Escaping the avaricious paws of Interactive Investor – again

I opened my S&S ISA in March 2009, with Interactive Investor (III). I was used to their system, had used it for shares research in my dotcom boom and bust days, and their charges were OK. What I want in a ISA platform is pretty simple. No ongoing fees, and specifically no percentage fees. I am happy to pay for buying and selling shares, not to hold them.

Before the Retail Distribution Review (RDR) this was common. Platforms made their money on kickbacks from funds. I had been educated to this problem so I didn’t have any funds. Simples. The RDR was supposed to help the common people, but I took the shaft. I was perfectly happy to have my platform costs subsidised by all those fund holders. III introduced a £80 p.a. fee, apparently for our own good. From their guff at the time

We believe that customers should be engaged with their investments and actively manage their portfolios. To support this, we are introducing a quarterly fee of £20. If you already trade twice or more a quarter then this fee will make no difference to what you pay – it is effectively an advance payment of those first two trades for the quarter. If you are trading less than that then you will still have the right to your two trades in each quarter without any additional payment and hopefully feel encouraged to more actively manage your investments.

I’d go to IG Index if I wanted to trade, guys. That’s not me, so I jumped to TD Direct. Not without pain, indeed iii’s attempt to make money out of their 2012 switchers showed that they are moneygrabbing scum, which is something I had forgotten over the intervening five years.

Moving a S&S ISA is tedious and slow

It took ages to move that ISA, I moved it in stock format. Don’t know why we suddenly resurrect Latin and call this in specie, but that’s the convention. You have to watch it because some platforms charge a transfer out per line of stock. OTOH you get to pay the transaction charges twice if you convert to cash and rebuy. Some people say there’s the extra hazard of being out of the market, and I suppose since bull markets are longer than bear markets that’s probably the case for a randomly chosen time period.

I had five years with TD, where they generally did what I wanted them to do, and didn’t give me any trouble, other than starting to charge for holding funds. So I got rid of funds I’d acquired with TD and switched to using ETFs. That gets easier as the ISA becomes a bigger beast. I don’t really buy less than £2k of anything now, £12.50 out of that is 0.63%, on a par with stamp duty. So I take a 1% hit upfront. On the £500 transactions when I started out in 20091 that 12.50 was an ugly 2.5%, which is why everybody used funds in those days. Paying the 3% in kickbacks and fees, no doubt 😉

Having laid the beast of III to rest, the zombie comes after TD Direct and buys it up. Other TD Direct customers were more savvy than me and jumped early, I left it until III tell me they are bringing their ugly “annual fees but not if you trade lots” fee structure to TD Direct, and get caught in the crush for the exit. I initiated a transfer to iWeb end of October 2017. Every month after I chased them in their private message system and nothing happened.

They did sod all for ages, to the extent I had to ask iWeb for an extension in February as they were going to give up due to not response from III. Then III had the temerity to charge me the first £22.50 quarterly fee in January. In February I rang them up and invited them to shift their ass, give me my £22.50 back, and compensate me for the time and aggravation of pushing a process that should take six weeks (why so long?) but which was now three months and counting.

It seems the online comms are a waste of time with III. Ringing them up unblocked this, and in the end they paid me £75 compensation, after I requested they put this into their formal complaints process as a precursor for a financial ombudsman case. So I am now shot of III – again.

Is there a big picture I’m missing?

This was a lot more painful than last time because this HYP ISA has increased massively since 2012 because of the nine-year bull run. I stopped adding to this ISA after 2015, switching to Charles Stanley and a regular world ex-UK2 index saving, because I wanted to spend less time obsessing about shares. HBR has a point that

“My experience is what I agree to attend to”

attention management – more prehistoric stones and less screen-time perhaps…

Index investing with CS is pretty damn boring and lacklustre3 compared to that HYP, but then starting the HYP in early 2009 and quitting in 2015 is probably an easy win for excitement. It’s tough to see the opportunities at the moment, what with the house purchase I haven’t committed any of this year’s ISA contribution though I will make it by the end of March.

In the early days, fighting hard to be able to invest without carrying annual platform fees was a big deal and easier to do. I only have shares and ETFs in this account, and it’s a fair amount of money. III is privately held, and that’s bad in a financial institution IMO. Large privately held companies in the Anglosphere tend to be rapacious asset-strippers doing all sorts of stuff hidden from sight.

Not all privately held companies are bad – Aldi is privately held, but your risk dealing with Aldi stops when you get out of the store, or perhaps after you’ve eaten the food. Whereas in a financial institution it can look fine, until one day it isn’t. Sunlight is the best disinfectant4, so I don’t want privately held financial institutions in my life unless there’s a really good reason.

