Reorganising my investments with HL

minimalising

Hi, Forum!

I've got a SIPP with Vanguard and a Stocks and Shares ISA with Hargreaves.

I'm quite happy with the SIPP but I want to get some opinions on the Stocks and Shares ISA.

1 - I know Hargreaves have bigger fees and I'm wondering if now is the time to move away.  But who to?  The thing about H&L is that I feel like they're quite 'safe' and I do like their website functionality.  Anyone got any ideas of somewhere better?  I don't want to put the ISA into Vanguard as I don't want to exceed 85K in the future.

2 - I'm in on a few funds and I've compared their performance over the last five years (this isn't how my stake in them has improved or indicative of how long I've been in some of these funds but rather the general fund performance figures).

I feel like I might be better off consolidating down to the best performing funds (while accounting for the fees).



3 - I've never sold or transferred funds.  Say I wanted to take four of these funds and transfer them into one of the others, what are the ramifications of that.  Would that process count as putting in new money towards my ISA limit this year?  Would there be a cost to it?  What's the best way to do it?

El_Torro

I'm not very familiar with your specific choice of funds, but I do have some comments:

Selling the worst performing funds and putting all your money into the best performing funds might not give the result you are expecting. Often funds that go through a rough patch improve in the next cycle, and vice versa.

HL are good, I use them myself. As you say though there are cheaper platforms out there, equally as safe as HL. I also use AJ Bell, which I'm happy with. There are cheaper platforms than AJ Bell too. 

If you sell funds within an ISA and then buy other funds (within that same ISA) this does not count as removing or adding money from your ISA. Your ISA allowance for the year remains untouched. If you transfer from one platform to another (keeping the money wrapped in an ISA at all times) this also doesn't count as using up your annual ISA allowance.

minimalising

Ta, for the reply.

In terms of the funds.  They're the ones I've ended up with but that table was me trying to figure out which one or two are best to consolidate into and really the table doesn't give many insights.  Artemis has done well each year compared to the rest but has slightly higher fees (is 0.59% even that much?).

That Vanguard index fund dropped the least in 21/22 and did well last year.  But also has the lowest fees being that it's an index fund.

I don't know.  It's always so hard to make these kind of decisions.

I know that HL have done bonuses if you transfer into them (but they don't have one right now I think).  I wonder if any of these other platforms do that.  That'd be a good incentive to switch out.

dunstonh

2 - I'm in on a few funds and I've compared their performance over the last five years (this isn't how my stake in them has improved or indicative of how long I've been in some of these funds but rather the general fund performance figures).
I feel like I might be better off consolidating down to the best performing funds (while accounting for the fees).

To be honest, the fund selection appears to be a bit of a mess.   i.e. no structure/strategy  that I cannot see.  (you may have one but its not immediately obvious what it is - it looks a bit random)

You shouldn't sell funds that you consider to be performing less into ones you consider are performing better.   The funds you hold have different risk levels.  So, you would need to look at the in context of their risk.   You would also need to look  at them in context with your chosen strategy (if one).    And you need to remember that different areas perform in different ways at different times. What is best in one period can be the worst in the next or vice versa.  Just look at US equity as a recent example. 

3 - I've never sold or transferred funds.  Say I wanted to take four of these funds and transfer them into one of the others, what are the ramifications of that.  Would that process count as putting in new money towards my ISA limit this year?  Would there be a cost to it?  What's the best way to do it?

No costs with the funds you have and no ISA allowance used.  Once the money is in the wrapper, you can make changes within the wrapper with no issues.   The ramifications are you are changing strategy/structure by changing the funds.  That may be a good thing if you don't have a strategy/structure but if you are doing it for the wrong reasons, it could make things worse.

Linton

minimalising said:

Hi, Forum!

I've got a SIPP with Vanguard and a Stocks and Shares ISA with Hargreaves.

I'm quite happy with the SIPP but I want to get some opinions on the Stocks and Shares ISA.

