Pick Holes in my Monevator ISA Hack Approach

[michael93]

Hi guys,

I got some really great feedback on some questions I asked about moving to a new ISA provider to take advantage of lower fees. One of the responses was to check out Monevator's ISA hacks to see what may work best for me. I've done some digging and come up with this approach. Can you guys shoot some holes in it for me?

1. Open an Invest Engine ISA
2. Transfer over full value of current Vanguard ISA (100% FTSE Global All Cap Index Fund Accumulation) to Invest Engine and pick up their transfer bonus:

Investment Bonus

£1,000 £20

£5,500 £55

£8,000 £70

£15,000 £120

£20,000 £150

£30,000 £225

£45,000 £325

£65,000 £525

£100,000 £750

£120,000 £1,100

£300,000 £2,500

1. Hold transferred amount in Invest Engine with no trading activity
2. Continue to purchase regular monthly amounts through Vanguard
3. At the most appropriate time (annually?) transfer Vanguard amount over to Invest Engine

6. Rinse and repeat

I must admit this feels a bit too straight forward and I'm sure you guys will catch some thing I haven't. The only issue I can see at the moment is that Invest Engine may not actually offer the FTSE Global All Cap Index Fund acc. With this in mind I wouldn't be averse to switching to VWRP upon transfer.

Thanks guys!

J

 

[molly2017]

@michael93 You could only do this once per financial year given the rules on opening and depositing into ISAs.

Does Invest Engine pay the bonus to one account holder more than once?

Is the bonus guaranteed to always exist?

How much time are you going to be out of the market while you switch from the index fund to the ETF?

 

[michael93]

@molly2017 Thanks for the reply. Some comments below:

You could only do this once per financial year given the rules on opening and depositing into ISAs. - I was wondering if this may change with the new ISA rules for the 24/25 tax year?

Does Invest Engine pay the bonus to one account holder more than once? - I believe this is a bonus to one account holder as a one-off only once the initial transfer is complete.

Is the bonus guaranteed to always exist? - I very much doubt this, I think this bonus is possibly only running for a few months not certain though.

How much time are you going to be out of the market while you switch from the index fund to the ETF? - This is of course a consideration, my recent transfers have been very smooth and not taken me out of the market for too long. Thinking that potentially the bonus may buffer small movements if this was to happen.

 

[joltor0517]

@michael93 I don't really understand this approach if you only get the transfer bonus Ince. What are you gaining from it?

 

[michael93]

@joltor0517 Sorry should have been clearer, the main goal here is reducing ongoing fees. Vanguard is now creeping up in cost with their %age based fee approach for holding an ISA with them,

 

[homeofstars]

@michael93 I don't understand why you would continue to buy monthly through vanguard when investengine has no trading fees anyway?