The other part of the big picture is – am I chiseling? III’s £90 p.a. is a bit much, but Hargreaves Lansdown would charge me £45 and no more to hold this ISA.

I use HL for my SIPP, but that SIPP is run down to less than 10% of the ISA, so it doesn’t increase my exposure much. HL’s website and service is a lot smoother than iii’s, and iWeb (which is part of Halifax) has a pretty grungy website. Having said that, iWeb were reasonably quick to fix the problem when in a fit of woolgathering I transferred an ISA cash contribution to the trading account rather than the ISA. Their website is not going to upset me too much as I don’t trade often. It’s a pity that unlike TD, they don’t let you set the book cost of the shares – since the transfer happened in February I look like the world’s worst investor with red ink everywhere on valuation. I have the information on book cost from a spreadsheet, and of course I downloaded absolutely everything from iii before I quit.

If I get crap from iWeb I will consider spending the £45 for a smoother ride from HL, even if I will be enriching ardent Brexiters (to the tune of £3m donated to vote leave). That is way less than a tenth of a percent of this ISA. Perhaps RDR damaged the ISA platform industry too much for those that just carry shares, and I should be prepared to pay more 😉

If I could believe they won’t arbitrarily jack this up5 I would go that way, but their charges on funds are still a significant drag on performance up to £1m, and I will never live long enough for this ISA to get up to that sort of level. A simple statement from HL

“We have decided the treatment of shares and funds is unfair to fund holders so me are harmonising our fee structure in the interetss of transparency and equivalence”

would set me off on the run again, and HL have a £25 per line of stock transfer charge 😦

 


  1. My first S&S ISA contribution in March 2009 was only £3600 so I could only buy seven different shares at the time, though another £3600 follwed that in April. I was a pussy like 75% of people and was playing it safe with a cash ISA for the other half, which was a dreadful misallocation of capital in 2009
  2. Ex-UK because I have enough UK in the HYP 
  3. It’s highly unfair to blame CS or index investing alone for the lacklustre performance – CS enabled the flexibility for me to borrow a lot of my ISA back this year to bridge a house purchase, and even after that hit the CS account is still ahead. I’ve only had two years of that, whereas the HYP ISA has had nine years starting from the low-water mark of a bear market. My indexing is probably poorer than everybody else’s too – I regularly index invest only when I can’t see fear in the markets 
  4. Louis Brandeis, Other People’s Money—and How Bankers Use It (1914) 
  5. There is a cautionary tale in this post from May 2014, where I got the impression HL capped their fund charges at £200, where now they top out when you have got to £2m, where you will be paying them £4,000 p.a., or 0.2%. If I were a funds guy I’d be paying a lot more than £45 with them. 
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61 thoughts on “Escaping the avaricious paws of Interactive Investor – again”

  1. re: moving from iweb to HL – why not just split it across the two?

    I’ve avoided II as I didn’t like the way the were owned either and also they somehow managed to annoy me even when I only had one of those ‘virtulal’ accounts where you can run a ‘test’ portfolio.

    Based on what I’ve heard, I’ve not regretted avoiding them..

    I’ve used iweb for years and quite like the spit and sawdust look and feel – but they’ve always been good when I’ve had queries/problems..

    I’m ex HL but want to get back in there, but with an ETF only portfolio

    I’m sad to hear how long it took to do an in specie transfer. One of my housing related strategies is to do a last-minute transfer from iweb to share centre to get the benefit of their flexible ISA offering, so I can take everything out and then put it all back in as a sort of bridging loan to myself that is CGT free. Maybe its not as feasible as I’d hoped. It would be horrible to see an ISA fall over the cliff-edge of the end of a financial year due to bad admin..

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    1. One of my housing related strategies is to do a last-minute transfer from iweb to share centre to get the benefit of their flexible ISA offering, so I can take everything out and then put it all back in as a sort of bridging loan to myself that is CGT free.

      Now that is a damn sight easier – I can speak from experience. Charles Stanley is my flex ISA provider, and I hold funds with them. I had cash in the HYP, and did an ISA to ISA transfer out of cash from about 10% of the HYP to CS. Then borrowed from CS. Easy, and much faster.

      Part of the problem here was that III effectively changed the whole of TD Direct’s fee structure, so they were swamped

      In your case I’d sell up (part?) of the donor ISA, do the cash transfer and have at it. Life is easier if the cash transfer doesn’t have contributions from the current ISA year. If it does then I believe you must transfer 100% of the current year contributions – ask them first if that applies ot you!

