Withdrawing money from HL

redmalc

Morning all
I have been looking at the small print on HL,s and Fidelity sites and cannot find what I am looking for,myself and the wife are holding 260K in HL within 18 funds and 14 funds in Fidelity and done very nicely over the last 17years.
The time is coming where I may need to take stock and defend our investments because I have been and still am in high risk funds,the options I have are,I move everything out into cash,what are the charges ? Or move into some low risk vehicle,but I am not sure what,any ideas would be helpful

jimjames

No cost to switch to cash, just make sure it stays in the ISA. But if it's just because you're in the wrong funds it would be better to just rebalance.

Without knowing what you have it's impossible to say but if they've done well for 17 years what's triggered it now?

bowlhead99

So when you say withdrawing from HL or Fidelity you're not necessarily meaning withdrawing the money from their platform to your own bank account as cash, but perhaps just selling out of the funds and holding them in cash on the platform, pending investment into lower risk funds?

The charges are pretty simple. To sell a fund on their platform is free. So if all your investment vehicles are 'funds', that won't cost anything. To sell a share, investment trust or ETF that needs to be dealt on a stock exchange, costs £11.95 per trade.

Then once you have cash on their platform you can either buy something else (buy funds free, buy shares/ITs/ETFs £11.95 a trade), or you can hold the cash on the platform while you think about it (earn some nominal rate of interest which is tiered so you get 0.1% a year on amounts over £50,000), or you can withdraw to your own bank account, which is free.

http://www.hl.co.uk/investment-services/fund-and-share-account/charges-and-interest-rates
http://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

Obviously if your funds are not in an ISA wrapper and you've had them all 17 years without managing your capital gains tax planning, you may have a large CGT bill to pay - but HL or Fidelity won't take anything off you for that, you just do the calcs yourself and pay HMRC after the end of the tax year.

But if funds ARE currently inside an ISA wrapper then once you convert them to cash which is still inside an ISA wrapper, you wouldn't want to withdraw it all to your bank account and lose the ISA status on hundreds of thousands of pounds of value, so you should transfer out to another cash ISA provider rather than to your personal bank account. Arrange that with the new provider.

I don't really have a a lot of 'low risk' funds but there are various 'lower risk' ones.

For example M&G Optimal Income is a strategic bond fund and is going to be lower risk than AXA Framlington Biotech, though it relies on strategic active management choices to deliver an income rather than holding the absolute 'safest' type of bonds at all times, and those choices may be incorrect with hindsight.

Standard Life's Global Absolute Return Strategies aims to deliver a positive 'absolute return' each year rather than a return correlated to the direction of the equities or bond markets, and so will be rather less volatile than a global shares tracker, even though its holdings are very complex and its returns reliant on fund manager skills and strategies.

There are various investment trusts which focus on capital preservation and steady growth with a mix of equities, bonds, gold etc ; Personal Assets Trust and Ruffer for example have a generally more cautious view than some other more aggressive mixed assets funds (though I note PAT recently went out to shareholders to get signoff on the fact that they are only able to maintain their dividend levels by distributing historic capital profits).

A government gilts fund or investment-grade corporate bond fund could suffer major losses if/when interest rates rise but not as major as the potential losses in the FTSE100 or S&P500.

A direct commercial property fund receiving rents on its UK warehouses and office blocks and shopping centres will typically be less volatile than a fund buying Chinese tech firms or Greek banks, but can still lose money when its properties get revalued downwards because nobody is paying the rent at the shopping centre during a recession.

An investment trust that buys care homes or NHS buildings and receives rent from OAPs and government departments would seem to be well placed for an aging population who still need the service when there's a recession on, compared to the lessee of a warehouse or shopping centre unit who might not want to renew when the contract is up. But if they are funding their acquisitions with borrowed money they could go bust when interest rates go up or a government slashes NHS funding and reneges on the long-term contracts.

So there is risk in everything and the answer for your £260k is perhaps not just 'some low risk vehicle'; more likely several lower risk vehicles plus cash at the best rates you can find across current accounts and savings products, and probably keep at least some 'growth' investments in the background in case a hyper "must defend our investments" policy causes you to miss out on a strong market performance.

Everyone's definition of 'low risk' is different. For example if your goal is to grow your £260k into £360k over the next decade, cash has the risk of falling rather short against that target. If your goal is to preserve the buying power of the £260k, cash accounts which fail to keep pace with inflation may be less suitable than keeping a chunk of equities which exceed it over the long long term. But cash and some of the other products mentioned are rather less likely to fall 40% in value in a single year than a FTSE tracker might, or 60-70%+ like a hyper-specialist single-sector equities fund might.

Have fun playing with your portfolio!

redmalc

Bowl head many thanks for that comprehensive response,I am a amateur investor that has trawled around the forums for many years and have to say been very lucky with what I have invested in.
It may be time to have a word with an IFA now retirement is looming in three years and I will need to keep what I have.
We have pension pots of £300K and £100K in cash Isa,s doing nothing and we have a property worth 400K paid for,time to think about enjoying ourselves I think.

slinga

Be careful with IFAs.
When I invested 200k through a major IFA back in 2000 ish they didn't even advise me to use ISAs annually.
I was so annoyed with their help after a few years I started making my own 'guesses' but comparing against how their advice was doing. I did much better myself.

And I did look at 3 or so IFAs before I plumped for the wrong one.

To me choosing your own investments is less of a problem than choosing an IFA.

Glen_Clark

bowlhead99 wrote: »

a government slashes NHS funding and reneges on the long-term contracts.

Great post as usual, but do politicians renenge on Private sector contracts?
I thought they would rather lose taxpayers money as quietly as possible,
than lose face
After all its easier to bring in another stealth tax, or quietly run up more debt, than risk the embarrassment of a damaging legal fight out in the open.