Advice Regarding ISA Company to use - Fidelity? HL?

Dragonfly1

I appreciate that there is no simple answer to the above question and it depends on your circumstances. 
I originally invested using Fidelity and have a Stocks & Shares ISA with the company. Currently a five figure sum of around £25,000. I am invested in a couple of globally recognised funds and am happy with my investments.
I then created a Lifetime ISA which is with Hargreaves Langsdown - since fidelity don't offer LISA's. 
This has been my approach for the last couple of years. 

However I have occassionally wanted to buy U.S shares to do some higher risk taking of investments in individual companies, which have so far proved very lucrative (e.g. AMD) albeit I appreciate this is high risk etc. I do 1 or 2 U.S trades per month. As Fidelity don't offer this service - and I want to invest in particular companies rather than sectors - I use my LISA. However there is a limit to the amount I can invest within a LISA and therefore a limit to U.S investments.

This brought me to consider bringing my Stocks & Shares ISA from Fidelity to Hargreaves Langsdown. There should be no fees for this as far as I can tell from either website. However HL have a higher fee for the amount sitting within the ISA (0.45% versus 0.35%). The funds themselves have no difference in fees. And HL appear to pay £100 for the switch according to their website. 

However there have been many-a-post on this forum suggesting these companies charge (relatively) extortionant fees for their services - and the U.S share trading price of almost £12 is pretty high, considering they take further currency comission exchange on top of that unlike my bank (Starling). I have not formed an ISA this year so I could create another ISA - although i'm not sure whether it would be fee-efficient to effectively have 2x Stokes & Shares ISAs and 1x LISA across 3 different companies.

Based upon the fact I do not have huge sums of money within my ISAs, I can probably live with the 0.1% increase in fees in HL compared to Fidelity. However before I go to the effort of moving everything to one company, does this all sound reasonable or should I be looking for a third company that can trade U.S shares in a Stocks and Share ISA (+- Hold the LISA in the same company for convenience?) Just wanted to check I had effectively considered everything above before I put the switch request in.

EDIT 1: Mods feel free to move to the ISA sub-forum - sorry I missed it.
EDIT 2: In terms of platforms, I'd rather use a reasonably well-known company rather than a recent start-up. I appreciate that's a little ambiguous definition though  

bowlhead99

If you're only holding stock-exchange traded investments (shares, investment trusts or ETFs) at HL, they cap the 0.45% fees on ISAs and LISAs at £45 a year (ie if you have £20,000 of shares it doesn't cost you any more than if you had £10,000 of them).  However the 0.45% on any open-ended Funds held doesn't get any caps or reductions until you get to £250k.

If at Fidelity you have £25k "in a couple of globally recognised funds and am happy with my investments", there doesn't seem to be much sense in moving that money to HL where you are doing your speculative US individual stock investing, where those funds would cost you more to hold. Presumably as you're happy with that £25k of investments, you're not going to be dumping them to take punts on individual stocks, so the extra US share dealing will be new money from this year's LISA or ISA allowance. 

It's fine to have more than one LISA but relatively inefficient - e.g. harder to hit the fee caps, and annoying that you can't club spare money on one platform with spare money on another platform to do a transaction of an efficient size. There are not a huge number of S&S LISA providers but one firm that offers LISAs as well as ISAs and SIPPs, allows trading on some foreign markets including USA, and charges 0.25% for holding funds instead of 0.35% or 0.45%, would be AJ Bell Youinvest.  I have some individual US stocks with them; you could move your Fidelity ISA over there and save £25 a year of fees, as well as save 0.2% a year on what you're paying on your HL LISA (assuming you're below their fee cap).

Dragonfly1

Thanks for your detailed reply.
I can't do any more US share trading via the LISA because I need to put fresh money in (which is already maxxed at this year's LISA limit) hence it has to be done via the S&S ISA with fresh investment albeit not possible at present with Fidelity.

Going forward it sounds sensible to go with AJ Bell as you suggest. This allows to consolidate the ISA & LISA with the one provider whilst giving ongoing access to the US Market at a slightly lower fee all-round; without adverse changes to my current funds.
I may well consolidate the S&S ISA into HL for just one year so that I ultimately will transfer from HL into AJ Bell (Rather than 2 companies trying to transfer into another company with which I've not previously had any account) and let this route be covered by the £100 HL fee and so I am no worse off at all. That's admittedly not the most logical MSE route but gives me a little bit more illogical peace of mind The transfer of the S&S ISA from Fidelity may also happen slightly quicker if I am already an existing HL customer? 

Appreciate the advice already given as you've answered my main question of consolidating into a reasonably-well known company with lower overall fees with US market access!

bowlhead99

As I understand from your OP, you don't already have an HL ISA. You have an HL LISA which is holding your sharetrading activity, and a Fidelity S&S ISA which has the funds activity.

