Splitting Stocks & Shares Isa Allowance between providers.

RajaStyle

I already have a stocks & shares ISA with one provider (Nutmeg) which I have been paying in a small monthly amount of £20 a month in every month for the past 3 years.

Is it possible I can open another stocks and shares ISA with another provider this year and put a lump sum in of around £1000 to take advantage of another fund that Nutmeg doesn't provide .... even though I have been paying £20 a month into Nutmeg ?

Assumming I stay well below the annual allowance of £20000 between both for this tax year.

Thanks All in Advance

Malthusian

As you've paid money into Nutmeg in this tax year, you'll need to transfer the Nutmeg ISA - or at least the money that represents your contributions from the current tax year - to the new provider before adding your £1,000.

You could reinvest the money from Nutmeg into a multi-index fund and get largely the same thing you have with Nutmeg at lower cost.

RajaStyle

Malthusian wrote: »

You could reinvest the money from Nutmeg into a multi-index fund and get largely the same thing you have with Nutmeg at lower cost.

Thanks any examples of these lower cost options compared to Nutmeg ?

chockydavid1983

http://www.comparefundplatforms.com/

Alexland

Nutmeg's cheapest offer is the Fixed Allocation portfolio at 0.45% platform and 0.17% average weighted fund cost so 0.63% total per annum.

You could get similar asset allocation from Vanguard Investor in the multi asset Vanguard LifeStrategy (VLS) fund range at 0.15% platform and 0.22% fund so 0.37% total per year.

Nutmeg fixed allocation risk levels match the equity/bond ratio so level 3/5 is 60% equities and 40% bonds similar to VLS60. Or the Nutmeg risk level 4/5 is similar to VLS80.

If you got a bonus for signing up to Nutmeg remember to stay for the minimum term (usually one year) to avoid them deducting it before transferring to a new provider. I can't see why an ISA customer would stay with them when Vanguard are cheaper and more financially secure. Still they are not bad on the LISA for early year contributions - which is a less competitive market.

Finally - you can only contribute to one S&S ISA each tax year but you can transfer it during the year and continue to contribute with the new provider up to the limit.

RajaStyle

Thanks all shame you can't do a split as long as you stay below the allowance and just stop paying into the first one ... would have been so much easier :-)

Although I got the impression that Nutmeg invest alot wider and more actively, hence maybe the higher charge.

Alexland

Nutmeg are just thousands of times smaller than Vanguard so less economies of scale and resources available. Also Nutmeg need to recover the generous signups bonuses. Nutmeg just got to £1bn and Vanguard are at circa $4.5tn assets under management.

I struggle to see how (a) their Managed portfolios are any better performance than their Fixed Allocation portfolios and (b) their Fixed Allocation portfolio are any better than the Vanguard LifeStrategy funds. Although worth noting the Vanguard minimum monthly contribution is £100

I am a customer of both and on the S&S ISA the Vanguard proposition is more compelling and probably slightly more diversified. Although in truth I haven't counted all the underlying holdings the the VLS fund of funds compared to the Nutmeg ETF mix.

Once the ISA value gets bigger there are even more appropriate providers.

Alex

Audaxer

Alexland wrote: »

Once the ISA value gets bigger there are even more appropriate providers.

Do you mean single sector active funds?

Alexland

No it was more about moving from a percentage fee to a capped or fixed fee platform as the balance grows.

Ok the Vanguard fees are capped at £375 when you hit £250k but the customer should have moved on to a cheaper capped or fixed price platform long before then. £375 is about 4x the price of the similar £90 ISA service from Interactive Investor. Having such a high cap doesn't seem very aligned to the Vanguard philosophy to be ultra competitive.

Still Nutmeg have no cap and still advertise as low cost and high performance because they are comparing themselves with an advised service where the fees errode the return.