      The housing bridging loan trick only works if your house bridge completes within one ISA year, but it works a treat. I am dead chuffed, because the Ermine is dead to the finacial system because I don’t have a job – nobody but credit cards would lend me money 😉

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      1. yes – you’re right it doesn’t have to be in specie as I’d be cashing in anyway. Does mean that in a perfect world you’d be undertaking such a wheeze as soon after april as is feasible. If you were just getting going in Feb/Mar you’d have no chance?

        Will look into CS as a share centre alternative..

        In a perfect world iweb will make theirs flexible in the meantime then I don’t need to worry about anything

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      2. Well, I initiated a transfer of cash from TD Direct to CS by filling in the CS transfer request form on 19/10/16 and confirmation came through on the 7th Nov. That was setting things up, I didn’t move in 2016. TD had nothign to do with iii at the time 😉

        If you were just getting going in Feb/Mar you’d have no chance?

        IMO you’d be nuts to use an ISA for that sort of bridging loan then, because your money must leave the ISA and be back in there within the same tax year. Not within a year – within the same tax year. Unless you knew you were going to complete and be able to shift the money back into the ISA by the 5th April this year, don’t even think about it, otherwise you could end up busting the tax sheltering of all the cash you took out of the ISA. If you must start now, take a bridging loan until the 6th April, and then pay it off on the 6th, gives you a year to sell your old house. Bridging loans are dear, but they’re not that dear for a month!

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  2. I’ve just been through the pain of moving my ISA from HL to Vanguard so feel your annoyance. What should be a simple switch takes months with endless chasing required of the provider you’re leaving. After no response for 6 weeks from HL I finally rang and they said they were waiting for the closure fee to be paid. Why not just tell me this, Or even just take it from the cash available within the ISA? In a time where bank account switches are covered by many gaurantees and incentives is it not time for Share ISAs to have the same?

    I wish I’d had the inclination to escalate a complaint and push for compensation but frankly I’m glad to see the back of them and their endless stream of glossy promotional junk arriving on my doorstep.

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    1. I think initiating a formal complaint procedure as a precursor to the ombudsman concentrates the mind somewhat. And you may as well suggest they compensate you for your trouble – iii correctly made the call that £75 would shut me up as far as pushing it further 😉

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    2. That’s interesting to hear, I’m planning to move my VLS holding from HL to iWeb to cut my broker fees through quarterly fund purchases. I’ve got a small amount of my annual ISA allowance remaining and was going to leave it as cash in my HL account to cover a couple of months worth of fees and the exit fees. Reading about your experience makes me think I might be better off just investing my full allowance and arranging to pay my exit fees from outside my ISA allowance. What do you think?

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  3. Thanks for the head’s up Ermine. I was looking to consolidate some of my ISA holdings over different platforms, and had naively assumed it would flow as seamlessly as cash ISA transfers!

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    1. No, it’s been a world of hurt both times 😦 Cash moves over a bit faster, but I do my S&S transfers in specie to avoid transaction costs. It seems to be a dreadfully manual process and error prone. There’s the problem that the outgoing platform has a lot of work and no incentive to do it, and the incoming provider isn’t incentivised much to chase, though iWeb did each month and informed me of the lack of action each time.

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  4. I’ve never found a uk mass broker with good service, they all have failings. The difference being if you are ignored completely or if they politely tell you you are wrong or that they won’t do what you ask. Depending on your personality depends on which irritates you the most.

    I’ve made my peace with the fact their customer service is pants all round, and now go with the cheapest. And hope one day I’m rich enough to level up to premium services.

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  5. I hope iWeb will suit you. I find them absolutely fine for my purposes, and not bad on service quality at all. I do about half a dozen trades a year across 3 accounts. I have occasional fantasies about going over to the dark side (swapping Youinvest for HL, I think it might nearly be cheaper) but inertia gets the better of me….

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    1. They certainly handled my muppetry crediting to the wrong account with aplomb, and handled my request for an extension of the transfer timeout well, no complaints on their telephone service. If only the website didnt’ look so 1990s. But it works OK and the price is right. And no shady private company either!

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      1. IWeb will allow you to change the book cost if it wrong. Just contact them and tell them what it is, and they will change it. It worked for me.

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  6. If I remember rightly iWeb and Halifax will set you book cost if yo7 ask them to over the phone. Not as nice as the TD solution but you end up with the same result.

