Is there any benefit to consolidate ISA's and can you split an ISA? 23 November 2021 at 12:34AM in ISAs & tax-free savings 9 replies 173 views

isayhello

I have an ISA with Vanguard which contains about 70k and I have an ISA with Hargreaves Lansdown with about 20k.
I was going to transfer the HL into Vanguard but wondered what are the pro's and cons? do some people prefer to keep them separate?

Also if you did have 100k in a single ISA, is it possible to split that and transfer say 20k out of it out into another platform?

eskbanker

isayhello said:

I have an ISA with Vanguard which contains about 70k and I have an ISA with Hargreaves Lansdown with about 20k.
I was going to transfer the HL into Vanguard but wondered what are the pro's and cons? do some people prefer to keep them separate?

Some people feel more comfortable not having all their eggs in one basket, to protect against issues arising from platform failure, but realistically the likes of HL and Vanguard aren't going anywhere.  However, if you're using a platform with such a limited range of investment options as Vanguard then using another one that has much greater market coverage opens up more possibilities.  There's typically a bit more admin associated with two accounts and inevitably they can't both be the cheapest - what was your rationale for setting things up that way in the first place?

isayhello said:

Also if you did have 100k in a single ISA, is it possible to split that and transfer say 20k out of it out into another platform?

If your starting position is a large pot in one ISA, you can split some off to another provider, as long as both support partial transfers (not all do....), and as long as you keep all current year money together.

Alexland

isayhello said:

I have an ISA with Vanguard which contains about 70k and I have an ISA with Hargreaves Lansdown with about 20k.

If you are holding funds then your £20k at HL and £70k at Vanguard would be costing £195pa. Even if it was all on Vanguard that would be £135 pa. Having you considered just switching them both into a provider with no ongoing charge such as Jarvis X-O (if you are happy to be limited to exchange traded assets) or iWeb (if you are happy to pay the setup fee and wait for their extended transfer times) and paying the occasional trade fee trying to limit your activity? If still drip feeding you might even choose to use them as a static 'car park' account with a single accumulation fund/etf and then start again with a new provider on percentage fees for next tax year's contributions.

isayhello

eskbanker said:

isayhello said:

I have an ISA with Vanguard which contains about 70k and I have an ISA with Hargreaves Lansdown with about 20k.
I was going to transfer the HL into Vanguard but wondered what are the pro's and cons? do some people prefer to keep them separate?

Some people feel more comfortable not having all their eggs in one basket, to protect against issues arising from platform failure, but realistically the likes of HL and Vanguard aren't going anywhere.  However, if you're using a platform with such a limited range of investment options as Vanguard then using another one that has much greater market coverage opens up more possibilities.  There's typically a bit more admin associated with two accounts and inevitably they can't both be the cheapest - what was your rationale for setting things up that way in the first place?

I think they are both pots from years ago and I might have tried HL just to see what it's like and now I was wondering whether its better to consolidate.

I think it does make it easier to manage one pot but wanted to understand if there are other benefits or negatives I hadn't thought about. Also Vanguard would be cheaper than the HL 0.45% fee.

isayhello

Alexland said:

isayhello said:

I have an ISA with Vanguard which contains about 70k and I have an ISA with Hargreaves Lansdown with about 20k.

If you are holding funds then your £20k at HL and £70k at Vanguard would be costing £195pa. Even if it was all on Vanguard that would be £135 pa. Having you considered just switching them both into a provider with no ongoing charge such as Jarvis X-O (if you are happy to be limited to exchange traded assets) or iWeb (if you are happy to pay the setup fee and wait for their extended transfer times) and paying the occasional trade fee trying to limit your activity? If still drip feeding you might even choose to use them as a static 'car park' account with a single accumulation fund/etf and then start again with a new provider on percentage fees for next tax year's contributions.

I did think to switch to Vanguard as it would bring the fees down.

Are exchange traded assets the same as ETF's?

I have considered iWeb but the setup fee of £100 did put me off. I didn't know about their transfer times, do they take a lot longer than most other platforms?

Alexland

Yes at Jarvis X-O their exchange traded assets include company shares, investment trusts and ETFs. The main limitation is you cannot hold traditional funds. You can email them in advance to determine if they have the ETF you want with plenty of good passive ones from Blackrock iShares, Vanguard, HSBC, etc. Customer service is very good but they do eventually charge £50+vat for closing the ISA. Do the maths on your trade pattern but the pay per trade charging model works best with large inactive accounts.
On iWeb then I wouldn't let the £100 setup put you off as you are already spending more than that each year and over the long term it should be a lot cheaper depending on your trade pattern. IWeb transfers are taking ages so maybe complete this tax year's contributions and leave plenty of cash to pay the old provider fees until the asset transfers complete.
I find the pay per trade model helps with investor discipline as it discourages me from fiddling with the investments.

isayhello

Alexland said:

Yes at Jarvis X-O their exchange traded assets include company shares, investment trusts and ETFs. The main limitation is you cannot hold traditional funds. You can email them in advance to determine if they have the ETF you want with plenty of good passive ones from Blackrock iShares, Vanguard, HSBC, etc. Customer service is very good but they do eventually charge £50+vat for closing the ISA. Do the maths on your trade pattern but the pay per trade charging model works best with large inactive accounts.
On iWeb then I wouldn't let the £100 setup put you off as you are already spending more than that each year and over the long term it should be a lot cheaper depending on your trade pattern. IWeb transfers are taking ages so maybe complete this tax year's contributions and leave plenty of cash to pay the old provider fees until the asset transfers complete.
I find the pay per trade model helps with investor discipline as it discourages me from fiddling with the investments.

Thanks, I've already filled this years contribution at Vanguard.

I may for now just consolidate with Vanguard to bring the fees lower and make managing one pot easier and then look into iWeb for the future. I don't trade too often but I like the fact that even though there is less choice with Vanguard funds, there aren't any charges.

Doing some simple math then, if I had 100k in Vanguard, I'm paying £150 for the platform fee whereas iWeb would be £50 cheaper and overall iWeb offers a larger variety of funds and shares to invest in.

Have I got that right and does that seem like a reasonable course of action?

Alexland

It's up to you, but if you are investing over the long term then it's worth considering the difference in fees over several years where you will likely see hundreds of pounds benefit moving to a platform with no ongoing charge. Year 1 might roughly breakeven covering the setup/exit charge with big savings in year 2 onwards.

isayhello

Alexland said:

It's up to you, but if you are investing over the long term then it's worth considering the difference in fees over several years where you will likely see hundreds of pounds benefit moving to a platform with no ongoing charge. Year 1 might roughly breakeven covering the setup/exit charge with big savings in year 2 onwards.

True but if I make some trades a year between funds then that gap does close a bit but I take your point.

If I do for the short term go for Vanguard and leave HL, do you know if I'm able to transfer a partial amount to iWeb later? so I can have a split across both platforms initially while I see how it goes?

Alexland

isayhello said:

If I do for the short term go for Vanguard and leave HL, do you know if I'm able to transfer a partial amount to iWeb later? so I can have a split across both platforms initially while I see how it goes?

Off the top of my head I can't remember their policies on this so best to ask them in wirting to establish their latest positions on partial transfers in and out.