1 - I know Hargreaves have bigger fees and I'm wondering if now is the time to move away.  But who to?  The thing about H&L is that I feel like they're quite 'safe' and I do like their website functionality.  Anyone got any ideas of somewhere better?  I don't want to put the ISA into Vanguard as I don't want to exceed 85K in the future.

2 - I'm in on a few funds and I've compared their performance over the last five years (this isn't how my stake in them has improved or indicative of how long I've been in some of these funds but rather the general fund performance figures).

I feel like I might be better off consolidating down to the best performing funds (while accounting for the fees).



3 - I've never sold or transferred funds.  Say I wanted to take four of these funds and transfer them into one of the others, what are the ramifications of that.  Would that process count as putting in new money towards my ISA limit this year?  Would there be a cost to it?  What's the best way to do it?

In my view you are taking too much interest in the detailed performance.  Most funds perform according to what they invest in.  Managers dont generally do investment gymnastics to add an extra %.  So provided that overall you have a well diverisifed. allocation to asset types, geographies, sectors, sizes,  etc that satisfies you, you can just let your investments do whatever it is they do. In the long run I believe all such portfolios will perform much the same.  Even if not, you cannot predict which will do better.

It is perhaps symptomatic that your table simply shows charges and annual performance.  The effect of the first is marginal, certainly in year by year results, and the second is highly variable.  What your table does not show is % allocation which I believe is far more important.

As to which platform...

All mainstreram platforms a very similar in practice, you can normally do whatever you want to do without too much effort.  The key factor determining the cost is the size of your portfolio.  If you have a small portfolio, say <£100K then you should look at  platforms that charge as a % of money invested.  WIth much larger portfolios the fixed price ones are much more attractive.  I use AJBell, BestInvest and II.  The majority are with II.

To answer your specific questions..

1) "Better" depends more on you than the characteristucs of the platform.  If you feel happy with HL, why change? Vanguard thas the disadvantage that it only sells Vanguard funds.  HL will provide almost anything you could reasonably want. I dont understand the significance of £85K in your choice.

2) You should try to avoid holding multiple funds that invest in much the same underlying shares.  There should be a specific purpose for holding each fund. Consolidating your money into best performing funds is a bad idea.  The reason is that the best performing funds in the market will be those that are least diversified and just happen to hold those parts of the market that performed best last year say.  There is no guarantee that those areas will perform best next year.  In fact there is a general tendancy in the reverse direction.

3) Transferring between ISAs is possible but can be a hassle and may not be as quick as you would like.  So I would see it as a one-off activity.  Not something to do every few months.  Transfers from one ISA to another do not count as a new investment.

minimalising

dunstonh said:

2 - I'm in on a few funds and I've compared their performance over the last five years (this isn't how my stake in them has improved or indicative of how long I've been in some of these funds but rather the general fund performance figures).
I feel like I might be better off consolidating down to the best performing funds (while accounting for the fees).

To be honest, the fund selection appears to be a bit of a mess.   i.e. no structure/strategy  that I cannot see.  (you may have one but its not immediately obvious what it is - it looks a bit random)

You shouldn't sell funds that you consider to be performing less into ones you consider are performing better.   The funds you hold have different risk levels.  So, you would need to look at the in context of their risk.   You would also need to look  at them in context with your chosen strategy (if one).    And you need to remember that different areas perform in different ways at different times. What is best in one period can be the worst in the next or vice versa.  Just look at US equity as a recent example. 

3 - I've never sold or transferred funds.  Say I wanted to take four of these funds and transfer them into one of the others, what are the ramifications of that.  Would that process count as putting in new money towards my ISA limit this year?  Would there be a cost to it?  What's the best way to do it?

No costs with the funds you have and no ISA allowance used.  Once the money is in the wrapper, you can make changes within the wrapper with no issues.   The ramifications are you are changing strategy/structure by changing the funds.  That may be a good thing if you don't have a strategy/structure but if you are doing it for the wrong reasons, it could make things worse.

