Moving money from an ISA to another ISA
Discussion
Chaps,
Simple one. Mrs zcacogp and I have some ISA's, with HSBC. They are performing badly.
We have some investments in a portfolio run by Towry. They are doing OK. We are thinking of moving the money from the HSBC ISA's into the Towry investments, where they can be treadeg as ISA's, but have to be transferred as ISA's. I don't know what this involves, but Towry want to charge around £230 (plus VAT) to do this.
I have spoken with HSBC who confirm that it is something the new ISA provider will need to do (i.e. I can't do it myself), but they seemed to imply that it was a simple transaction, and that it would be free in most cases. They (very properly) refused to comment on the proposed charges any other ISA provider would make, but I came away with the distinct impression that I was about to be fleeced.
I know little about the process, but is nearly £300 to transfer a couple of ISA's over steep? What sort of sum would be more reasonable? (For reference, there is about £17000 in the ISA's.)
Oli.
Simple one. Mrs zcacogp and I have some ISA's, with HSBC. They are performing badly.
We have some investments in a portfolio run by Towry. They are doing OK. We are thinking of moving the money from the HSBC ISA's into the Towry investments, where they can be treadeg as ISA's, but have to be transferred as ISA's. I don't know what this involves, but Towry want to charge around £230 (plus VAT) to do this.
I have spoken with HSBC who confirm that it is something the new ISA provider will need to do (i.e. I can't do it myself), but they seemed to imply that it was a simple transaction, and that it would be free in most cases. They (very properly) refused to comment on the proposed charges any other ISA provider would make, but I came away with the distinct impression that I was about to be fleeced.
I know little about the process, but is nearly £300 to transfer a couple of ISA's over steep? What sort of sum would be more reasonable? (For reference, there is about £17000 in the ISA's.)
Oli.
Are there one or two ISAs? Your name and wife's name? Are they invested in direct shares or collective investments e.g. Unit Trusts etc?
Does HSBC charge dealing commissions or are they managed on a "fee only" basis? Ditto Towry?
£300 seems a little steep so ask about having the transfer made "in specie". This means transferring the investments to Towry without selling them. Normally there is a notional charge for this exercise eg. £30 per line of stock which can save money compared to dealing commissions on top.
Bear in mind that after the "in specie" transfer, Towry would then have to sell the investments and reinvest in your preferred alternatives so that would give rise to additional charges.
Check the small print for charges. Management fees or and/or dealing commissions? Then you will be able to work out the most economical way to transfer your plans.
HTH.
JB
Does HSBC charge dealing commissions or are they managed on a "fee only" basis? Ditto Towry?
£300 seems a little steep so ask about having the transfer made "in specie". This means transferring the investments to Towry without selling them. Normally there is a notional charge for this exercise eg. £30 per line of stock which can save money compared to dealing commissions on top.
Bear in mind that after the "in specie" transfer, Towry would then have to sell the investments and reinvest in your preferred alternatives so that would give rise to additional charges.
Check the small print for charges. Management fees or and/or dealing commissions? Then you will be able to work out the most economical way to transfer your plans.
HTH.
JB
zcacogp said:
Chaps,
Simple one. Mrs zcacogp and I have some ISA's, with HSBC. They are performing badly.
We have some investments in a portfolio run by Towry. They are doing OK. We are thinking of moving the money from the HSBC ISA's into the Towry investments, where they can be treadeg as ISA's, but have to be transferred as ISA's. I don't know what this involves, but Towry want to charge around £230 (plus VAT) to do this.
I have spoken with HSBC who confirm that it is something the new ISA provider will need to do (i.e. I can't do it myself), but they seemed to imply that it was a simple transaction, and that it would be free in most cases. They (very properly) refused to comment on the proposed charges any other ISA provider would make, but I came away with the distinct impression that I was about to be fleeced.
I know little about the process, but is nearly £300 to transfer a couple of ISA's over steep? What sort of sum would be more reasonable? (For reference, there is about £17000 in the ISA's.)
Oli.
Can you not just switch the funds held within your HSBC ISA rather than transfer to a new provider? It's free to switch funds within HSBC S&S ISAs...Simple one. Mrs zcacogp and I have some ISA's, with HSBC. They are performing badly.
We have some investments in a portfolio run by Towry. They are doing OK. We are thinking of moving the money from the HSBC ISA's into the Towry investments, where they can be treadeg as ISA's, but have to be transferred as ISA's. I don't know what this involves, but Towry want to charge around £230 (plus VAT) to do this.
I have spoken with HSBC who confirm that it is something the new ISA provider will need to do (i.e. I can't do it myself), but they seemed to imply that it was a simple transaction, and that it would be free in most cases. They (very properly) refused to comment on the proposed charges any other ISA provider would make, but I came away with the distinct impression that I was about to be fleeced.
