Transferring S&S ISA from Vanguard when it gets above ~£30k

FIREmenow

Hi All, I hope you are well.

My S&S ISA is getting to a point where a flat fee would be better than Vanguard's percentage fee.  I have just over £30k invested there from previous years.  I also have £16k of this year's allowance to put somewhere before 6 April, having already put £4k in a LISA.

I've been checking Monevator's broker comparison tables, and reading about the various switching/sign-up bonuses on offer at the moment and would be interested to hear where others have gone next after Vanguard and how it is working out?

I have been looking at iweb or ii for the transfer: 

- ii has £250 cashback for my pot size and would be £5/mth fee.  

- Even without the cashback ii beats the Vanguard platform fees on a pot of £40-50k and regular investing is free. 

-If I transfer Vanguard to ii and put the new money in, then I will quickly tip into the £12/mth fee, to avoid this I could also open an iweb ISA (for which the £100 intial fee is currently waived but trades are £5) and put the £16k for this year in there, with one or two trades to invest that money in index funds and then hold.

If I did this, then after 6 April I would probably set up free regular investing into ii for the 24/25 tax year, keeping under £50k until the cashback pays after 12 months.  Am I right in thinking that with the rule changes from 6 April, I will be able to switch to adding money to iweb instead of ii mid-year as ii approches £50k, effectively funding two S&S ISAs in one year (within ISA limits)?

Long-term, around Apr 2025 I could then transfer ii elsewhere (possibly into iweb), and open a new Vanguard S&S ISA and regularly invest the new allowance without dealing fees, transferring this out again when it gets too large.

Has anyone done similar to this or can see problems with this approach?  I'll end up just funding Vanguard for another year if I don't sort this out soon, so I really appreciate your thoughts.

GeoffTF

FIREmenow said:

Long-term, around Apr 2025 I could then transfer ii elsewhere (possibly into iweb), and open a new Vanguard S&S ISA and regularly invest the new allowance without dealing fees, transferring this out again when it gets too large.

Transfers out from Vanguard can take forever. Most people do not want to repeat the experience.

FIREmenow

True, I've heard that mentioned. I might change that plan with the benefit of hindsight!

dunstonh

If you are using cash transfers then do not underestimate the loss potential of being out to the market.  Whilst the faster players are about 7 days, the slower ones can be closer to a month.  If you use in-specie transfers then you avoid that issue but you are potentially preventing the ability to trade on that fund for up to a year.

e.g. the S&P500 was up 2% the other day. If you were out of market on £30k and there was a 2% movement upwards, the you have just lost £600.

However, a lot of Vanguard's trackers are expensive and lower cost alternatives exist elsewhere.  So, over time, using other fund houses at lower cost as well as the lower cost platform charge would breakeven.

Scrounger

GeoffTF said:

FIREmenow said:

Long-term, around Apr 2025 I could then transfer ii elsewhere (possibly into iweb), and open a new Vanguard S&S ISA and regularly invest the new allowance without dealing fees, transferring this out again when it gets too large.

Transfers out from Vanguard can take forever. Most people do not want to repeat the experience.

IME Vanguard ISA transfers (in & out) are generally OK, its Vanguard SIPP transfers (out) that are problematic and slow.

@FIREmenow I think your plan is good and well thought out.


Scrounger

Aminatidi

This is the dilemma I have.

I want to transfer from Vanguard to IWeb but the stories I hear make me think it isn't worth the hassle when I pay Vanguard £300/year on £200K.

Who to transfer to ultimately comes down to your buying amounts and pattern but assuming they work for you I've not seen a more compelling offer than IWeb for larger amounts.

boingy

FIREmenow said:

Hi All, I hope you are well.

My S&S ISA is getting to a point where a flat fee would be better than Vanguard's percentage fee.  I have just over £30k invested there from previous years.  I also have £16k of this year's allowance to put somewhere before 6 April, having already put £4k in a LISA.

I've been checking Monevator's broker comparison tables, and reading about the various switching/sign-up bonuses on offer at the moment and would be interested to hear where others have gone next after Vanguard and how it is working out?

I have been looking at iweb or ii for the transfer: 

- ii has £250 cashback for my pot size and would be £5/mth fee.  

- Even without the cashback ii beats the Vanguard platform fees on a pot of £40-50k and regular investing is free. 

