Messy investments - can I pay someone to give them a spring clean?

[lizbubb]

My investment persona has a split personality.

On one side is investments I have made myself - rainy day cash, pensions, holdings in 4 relatively diversified funds and a bit of gold. I know what is in there and why.

On the other, a portfolio of shares and funds I inherited 20 years ago. Lots of small holdings with an income bias. I do basically nothing with it other than cash dividends (when I make it to the bank) and include it in the tax return each year. Any time there is a corporate action I just accept the default.

For years I have been wanting to streamline this zombie, consolidate and gradually move it under an ISA wrapper. Every now and then I make a start, then get tangled up in some part of the process and it all stalls again. As an extra layer of complication, I work in financial services so I have to get same-day permission before any share trades.

What I really want is to pay someone a one-off fee to untangle it and set out a set of actions I can follow to get it sorted. I know an IFA would advise on new investments, but (1) not sure if they exist any more or if it's all tied advisers, (2) do they also take on the untangling bit, and (3) I would probably be ok picking what I want to invest in, the blocker is untangling the current state efficiently.

Does such an untangling service exist, or only in the context of an ongoing adviser relationship? The portfolio is about £50K so nowhere near wealth management levels.

[monabri]

I'd be tempted to post on the "Portfolio Management & Review" board and ask for comments.

Best if you list them out, what they are and what percent they are of your total portfolio.

Be aware of how much you can earn from your dividends before you have to pay tax. It might be that your total divis from shares is less than £2k per year and so no tax is due. Selling lots of small holdings in shares and rebuying in an ISA might be an unnecessary cost ( well, you might only need to ISA a small number of holdings and not all of them - just enough to stay under the £2k per year tax free limit).

Wouldn't hurt and it's free.

I wouldn't include cash nor your gold holdings.

[77ss]

My investment persona has a split personality.

On one side is investments I have made myself - rainy day cash, pensions, holdings in 4 relatively diversified funds and a bit of gold. I know what is in there and why.

On the other, a portfolio of shares and funds I inherited 20 years ago. Lots of small holdings with an income bias. I do basically nothing with it other than cash dividends (when I make it to the bank) and include it in the tax return each year. Any time there is a corporate action I just accept the default.

For years I have been wanting to streamline this zombie, consolidate and gradually move it under an ISA wrapper. Every now and then I make a start, then get tangled up in some part of the process and it all stalls again. As an extra layer of complication, I work in financial services so I have to get same-day permission before any share trades.

What I really want is to pay someone a one-off fee to untangle it and set out a set of actions I can follow to get it sorted. I know an IFA would advise on new investments, but (1) not sure if they exist any more or if it's all tied advisers, (2) do they also take on the untangling bit, and (3) I would probably be ok picking what I want to invest in, the blocker is untangling the current state efficiently.

Does such an untangling service exist, or only in the context of an ongoing adviser relationship? The portfolio is about £50K so nowhere near wealth management levels.

A radical solution. The Gordian knot. Sell up, lock stock and barrel. Untangled at a stroke! Who wants a lot of small holdings? If you've been wanting (and failing) to streamline for years, then you have to try a different approach. Rebuy decent slugs of the shares you really want (your point 3). £50K will take you only 2.5 years to move into an ISA wrapper. I see no problems with holding some shares (or cash) outside a tax-free wrapper for a bit.

[TUK020]

A radical solution. The Gordian knot. Sell up, lock stock and barrel. Untangled at a stroke! Who wants a lot of small holdings? If you've been wanting (and failing) to streamline for years, then you have to try a different approach. Rebuy decent slugs of the shares you really want (your point 3). £50K will take you only 2.5 years to move into an ISA wrapper. I see no problems with holding some shares (or cash) outside a tax-free wrapper for a bit.

Or do it in 3 chunks,
Sell the first 20k's worth (start with smallest holdings?) transfer to ISA, repeat a year later, etc
That way you don't wind up with an interim account to worry about

[richfool]

Yes, sell them (yourself). Transfer the cash to an ISA (within the limits allowed) and then buy what you want to hold within the ISA.

[Dod101]

It is surely not worth your while to pay someone else to sort out a £50,000 portfolio. What is stopping you doing it yourself? Getting permission for dealing is surely not that difficult and anyway just list all the shares and get blanket permission if that is possible, then sell. You then have cash with which to make a fresh start.

Dod

[dspp]

Get permission to on one day, sell everything.

Then move all the cash into an ISA.

Then get permission to, a few days later, stick the lot into a global index tracker (say, VWRL).

Job done. Doing it this way minimises admin, and also minimises time out of the market risk.

The only improvement I can see is to transfer it all into the ISA before selling (i.e. transfer using B&ISA). That is worth doing if there are accumulated capital gains. Maybe a B&ISA instruction doesn't require getting permission as it is not trading in the normal sense of the word.

