Transfer ISA from VG to HL Platform?

fiisch

I'm weighing up the pros and cons of transferring my S&S ISA from Vanguard (invested in VLS100) to HL, and would like some thoughts from the clever people of the MSE Savings and Investments board

Currently, I hold a SIPP (I don't have a workplace pension) with HL and my S&S ISA on the VG platform.  My wife's modest S&S ISA and SIPP (both of which I fund also as she is currently not working) are with AJ Bell, and I like the idea of having one "portfolio" with different accounts within the same app.

HL are currently offering cash back for transferring ISA's - my current pot is just shy of £10k, with £500 being contributed on a monthly basis, so the cash back is only £50.  Appreciate the fees are higher on HL (0.45% vs 0.15% I believe).  Long-term plan was always to move the ISA to HL as the pot grows (I believe the crossover is about £50k where HL works out cheaper than VG for some reason?), but wondering if it was worth moving sooner due to a).  Cashback on offer; b).  Simplicity of having investments in one easy-to-use app and c). Options to diversify my ISA investments in the future.

Am I being too hasty and should I stick with VG, or is the difference in fees negligible?  I've been trying to work out the approx. fees for each option but I'm struggling..!

Another_Saver

I'm assuming you intend to use funds and ETFs mostly as you're coming from Vanguard. I think the key thing is that HL offers more choice, a flashy app and (arguably) better service. But do you trust yourself not go on the app everyday and check and fiddle with your accounts? Besides, you can get the vanguard website on a mobile browser.
1. There isn't really a crossover point, HL will always be more expensive except for ETFs (dealing charges may cancel out the cheaper platform charges depending how much you trade).
2. The cashback is negligible in the long run.
3. It is a bit complicated so here goes:
Vanguard charge 0.15% on your total account value upto £250k account value/£375pa max platform charges. All dealing is free (you can pay £7.50 for live ETF dealing or you can get free overnight ETF dealing). This is across all types of account so the max each of you will pay is £375 pa if you don't use live ETF dealing.
Fund OCFs, spreads, transactions costs and incidental costs are the same on either platform (if you're intending to use vanguard funds on HL, I can't speak to costs and future refunds of any other funds you may buy).
HL's ISA charges 0.45% on the first £250k of funds, and still implements lower charges thereafter. Even with free dealing HL will always be more expensive for funds.
However HL caps the charge for ETFs held in an ISA at £45pa, so if you have/want more than £30k of ETFs in each ISA, HL would be cheaper, but you would be paying dealing charges of £11.95 every time you buy and sell whereas Vanguard is free.
The SIPP charges are the same except that the £45 cap for holding ETFs is increased to £200, so holding more than £133k of ETFs would be cheaper in a HL SIPP before taking into account the cost of dealing charges.
I'm afraid there's no definitive answer about which is cheaper. Having all your investments in one place is as good a reason as any to transfer. Personally I prefer vanguard for not having an app and for having less choice - makes it easier for me, and less tempting to check it and fiddle with it.
As for your point about being able to diversify your ISA further with HL, if you've bought a multi-asset fund or a broad global equity index fund, you've already achieved maximum diversification.

bowlhead99

fiisch said:

Currently, I hold a SIPP (I don't have a workplace pension) with HL and my S&S ISA on the VG platform.  My wife's modest S&S ISA and SIPP (both of which I fund also as she is currently not working) are with AJ Bell, and I like the idea of having one "portfolio" with different accounts within the same app.

Long-term plan was always to move the ISA to HL as the pot grows (I believe the crossover is about £50k where HL works out cheaper than VG for some reason?), but wondering if it was worth moving sooner due to a).  Cashback on offer; b).  Simplicity of having investments in one easy-to-use app and c). Options to diversify my ISA investments in the future.

As Another_Saver points out, HL isn't going to get cheaper for an ISA invested in funds such as LifeStrategy vs a Vanguard ISA invested in funds at some magic £50k crossover point, as they will still be charging 0.45% (£225) while AJ Bell charge 0.25% (£125), plus transaction costs if any and Vanguard 0.15% (£75). Though you are some distance away from having that much in the account so the difference isn't so stark.   It's a slightly different story if you're building your own SIPP portfolio from ETFs and investment trusts because the percentage-based charges are capped at a lower level than funds (£100 for AJ Bell and £200 for HL) so Vanguard would eventually go higher at a big enough account value.

If you want stuff in one place and the ability to buy different types of investments / non-Vanguard products, have you overlooked the option of moving the SIPP to AJ Bell instead of HL? If you and your wife both have accounts there you can can complete a family linking form to be able to see and transact on her account from your login.  HL is not going to be any cheaper than AJ Bell for £10k of fund assets with 12 purchases a year, so the £50 cashback sweetener is their hope they will eventually claw it back from you over time as the balance in the account rises. 

IMHO the smarter move if you want an 'all in one place' solution with a broader investment choice and some cashback in your hand now, is to consolidate at AJ Bell instead of HL. They are generally cheaper than HL, and your wife will get £100 if you use the 'recommend a friend' process and fund your new SIPP or ISA account with at least £10k within 120 days of opening your account. So if you are not far off having £10k in the SIPP and adding £500 each month it seems like you would get there, but you could just wait a few months and do it later if you have no hurry. From a strictly logical point of view, you don't really need to 'monitor' your SIPP balance on one app as it's not like you would do anything about it if the lifestrategy fund rose or fell and you're not taking it out to retire on any time soon. But I can see why you'd like it.  Probably no hurry on the AJ Bell offer as they have been doing the recommend a friend deal (https://www.youinvest.co.uk/landingpage/recommendafriend ) for at least the last seven years in the £75-100 range.

csgohan4

+1 to AJ bell for SIPP, I use it for their capped charges on ETFs and IT, very handy and use another platform for OEIC/Funds

fiisch

Thank you - food for thought 

I hadn't considered all under one roof - the technology-enthusiast really likes the idea of a family linked account all under one roof, although I suppose there is a minute chance of platform disruption (or worse) meaning there is sense in keeping investment accounts across different platforms.

The point about not fiddling is a good one I hadn't thought of.  I must admit with HL/AJ Bell, I have to really resist the urge to tinker, whereas VG - even though their site works well on a mobile - gives significantly less opportunity, which can only be a good thing!  I do also have my daughters' JISAs on VG, so I might just stick with VG a little while longer...  

Thanks again.