Transfer Vanguard funds to a fixed fee platform

Aylesbury_Duck

It's a tactic I used, building up my £20k allowance in chunks in Vanguard over the year, then transferring across to iWeb.  I had a terrible experience last year though, where iWeb and Vanguard between them took over 13 months to effect the transfer.  I did get several hundred pounds from each by way of compensation, but I did spend many hours on phone calls, secure messages and emails to the ombudsman to get it all sorted out.  

Rollinghome

AndyTh_2 said:

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.

You can, but I suspect Albermarle was referring to the day-to-day movement of investment values.

Perhaps worth pointing-out too, that trades on the Vanguard platform won't always be free.  If you trade an ETF using the normal quote and instant trade system, they charge £7.50, so more than Iweb. 

Only daily bulked trades at a time of their choosing would be free, so nullifying one of the major benefits of using ETFs rather than OEICs.

Albermarle

You can, but I suspect Albermarle was referring to the day-to-day movement of investment values.

Correct. I was just trying to put these minute savings in some perspective. Especially when this happens.

 I had a terrible experience last year though, where iWeb and Vanguard between them took over 13 months to effect the transfer.  I did get several hundred pounds from each by way of compensation, but I did spend many hours on phone calls, secure messages and emails to the ombudsman to get it all sorted out.  

retiringtoosoon

Took less than a week for my in specie transfer to complete from vanguard to iWeb. Prefer to have that £100 of fees in my pocket than an investment platform.

Snapdragon

I've used the concept you are proposing.

I had several years of ISAs built up in Vanguard and wanted to transfer historic ISAs to IWeb, with the aim of saving £100+ per year Vanguard fees. I opened the IWeb accounts just prior to them putting joining fee up to £100 in Christmas 2020 but waited until the new tax year to request the transfer. My 2021 attempt was a paperwork nightmare and a disaster from the word go. I gave up on the attempt at the point when IWeb asked for the paperwork to be posted a second time, after I'd already waited 3 months with nothing happening!

HOWEVER I tried again this year transferring in-specie in September instead of trying in April when everyone else was asking for transfers. It couldn't have been simpler, was all done online which was a vast improvement, instead of posting physical forms, took very little time and process was all completed within 10 days, with good communication during the process from Vanguard and with confirmation from IWeb on completion. So ....what I learned from the experience is DON'T try to transfer at the beginning of a new tax year, its mayhem, invariably takes much longer than you'd expect and a lot of people experience issues at that time point, but if you're happy to sit tight for a bit, the concept works. IWeb hasn't cost me a penny (other than the original account opening fee) to hold the ISAs.  

AlwaysLearnin

This thread might be worth a read OP:

https://forums.moneysavingexpert.com/discussion/6409213/iweb-offering-100-cashback-negating-the-100-account-opening-fee/p1

dllive

Thanks all - very useful. 

Ive just been reading Movetors article on the topic: https://monevator.com/cheapest-stocks-and-shares-isa-hack/

It seems - if I do transfer previous years' ISAs to another platform - theres the additional benefit that it will take the amount I have with Vanguard below the FSCS investor compensation limit. So theres a bit of added security there. (I presume for this reason people use more than one platform?).

Unless Im reading the article wrong, it makes sense to transfer from Vanguard to a fixed fee platform once you have ~2 years' worth of ISAs in there:

"Percentage-fee platforms offer the best terms to small investors. They tend to rake it in once your account swells beyond £25,000 to £50,000. They’re relying on your inertia."

It costs about £16pa for each years' ISA held on the Vanguard platform:

"Were you to drip-feed your ISA allowance in evenly (£1,666 every month), you’d pay approximately £16 in platform fees for the year."

After reading the Monevator article its got me more enthused to do this, although as has been mentioned in this thread, I cant really be bothered if Im only saving a nominal amount each year. But the replies on Monevator's article are full of people saying they do this, but perhaps they are more penny-pinching than myself or have more time to worry about these things!

So now Im vacillating whether to do this or not! 

shortseller09

Spend a week monitoring the daily movement in your portfolio, and then see whether it's worth the hassle.

Albermarle

theres the additional benefit that it will take the amount I have with Vanguard below the FSCS investor compensation limit. So theres a bit of added security there. (I presume for this reason people use more than one platform?).

Many experienced investors, hold way over the compensation limit with mainstream investment platforms/pension providers. The chance of a provider like Vanguard going bust, or being subject to massive fraud, is not considered to be a realistic prospect.

cloud_dog

dllive said:

Thanks all - very useful. 

Ive just been reading Movetors article on the topic: https://monevator.com/cheapest-stocks-and-shares-isa-hack/

It seems - if I do transfer previous years' ISAs to another platform - theres the additional benefit that it will take the amount I have with Vanguard below the FSCS investor compensation limit. So theres a bit of added security there. (I presume for this reason people use more than one platform?).

Unless Im reading the article wrong, it makes sense to transfer from Vanguard to a fixed fee platform once you have ~2 years' worth of ISAs in there:

"Percentage-fee platforms offer the best terms to small investors. They tend to rake it in once your account swells beyond £25,000 to £50,000. They’re relying on your inertia."

It costs about £16pa for each years' ISA held on the Vanguard platform:

"Were you to drip-feed your ISA allowance in evenly (£1,666 every month), you’d pay approximately £16 in platform fees for the year."

After reading the Monevator article its got me more enthused to do this, although as has been mentioned in this thread, I cant really be bothered if Im only saving a nominal amount each year. But the replies on Monevator's article are full of people saying they do this, but perhaps they are more penny-pinching than myself or have more time to worry about these things!

So now Im vacillating whether to do this or not! 

I have been quite surprised by some of the "meh, can't be bothered, too small to worry about" comments on here, after all the one thing you have control over is your costs (or at least who gets them).

We use iWeb as our buy and hold ISA repository, and I have done what you indicate in the past using a Vanguard GIA.  When I did it I just used to sell the GIA investments, allow the regular investment to continue, transfer the cash in to the ISA, and then make my buy.

I think it will be well worth your time doing it TBH.  Whilst it is £100+ saving, it will be a saving each year ans the value of the saving will increase as your investment value increases (compared with Vanguard).

If you don't look after your money, no one else will