PEP's and ISA's

md58

My husband and I both have a number of small PEP's and ISA's, usually using thetax free threshhold each year. Our financial adviser is saying its getting 'too messy' to keep a handle on everything and suggests we use the tax free wrapper and move it all into one investment. He's suggesting we join 'Transact' and move all investments into companies they use. Can anyone give an opinion on Trasact and the idea of moving all our PEP's and ISA's into one company? Thanks

Aegis

I've not heard of transact personally, which may or may not be a good thing given how many businesses we hear of here in both good and bad ways!

Is your financial adviser independent? If he is, then you're more likely to be ok than if he's a tied adviser. If you want a second opinion, then https://www.unbiased.co.uk is the ideal place to find an IFA near you for one.

md58

Thank you for your reply. Our financial adviser is independent. I will have a look at the web address you suggest. We are both very confused the cost of joining Transact and the commission due to the FA is an awful lot of money and I'm not sure what advantages there are is transferring everything just because he thinks it's too messy!

Aegis

If you could run through a few of your providers at the moment, that would be good, and if you could say what he's planning on taking as commission for the transfer, that might also help.

I understand that this data might be a little sensitive, but if you could provide a little more data it might be a bit easier to see what your benefits of transferring would actually be.

jem16

A bit of information on the Transact platform here. Although the main focus in this thread is pensions I'd imagine that it is basically the same.

http://forums.moneysavingexpert.com/showthread.html?t=897879&highlight=transact

Aegis

Reading through that, I can see the point if you have a huge pension pot and want to consolidate it all in to one place, but unless the PEPs and ISAs are currently in need of a lot of servicing, I'm not really seeing why the OP should transfer across at a cost to herself.

dunstonh

As the thread linked gives info on Transact I wont repeat it.

I like the idea of transact but I dont like the charges. That doesnt mean it is necessarily expensive as there are more expensive options and if you have a large portfolio or have linked portfolios (you can use the combined values of family members portfolios with transact to get discounts) which total a large value, the discounts can actually make it very good value. That is the real transact target market. Also, if you want a Wrap with unlimited investment options all in one place for administration and online access then it does the job very well.

However, if you are only going to be using unit trusts/oeics/sicavs and your portfolio is not in the hundreds of thousands of pounds range then you are better off with a fund supermarket as you dont have the extra layer of charges being made for providing all those extra services. If you utilise the features and options then its money well spent. if you dont, then its money wasted.

IFAs are different. It is one term that covers many different business models. Some IFAs have back office software that integrates with many fund supermarkets and insurers and can provide the basic features of a wrap (such as portfolio valuations, portfolio reports etc). The cost is then absorbed by the IFA for that software (which isnt cheap btw). Other IFAs wont run hardly any back office software but use providers/platforms to do the admin. In the case of transact, the consumer directly pays for the cost of doing that.

I would suggest the OP goes back to the IFA and suggets that the wrap service is an unnecessary cost (unless the thought of all those services appeals to you) and that you feel a fund supermarket is the better option. Such as cofunds, fidelity or selestia. Dont let the comments put you off consolidation. Fund supermarkets are one of the best innovations in investing over the last decade. They are also typically cheaper than buying direct from the fund house so its a bit of a no brainer to use them.