Looking to start a self-select S&S ISA and transfer in L&G, can it be done?

NickHStamford

Hi,

I'm hoping for some advice or comments based on previous experience of doing the same (or similar) as I plan.

I've been paying into one S&S ISA (L&G UK Index Tracker) by means of a fixed sum every month, for about the last 15 years. It's now a good sum of money (by my standards).

However I feel at risk in terms of being exposed to a single market, and plan to diversify.

I have some shares that I purchased outside of an ISA and thought to bring these in, only to learn that's not possible without selling and then re-purchasing from inside of a self-select ISA.

L&G don't seem to offer a self-select ISA so I need to set one up elsewhere. I bank with First Direct and they seem to do one, but I cannot see any detail on whether my L&G investment can be transferred in - it says that other investments can be, but some may have to be sold and transferred as cash. I'd rather avoid that.

Once I have opened a self-select ISA and (hopefully) transferred in L&G, I hope to be able to keep adding to L&G but diversify with the purchase of other investment trackers or ETF's, or whatever.

So the questions I am looking for help on:

1) Is the only way to find out if I can transfer in L&G UK Index Tracker, to contact the potential provider of the new Self-select ISA?
2) Is the First Direct Sharedealing (self-select) ISA any good, or should I look elsewhere?
3) If I can't transfer in my L&G tracker without cashing it first, can I just stop the monthly investments into it, leave it like that, and open a self-select elsewhere for new investments?
4) Are there any issues with my plan that I should be aware of (in terms of hidden costs)?

Really appreciate any thoughts on this.

bowlhead99

1) yes

2) never tried it, but if you search this forum for fund platform recommendations or platform comparisons you will learn of loads. Ideally you would want one that has a lot of different funds available (rather than just shares) with a low ongoing (fixed or percentage based) fee for new contributions and existing balance. The cheapest and most flexible for your needs depends on the amounts involved.

3) with ISAs you can't contribute to two S&S ISAs in the same tax year without transferring the first to the second. It is part of their rules to make sure you don't go over the subscription limit. However we are very nearly at the end of this tax year. So you could very easily just leave the L&G one to grow and start a new one elsewhere from April.

4) The problem with 3) is you would have 15 years of contributions worth of UK investments in a not particularly cheap tracker fund at L&G and 0 years of contribution in your nice new global spread of investments. At the very least you should investigate switching your fund within L&G to include some of their global funds rather than purely in one fund. But you will probably find you can buy trackers and indeed other funds cheaper by paying a cheap fund platform fee elsewhere and adding one or more lower priced funds, instead of paying the high L&G all-inclusive costs. So, if you can't do a quick and easy transfer of funds to the new provider, I would just transfer as cash. If you are out of the market for a couple of weeks that is nothing in your 15 years (so far) timescale.

NickHStamford

Appreciate you taking time to respond to my questions, bowlhead99.

With regard to "4) The problem with 3) is you would have 15 years of contributions worth of UK investments in a not particularly cheap tracker fund at L&G and 0 years of contribution in your nice new global spread of investments"

Are you suggesting that it might be worthwhile to cash some of the L&G tracker fund and then use that cash to buy into something with broader exposure? I was actually thinking I would include the L&G tracker from within the new wrapper but then probably switch or share the monthly payments to a new, broader or complementary fund, to give the diversification. I can see your point that I will still be at risk, and for some time, until the investment in the new fund balanced the first. For some reason I have a bit of a mental block around selling any of the existing L&G fund, I guess I am thinking the outlook for the FTSE All-Share might be reasonably upbeat after a generally bearish period over past years. This is really a retirement fund approach, and I am just 40 at present, so some way to go on top of the 15 years investment period I already made.

jimjames

NickHStamford wrote: »

Are you suggesting that it might be worthwhile to cash some of the L&G tracker fund and then use that cash to buy into something with broader exposure? .

That would seem to be a sensible option. At present you have no exposure to any markets outside the UK, no Europe, no USA, no Japan, no Far East and no bonds.

You can get a single fund that combines all of these, Vanguard LS series with different percentages of bonds and shares.

L&G direct may not be that cheap but they have one of the cheapest trackers on some platforms from 0.06% I believe.