The Lemon Fool

Hi all,

Many thanks to all of you who have answered my question last month regarding portfolio protection, lots of useful information, possibly too much for me to straight in my head so it’s got me this far, that I now have a decision to make, I’d like your opinions on a ‘if it was you what would you do’ basis.

I have £250k in AJBell, fully invested in a Vanguard world tracker (VEVE and VFEM correctly apportioned). I’m happy with that.
I’m 46 so a long time yet until I will be drawing on my pensions and a plan to pay in at least the same amount again over the next 4/5 years. My options are for the next £250k are:

1) continue putting it into the same funds in AJBell
2) continue putting funds into AJBell but into the ishares world tracker equivalent
3) open a Fidelity account and fund that with £250k of VEVE/VFEM
4) open a Fidelity account and fund that with £250k of the ishares world tracker equivalent

Obviously this is about not having all my eggs in one basket, for the benefit of this question ignore whether all in world trackers is sensible, this would be my core even if it wasn’t my full holding. This is about diversifying platforms and managers.

I’m decided on Fidelity as a second platform if that is the route I’m taking so it’s a straight forward choice…. Just not landed on what that choice is yet!

So what would you do?
Thanks in advance
Gumble

I would stick with VEVE/VFEM and either AJ Bell or perhaps better Fidelity. Fidelity has a big US parent to bail it out if something goes wrong (which is very unlikely) whereas AJ Bell does not. Your big risk is that the global equity market will not perform. The other risks are negligible in comparison, and I would not worry about them.

GeoffF100 wrote:I would stick with VEVE/VFEM and either AJ Bell or perhaps better Fidelity. Fidelity has a big US parent to bail it out if something goes wrong (which is very unlikely) whereas AJ Bell does not. Your big risk is that the global equity market will not perform. The other risks are negligible in comparison, and I would not worry about them.

Thanks Geoff, I'll take that as an option 3. I did have a pre conceived idea on what I thought I would do but won't comment on that yet so as not to bias other people's answers.
Noted on the risks being equity and market related and you are exactly right but I'm comfortable with that.

Gumble wrote:

GeoffF100 wrote:I would stick with VEVE/VFEM and either AJ Bell or perhaps better Fidelity. Fidelity has a big US parent to bail it out if something goes wrong (which is very unlikely) whereas AJ Bell does not. Your big risk is that the global equity market will not perform. The other risks are negligible in comparison, and I would not worry about them.

Thanks Geoff, I'll take that as an option 3. I did have a pre conceived idea on what I thought I would do but won't comment on that yet so as not to bias other people's answers.
Noted on the risks being equity and market related and you are exactly right but I'm comfortable with that.

No it is not option 3. It is either option 1 or option 5. Option 5 is put all your money with Fidelity (or another platform). I would not mess about with two platforms, I would pick the safest one that has reasonable charges.

For diversity, I'd never use just one for that value. It's just too important, tiny risk but unknown consequences. More likely to be inconvenience and temporary loss of control than total loss I admit.

There are plenty of choices to diversify risk.

Plenty of low cost world trackers.

Ii is a good second string platform you can hold funds without a percentage charge, diversify between an ETF and an OEIC

Fidelity do a low cost MSCI world tracker and HSBC do an equivalent fund to VWRL at a cost of just .12% even cheaper than VEVE/VFEM

My rule is no single point of failure over £1m, ie fund management company or platform.

No individual fund to exceed 15% of the whole portfolio/£500,000

If there was a failure it would probably be made good, eventually but it’s minimal cost/effort to spread the risk.

Is there a thread somewhere on comparative charges of the different platforms? I just made an investment in a German stock via Barclays / AJ Bell, and they gouged me on a currency exchange charge. Total charges were about 11I percent!

I am switching. I need no advice and don't trade often.

If you don't run two platforms then have an emergency fund that you can draw on for 1 year duration. If something was to go wrong at AJ Bell and administrators were needed, it will take time to move your account to another platform. In the meantime, your account is frozen...nothing in,nothing out. Based on my experience of the time it took to move my account from SVS Securities to ITI Capital (frying pan into bag of sh...) then 1 year should hopefully more than cover the transition period.

dpcarey123 wrote:Is there a thread somewhere on comparative charges of the different platforms? I just made an investment in a German stock via Barclays / AJ Bell, and they gouged me on a currency exchange charge. Total charges were about 11I percent!

I am switching. I need no advice and don't trade often.

I know of no site that offers a useful comparison for you. Most such sites ignore overseas investment. However I was interested in your question and did a bit of research.

I have accounts with A J Bell and II.
NO broker will be able to hold foreign currency in an ISA, but as far as I can tell you can in a SIPP.
A J Bell won't hold foreign currency at all.

However II will!
https://www.ii.co.uk/investing-with-ii/ ... -investing
This is an obvious advantage when it comes to making investments and receiving dividends. Indeed holding a basket of currencies may be a good idea in and of itself. Maybe I need to consider moving a pension to II.

Ps, If you do decide to join II please consider dropping me a PM. Like many they offer a small incentive to introduce new customers.

Many thanks. I looked at them briefly yesterday and wondered about their monthly charge of, what was it, 18 pounds?

I need to look at them all when I recover from a nasty chest bug.

Thank you!
David C

dpcarey123 wrote:Many thanks. I looked at them briefly yesterday and wondered about their monthly charge of, what was it, 18 pounds?

I need to look at them all when I recover from a nasty chest bug.

Thank you!
David C

£13pcm, at the moment. Though more if you have other accounts with them.
https://www.ii.co.uk/pensions/understan ... on-charges
There are I understand cheaper options. Que someone to jump in talking about iweb, or maybe not now I've looked at their SIPP charges.
However it was the foreign currency account that caused me to suggest them.

FWIW, I actually pay five lots of charges, of which only one is to II.

Ps, hope you recover soon.

Urbandreamer wrote:£13pcm, at the moment. Though more if you have other accounts with them.

ii will let you have some of it back as trading credits.