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

Aminatidi

The platform works fine.

Depending on your investing habits (amount and frequency) there are probably cheaper ways but doing something stupid on impulse could cost me far more than a little bit more in fees.

Keep in mind they will only transfer Vanguard funds or cash nothing else.

dunstonh

Aminatidi said:

One reason.

Also a bit of personal psychology there where I'm trying to move towards passives and rightly or wrongly Vanguard not having 3000 active funds minimises the occasional urge to tinker

But Vanguard doesn't have the best or cheapest trackers in every area.  So, limiting yourself to just them could compromise the outcome.

Aminatidi

Sure but their FTSE Global All Cap is close enough and I'll be there or there about without second guessing myself too much over a few bps.

It works for me.

GeoffTF

dunstonh said:

Aminatidi said:

One reason.

Also a bit of personal psychology there where I'm trying to move towards passives and rightly or wrongly Vanguard not having 3000 active funds minimises the occasional urge to tinker

But Vanguard doesn't have the best or cheapest trackers in every area.  So, limiting yourself to just them could compromise the outcome.

Vanguard's trackers are as good as any. The cost of the platform will usually be more important than a small difference in the OCF. Transaction costs cannot be compared between providers because there is no standard method of calculation. You do not need trackers "in every area". Adding more of them will not increase your chances of a good outcome.

CheekyMikey

Bobajobbob said:

Quick update on this thread for those who may be interested in the pitfalls and hurdles of migrating ISAs and GIA from one provider to another.

I had initially intended to liquidate the portfolio in my ISA however I hadn't taken into account the fees charged by my current provider to do this. As with most of their fees this would have cost me 1%+. I have instead chosen to transfer everything "in specie" to the new provider however this complicated the process as my preferred ultimate destination was Vanguard and they will not take individual stocks. I am instead moving the whole portfolio to another provider when I can then liquidate the component parts at a fixed fee per trade. Once this is done I have the choice to reinvest  in simple tracking funds with this provider or migrate the ISA onward again to Vanguard. Because nothing in life is simple the interim platform charges a relatively high fee (0.40%) for holding funds in the ISA wrapper. Still cheaper than the original manager however higher than Vanguard.

On the GIA side there doesn't appear to be the same Fund charge as for the ISA wrapper so it should be easier to liquidate the portfolio and reinvest in a select few funds.

One step at a time. I have now instructed the transfer and will need to wait patiently to see if it happens smoothly. I am expecting that some of my original holdings may not be supported by the new platform but lets wait and see. 

Quick question for those in the know. Is there a limit on the number of ISA transfers that can be performed in a year? 

Thanks Bob, I’ve found this a very useful read as I face the same dilemma myself in finally wanting to move away from my IFA and the 10 funds all held in a Nucleus ISA wrapper. Like you I’ve realised that the fees I’m paying are way too much for what I think can be done equally effectively and much cheaper on AJ Bell with a few etfs. I think I’m still at least 10-15 years away from needing serious financial advice with things like gifting and IHT planning so can get that on an adhoc basis as needed. I note especially where you mention the cost of encashing your ISAs so instead transferring them in specie as I may also face that issue. Do you mind me asking which new provider you used as intermediary before going to Vanguard? Also, which Vanguard funds did you decide on in the end? I had ideas to create a portfolio similar to my old one with separate etfs for S&P500, global small cap and emerging markets, and Europe but now thinking of going mostly in to VG All World etf or an equivalent. Anyway, glad you started this thread, it’s helped a lot.

dunstonh

GeoffTF said:

dunstonh said:

Aminatidi said:

One reason.

Also a bit of personal psychology there where I'm trying to move towards passives and rightly or wrongly Vanguard not having 3000 active funds minimises the occasional urge to tinker

But Vanguard doesn't have the best or cheapest trackers in every area.  So, limiting yourself to just them could compromise the outcome.

Vanguard's trackers are as good as any. The cost of the platform will usually be more important than a small difference in the OCF. Transaction costs cannot be compared between providers because there is no standard method of calculation. You do not need trackers "in every area". Adding more of them will not increase your chances of a good outcome.