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    1. Good to know it’s possible, but it could be painful with over 20 lines of stock 😉 I have this data in my spreadsheet, but it is no of shares and cost totalised per year. So I need to munge that in Excel and insource this job. It’s the usual principle – don’t trust the Cloud for long-term data

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  7. It’s with everything. I just had a water meter installed because a friend living nearby told me his bill dropped to a 5th (he’s a single guy in a 4-bed house) of what it used to be when they can write themselves a check if you’re not metered. A quick flip through the last few bills showed that the water company I have no choice but to use, had simply escalated the bill by at least 5% annually irrespective of what you use; this business model is a dream. My automated bills stopped, but then a a few months later I got the usual annual escalator bill, from £550 up to >£600 now for a standard 3-bed semi, after the meter had been in place for 3 months; yet they had spelt out in the preparation circular for the meter installation, that this would not happen.

    A call to their query line confirmed it was a mistake, so I should just ignore that bill. A few days later, a new bill arrived in the old style, but now escalated to ~£700, for the coming year. They’d realised people could be incentivised to save water, if they have to pay for what they use, so the standing charges were now increased by ~500% and it explained that they’d take a reading soon, but in the meantime, whilst my actual usage became clear, I must keep paying them upfront at the high estimate. It’s so Orwellian you wonder if you’re mad, like why you can’t just read the meter and then pay just for what you fk’en use, which was supposed to be the whole point of metering usage. Is there any real protection for honest people any more?

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    1. Well, if the effect of initiating an official complaint with III got them to shift and cough up £75 for my trouble, you know what to do – kick off an official complaint! With water the process is summarised here. You probably don’t need to go through it all to the bitter end, just get yourself lifted out of the ‘computer sez no’ droids and AI systems…

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      1. Thanks, I know you’re right, but sometimes you can feel just so tired. I was already psyching myself up for the annual battle with my broadband provider to get off their unremitting price escalator, while still chasing up a rail company for an expensive ticket they agreed they’ll refund but haven’t for weeks, citing ‘delays’ in their bureaucracy; after cancelling the journey because a snowflake ( not me 🙂 ) was forecast to possibly be in the general region around that time.

        It’s got to the point where if I’m not involved in some dispute I worry I’ve forgotten to check something.

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    2. My water bills dropped by a quarter when I switched to a water meter. It’s been years now so I can’t remember now how long it took but it did take a while for the monthly amount to drop as you get them ‘estimated’ for a year. I too have noticed that the standing charge creeps up every year but I guess I’m just happy that compared to before the meter, my monthly charge is really low.

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  8. Trading platforms are in essence software providers with a custody account in between you and them. M&A creates unnecessary operational hassle for these outfits, methinks. Because: one or the other becomes a legacy system, which is then added to a menagerie of other legacy systems, that are often held together with the digital equivalent of superglue and sticky tape. Add to this the upheaval from the merger, clients moving out…
    Barriers of entry are rather low – it’s tech after all – so I guess the benefit is just from economies of scale, and if the acquiree has a piece of software you want.
    Private equity is not always bad, btw 😉 at least JC Flowers doesn’t have a bad reputation. I recon ii is a long term investment for him and he’s scaling it up to make the game worth the candle. We’ll see.

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    1. Didn’t realise that TD Direct was four times the size of iii. But having what’s now the second largest UK investing platform in the hands of private equity gives me the willies. Public listing didn’t stop MF Global, but I just don’t like private equity in charge of my money.

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      1. Why? I don’t think there’s any advantage in being a client of a listed entity vs privately held. If anything, PE funds don’t obsess over quarterly reports like public company investors do so there’s less short-termism there, and there’s no risk of an activist asshole moving in and starting to wreck havoc, demand divestitures, dividends, chainsaw cost saving initiatives… Listing rules don’t do much for client service, IMHO.
        The only point I may concede 🙂 is on the theoretical ability to inject capital in times of trouble. PE have only what their incestors have given them, and while the markets’ pockets are virtually bottomless. But rights issues, say in a financial crisis 😉 , are tricky too. So what if in theory there’s money out there, when all investors are running scared and buying gold? I wouldn’t be a minority investor in a private company, but a client ≠ minority shareholder.

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      2. Dunno if it worked because it’s me, but I used this page and favoured the HTML entity for the ≠ sign, so I changed it in your comment, hope it’s what you actually meant 😉

        I think it’s that sunlight thing, and too many stories of PE firms basically asset-stripping. Which is usually shit for emloyees, which as a consumer is no big deal. Trouble is your status as a customer with an ISA provider isn’t the same as you status as a customer of Tesco, ebcause it’s ongoing. It’s not even the same as with your bank, because the switching process is so grievous, and the issue of retaing the ISA status means you can’t pull all your money from a hole in the wall machien and wander up the road to put it in elsewhere.

