Best way to switch platform

lucky77

I have a stocks and shares isa with Bestinvest (in conjunction with Fidelity fundsnetwork). I would benefit from lower charges if I moved to iweb for instance. I have about 22 different funds which Bestinvest have advised me to purchase over the years which I would like to simplify. Am I right in thinking that I should ask Bestinvest to sell my funds, open an account with say iweb and ask iweb to transfer in the isa cash for me to re-invest (probably in VLS or similar)? I’m sure I should have switched platforms years ago but confirmation of the right way to go about it will hopefully encourage me to take action!

Alexland

Personally I would clean up the portfolio on the old platform to reduce the complexity of switching. Then when you have consolidated check the fund(s) you want are available on iWeb as they have a fairly limited range.

Transfering holdings in-specie can cost more but avoids time out the market. If you transfer as cash you risk the market moving and buying back in with more or less units.

On iWeb for multi asset funds that use underlying tracker funds I would suggest looking into the VLS or HSBC Global Strategy series. I moved from VLS to HSBC GS this year.

Alex

Plus

Might also be worth using spare funds to help - either existing cash ISA money or your current S&S allowance. This can avoid being out of market. It only works if cash transfers are free but in-specie transfers cost.

Let's say you have £2000 of Fund A at your existing S&S provider X. You pay in £2000 to the new provider Y, or transfer £2000 from a cash ISA. You then sell your holding of Fund A at provider X and on the same day buy £2000 of Fund A at provider Y. Both deals happen at the same valuation point, so you don't lose by being out of market - only if there is a spread (and dealing costs).

That now gives you £2000 cash in old provider X. There's a further trick, if both provider X and Y accounts are with 'old' money. You now transfer the £2000 cash to new provider Y. Once the transfer has completed you can repeat the process with your £2000 holding of Fund B, and go around as many times as needed to transfer the lot.

It's a bit time consuming but you avoid transfer fees and investment risk.

IanSt

Unless there was a very clear cost benefit to not do it, then personally I would always prefer to transfer my funds in specie rather than cash - you could potentially lose a lot more by being out of the market i.e. the price of the fund goes up whilst the cash transfer goes through.

So as I don't think you have to pay for fund purchases/selling/switching on Bestinvest, how much would it cost to transfer the final funds out against the cost of transferring in cash and then having to purchase the final funds on iweb, and then compare that against what would happen if you were transferring in cash and the fund prices go up.

The above assumes that there are no funds in your simplified portfolio that you can only buy on one of the platforms.

lucky77

Thanks for your advice. I thought that Bestinvest charged £25 to transfer each stock hence I thought it would be best to sell funds and transfer cash. However I have just spoken to them and they say my platform is Fidelity fundsnetwork who don't charge for transfers out. So it looks as if I should switch funds first through Bestinvest, having first double-checked what is available with iweb, then open an account with iweb and ask them to transfer in the funds from Fidelity. Have I got that right and is there anything else I need to be aware of?