I never said you needed trackers in every area.   

However, Vanguard do have one of the largest range of trackers in non-core areas.   They are just not as low cost in core areas compared to other fund houses.

If charges are a driver behind the decision, as they are in this thread, then restricting yourself to Vanguard trackers only increases your charges.

Exodi

This thread was worth a read for Richard1212's comments alone.

Certainly a wealth managers wet dream.

Richard1212 said:

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

I can only imagine the suprise when you find out that most DIY investors are not 'finding the time to keep up to date with the minutiae' or 'the evolving state of companies' heatlh' (props to the wealth manager's sales ability though). Your face when you realise that people are just dropping the money in a single global/US tracker and forgetting about it (and almost inevitably achieving greater returns than you) will be priceless...

Richard1212 said:
Unless you employ a Wealth Manager with a Masters Degree in Economics and Financial Management from Cambridge and a long history in the City, I doubt you would understand their worth for anyone with a sizeable portfolio. I can only assume you do not have a sufficient portfolio.

And, as for letters after names, I value my own BA ( Hons) ---and I take great care in looking at the letters after the names of all people I employ, such as consultant physicians or surgeons whom I consult.

This was pretty cringe-inducing to read, I don't know how else to say it... you've been pretty condescending in this thread and answered a question the OP has explicitly stated they weren't asking.

If you want to carry on donating to your wealth managers wine collection, by all means crack on. But you don't need to try take down those discussing alternatives, especially as you made it clear early on you don't know what a passive index fund is. It's no secret that passive investing has outperformed active investment.

Richard1212 said:

I am glad that O/P cleared up the full meaning of his post and that it looks very much as though his questions have been answered in spite of his remaining "trepidation" about the transition. I think this thread has run its course and I wish Bob a happy transition and continuing good fortune.

For the record, the OP didn't need to 'clear up the full meaning of his post' - you were the only person who (willfully?) misunderstood it, requiring them to clarify specifically for you.

The thread has not run it's course, but your unwavering praise of WM's has, so you're free to dip out and leave others to continue the original discussion.

Cus

For me, the wealth manager and active funds versus the DIY and passive trackers debate is similar to Premium bonds.  
We know that (ignoring tax implications) you can get better rates in some current accounts than  in premium bonds on average but the chances of earning more is enticing.
Similar for me with wealth managers/active. We know that only 10% beat their benchmark index over 10 years, but there is a chance, where as with trackers you can't.
Maybe it's like gambling, only bet what you can afford to lose.

Bobajobbob

I have nothing against active funds personally and as you suggest it may be worth allocating a certain amount of capital into active funds alongside cheaper passive trackers for the opportunity of greater upside. What I am very clear on now however is that I don't need to pay a wealth manager to then invest in active funds (or any other fund for that matter) on my behalf.

I have paid far too much over the past decade for the odd jovial conversation, an annual catch up/survey, reams of unnecessary quarterly reports and performance that was at best in line with the benchmarks. This is all with plenty of hindsight, greater confidence and understanding of both the impact of fees and the performance of passive funds over time.

For those interested in the migration progress (or lack of it) 3 lines of individual stock have now made their way across 2 weeks after the initial transfer request went in. They were equity positions that I held with the wealth manager but fell outside their discretionary management.

The ISA and GIA accounts have been set up on the new platform and I have confirmation that the two firms are talking however the lion's share of investments have yet to move. I suspect that the new platform may not be able to support some of the more exotic stocks/funds available to the wealth manager but we will see. I haven't been through and checked every cusip/code as there isn't anything I can do about it. With a bit of luck there will be more observable progress in the next week or so.

CheekyMikey

Your experience so far Bob is swaying me towards paying the fees to simply cash in all my ISA funds, transfer the cash to a new provider ISA account and then purchasing my new etfs from scratch…the transfer process sounds longwinded and complex, albeit possibly cheaper, but I think I’d like the break to be as swift and easy as possible.