Transfer Vanguard funds to a fixed fee platform

dllive

hi all,

Im currently doing an end-of-year self-audit.

In 2022 Ive paid £182.52 in Vanguard fees. I wonder if I transfer my funds over to a fixed-price investor platform. (Although Id still use Vanguard because theres no dealing fees).

Im curious to hear if any Vanguard investor has done similar?

Thanks

ColdIron

Or a no fee platform such as IWeb. They have a cashback offer that negates the usual opening fee

https://www.iweb-sharedealing.co.uk/landing-pages/cashback-offer.html

Qyburn

dllive said:

In 2022 Ive paid £182.52 in Vanguard fees. I wonder if I transfer my funds over to a fixed-price investor platform. (Although Id still use Vanguard because theres no dealing fees).

Won't dealing fees depend on what the new platform charges? Which for iweb looks like £5 per trade.

dllive

Qyburn said:

dllive said:

In 2022 Ive paid £182.52 in Vanguard fees. I wonder if I transfer my funds over to a fixed-price investor platform. (Although Id still use Vanguard because theres no dealing fees).

Won't dealing fees depend on what the new platform charges? Which for iweb looks like £5 per trade.

I should have clarified: I wont be dealing on the fixed-fee platform. It will only be used if the platform's fixed-fee is cheaper than the Vanguard percentage-fee.

So Ill only be investing on Vanguard, and then moving past year's ISAs to the new fixed-fee platform.

Im just trying to figure out if this is a good strategy, and if so, when to do this.

ColdIron

It's a reasonable strategy, I've read about a few posters doing this though you'll have to put up with a transfer periodically

£182.52 at 0.15% implies a holding of £120,000 and it's a pretty reasonable charge. Your savings will be minimal especially after you deduct the fixed fee (except IWeb). I bet the value of your funds goes up and down 10 times that amount on many days of the month. There's a lot to be said for an easy life

Is it a SIPP, ISA or GIA?

Have a look at some of the flat fee providers available

https://monevator.com/compare-uk-cheapest-online-brokers/

Rollinghome

dllive said:

So Ill only be investing on Vanguard, and then moving past year's ISAs to the new fixed-fee platform.

Im just trying to figure out if this is a good strategy, and if so, when to do this.

You may be able to save a fiver per trade, but transfers between platforms generally take a couple of weeks, and if there are mistakes or problems, considerably longer. So there may be far easier ways to save a fiver.

ColdIron

Vanguard don't charge a fiver for trading, it's free and the OP won't be trading on the fixed fee platform, they are looking to reduce the Vanguard percentage fee

Though I agree that the savings will be small, too small for me to take on the extra complexity

PS 2 weeks for an in speccie transfer seems optimistic

dllive

ColdIron said:

It's a reasonable strategy, I've read about a few posters doing this though you'll have to put up with a transfer periodically

£182.52 at 0.15% implies a holding of £120,000 and it's a pretty reasonable charge. Your savings will be minimal especially after you deduct the fixed fee (except IWeb). I bet the value of your funds goes up and down 10 times that amount on many days of the month. There's a lot to be said for an easy life

Is it a SIPP, ISA or GIA?

Have a look at some of the flat fee providers available

https://monevator.com/compare-uk-cheapest-online-brokers/

I have all 3 with Vanguard: I have a small amount in the SIPP; a nominal amount in the GIA; most of it is previous year's ISAs.

Thanks - Ill read that article. (TBH, I probably got the idea from that Monevator article in the first place!!)

Rollinghome

ColdIron said:

Vanguard don't charge a fiver for trading, it's free and the OP won't be trading on the fixed fee platform, they are looking to reduce the Vanguard percentage fee

I was referring to the £5 per trade I assume he wants to avoid paying Iweb.

But he'd be limited to Vanguard investments, and will still need to pay the Iweb fiver if he wants to sell or switch the investments once transferred in, unless he's going to transfer back to Vanguard each time.

Assuming he buys at least once a month at Vanguard, he'd save £60 a year or 0.05% on £120,000.  Minus account fees payable to Vanguard prior to the investment being transferred. He might save that or more with the freedom to buy non-Vanguard investments with lower OCFs. 

Fine for a one-off switch if you're happy to be restricted to Vanguard, but doesn't sound much of an ongoing strategy in return for the hassle and investment limitations. Each to his own I guess. Might be simpler to use one of the freebie outfits such as InvestEngine who charge zero platform or trading fees for a DIY portfolio, though that wouldn't be my choice either.

Albermarle

Assuming he buys at least once a month at Vanguard, he'd save £60 a year or 0.05% on £120,000. Fine for a one-off switch if you're happy to be restricted to Vanguard, but doesn't sound much of an ongoing strategy in return for the hassle and investment limitations.

An investment fund can go up or down 0.05% in less than the blink of an eye, so saving such a small amount on fees is really not worthwhile. Especially as something might go wrong, and you have to spend ages on the phone trying to sort it out. Life's too short !

AndyTh_2

Albermarle said:

Assuming he buys at least once a month at Vanguard, he'd save £60 a year or 0.05% on £120,000. Fine for a one-off switch if you're happy to be restricted to Vanguard, but doesn't sound much of an ongoing strategy in return for the hassle and investment limitations.

An investment fund can go up or down 0.05% in less than the blink of an eye, so saving such a small amount on fees is really not worthwhile. Especially as something might go wrong, and you have to spend ages on the phone trying to sort it out. Life's too short !

ISA and SIPP transfers can be done in-specie, which is just reregistering the shares with the new broker (if the new broker has the right ones available).

Therefore you can transfer without leaving the market, and so just save on fees without the risk of market changes.