If you have unused ISA allowance it is worth doing it this tax year.

regards, dspp

[richfool]

The only improvement I can see is to transfer it all into the ISA before selling (i.e. transfer using B&ISA). That is worth doing if there are accumulated capital gains. Maybe a B&ISA instruction doesn't require getting permission as it is not trading in the normal sense of the word.

If the investments are currently held unprotected (i.e. outside an ISA) then Bed &ISA'ing them would not protect any gains from potential CGT liability. Noting they have to be sold from within the unprotected account, and then purchased again within the ISA. The initial sale would be a potentially chargeable event dependent upon your CGT allowance. Once inside the ISA they would then be protected.

[dspp]

The only improvement I can see is to transfer it all into the ISA before selling (i.e. transfer using B&ISA). That is worth doing if there are accumulated capital gains. Maybe a B&ISA instruction doesn't require getting permission as it is not trading in the normal sense of the word.

If the investments are currently held unprotected (i.e. outside an ISA) then Bed &ISA'ing them would not protect any gains from potential CGT liability. The initial sale would be a potentially chargeable event dependent upon your CGT allowance.

Drat, sorry. , So far this decade I have managed to keep my capital gains either in my ISA, or under limit, so I'm behind the curve on that aspect.

In that case, take the hit, sell the lot, move the cash into an ISA, buy VWRL. Job done.

regards, dspp

[monabri]

How can we say "sell" when we don't know what's in the pot...the mishmash might all be good stuff!
Why introduce selling,rebuying and stamp duty costs ?

Will the dividends exceed £2k in this tax year? Maybe they will...but it might simply be a case of selling only a small percentage of the share holding and then re buying in an ISA. Just do enough to minimise Mr Tax.

But paying someone to look at a £50k portfolio....that'll cost you and the advice might be of dubious quality.

[PinkDalek]

Returning to this paragraph:

On the other, a portfolio of shares and funds I inherited 20 years ago. Lots of small holdings with an income bias. I do basically nothing with it other than cash dividends (when I make it to the bank) and include it in the tax return each year.

Are you saying all or most of these holdings are in certified form?

If you are looking to sell in such a form, you'll encounter hefty commission charges (HL for instance minimum £20).

Do you already have an online broker to which you can transfer them? From then on the selling or bed and ISA process should be both simpler and cheaper (assuming your broker does bed and ISAs).

If you don't have an online broker, many here will give plenty of views on who might be suitable.

[dspp]

How can we say "sell" when we don't know what's in the pot...the mishmash might all be good stuff!
Why introduce selling,rebuying and stamp duty costs ?

a) because they WANT to clean it up into something recognisable and manageable (as I understand it);
b) because they WANT to get it into a tax wrapper, so those costs are going to be incurred in any case as they will have to B&ISA to do so.

regards, dspp

[monabri]

How can we say "sell" when we don't know what's in the pot...the mishmash might all be good stuff!
Why introduce selling,rebuying and stamp duty costs ?

a) because they WANT to clean it up into something recognisable and manageable (as I understand it);
b) because they WANT to get it into a tax wrapper, so those costs are going to be incurred in any case as they will have to B&ISA to do so.

regards, dspp

My 'concern' is that there might be no need to B&ISA based on a 50k portfolio with a dividend yield of 4%..or there might only need to spend a small sum of money to B&Isa a proportion of it. I'd also caution about cashing it all in and buying VWRL at the current sterling exchange rates ( which way do we think rates are going to change over the next few years when Brexit issues are hopefully resolved.? At the moment one would be buying assets which are valued in US dollars with our weak pound).

I'm advising do nothing until advice is taken...either paid for or for free. PD has mentioned/ asked if the shares are in certificated form ( expense to sell)?

I would suggest we cant offer pertinent suggestions without a little more information .

[Alaric]

Are you saying all or most of these holdings are in certified form?

I would think the way to proceed is to open an account which offers both dealing and ISA facilities. What you then do is to fill in the forms which transfer the paper certificates to the provider of your choice. At the very least it gets the dividends under control.

You don't have to do Bed & ISA to get the assets into an ISA. At the end of a tax year sell enough to raise enough for the next tax year's ISA. Hold cash over the year end, transfer and invest in the new year. What you sell may be influenced by the CGT position.

[lizbubb]

Hi- thank you for all the advice.

To answer a few questions:

I have a Fidelity ISA which now offers individual shares as well as funds.

I have (had?) a Halifax S&S ISA but never used it - I couldn't transfer the shares in because at the time they were not held electronically.

Last time I ran the numbers selling the lot in one go would incur CGT I think, so it does have to be staged

The income is usually between 2 and 3 K PA. In theory all or most within the dividend allowance but in practice I'm just about in the 100-150K PA income bracket so it actually does incur tax through the impact on my personal allowance, which I believe putting it in an ISA would avoid

The shares are mostly now in nominee accounts (did that the last time I had a big push) although some are still certs. Most of the paper cheques are from the funds. Since I inherited this stuff a long time ago, most of the funds have my accounts flagged as missing KYC details which I have to rectify before I can change anything.