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      3. Yes! Thanks 🙂
        That’s a fair point about asset stripping, but JC Flowers don’t have this reputation. They’re nerds as opposed to cowboys. I know a “reputation” isn’t evidence, and they are no charity, I’m sure. Then again, these village opinions aren’t often wrong, at least at a point in time.

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  9. I think you’re being unduly harsh on II. You’ll know from Monevator’s broker table that every institution has their own weird and wonderful charging model, and I don’t think it unreasonable to be expected to pay for a service, even if that ‘service’ is only holding funds – providing you with the platform costs the business, and they need to make money to survive.

    That said, what’s right for me, may not be for you, etc. If II/TD/whoever no longer suit, then it’s up to you to make the move, hassle though it is.

    With regard to the balls-up with the ISA transfer – no, it shouldn’t be happening, but II aren’t unique in this regard as evidenced by a comment above about HL->Vanguard, and I had my own hassles with Fielity->Halifax. What would be interesting is a table mapping average transfer times to/from all brokers!

    As an aside, your comment about being happy to pay a £12.50 fee on £2k, but not on £500, because it’s a larger %age, is irrational. £12.50 is £12.50, whatever the size of the transaction it’s being applied to 🙂

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    1. III needed some stick. They took three months to do a job they said would take six weeks, and only shifted their backsides under threat of escalation to the FOS.

      I don’t think it unreasonable to be expected to pay for a service, even if that ‘service’ is only holding funds

      As a general principle, though, I favour paying in one-off costs and hate subscriptions. I pay on buying and selling shares – fine. The percentage annual charge sucks too, is it any dearer to carry £10k worth spread across five funds as £1m spread across five? It’s fair enough that there’s choice as to pay transactions or PAYG, it’s the change that hacks me off, particularly as the direction the market seems to be going appears to be high static costs or percentage fees capped at increasingly high levels – in three years HL went from a cap of £200 p.a. on fees on OEIC holdings to £4,000.

      Not sure I understand the £12.50 is £12.50 though. After all, it takes four times as long to earn back the £12.50 from the future income stream or income+growth of £500 of an asset than from £2k of the same asset. The generally expected real return on shares is sadly too low to be able to carry too many passengers, be they high transaction fees or high platform fees 😉

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      1. Imagine you’re doing your usual Sunday afternoon thing of browsing cars at the local branch of your town’s biggest car dealer – you eventually agree to buy a brand new car (small, economical, of course!) at the advertised price of £10k (the salesman couldn’t offer even the tiniest of discounts). While the salesman goes off to print out the paperwork for you to sign, your wife, who has been browsing the web on her smart phone, advises that the exact same car is available in the branch a mile down the road for £12.50 less – would you travel to make the saving?

        After leaving the showroom you pop into the neighbouring supermarket for a bottle of your favourite gin, which retails at £25. As you’re about to put the bottle in your basket, your wife helpfully points out that the same gin is on offer in the branch down the road for £12.50 less – would you travel this time?

        Rationally, you should make the same decision in both cases, as the cash saving, the net effect on your wallet, is the same.

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  10. But wait, there’s more!

    I also guided my mum to transfer from TD/III to IG too. (She’s financially very solid but doesn’t like tech so I try to help with that side of things.)

    IG is weird in that you need to open a normal trading account, then add an ISA. The transfer bonus then gets paid into the trading account.

    My mum transferred just after I had started mine in November.
    – Again, it appeared to be going well, with the shares and money moving in a few weeks.
    – However, it all appeared in the normal trading account, not the ISA!
    – My mum managed to call IG and get them to magically assign it all into the ISA, without affecting the current year’s allowance. (Irritatingly, IG don’t track it properly, saying one has the full £20k even if some has already been used)
    – Of course, a couple of weeks later, £7.06 turns up in the trading account.
    – She emails IG and gets no response.
    – She calls them and gets them to magic it into the ISA without affecting the allowance (which she had already used in a normal cash ISA elsewhere.)
    – Another week passes and £28.28 appears in the trading account!
    – She emails and gets no response.
    – This time, she gets a numpty from IG on the phone who does a normal deposit, using the allowance.
    – She emails and gets no response.
    – I try to call them with her and didn’t get past the hold music.
    – We draft a massive email explaining exactly what has happened and someone eventually fixes it in the middle of February.

