when I chose new platforms, and placed all my funds, wrapped and unwrapped, with the same platform.

ColdIron

If you have enough cash in an easy access deposit account it's probably worth your while to use this for you ISA purchase and replenish it when the sales cash becomes available. Of course you need sufficient free money

I don't think the split you have makes too much sense, CSD charge a percentage and II a flat fee. If you have a large chunk invested would you not be better off keeping it all with II and just paying one fee? If you have less invested then one or even more than one percentage based providers would seem more efficient

gterr

ColdIron wrote: »

If you have enough cash in an easy access deposit account it's probably worth your while to use this for you ISA purchase and replenish it when the sales cash becomes available. Of course you need sufficient free money

I can't make a deposit into my ISA from any source at all until CSD send me the email to acknowledge that I've agreed to the terms and conditions for the ISA, and they won't do that until their next working day. Had I realised that this step was required I could have done that last week, whilst I waited for my sale from iii to complete. I thought I would just need to tick a box to say I agreed to the terms. Didn't realise another step was involved. And, yes, had I known the degree of delay I could have used money from a savings account and replenished it later.

I don't think the split you have makes too much sense, CSD charge a percentage and II a flat fee. If you have a large chunk invested would you not be better off keeping it all with II and just paying one fee? If you have less invested then one or even more than one percentage based providers would seem more efficient

The reason for the split is that I am building up my holdings in my ISA account, so over the next couple of years there will be a relatively high number of new fund purchases and transactions. There's no fees for this with CSD, but with iii I would have trading fees. I have calculated all this and I know exactly where the tipping point is (taking account also of the costs to transfer in specie), at which time I will need to have both accounts with the same platform, probably iii.
Another advantage of using two platforms temporarily is that I can see how they compare (ease of use, customer service etc.), which will inform my choice when the time comes to make a move to a single platform.