I know none of this is rocket science, but it's a lot of small hurdles that I have to find time to meet before anything gets tidied up, and each one seems to involve calling umpteen customer services numbers which my job makes it hard to do during office hours. I've tried taking a day off to get it sorted but there is always something (like the KYC stuff) that has to be posted and everything grinds to a halt again. That's why I am wondering about just paying someone to sort it all out even if it costs me to do so.

[Alaric]

I have (had?) a Halifax S&S ISA but never used it - I couldn't transfer the shares in because at the time they were not held electronically.

You cannot transfer shares directly to an ISA, you always have to sell them first. Brokers may offer a facility ("bed & ISA") where they will sell in the taxed account and then repurchase in the ISA. It's not the only way of doing it. You can just sell for cash, transfer the proceeds to the ISA and then reinvest at your leisure.

The Internet has empowered private investors to efficiently "do their own thing" with regard to managing personal investment wealth. I suppose someone somewhere would essentially act as a secretary for wealth management, but they are elusive.

Financial planners/ wealth managers invariably have some pet method/fund to sell on behalf of the organisation that employs or sponsors them.

[lizbubb]

Brokers may offer a facility ("bed & ISA") where they will sell in the taxed account and then repurchase in the ISA.

Yes, that is what I was trying to do I think - the Halifax ISA website had forms to fill in to transfer shares outside an ISA in but it turned out to be a Crest transfer form, which wasn't any good for paper certs. So I tried to demateralise them and ended up with Equiniti and Compushare nominee account holdings - which I am not sure was what I intended to do but does at least mean I'm not on paper any more.

Financial planners/ wealth managers invariably have some pet method/fund to sell on behalf of the organisation that employs or sponsors them.

Yes. And I don't really want investment advice anyway, just someone to act as my proxy and plough through all the admin to get the darn things sold and/or ISA'd!

I guess I'll just have to stop worrying about the most efficient approach and work through the pile one by one. (I assume funds are the same as shares WRT transferring into ISAs ie I'll have to liquidate and repurchase in the ISA)

Weak sterling and Brexit is a concern as well, so I'll likely try and minimise the period holding cash by reinvesting each pot as I sell it rather than sell everything then reinvest.

[Alaric]

(I assume funds are the same as shares WRT transferring into ISAs ie I'll have to liquidate and repurchase in the ISA)

The rules are the same. You may well find that once you have a dealing account set up, that transferring "funds" prior to selling them will be easier than directly selling them. If the receiving platform has satisfied itself as to your identity, ceding platforms will be more relaxed.

[Howard]

Yes. And I don't really want investment advice anyway, just someone to act as my proxy and plough through all the admin to get the darn things sold and/or ISA'd!

I guess I'll just have to stop worrying about the most efficient approach and work through the pile one by one. (I assume funds are the same as shares WRT transferring into ISAs ie I'll have to liquidate and repurchase in the ISA)

Weak sterling and Brexit is a concern as well, so I'll likely try and minimise the period holding cash by reinvesting each pot as I sell it rather than sell everything then reinvest.

Have you considered employing an accountant to do this for you? From what you have written about your income, you might find an accountant to be a help in the future if you accumulate assets. I'm not an accountant, but know of friends who use a small accountancy firm to help them with tax returns and other financial issues. I guess they could do these things but prefer (and can afford) to use their time in other ways.

It might be an idea to see if you could find someone to do this and, if they do it well, you have a good resource which might be very useful later. As someone a little older than you, I'd advise choosing a young professional and then there is a good chance they'll still be there in twenty years when you might have more need of them.

Please let us know how you solve the problem - and good luck!

Howard

[77ss]

....

I guess I'll just have to stop worrying about the most efficient approach and work through the pile one by one. (I assume funds are the same as shares WRT transferring into ISAs ie I'll have to liquidate and repurchase in the ISA)

Weak sterling and Brexit is a concern as well, so I'll likely try and minimise the period holding cash by reinvesting each pot as I sell it rather than sell everything then reinvest.

Definitely stop worrying about efficiency. You have a £50k monkey on your back - getting rid of it must be worth something! As you clearly realise when you wonder about paying someone to sort it for you.

Tax on your dividends from your £50k is surely a minor factor - aren't you paying that now anyway? Sell the higher yielders first maybe.

Costs? One major (and largely unavoidable, however you do it) item will be the 0.5% stamp duty when you reinvest any sale proceeds. And even that is only £250. Dealing costs on share purchase can be minimised by buying sensible amount of just a few shares. 5-10 perhaps - depending on your other holdings.

I did wonder about potential capital gains. If I understand the rules correctly, you can sell £11,700 this tax year (and £12,000 next year, etc), without incurring any tax liability - and, more importantly perhaps, without having to submit anything to HMRC! Doing it that way would take 4 years, but would remove a significant element of complexity (at least I find it so).

If you are housecleanng, do take the opportunity to rationalise. Call it putting your costs to good use.