Help please understanding the cost of moving a cash ISA to S&S

Prudent

Please be kind. I have a neurlogical condition that is impacting my cognitive skills. 

I have a couple of cash ISAs due to mature. In March and April of this year, I set up my first S&S ISA, mainly due to dismal returns and high inflation. I sought help from an IFA as well as I also had a small private pension I wish to move. Additionally, I paid  £3,600 into my pension in March and April. We had zoom consultations plus one in-person meeting and I was happy with the process. The fees worked out to about 2.4% with a reduction given because of the amount I was transferring.

I now have a couple of cash ISAs due to mature and have asked about moving them over. The charge this time is 3% because of the work involved. I was a bit surprised as they will simply go into my existing S&S ISA account with no new consultation or advice. Additionally, there will be the usual platform fee and product fees to pay. On my cognitively good days, I did research these and was happy enough with them. Is there a lot of work involved in transferring a cash ISA in this way?

Swipe

Prudent said:

Is there a lot of work involved in transferring a cash ISA in this way?

I have transferred multiple cash ISAs and other pensions to Vanguard and it was very simple. They really just asked to me to fill out a form asking for the banking institution, account number, sort code, pension provider details and estimated value. They then did all the work by contacting the ISA and pension providers and arranging transfer. I certainly wouldn't pay anyone to do it. The only downside is it can take a while. You can't go wrong really, it will either work successfully or just fail if you did it incorrectly. 

masonic

The fee quoted looks high to me, especially as most of the "work" will have already been done in choosing suitable investments for you. The new sums will presumably just be spread around the existing investments, keeping the percentages the same. The transfer process is simple, this just requires details of each ISA to be transferred to be completed on a transfer form from your S&S ISA provider, and a signature from you. If the value of the ISAs to be transferred is low, then perhaps the fee in £ is more reasonable for your adviser's time, though I can't see the whole process taking up more than an hour of active time on your adviser's part.

Albermarle

Swipe said:

Prudent said:

Is there a lot of work involved in transferring a cash ISA in this way?

I have transferred multiple cash ISAs and other pensions to Vanguard and it was very simple. They really just asked to me to fill out a form asking for the banking institution, account number, sort code, pension provider details and estimated value. They then did all the work by contacting the ISA and pension providers and arranging transfer. I certainly wouldn't pay anyone to do it. The only downside is it can take a while. You can't go wrong really, it will either work successfully or just fail if you did it incorrectly. 

The IFA charge is really for taking responsibility for making investments that are appropriate for the client, and the documentation behind that ( they have regulated processes they have to follow) The actual mechanics of the transfer can be done quite cheaply/quickly. Or as you point out you can DIY it for free, but you have in the end to take responsibility for choosing the investments yourself. 
Having said that, the charge looks on the high side considering most of the time consuming fact collection process has already been done the first time around.

xylophone

Could you not simply contact your S&S ISA providers and request  them to arrange the transfer of your cash ISAs to the S&S ISA?

Prudent

Thank you so much, everyone. You touched on exactly what is puzzling me. I have already paid for the research work to be done and the incoming amount would be spread in the same way as the two previous amounts invested. The total amount involved (for both) would be just over £40,000 so the fee would be approximately £1,200. I assume the platform itself would then be doing the allocation to each of the investments and I am paying an additional platform fee for this.

Albermarle

xylophone said:

Could you not simply contact your S&S ISA providers and request  them to arrange the transfer of your cash ISAs to the S&S ISA?

The OP could do this, but originally they felt they needed help from an IFA and they have mentioned an ongoing  medical condition. So they may be better keeping some professional help for their finances. However preferably at a lower cost for the transfers than has been proposed. 

masonic

Well someone needs to instruct the platform how to invest the cash, but this is minimal work. Maybe it is time to explore whether you could take on this task yourself?

Prudent

I had sought help from an IFA because I knew the pension product was quite outdated. No draw-down option etc. The advice I got in relation to the pension was spot on for my needs. I was able to glean some good information about long-term planning. I hadn't used my 2021 ISA allowance as the rates were so poor. It felt like a good time to ask about investing my ISA allowances for 2021 and 2022.

xylophone, I don't think I can do that. As far as I can see the platform works by accepting investments from IFAs. There doesn't seem to be an option for individual investors. Also, I think this particular spread of investments was developed in conjunction with the IFA group that I am using.

Prudent

masonic said:

Well someone needs to instruct the platform how to invest the cash, but this is minimal work. Maybe it is time to explore whether you could take on this task yourself?

I am now considering how much work I can do myself. I have considered products like the Vanguard Lifestyle option before but was nervous about making mistakes. This is something I need to take time to weigh up. No regrets about using the IFA when I did. I needed help with the pension. I was happy with the process and cost of it all. However, over the next couple of years, most of my cash ISAs are maturing and at the 3% rate transferring them all via an IFA would cost me £6000. 

Albermarle

It is possible to negotiate fees with IFA's

If you say you were shocked by the new proposed fees, when a lot of the work was already done, and were considering 'other options' they may reconsider. 

By the way, it is usually better to keep a reasonable level of cash savings,  and not transfer them all to a S&S ISA/investments.