Transfer Vanguard funds to a fixed fee platform

jimjames

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). 

£180pa doesn't sound minimal to me but maybe that wasn't what you were referring to. 

shortseller09 said:

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

I'm not sure what the hassle is for a transfer but if it saves £180 every year surely a fair hassle is still worth it!

ColdIron

jimjames said:

£180pa doesn't sound minimal to me but maybe that wasn't what you were referring to.

It was I'm afraid. It's 50p per day, my fag bill dwarfs it (so does my coffee bill come to think of it)

But different strokes for different folks and before I'm drummed out of the MSE club I agree that moving to IWeb could be a good move, it's where I keep my growth portfolio, mostly trackers that just sit there with little if any interaction

I'm not so sure about some of the other fixed fee platforms with a periodic charge which would reduce the £180 savings

Linton

Question for the OP - if dealing fees are a concern how often are you dealing and in what size amounts?  If you are buying a small amount every month perhaps it would be better to accumulate the cash in a high interest regular savings acount and buy the funds once a year.

An Interactive Investor ISA  costs a fixed £9.99/month which also includes 1 free tade.

Snapdragon

A move to IWeb (particularly whilst they have an offer running which effectively refunds the joining fee) looks worthwhile. You have to remember its an annual saving not a one-off. Since the common advice is you don't hold stocks &shares for any less than 5 years and preferably at least 10 years, you are therefore potentially holding the historic ISAs without any further fees for quite a few years, saving £180+ each year you continue to hold (or more vs a %based platform, if you get growth in your pot).

Knowing from personal experience a) how much the Vanguard to IWeb process has changed in this last year for the better by going all online, and b) accepting that if you avoid the frenzy of the new tax year and transfer a bit later then I wouldn't have any qualms about the build in Vanguard and hold in IWeb strategy.

Rollinghome

cloud_dog said:
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).

Perhaps the scepticism is due to the lack of details as to how this wheeze might operate?

(Simply moving to Iweb would be useful to many investors. I've been with them for over 12 years, with the bulk of my equity investments there, and resulting in huge savings.)

To avoid paying the Iweb £5 per trade fee, the poster seems to be considering the strategy on an ongoing basis, not a one-off. A saving of £100+ a year would suggest more than 20 trades a year at Iweb at £5 each.  Would the transfers from Vanguard be done immediately after buying, i.e. 20+ transfers every year?

Or would they be allowed to accumulate until worth transferring, and would there be platform fees of 0.15% to pay Vanguard during that period? If so, are those fees to Vanguard allowed for in the £100+ figure?

Has any calculation been included for when there are similar but cheaper alternatives to Vanguard investments from other managers. Or for the cost of missed opportunities by restricting investments entirely to those available from Vanguard?

Does it assume that trades of ETFs will only be done using once a day, bulk-buying in order to avoid Vanguard's £7.50 a trade fee? The delays for bulk selling/buying can allow for large swings in markets and significant costs. If there was a need to switch investments after transfer to Iweb, is the plan to transfer them back to Vanguard, then back to Iweb?

Has there been an estimate of the hourly rate of return on the investor's time?

Without knowing the details, it seems a very restricted, hair-shirt, and possibly counter-productive approach, so my suspicion is that there are far easier ways to save or earn £5 - including simply trading less often. As a one-off, fine, but to spend time, on an ongoing basis, constantly arranging and monitoring transfers, seems neither great fun nor the shrewdest of strategies to me. But if it floats your boat...

cloud_dog

I think the intent from the OP is quite clear TBH, not amounts but in concept.

Rollinghome

cloud_dog said:

I think the intent from the OP is quite clear TBH, not amounts but in concept.

The strategy seems to be to continue buying on Vanguard in order to then transfer to Iweb in order to avoid Iweb's trading fee.

I've used Iweb for many years, so it makes no sense to me for anyone with more than the smallest portfolio or making very frequent trades to use the Vanguard platform.  I'd be with moving to Iweb or similar all the way.

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).

dllive said:

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.

But it's not clear to me why you think it "a good idea" to continue an account with Vanguard, who charge 0.15% ad valorem, to buy investments that would then be transferred to Iweb in order to save Iweb's £5 fee.

I was hoping you would clarify how that plan would be operated in order to get that £100 pa saving you mentioned?

TheAble

Rollinghome said:

I was hoping you would clarify how that plan would be operated in order to get that £100 pa saving you mentioned?

Presumably trading frequently on Vanguard at the zero cost next trading point?

Rollinghome

TheAble said:

Rollinghome said:

I was hoping you would clarify how that plan would be operated in order to get that £100 pa saving you mentioned?

Presumably trading frequently on Vanguard at the zero cost next trading point?

So 20+ trades and 20+ transfers?  Would that be better than transferring the lot to Iweb to avoid paying Vanguard's 0.15% platform fee plus £7.50 live trade fee for ETFs  and paying their £5 fee for future trades?

TheAble

Rollinghome said:

TheAble said:

Rollinghome said:

I was hoping you would clarify how that plan would be operated in order to get that £100 pa saving you mentioned?

Presumably trading frequently on Vanguard at the zero cost next trading point?

So 20+ trades and 20+ transfers?  Would that be better than transferring the lot to Iweb to avoid paying Vanguard's 0.15% platform fee plus £7.50 live trade fee for ETFs  and paying their £5 fee for future trades?

I'm not saying I'd do it myself necessarily. But even if you only transfer the full 20k once per year at the end of the year you'd only pay £15 in Vanguard custody fees (assuming you've deposited the money at an even pacing throughout the year), plus custody fees on the growth.

You don't need to pay live ETF fees either, the free overnight will be fine for most.