S&S ISA and LISA are different products. If you were to put some new money into a S&S ISA anywhere other than Fidelity, it would be a new account.  It seems a bit of a hassle to 'consolidate the S&S ISA into HL for just one year' and then move it somewhere else, although there is cashback for doing it - it's not a huge amount of cashback. 

Over the course of the minimum one year to keep the cashback, at 0.45% on £25k of funds moved from Fidelity you would be paying £113 of platform fees. At AJ Bell's 0.25% it would only be £63. So you would be spending £50 extra fees and doing a whole extra transfer just to get the £100 cashback. You might as well just go to the referrals board and find someone willing to split the cash for a 'recommend a friend' deal for you to transfer into AJ Bell Youinvest with your Fidelity funds.

Independent of that process you could also transfer your HL LISA to Youinvest either now or in due course. 

Dragonfly1

bowlhead99 said:

As I understand from your OP, you don't already have an HL ISA. You have an HL LISA which is holding your sharetrading activity, and a Fidelity S&S ISA which has the funds activity.

You are correct.

bowlhead99 said:

S&S ISA and LISA are different products. If you were to put some new money into a S&S ISA anywhere other than Fidelity, it would be a new account.  

I had perceived it as transferring from one provider to another without a 'new account' - and therefore would transfer e.g. the LISA from HL to AJ Bell; are you saying it's more like creating a new LISA with AJ as the first step; followed by the transfer of the old HL LISA into the new LISA. And the process repeated of course the S&S ISA.

However you can only pay into one S&S ISA per tax year, correct? And so are there restrictions on new investment in the AJ Bell S&S ISA this tax year, considering this is a 'new account' and I've already put money in the Fidelity S&S. In which case, should I max out my allowance in Fidelity just prior to transferring it across?

If transfers of S&S ISAs are relatively hassle-free and rarely go technically wrong in some wonderful way (I'm now overthinking this ) , I might as well do it all now to AJ Bell You invest and get it done & out of the way.

And I've seen your post from 28/9/2018 if you still use AJ Bell? The charity contribution part can be totally at your discretion.

bowlhead99

Dragonfly1 said:

I had perceived it as transferring from one provider to another without a 'new account' - and therefore would transfer e.g. the LISA from HL to AJ Bell; are you saying it's more like creating a new LISA with AJ as the first step; followed by the transfer of the old HL LISA into the new LISA. And the process repeated of course the S&S ISA.

The process for a transfer of a LISA or ISA into a place where you don't already have that type of account, is that you open up that type of account with the new provider, and when you are doing that, you can fill out a form to transfer your old ISA into that account. As long as the new provider allows you to hold the holdings you bought at the old place, you can tell them to transfer those holdings over; otherwise they can be sold and transfer the cash over. The new provider arranges with the old provider to go and get the cash or assets, and it arrives in the new account.

Dragonfly1 said:

However you can only pay into one S&S ISA per tax year, correct? And so are there restrictions on new investment in the AJ Bell S&S ISA this tax year, considering this is a 'new account' and I've already put money in the Fidelity S&S. In which case, should I max out my allowance in Fidelity just prior to transferring it across?

If you've already paid in to the old ISA this tax year you can't contribute into the new ISA until you've fully completed a transfer from that old ISA into the new ISA, because all your current-year S&S ISA money must sit together at all times. Unfortunately if you're transferring the assets as funds rather than as cash, the process of re-registration of those funds to be held on the new platform rather than at the old platform can take 6-8 weeks, and sometimes there is a curveball that makes it take longer. As we're only 6 weeks from the end of the tax year ... then to avoid being in limbo for that time and unable to max out your 2019/20 allowance, you're right that it would be best to max out the allowance at Fidelity before you start the transfer process.

I had assumed from your OP where you said "I have not formed an ISA this year so I could create another ISA" that you hadn't used any of your current year ISA allowance. But if you have subscribed new money into Fidelity, you won't be able to form a new ISA and immediately contribute to it, because of needing to have all the current year money together. Your choice is between adding more money at Fidelity (and then transferring the whole lot elsewhere), or moving the Fidelity money somewhere else and once it lands at that 'somewhere else', add further money and start to invest.  

If you have plenty of spare cash which you're not going to be using to max out your ISA allowance, and are desperate to buy some more US individual stocks right now due to FOMO, you could always do that investing in an 'unwrapped' (i.e. non-ISA) general investment account. If it's only a few thousand quid, you're unlikely to make enough income or gains to exceed your £12k annual capital gains exemption or £2k annual dividend income allowance, over the next few months.  You can't transfer stocks from outside an ISA into an ISA so if you later eventually want those assets to be inside an ISA you would need to sell them, get the cash, contribute the cash to the ISA, and then buy them again. Platforms can arrange that 'bed and ISA' process but it will still cost you to do the transaction and the fx commission back to sterling and back to dollars.

Yes I'm still with Youinvest. If you want to discuss referrals just send me a PM via the Inbox function.