    Of course, she also fell foul of IG’s small print for the transfer reward. I haven’t asked her whether she maanged to close the TD/III account.

    Gaaaaah!

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  11. Hold on! I’m not done yet!

    I also suggested my brother move, again from TD/III to IG. My brother is not especially financially experienced (though has a sensible portfolio) and somehow always makes a mess of tech things, so again I help him out.

    – When setting up the IG normal Trading account in October, he forgets to uncheck some boxes so also applies for a spread betting account and a CFD account – both well beyond him.
    – I tell him to cancel the SB/CDF accounts and get on with the ISA. He emails them to cancel them and they need extra info for some reason.
    – It turns out he can’t open an ISA with the SB/CFD accounts pending cancellation.
    – For some reason it takes an age to do this so he doesn’t get the ISA open for a couple of weeks.
    – He makes the transfer request in late November IIRC – now everyone is jumping ship and the TD transfer tracking page is gone.
    – Nothing seems to happen for a while.
    – a bunch of shares appear in his ISA. Hooray! Now just to wait for the cash!
    – Nothing seems to happen for a while.
    – He rings TD/III (and gets through!) and they say “we appear not to have actioned this after the shareholdings were transferred”.
    – More weeks pass, though his transfer reward appears in is IG account. (Naturally, it is a lower amount than he was expecting as he didn’t see the small print of it being in specie – not that that would have mattered as TD/III haven’t actually transferred any cash.)
    – He checks again and notices that one shareholding (Personal Assets Trust, not exactly a weird one) hadn’t been transferred.
    – He phones and they say “Oh – there’s a note on the account to transfer the PNL holding. We can’t transfer the cash until then.”
    – He notices the £24 a quarter IG change and is not happy.
    – TDD/II have also charged him a quarterly fee and he is not happy.
    – It’s now mid March and he’s concerned that it might run into the next tax year, which I’m sure would bring in new complications. He’s also not comfortable adding any cash to his IG ISA while the mess is going on.
    – However, last week it appears to have all gone through.
    – With luck he’ll be able to close his TD/III account in lesss than the 3 months it took me!

    Ridiculous.

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    1. Wow. I never really considered IG, it just didn’t feel right to use my old spread betting stamping ground for real money, but I’m glad I dodnged their fee change, even if it was for irrational reasons.

      Recently had to re-open a SB account with them, bceause they had closed my old one for inactivity. Must remeber to leave £5 in the account if I leave it. Was trying to see if it’s a way of achieving gold exposure without cluttering up my ISA and without CGT issues. They are extremely high-touch for new accoutns – they even tried ot call my mobile several times. I don’t have my mobile switched on unless I am travelling and there’s a good reason, so fortunately that didn’t trouble me. So it isn’t that they can’t talk! Still haven’t worked out if they can help me with gold, I suspect not due to the cost of carry.

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  12. “…jumped early”, into the IG fees fire. Hohum, 2 months and counting for a transfer out. Sick of business models that seem to constructed around bait and switch e.g. insurance, financial services, energy, telecoms. Just pointless.

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    1. Oops. I’ll stop moaning – looks like I got off lightly 😉

      I think Ellen Ruppel Shell called out why we are getting all this bait and switch in her book about the high cost of discount culture, and it’s getting harder to stay ahead 😦

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  13. Almost in exactly the same boat Ermine. I moved from TD to HL sometime ago after they made a colossal mess-up with my sister’s funds. No apology forthcoming so I moved most of our money out. When iii took over I convinced Mrs YFG to move out as well to iWeb. It took about 3/4 months.

    Now you excuse iii somewhat for taking so long because it was ‘swamped’. I’m less sanguine – it was swamped because of the business decisions it made. If Tesco announced it was going to flog £100 bottles of wine for £5 then they’d be swamped too – and would need to take adequate measures (getting the heavies in!).

    The FCA rules say Stocks and Shares ISAs should be transferred within 30 days. But time and again pretty much all the industry flouts the rules. The FCA could sort this out almost immediately by using its powers to levy fines and other remedial measures but they turn a blind-eye.

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    1. > It took about 3/4 months.

      Looking at Greg’s experiences I’m starting to think of Mrs YFG and me as the lucky ones only suffering a delay of three times what it should have been 😉

      Now III is the second largest retail platform, they’re not going to be the place to go for customer service or low cost, wonder what they aim to have as their USP?