-If I transfer Vanguard to ii and put the new money in, then I will quickly tip into the £12/mth fee, to avoid this I could also open an iweb ISA (for which the £100 intial fee is currently waived but trades are £5) and put the £16k for this year in there, with one or two trades to invest that money in index funds and then hold.

If I did this, then after 6 April I would probably set up free regular investing into ii for the 24/25 tax year, keeping under £50k until the cashback pays after 12 months.  Am I right in thinking that with the rule changes from 6 April, I will be able to switch to adding money to iweb instead of ii mid-year as ii approches £50k, effectively funding two S&S ISAs in one year (within ISA limits)?

Long-term, around Apr 2025 I could then transfer ii elsewhere (possibly into iweb), and open a new Vanguard S&S ISA and regularly invest the new allowance without dealing fees, transferring this out again when it gets too large.

Has anyone done similar to this or can see problems with this approach?  I'll end up just funding Vanguard for another year if I don't sort this out soon, so I really appreciate your thoughts.

Sounds like a decent plan as long as you can be bothered with the transfers, especially if you are doing them "in-specie".
iWeb suits me perfectly because I invest in one large lump sum and leave it "forever" so it only incurs one £5 trading fee. I would feel differently if I was investing a regular monthly amount because those fivers soon add up. 

If you do nothing else I would suggest opening an iWeb GIA before their offer expires in June. You can leave it unfunded and open an ISA at a future date without incurring the £100 fee.

cloud_dog

Aminatidi said:

This is the dilemma I have.

I want to transfer from Vanguard to IWeb but the stories I hear make me think it isn't worth the hassle when I pay Vanguard £300/year on £200K.

Who to transfer to ultimately comes down to your buying amounts and pattern but assuming they work for you I've not seen a more compelling offer than IWeb for larger amounts.

But if you are transferring in-specie and not looking to change investments, merely reduce costs, then does it matter how long it may take?  Obviously if you are an active investor then this may cause you a little inconvenience, but other than that, I'm unsure where the 'hassle' is TBH. 

seasickmick

GeoffTF said:

FIREmenow said:

Long-term, around Apr 2025 I could then transfer ii elsewhere (possibly into iweb), and open a new Vanguard S&S ISA and regularly invest the new allowance without dealing fees, transferring this out again when it gets too large.

Transfers out from Vanguard can take forever. Most people do not want to repeat the experience.

I opened an iWeb account last year (with the £100.00 cash back) and transferred out my Vanguard funds "in-specie" which took a almost a month to complete but nothing longer than I expected. I have repeated the exercise this year and requested a transfer (again "in-specie") on 07/02/24, the funds appeared in my iWeb account on 16/02/24. Given some of the comments made by other posters I was pleasantly suprised!

I pay dribs and drabs into my Vanguard ISA account through-out the year (no charge to buy) and transfer funds each year to iWeb where there is no platform charge for "holding".

SpeedSouth

Yep I've done 2 ISA in speccies from Vanguard to Iweb.  My account and missus.  Both happened in well under a month. Didn't do it at the end of a tax year if that makes a difference.

I'll build new ISAs up in Vanguard with the monthly contributions and swap out again no question.

FIREmenow

Thanks for your comments everyone!

My intention is to transfer in-specie, and I buy and hold. Should be able to use new money for any rebalancing.  So the Vanguard transfer time is less of an issue.

Regarding one point in my post;

Am I right in thinking that with the rule changes from 6 April, I will be able to switch to adding money to iweb instead of ii mid-year as ii approches £50k, effectively funding two S&S ISAs in one year (within ISA limits)?

Is this the case?  If so then I will put the new money from Apr '24 into ii stopping well before reaching £50k and higher fees, and then change to funding either the iweb or open a new Vanguard ISA mid-year, without transferring (the switching bonus requires 12 months in ii).

The new money I have for this year, will probably go to iWeb, and be invested in two funds (equity and bonds) at about a 90/10 split.  @dunstonh makes a good point on the cost of some Vanguard trackers.  How important is it to diversify trackers?  I have HSBC FTSE All-World Index Fund C and iShares Global Govt Bond in my LISA (89/11 split), My Vanguard is mostly in LS80, would a different global equities/bond traacker be advisable?  As many global trackers have huge overlap, is it just a case of holding trackers from diverse providers, rather than what is in them? I'm very much fire and forget, so don't want to get more complex than two funds in iWeb without good reason.

Thanks again for your thoughts.