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

masonic

Prudent said:

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. 

If you have most of your assets under the stewardship of an adviser, then if you were up for it, there's nothing to stop you running your own investment account on the side. You could start off relatively small, perhaps with one of your maturing cash ISAs, and take it from there. A product like Vanguard Lifestrategy can be bought and left alone, and most of the experienced investors on this forum would consider it a decent option for a novice investor. You just need to choose the appropriate risk level.

Hopefully your adviser has put you into some high performing investments that make up for the 2.4% fee and other charges. It could be interesting to see how an investment you make yourself measures up to this.

Prudent

Albermarle said:

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.

Thank you. I think I will contact them and discuss this as I feel it is very high. I will still have about 50% of my savings in cash. 

Prudent

Thank Masonic, I think I might well try some of my own alongside. However, only about 25% just now are invested by the advisor. The pension is not my main pension. I am already in receipt of that as I took ill health retirement. 

Daliah

Does your IFA charge you for placing investments with new cash? If so, how much? They shouldn’t charge a lot for that, and certainly not a lot more for requesting the transfer of a cash ISA.

Prudent

Daliah said:

Does your IFA charge you for placing investments with new cash? If so, how much? They shouldn’t charge a lot for that, and certainly not a lot more for requesting the transfer of a cash ISA.

I am not sure. I have no real reason to do that though. I have already used this year's ISA allowance. I want to transfer an existing ISA to keep that pot of money within an ISA.

adindas

Prudent said:

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?

Not really, it is mainly to do with fill in the ISA transfer form. I have done that multiple times and it took me less than ten minutes to do that. The rest is just waiting until the ISA arrive in my S&S ISA account.

I think the charge from your ISA is due to the fact that you have a couple of them ?? In some cases, this could be done using the same form.

The rest of this is for financial advice ??

3% could or could not be reasonable could be high depending on the money involved. I think You will need to find out how much money do they charge you from transferring your ISA.

Albermarle

Prudent said:

Daliah said:

Does your IFA charge you for placing investments with new cash? If so, how much? They shouldn’t charge a lot for that, and certainly not a lot more for requesting the transfer of a cash ISA.

I am not sure. I have no real reason to do that though. I have already used this year's ISA allowance. I want to transfer an existing ISA to keep that pot of money within an ISA.

Does your IFA charge an ongoing charge ? I do not think that has been mentioned yet .
Ongoing charge means a regular charge of usually between 0.5% and 1 % .
If they are charging this then they should really do any new transfers for nothing . If you are not paying an ongoing charge, then it is more reasonable that they will have a charge for transferring a new cash ISA ( but ideally not as much ) .

dunstonh

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. 

That is fair enough if you are not on an ongoing servicing basis with the adviser.

 I was a bit surprised as they will simply go into my existing S&S ISA account with no new consultation or advice. 

The adviser still gets it classified as advice.   

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

2-3 hours work.   Possibly involving two members of staff.  

With the amounts of money unknown, its difficult to say whether that is expensive or cheap.  i.e. 3% of £5000 is £150 whereas 3% of £100,000 is £3000.   The former is cheap.  The latter is expensive.

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.

I would say its a bit over the top on the charge but you should expect something.  £500-£750 would be a good ballpark.  And no, the platform does not do the allocation to the investments.  The platform is just the administrator for instructions given by the adviser.

Where you pay an adviser for ongoing servicing, things like this would typically have no initial charge.

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.

The platform market is generally split between those that have an adviser and those that want to DIY. Not many cater for both at the same time.

anonmoose

I have recently transferred a few pensions into vanguard and a cash isa into fidelity. Really easy to do and a couple needed to print paperwork and one just did it filling online instruction. Nothing complicated.

I would say as others have said the biggest thing about going DIY is making sure you don't make any silly mistakes. So be sure of the risk level you are happy with and don't sell in a panic when things drop. If you can do that DIY is easy especially with the likes of vanguard and fidelity.

A bit of initial reading is worthwhile if you don't have a grasp on risk levels and market cycles.  Knowing what you are getting into is important.  

I have loved going DIY as I now feel I have control of my money and better understanding of investing. This board is great for help and sense checks if you are unsure.

adindas

anonmoose said:

I have recently transferred a few pensions into vanguard and a cash isa into fidelity. Really easy to do and a couple needed to print paperwork and one just did it filling online instruction. Nothing complicated.

I would say as others have said the biggest thing about going DIY is making sure you don't make any silly mistakes. So be sure of the risk level you are happy with and don't sell in a panic when things drop. If you can do that DIY is easy especially with the likes of vanguard and fidelity.

A bit of initial reading is worthwhile if you don't have a grasp on risk levels and market cycles.  Knowing what you are getting into is important.  

I have loved going DIY as I now feel I have control of my money and better understanding of investing. This board is great for help and sense checks if you are unsure.

The OP does not need to sell anything as per title suggests "Help please understanding the cost of moving a cash ISA to S&S". But certainly for DIY he still needs to decide which stocks, funds to invest.