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  14. Oh hold on, wordpress seems to have eaten my first comment as I wasn’t logged in. Luckily I always copy any comment I make and dump it into notepad++ before posting… Here’s the original. I suppose not that interesting, but it’s cathartic…

    Despite being early to make the transfer request and it appearing to go well at first, my transfer experience was similarly terrible.
    – I liquidated my relatively small OEIC holdings in advance
    – I requested to transfer from TDD/III to IG on 5th November and got a confirmation the next day. So far so good!
    – The transfer completed on 22nd November. Hooray! All I thought I needed to do was close the account, which could be done by sending a letter, which I duly did.
    – Then a dividend appeared in my TD/III account. Gah! I managed to get them to send it on and it eventually got transferred.
    -I thought all was well, but when I checked back a few weeks later, more dividends appeared in my TD/III account. Gaaah!
    – This time they wouldn’t transfer the cash knocking around in the account as the transfer had ‘completed’.
    – In addition, they hadn’t moved a tiny holding of redemption shares (that were listed as zero value but would eventually get me a few pounds).
    – Of course, they had charged me the quarterly fee!
    – After waiting 45 minutes on hold trying to call them to sort it out, I gave up and messaged them telling them to give all the redemption share income to charity, refund the fee, wait for me to withdraw all cash normally, then close the account, which they managed to do.

    Naturally while in the middle of all that, IG cheerily
    – informed me that in some small print I never saw, the reward bonus was for the in specie part, so I got the lower amount. Bah!
    – sent me an email saying “we’re changing the fee structure to £24 a quarter but if you trade 3 times we wave it”.
    OH BELGIUM!

    (I’m now under the impression that spread bets count for this so I can escape by making a few trivial ones.)

    Like

    1. You poor devil, you have been through the wars with that. I’m starting to feel guilty about grousing about just a mere delay 😉

      Hat tip to you for picking up the IG spreadbet trade counting to the 3x waiver thought, that is pure genius!

      Like

  15. I am iWeb for ISA and HL for SIPP and unprotected trading too, and carefully allocate etfs and OEICs to keep my fees minimal. I do worry that IWeb aren’t making enough money and will change, as I always want 2 brokers for risk reduction

    I will need a flexible ISA sometime so I can fund a house purchase before selling the rundown house Mum will leave me in her will so I’m putting £19k in IF Isas to leave wiggle room when that sad day comes.

    Lots of people get excited about Vanguard ISAs and SIPPs even though they cost more than HL/IWeb in ETF land

    Like

    1. > putting £19k in IF Isas

      Nicely observed – thanks for that heads-up! I hadn’t realised that IF ISAs are also flexible ISAs in some cases so you can do the bridging loan shuffle by transferring cash from a S&S ISA into the IF one, and then back within the tax year. It had never occurred to me to look at other types of ISAs.

      There seems to be an insidious creeping drift towards ad valorem annual charges 😦 The RDR was an absolute bastard for me, since I didn’t really do funds.

      Like

      1. My IF ISA is not flexible, I’m leaving space for a £1k s&s one that is and can handle a huge transfer from IWeb

        Like

    2. > Lots of people get excited about Vanguard ISAs and SIPPs even though they cost more than HL/IWeb in ETF land

      I also don’t understand the hoopla about Vanguard’s ISA platform. It looks poor value to me. Once you have more than ~56k in your ISA you’d actually be better off with II even if you didn’t trade at all. If you were just a shares and ETF sort of guy the breakpoint against HL comes down to a bit over £100k, although I fear them changing that cap arbitrarily, it’s happened before with funds. Vanguard’s funds may be cheap, but their platform doesn’t seem to be particularly cheap at all.

      Like

  16. In October I started two transfers of shares from TD/ii – to Hargreaves Lansdown (HL) and another platform. The transfer to HL took 5 weeks … the other 4 months.
    Much as I hate to say it, HL really is much better at almost everything: a FTSE100 company with corresponding good governance, no debt, really great website and great service. It’s the cost I dislike. But as with all things in life – you usually get what you pay for.

    Like

    1. > It’s the cost I dislike.

      But therein lies the rub, particularly on a fund-based portfolio. At a typical long-run return of 5%, that .45% is getting on for a 10% income tax on earnings 😦

      Like

  17. I’m another one who jumped from TD to IG and due to IG’s platform fee will now have to move again. I admit that I didn’t really follow the significance of the above strategy to place spreadbets to reduce IG fees, so I think I’ll steer clear of that.

    I did think of moving my ETF-only ISA over to HL, but I currently have my sights set on Fidelity:
    – Fidelity have the same £45pa cap on ETF-only portfolios as HL
    – Fidelity have no transfer-out fees and HL do
    – HL only offer a really limited set of ETFs for regular investments: I’d much rather spend £1.50 for purchases instead of £12.50.