Thanks for the reply, Dunstonh.  

I picked some of the funds based on a bit of reading when I started six years ago.  The Rathbone one was a recommendation from a mate who works there.  The HL Global was because they offered me a cheapish buy in when it launched.  So yeah no real rhyme or reason.  That's why I want to simplify it all but that's at odds with what you said.

"You shouldn't sell funds that you consider to be performing less into ones you consider are performing better."

I mean I want to get rid of some because it's a mess so why not the least performant ones?

I know a lot of old school money guys, your Dave Ramsey types, say to just put it in global index funds (rather than managed funds) and looking at my table, that wouldn't have been a bad shout over the last five years. But I don't know what's best. 

Like you say, there's no real strategy apart from be diversified a bit and just hope to make enough money over the next few years to give me a headstart on retirement.  But it's all this talk of 'managed funds don't tend to beat index funds' that's making me think I can save some money on fees and just optimise a bit.

minimalising

Linton said:

1) "Better" depends more on you than the characteristucs of the platform.  If you feel happy with HL, why change? Vanguard thas the disadvantage that it only sells Vanguard funds.  HL will provide almost anything you could reasonably want. I dont understand the significance of £85K in your choice.

2) You should try to avoid holding multiple funds that invest in much the same underlying shares.  There should be a specific purpose for holding each fund. Consolidating your money into best performing funds is a bad idea.  The reason is that the best performing funds in the market will be those that are least diversified and just happen to hold those parts of the market that performed best last year say.  There is no guarantee that those areas will perform best next year.  In fact there is a general tendancy in the reverse direction.

3) Transferring between ISAs is possible but can be a hassle and may not be as quick as you would like.  So I would see it as a one-off activity.  Not something to do every few months.  Transfers from one ISA to another do not count as a new investment.

Thanks for the reply.

1 - the question is really about fees.  I don't know if 0.59% is a lot or not.  Now that I've got a few quid in there, I know fees will start to have more of an effect.  Re: £85k.  I'm thinking that if I've got more than that in one platform, I'd not be protected by FCSA for amounts over that.  That's the only rationale.

2.  Yeah there's definitely some crossover in this lot.  Re the rest of this answer, one of my funds (the Vanguard one) is a global index tracker which I'd assume means it's very well diversified.  Or am I getting that wrong?

3.  Yep, if I was going to simplify my portfolio with transfers, I'd try to do it all in one go.


I really don't know what I'm doing beyond just making sure I invest every month and so far it's doing okay.  I'm about 6 years in at this point.  I just don't feel as optimised as I'd like.  Still not really sure what to do.  I know people can't give actual financial advise but on a general level I don't know if this is too many funds or too high fees or whatever.  

dunstonh

 The HL Global was because they offered me a cheapish buy in when it launched. 

No they didn't.    HL is well known for marketing fund launches as if you are getting a cheaper price by buying a launch.  They were frequently criticised on this site by the regulars when the subject came up.   It was clever marketing and you fell for it.

I mean I want to get rid of some because it's a mess so why not the least performant ones?

I was saw someone who was boasting about his investment decisions on how he pulled out of a provider that wasn't doing well and put it into a different provider and it was so much better.  He was self congratulating himself thinking he was clever.     It turned out that he was in a FTSE all share tracker previously and had selected a FTSE all share tracker again but the new provider was more expensive than the old one.    He had actually made his situation worse.     The difference was that the first one was during a negative period (dot.com period) and the second period was during a positive period (the growth that followed).

To understand performance you need to understand what is going on with the underlying assets.     For example, Gilts had their worst performance in over 100 years between Nov 2021 and October 2023.   They have been much better since.   US equities were dire in the first part of this millennium but have been the best place to be in this cycle.

The FTSE250 tracker was a great place to be until Brexit.  Since then its been a basket case.