I know little about the process, but is nearly £300 to transfer a couple of ISA's over steep? What sort of sum would be more reasonable? (For reference, there is about £17000 in the ISA's.)
Oli.
The £230+vat is most likely an initial charge based on the value transferred rather than a specific 'transfer fee'. The transfer itself involves about 2 or 3 letters and a cheque being posted so as HSBC say it is indeed a simple process.
With regards to transferring 'in specie', quite often this isn't possible if the new investment manager's platform doesn't support the existing funds held. Investment managers always prefer transfers in cash as it allows them to sell their own or preferred funds.
CHaps,
Thanks for the replies. I am sure they are very helpful, but I'm slightly embarassed to admit that I'm not sure I understand them!
The price was for two ISA's, one in my name and one in my wife's name. They are cash ISA's, and work like most cash ISA's I have had dealings with; you pay money into them up to a certain amount each year, and you get statements showing how much they are worth. Very like a savings account, but tax-free.
I'm not sure that I understand how an 'in specie' transfer would then work. We have money invested with Towry, but I understand that this is invested in funds rather than in cash. Does this mean that the 'in specie' process wouldn't work?
Cannedheat, the charge is (apparently) an estimate based on the time it is likely to take to do the transfer. Towry would then take their usual 1% (cost of moving any money to a Towry investment) and it would be managed as per everything else. So the nearly-£300 would actually become £470. (£300 + 1% of £17,000).
As before, is this a normal arrangement, or are we being fleeced?
Oli.
Thanks for the replies. I am sure they are very helpful, but I'm slightly embarassed to admit that I'm not sure I understand them!
The price was for two ISA's, one in my name and one in my wife's name. They are cash ISA's, and work like most cash ISA's I have had dealings with; you pay money into them up to a certain amount each year, and you get statements showing how much they are worth. Very like a savings account, but tax-free.
I'm not sure that I understand how an 'in specie' transfer would then work. We have money invested with Towry, but I understand that this is invested in funds rather than in cash. Does this mean that the 'in specie' process wouldn't work?
Cannedheat, the charge is (apparently) an estimate based on the time it is likely to take to do the transfer. Towry would then take their usual 1% (cost of moving any money to a Towry investment) and it would be managed as per everything else. So the nearly-£300 would actually become £470. (£300 + 1% of £17,000).
As before, is this a normal arrangement, or are we being fleeced?
Oli.
zcacogp said:
CHaps,
Thanks for the replies. I am sure they are very helpful, but I'm slightly embarassed to admit that I'm not sure I understand them!
The price was for two ISA's, one in my name and one in my wife's name. They are cash ISA's, and work like most cash ISA's I have had dealings with; you pay money into them up to a certain amount each year, and you get statements showing how much they are worth. Very like a savings account, but tax-free.
I'm not sure that I understand how an 'in specie' transfer would then work. We have money invested with Towry, but I understand that this is invested in funds rather than in cash. Does this mean that the 'in specie' process wouldn't work?
Cannedheat, the charge is (apparently) an estimate based on the time it is likely to take to do the transfer. Towry would then take their usual 1% (cost of moving any money to a Towry investment) and it would be managed as per everything else. So the nearly-£300 would actually become £470. (£300 + 1% of £17,000).
As before, is this a normal arrangement, or are we being fleeced?
Oli.
Ahh yes, 'in specie' wouldn't apply in your case - generally when a S&S ISA is transferred from one provider to another, the shares within the account are sold and the monies sent as cash. An 'in specie' transfer means that the shares are kept as shares and just re-registered to the new provider's nominee. None of this applies in your case as you're looking to transfer Cash ISA's.Thanks for the replies. I am sure they are very helpful, but I'm slightly embarassed to admit that I'm not sure I understand them!
The price was for two ISA's, one in my name and one in my wife's name. They are cash ISA's, and work like most cash ISA's I have had dealings with; you pay money into them up to a certain amount each year, and you get statements showing how much they are worth. Very like a savings account, but tax-free.
I'm not sure that I understand how an 'in specie' transfer would then work. We have money invested with Towry, but I understand that this is invested in funds rather than in cash. Does this mean that the 'in specie' process wouldn't work?
Cannedheat, the charge is (apparently) an estimate based on the time it is likely to take to do the transfer. Towry would then take their usual 1% (cost of moving any money to a Towry investment) and it would be managed as per everything else. So the nearly-£300 would actually become £470. (£300 + 1% of £17,000).
As before, is this a normal arrangement, or are we being fleeced?
Oli.
With regards to the fees - I'm surprised that they're charging a 'transfer fee' and then the initial charges for the funds on top.
I work for the retail investment division of a very very large high street bank - for new investments involving a Cash ISA transfer we charge between 0% - 4% but this is based purely on the initial charge of the fund being invested into and the 'sale channel' used - the actual transfer is free.
ISA transfers are pretty simple processes, literally a couple of letters going back and forth and then a cheque being sent. Certainly shouldn't cost £300.
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