Partial Transfers

seanfred

I am trying to transfer part of a Stocks and Shares ISA from one index tracker with one provider to another. So far the providers I've found do not accept partial transfers. Does anyone know any ISA providers who will accept partial transfers from one company to another? Thanks

masonic

Most cash ISAs do, so the workaround is a two-step transfer. Beware that your existing provider might not permit a partial transfer out, in which case you'd need to transfer the whole ISA before splitting it and the whole process could take 4 transfers.

It is generally not a good idea to let factors such as whether or not the provider accepts a partial transfer dictate where you hold your ISA in the end.

Alexland

Splitting a S&S ISA is fairly unusual as it can be beneficial to have a larger account valuation to benefit from capped or fixed platform fees. Are you sure you need to do this?

seanfred

Issue is my ISA has exceeded the FSCS compensation limit so although the provider is large and stable the investment is no longer wholly underwritten by the guarantee.

masonic

seanfred wrote: »

Issue is my ISA has exceeded the FSCS compensation limit so although the provider is large and stable the investment is no longer wholly underwritten by the guarantee.

In a cash ISA (or cash savings account), the bank of building society uses your cash to finance its business. In a S&S ISA or general investment account, your money and assets are ring-fenced so they cannot be used by the business.

That means if a bank becomes insolvent, your money is essentially gone and the FSCS protection is absolutely required, whereas for investments, FSCS cover is only required for the percentage of your assets that could reasonably be swallowed by Administration costs or fraud. This is very unlikely to be a very high percentage, and may be capped below the FSCS limit as it was in the case of Beaufort Securities.

While you are of course free to split into £85k chunks, this can become quite costly, is of little benefit until you are several times over the FSCS limit, and does nothing to insure you against the more likely sources of loss of capital.

Could you not just start a new S&S ISA elsewhere and leave the existing one as is?

seanfred

Thanks for the info which is reassuring. The Isa in question consists of a number of unit trusts provided by the company running the ISA.
Does this make any difference?

masonic

seanfred wrote: »

Thanks for the info which is reassuring. The Isa in question consists of a number of unit trusts provided by the company running the ISA.
Does this make any difference?

It doesn't make a great deal of difference. If the ISA management company is really the same entity as the fund management company (this is often not the case), then your FSCS protection would extend to the unit trusts (as UTs and OEICs also have FSCS protection - note that closed ended investments like ETFs do not). If the fund management was provided by a separate company, then either or both companies could go bust and you'd have a more or less equivalent claim against one of them depending on the circumstances.

It's always a good idea to go with a mainstream provider with a good reputation, and ensure their "house funds" are competitive on price and performance. There are well known examples of providers whose own funds are best avoided.

bd10

Come April, I'll be doing two partial transfers myself. At the moment I have all with HL. The largest portion will go to Iweb, the rest to AJ Bell. (Would have transferred all to Iweb if it would not have been for their 1.5% FX fee on foreign shares. AJ Bell charge 0.5% less.) I spoke with all parties involved:
(1) Iweb accept partial transfers in. Needs to be detailed in the application form. On their website the option is only "full transfer" but proceeding with the application, the request for a partial transfer can be made and holdings specified. AJ Bell: no problem either.
(2) HL only accept partial transfers out if the ISA with them is not being subscribed at the time of transfer. So I'll have to wait till April.
So, as far as I can tell, partial transfers should work.