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

Exodi

CheekyMikey said:

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.

Patience with these things is key. While transfers 'in specie' take longer, being out the market for weeks/months during the transition period can prove painful should there be a spike in the original investments in the interim.

If the OP is concerned about 'exotic' investments that the new provider may not allow, I'd personally consider changing up their portfolio before the transfer to one they know can be fully received in specie. For me, it's about minimizing time out of the market.

Bobajobbob

CheekyMikey said:

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.

It depends entirely on the fees. In my case i was looking at a % charge for quite a large portfolio as opposed to 15 quid per line item so it really is a no brainer to transfer over and then liquidate on the new platform. As mentioned by Exodi above it is also a question of controlling my time out of the market. By transferring in specie I can liquidate and then purchase new holdings at my leisure in a time frame that I control.

Bobajobbob

Exodi said:

CheekyMikey said:

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.

Patience with these things is key. While transfers 'in specie' take longer, being out the market for weeks/months during the transition period can prove painful should there be a spike in the original investments in the interim.

If the OP is concerned about 'exotic' investments that the new provider may not allow, I'd personally consider changing up their portfolio before the transfer to one they know can be fully received in specie. For me, it's about minimizing time out of the market.

Agreed, in addition to the costs I prefer to be in control of any time out of the market. When it comes to the exotics I'll make the decision once I know how much we are talking about. If its only a fraction of the portfolio then I can probably live with the risk. If more significant then as you say it would make sense to switch into a transferable security prior to completing the move.

Albermarle

Exodi said:

CheekyMikey said:

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.

Patience with these things is key. While transfers 'in specie' take longer, being out the market for weeks/months during the transition period can prove painful should there be a spike in the original investments in the interim.

If the OP is concerned about 'exotic' investments that the new provider may not allow, I'd personally consider changing up their portfolio before the transfer to one they know can be fully received in specie. For me, it's about minimizing time out of the market.

Although a cash transfer could take a few weeks from end to end, it is highly unlikely that you would be 'in cash' for much more than a week, if that.
However of course a lot can happen in a week, although lurches in the market downwards tend to be more severe than movements upwards, so maybe the odds would be on your side.

GeoffTF

dunstonh said:

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.

We agree that you do not need separate trackers in every area. (I did not doubt that.) The vast majority of Vanguard funds are aimed at speculators who believe that a particular market or sector will outperform. They offer managed funds too. That is at variance with the founder's principles. Sensible investors nonetheless profit from other investor's folly.

With Vanguard funds it is cheaper to buy an equity fund and a bond fund than it is a packaged fund. It is also cheaper to buy a developed world tracker and and an emerging markets tracker than it is an all world tracker.

Let's compare Vanguard's Developed World ETF tracker VEVE with the cheapest option Amundi Prime Global ETF tracker PRIW. VEVE has an OCF of 0.12%, whereas PRIW has an OCF of 0.05%.

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-developed-world-ucits-etf-usd-distributing/overview

https://www.justetf.com/uk/etf-profile.html?isin=LU2089238203#overview

VEVE tracks the FTSE Developed Index, whereas PRIW tracks the Solactive GBS Developed Markets Large & Mid Cap index. VEVE has a market capitalisation of $2.8 billion whereas PRIW has a market capitalisation of £178 million and it is a relatively new fund. PRIW is tiny by comparison, but Amundi has €2 trillion Assets Under Management so it is far from being small.

https://en.wikipedia.org/wiki/Amundi

PRIW has less liquidity and a larger spread, and will be more prone to price spikes in difficult market conditions. Nonetheless, Vanguard's pricing is looking uncompetitive here. Vanguard does have a history of cutting its charges, so perhaps that will change.

This is all very interesting, but my point was that even the large 0.07% price difference here will often be small compared with the difference between investment platform costs.

AltaNate

Bobajobbob said:

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.

The exact same situation I find myself in with pension and preparing to make the change. To be honest in the early days they helped me understand some aspects of investing and risk, pensions and most importantly salary sacrifice.

Keep us up to date with progress.

bundoran

GeoffTF said:

dunstonh said:

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.

The vast majority of Vanguard funds are aimed at speculators who believe that a particular market or sector will outperform. 

The vast majority of Vanguard funds are aimed at long term passive investors who want to invest in either the whole world, the developed world, or regions of the world in a proportion which they have chosen and are comfortable with for their own reasons; or people who wish to invest in a mixed asset fund like Lifestrategy.

To say that these passive funds and mixed asset funds - which make up the vast bulk of Vanguard's offering - are "aimed at speculators" is asinine.

GeoffTF

bundoran said:

GeoffTF said:

dunstonh said:

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.

The vast majority of Vanguard funds are aimed at speculators who believe that a particular market or sector will outperform. 

The vast majority of Vanguard funds are aimed at long term passive investors who want to invest in either the whole world, the developed world, or regions of the world in a proportion which they have chosen and are comfortable with for their own reasons; or people who wish to invest in a mixed asset fund like Lifestrategy.

To say that these passive funds and mixed asset funds - which make up the vast bulk of Vanguard's offering - are "aimed at speculators" is asinine.

Choosing "regions of the world in a proportion which they have chosen and are comfortable with for their own reasons" is speculation. That is not what Jack Bogle advocated. I have not said that Vanguard is wrong to offer those funds.

As for your last sentence, kindly quote me accurately and be polite.

bundoran

GeoffTF said:

bundoran said:

GeoffTF said:

dunstonh said:

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.

The vast majority of Vanguard funds are aimed at speculators who believe that a particular market or sector will outperform. 

The vast majority of Vanguard funds are aimed at long term passive investors who want to invest in either the whole world, the developed world, or regions of the world in a proportion which they have chosen and are comfortable with for their own reasons; or people who wish to invest in a mixed asset fund like Lifestrategy.

To say that these passive funds and mixed asset funds - which make up the vast bulk of Vanguard's offering - are "aimed at speculators" is asinine.

Choosing "regions of the world in a proportion which they have chosen and are comfortable with for their own reasons" is speculation. 

That is simply not true. And I did quote you accurately- as everyone else can see.

If choosing regions and their proportions was "speculation" then making any investment - which always involves choosing something to invest in - would be "speculation", which it isn't.

Your posting was patently asinine. Passive funds make up the bulk of Vanguard's offering, and they are clearly not vehicles which speculators would be interested in because they follow market returns and are designed to be held long term. That is not how speculators work.

bundoran

GeoffTF said:

dunstonh said:

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.

This is all very interesting, but my point was that even the large 0.07% price difference here will often be small compared with the difference between investment platform costs.

Also by any rational analysis a 0.07% difference in an ongoing charge is not "large", and the rest of your discursive posting wasn't "all very interesting" - in fact it offered nothing insightful at all - which is why I haven't even bothered to quote it. 😁