Moving self-select investments

By THIS IS MONEY
Updated:

 

My wife and I each have a PEP and an ISA which have been invested as self-select with Charles Schwab. This has been very successful but we are now looking to transfer all or part to a managed fund within the framework of the PEP/ISA tax wrapper to provide a monthly income.

I believe it will not be possible to transfer part as it is obviously impossible to isolate the individual tax years. Can you comment on this and suggest a suitable investment? DC, Newton Abbott.

Justin Modray, independent financial adviser at Funds Direct, says: Because your Charles Schwab PEPs and ISAs are self-select, you can hold unit trusts and OEICs of your choice without having to move to another PEP or ISA provider.

This would be the simplest route, the only downside being the charges involved, as Charles Schwab charges an administration fee for the ISA and PEP wrappers in addition to the charges levied by the underlying funds.

Another option that may prove more cost-effective would be to use a fund supermarket. These services normally allow you to mix and match funds from different fund managers within a PEP or ISA without an extra charge for the ISA and PEP wrappers.

Finally, as of 6 April, 2001 you will no longer be required to transfer entire tax years when transferring PEPs (ISAs already benefit from this legislation). Therefore, you can switch PEPs and ISAs as you wish, the only restriction being the minimum investment sum accepted by the manager to whom you'd like to switch, generally in the region of £500 - £1,000.

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