Transfer from management of investments in active Wealth Manager to Vanguard passive funds

Bobajobbob

Hi all,
Quick question for anyone who has transferred their general investments and ISAs from an active manager to simple passive Vanguard funds. How much of a headache is it?

For historic and convenience reasons I have built up a decent pot of investments with a wealth manager over the years with the portfolio designed and managed actively and with a good proportion of those investments now in an ISA wrapper. The fees have always niggled with me but due to lack of time, experience and convenience I have continued the relationship. Returns have generally been in line with macro market and indices. In parallel I run a SIPP and GIA with Vanguard where I keep it very simple splitting funds into passive global equity trackers.

Having put it off for too long I am now considering again moving everything from this active manager into passive funds but every time I think about it I find something less painful to do instead. 

Has anyone been in a similar position and achieved this without to much pain? As I have investments both in and outside of ISA wrappers I assume there will be tax implications in liquidating positions outside the ISA amongst other headaches I haven't thought of.

Any advice/reassurance would be very welcome. As to why I want to move, it is simply because the performance of my active investments do not outperform the passive so it is impossible to justify the additional fees. 

Albermarle

Should be easy to transfer the ISA's you have with the wealth manager to another S & S ISA provider.
Dealing with the current GIA is a different subject.

Worth noting that there are other providers of passive low cost funds, other than Vanguard, and that you can buy Vanguard funds on other platforms than the Vanguard.

Bobajobbob

Thanks, any more feedback/tips from anyone who has completed a migration like this would be very welcome.

As noted by Albermarle I guess the ISA side is easier as no tax implications. Just a question of sell all, migrate the cash and reinvest. The only unknowns being the timing and risk of being out of the market. On the GIA side I guess its a more complex process of managing capital gains effectively.

Albermarle

The only unknowns being the timing and risk of being out of the market.

If you transfer 'in specie' ( means the actual investments are transferred) then you are never out of the market.

However you have to be able to hold the same investments on both platforms, and it can take a lot longer.

MX5huggy

If you’ve got CGT liability you want to use this year’s allowance up as a minimum, it halves next year and the year after I believe. (12k, 6k , 3k broadly). 

Look at iWeb for a platform no ongoing platform fee just £100 one off fee that even that is refunded on an offer ATM. 

Richard1212

I cannot advise you, Bob, on "migrating" from a Wealth Manager simply because I would never think of doing so.

Like you, I have a large portfolio built up over many years in conjunction with a Wealth Manager.      While I am involved in all major decisions and indeed initiate many, I don't think I could possibly manage to find the time to keep up to date with the minutiae or indeed the evolving state of companies' health ( which with the help of his team of researchers and market sector specialists he deals with excellently---and keeps me fully apprised in a monthly report and a monthly table of investments and amounts).

I do not find a modest 1.2% to be a "niggle" for me. I find it great value for money. I'd pay more if necessary in order for me not to have to try to keep "on top" of all the different parts and share sectors of my portfolio ( I have not got anywhere near the time to keep up to date with many companies spread over 9 market sectors + other components of my portfolio ). 

So I'm not "migrating" but I wish you well with your own decision and congratulate you on what seems to be an interesting portfolio that you have built up over years. All the best.

Albermarle

While I am involved in all major decisions and indeed initiate many, I don't think I could possibly manage to find the time to keep up to date with the minutiae or indeed the evolving state of companies' health

Your typical DIY investor ( on this forum anyway) is invested in funds, not in individual companies. So no need at all to study company accounts etc and very little minutiae to deal with.
To some extent wealth managers make it sound more complicated than it needs to be, to justify the charges.

bostonerimus

Albermarle said:

While I am involved in all major decisions and indeed initiate many, I don't think I could possibly manage to find the time to keep up to date with the minutiae or indeed the evolving state of companies' health

Your typical DIY investor ( on this forum anyway) is invested in funds, not in individual companies. So no need at all to study company accounts etc and very little minutiae to deal with.
To some extent wealth managers make it sound more complicated than it needs to be, to justify the charges.

The OP will have to deal with CGT on any GIA accounts, but other than that the transfer should be easy enough, unless there are some fees involved, in which case I'd dump the provider anyway.

Whether a wealth manager is worth their fee is hard to gauge as you don't really have a large data set to analyze. So one client might be happy, but then there might be another who is not. The one guaranteed thing is that you won't be paying the wealth manger's fee every year. For me simplicity is the key and so I've been an index investor for 35 years. My average annual return has been 8.5%, I've made sure to make generous contributions (minimum was $10k) and I've spent minimal time, and money, managing my portfolio, just rebalancing when things got volatile. Just run a compound interest calculation with the numbers above and you'll see why I was able to retire in my early 50's and never have to worry about money again...and I did nothing clever, just invested in the market, kept costs down and made sure I was frugal so I had money to invest and save.

There are many ways to financial success and independence and my simple brain just chose the one I understood most and appeared to be the most straight forward, so you definitely don't need a wealth manager to succeed.

Cus

Are the investments with the wealth manager invested in a similar distribution to your SIPP? If your SIPP is 100% equity, are your managed funds? This would be how to compare performance.

Also does the wealth manager appraise your attitude to risk? And is the SIPP at an appropriate risk level?

Richard1212

Albermarle said:

While I am involved in all major decisions and indeed initiate many, I don't think I could possibly manage to find the time to keep up to date with the minutiae or indeed the evolving state of companies' health

Your typical DIY investor ( on this forum anyway) is invested in funds, not in individual companies. So no need at all to study company accounts etc and very little minutiae to deal with.
To some extent wealth managers make it sound more complicated than it needs to be, to justify the charges.

Very impressive to know what a "typical" DIY investor does on this forum ? In any case, I was expressing my opinion to forumites who, like me, do not invest in funds : of which there are quite a number----and I ( and I imagine others like me)  DO need a Manager to deal with the minutiae and much more.

And I find Wealth Managers do the opposite of what you state with such confidence----I think they try to simplify complex issues and give a personal service which is well worth their modest fees. They are much in demand by those who have wealth from a large portfolio of shares and other investments.

Bobajobbob

Thank you all for the feedback. To answer the question above about investments the bespoke portfolio built and managed by the wealth manager is a global mix of funds, individual stocks and bonds. The funds I have in Vanguard are mostly invested in their global equity and lifestyle trackers. The portfolio with the wealth manager has been built based on my appetite for risk so focused more on capital gain than income at this time.

The fees on the Vanguard funds and service are a fraction of the active management and execution fees whilst the performance has been comparable over a number of years now through varied market conditions and crises. (I know that alternatives to Vanguard service are out there and cheaper but for time being I am just looking at the delta between my two services today). When you consider the compounding of the fees over many years without noticeable additional gains or protection from falls you begin to question the merits of the service. 

I guess I've reached a point where I've realised that I only need the assistance because the portfolio is complex and cumbersome to manage whilst also realising that it simply doesn't need to be complex and cumbersome because the same results can be achieved with a single fund. At this point there is no need for the bureaucratic assistance and no need for the additional fees.

Of course each to their own and if the fees I pay were lower I probably wouldn't be thinking about this. 

Thanks for the advice on a GIA transfer. It is a good suggestion that I simply transfer everything in specie to a self managed service and then slowly simplify these holdings. I guess I could also ask the manager to do this for me in advance, slowly migrate over a few years the multiple holdings into a few simple funds. Food for thought and thanks again for the feedback.