Negative could just be part of a cycle that is going to bounce in the next.    

El_Torro

if you're concerned about fund fees then one of the cheapest things you can do is go all in on global trackers or multi asset funds. You're talking a fund fee of about 0.25% or less if you do this. Most of us on this forum (myself included) are not big fans of managed funds (excluding multi asset funds, which it could be argued are managed funds). I do use a managed fund for my global smaller companies fund but most of my investments are in multi asset funds. 

Apart from being cheap global trackers (or multi asset funds) are well diversified and will change as the global market changes. So for example if the US starts losing value compared to other markets a global tracker will rebalance accordingly. 

As you say we can't give advice but my suggestion, assuming you don't really know why you bought this selection of funds in the first place, is to go this way. You don't have to use Vanguard, there are other providers too. This article gives you some idea of the different choices available: https://monevator.com/passive-fund-of-funds-the-rivals/

If you go this way the most important decision to make is how many bonds you want. Bonds will reduce the volatility but also impact the long term gains. To give you an idea my ISAs have about 40% bonds and my pensions roughly 20%. The idea being that I can dip into my ISAs whenever I want and I value stability at the expense of long term growth. 

Exodi

minimalising said:

Re: £85k.  I'm thinking that if I've got more than that in one platform, I'd not be protected by FCSA for amounts over that.  That's the only rationale.

Since I don't believe it's been directly addressed - the FSCS is not particularly relevant in this context.

You own the investments in your name (though the provider holds them for you). Even if a company like HL or Vanguard or whoever did go belly up, it would just be an (inevitably long) process of working with the administrator in transferring the investments they hold for you to another provider. They certainly can't just sell your investments to pay creditors.

Don't let the £85k FSCS limit influence your investment decisions - you could hold your SIPP and ISA on the same platform, as many of us do (and you don't need to open multiple SIPP's or ISA's each time an account hits £85k, most will be sitting on six figures in their SIPP's).

For full disclosure, there is a small caveat that if funds have been 'mismanaged' (e.g. FTX) then the FSCS would step in and compensate as the money has effectively been stolen. This is of course a crime and people would go to prison (and would be surprising for a big audited fund house).

minimalising

dunstonh said:

 The HL Global was because they offered me a cheapish buy in when it launched. 

No they didn't.    HL is well known for marketing fund launches as if you are getting a cheaper price by buying a launch.  They were frequently criticised on this site by the regulars when the subject came up.   It was clever marketing and you fell for it.

I mean I want to get rid of some because it's a mess so why not the least performant ones?

I was saw someone who was boasting about his investment decisions on how he pulled out of a provider that wasn't doing well and put it into a different provider and it was so much better.  He was self congratulating himself thinking he was clever.     It turned out that he was in a FTSE all share tracker previously and had selected a FTSE all share tracker again but the new provider was more expensive than the old one.    He had actually made his situation worse.     The difference was that the first one was during a negative period (dot.com period) and the second period was during a positive period (the growth that followed).

To understand performance you need to understand what is going on with the underlying assets.     For example, Gilts had their worst performance in over 100 years between Nov 2021 and October 2023.   They have been much better since.   US equities were dire in the first part of this millennium but have been the best place to be in this cycle.

The FTSE250 tracker was a great place to be until Brexit.  Since then its been a basket case.

Negative could just be part of a cycle that is going to bounce in the next.    

Re:  HL Global.  Ouch!  To be honest, it wasn't so much the marketing that got me but rather the idea that if HL run the fund they'd presumably want to make a good job of it.  So far I think it's done okay but I don't know.  That's why I'm on here asking the questions I'm asking I guess.

Re:  the rest of it.  That's why I've put the loss/profit % for each year on there.  Trying to get a bit of basic insight.  It's just not helped much which is why I put the table on here to see if anyone's got a better view.  

For the amounts I have in my ISA and SIPP I don't know if it's worth just contacting an IFA.  I'm just looking for some tips on optimising a little.