Transfer AJ Bell Lifetime ISA to Hargreaves Lansdown

kishanpatel99

I have currently got a Lifetime ISA with AJ Bell, and am looking to transfer it to Hargreaves Lansdown. According to the HL website this doesn't seem possible. 

"You can transfer up to £4,000 from another (non-lifetime) ISA to an HL Lifetime ISA each tax year. You’ll get the 25% government bonus on the amount you transfer, up to £1,000. Unfortunately, we can’t currently accept transfers from other Lifetime ISAs.

If you want to use the Lifetime ISA to buy a home, just remember that if you do that in the first year of having your Lifetime ISA, you will have to pay the 25% government withdrawal charge."

Does anyone know how I can get around this, without withdrawing from AJ Bell, as this would incur a 25% fee, so would lose my current government bonus that has been applied to my account.

Cheers in advance

Alexland

HL stopped accepting inbound LISA transfers a few years ago. The process seemed to be too hard for their skill level and the product's commercial value to them - they made human errors transferring our LISA accounts in from Nutmeg about 4 years ago.

I have no idea why you would want to transfer in that direction as AJ Bell generally have a better proposition especially for an existing account on the journey to getting larger where the fixed trade fees are less significant than the lower ongoing percentage or capped charges.

We moved our LISAs from HL to AJ Bell about 2 years ago (when HL made a different mistake notifying HMRC that I had closed my account rather than transferred it which caused my next tax year bonus claim to fail). AJ Bell seem to have a greater depth of competence.

kishanpatel99

Thanks for the reply.
To be honest I'm fairly new to investing and only had my account for a year. The main reasoning behind moving was the lower fees per dealing as was trying to benefit from cost pound averaging by dealing the funds monthly instead of one large dealing. HL doesn't seem to have fees on this, and AJ Bell charge 1.50 per deal. I currently hold 5 funds so was paying 7.50 per month in fees plus the standard 0.25% fee, whereas HL I believe I would only pay the 0.45% fee.
Feel free to correct me if I'm wrong. 
Maybe I will just stick with AJ Bell and invest my allowance in one lump sum, rather than splitting it monthly, over the year.
I guess you are also correct, as the 0.45% charge at HL will impact me more as the account gets larger, which is something I didn't factor in. 

Alexland

On a low valuation I question if you need 5 funds - consider using one of AJ Bell's own funds as their ongoing charges are reasonable and you don't have to pay the £1.50 to invest new money into them.

https://www.youinvest.co.uk/investment-ideas/ajbell-funds

Once the account gets larger you will feel the benefit of the lower ongoing platform charges and/or capping compared to HL. We have 5 years of full contributions in an ETF and the AJ Bell fees are capped at £42 pa and £1.50 per scheduled trade. You can do one-off scheduled trades (set them up and cancel after first run) from the cash balance to get around the £9.95 adhoc dealing charge. HL only let us have the reduced ETF trade rate on new direct debit contributions which didn't work for LISA bonuses another reason we left them.

kishanpatel99

That's great thanks, will have a look into it. Am currently enjoying learning further about the best and most effective ways to build equity and save money.
You've been a great help, cheers.

Alexland

No problem, and welcome to the forum.

eskbanker

kishanpatel99 said:

To be honest I'm fairly new to investing and only had my account for a year. The main reasoning behind moving was the lower fees per dealing as was trying to benefit from cost pound averaging by dealing the funds monthly instead of one large dealing. HL doesn't seem to have fees on this, and AJ Bell charge 1.50 per deal. I currently hold 5 funds so was paying 7.50 per month in fees plus the standard 0.25% fee, whereas HL I believe I would only pay the 0.45% fee.
Feel free to correct me if I'm wrong. 
Maybe I will just stick with AJ Bell and invest my allowance in one lump sum, rather than splitting it monthly, over the year.

I'd agree with @Alexland that splitting £4K across five funds seems overkill, and making purchases of each every month exacerbates that - if you really feel the need to have five funds then you could just buy into one fund per month on a rotational basis, i.e. you'd buy each one every five months, but to be honest buying into one all-rounder fund every year should be adequate, unless you have some very specific portfolio allocation requirements....

dunstonh

Maybe I will just stick with AJ Bell and invest my allowance in one lump sum, rather than splitting it monthly, over the year.

Maybe stick with one fund until you get to around £100k?

If you are going to build a bespoke portfolio of funds, you typically need around 8-15 funds.  If you pick just 5, then you are not going to get sufficient diversification (caveat: you could with careful selecting).   

Lets say your Japanese allocation is 3.8%.   If you have £4000 then just £152 to invest in a Japanese fund.      It just isn't worth it with small amounts.  Hence why a multi-asset fund would be better.

Alexland

In the below video, 9mins in, Russ Mould explains that every time a customer pays the £1.50 trade charge his kids use some of the money buy more lego which gets lost around his house and eventually clogs up their vacuum cleaner. He tells investors that his kids really don't need any more lego so please only pay for trades as infrequently as possible.

https://www.youtube.com/watch?v=6LfsR6hd6ME