    Seems I was lucky with my TD to IG in-specie transfer because that only took about a month. Hopefully will be luck again, but the horror-stories above full me with dread…

    Like

  18. HL > Share Centre (SIPP) has taken 3 months on a promise of 6 weeks, plus, endless chasing by me to both parties via email and phone.
    Driving down costs is the right thing to do, and a little hassle is acceptable, but the amount of hassle and time is just poor service especially as the provider (exiting) charges a fee and the provider (incoming) is gaining new business.
    Interesting to see it appears to be a common problem between most providers, not specific to 1/2.
    It appears this issue needs sunlight shone on it, greater publicity, and some influence on the regulator to address with Providers?
    Any ideas on how we can all contribute to improving this in order that future transfers we choose to execute are less painful?
    R

    Like

    1. I was also surprised to see that this seems widespread. The official nominal spec for transfers seems to be within 30 working days so if/when I go through this again I will kick off a formal complaint as soon as the 30 days is up, which means any escalation isn’t delayed. The trouble seems to be mainly with the outgoing institution, which by definition has little to gain from expediting the transfer. Although the receiving provider initiates the transfer, the outgoing one has to prepare a statement of the holding for in specie transfers.

      Cash seems to transfer faster, and indeed I don’t really have any complaints where it is a simple ISA to ISA cash transfer. It makes me wonder whether a smarter way is to reduce greatly your holding in the outgoing institution and then transfer the rump then close. Doesn’t help much if it’s fixed fees you are trying to escape, nor if you are currently contributing to the old ISA, because you must transfer the current year in it’s entirety.

      Like

  19. I think the transfer of my wife’s AVC pension fund from Mercer to her AJ Bell SIPP has to take the biscuit. She initiated it in August 2017 and it STILL hasn’t completed!!! This is despite an 18 page (count em) declaration, questionnaire, consent form, declaration &etc.

    AND a letter of complaint to the Pensions obudsman that has been totally ignored.

    Like

  20. Thanks. The gf opened her s&s isa with Cavendish. With less than £10k auto buying vanguard LS monthly they were very competitive when we opened the account a year ago. You log in through the fidelity log in page and none of the received paperwork mentions Cavendish. Website is very good.

    Like

  21. A word of warning about Fidelity – they only allow full transfers out of ISA. Have been trying to transfer some/all of my assets from them since Feb – though in all fairness, most of the time was a cancelled transfer to Vanguard. Specifically: 1-2 weeks from start being informed by Vanguard that Fidelity said to them that they only do full transfers, and asked what I wanted to do, 1 week thinking about it and cancelling the transfer, and a final week deciding to open iWeb and transfer to them starting around March. Here 1-3 week were lost because i was mailed, in writing, that 2 funds couldn’t be transferred, and had to reply, in writing, that they should just sell them and transfer cash. Still waiting for the transfer to complete while Fidelity quietly charges me £20 a month…
    To be fair to Fidelity, I quite liked them as they were very transparent, professional, and they really hold a special place in my heart as the first, and previously only, broker I ever used. Before RDR they were “free”, post RDR… guess I too am largely on the wrong side of this great consumer initiative as someone that who does 1 trade a year when savings allowed, and was half in denial that my portfolio has now grown to something substantial after 10+ years of quietly saving.
    Also, not sure if other % providers do the same, but they sell shares within my ISA to cover their charge. I asked when RDR change was happening if I could pay them directly, or open another (non ISA) account where they could take the fee from as losing tax sheltered money/assets was annoying, but basically they said they didn’t offer the service at the time. May be worth double checking if this has changed since.

    Like

  22. Ermine, why don’t you move that ISA to X-O? Since it only contains ETFs and shares as you write it should be free on X-O. Or am I missing something?

    Like

    1. X-O would be another good one, but iweb was the first one I came across. Iweb and X-O seem to be the last men standing of the no annual fee guys, my crystal ball shows me that probably a fixed annual fee ISA provider is in my medium term future unless platforms can work out how to make money from no fee share holdings and just buy and sell charges.

      Like

  23. Well after a bunch of binge reading I am up to date. I thought you had vanished from the blog-o-sphere, never knew about your change from wordpress.org to wordpress.com. My Feedly account showed nothing after your Dec 21 post.
    I happened to click on the blog title and immediately got transferred here. Glad I did.

    Liked by 1 person

      1. To reset Feedly I simply searched your new blog address and got a new feed set up. I see all the posts now just as before. The key result is you are still blogging.

        Like

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