Fidelity won’t let me do a partial transfer of my stocks and shares Isa – what can I do?

I’ve been investing monthly into a Fidelity stocks and shares Isa across four different funds for the past 25 years.

My plan was that as I got older and the Isa got fat, I’d sell some of the funds on a high note and ‘Isa transfer’ the cash to other, less volatile savings accounts. 

As a rough idea, I wanted to pull out £5,000 to £10,000 once a year if markets were good.

What I’ve found is that Fidelity (and other big stocks and shares fund providers) still don’t allow partial Isa transfers.

So my options are:

1. Manually take the money out and lose the Isa wrapper on it. This is fine if I’ve retired and I’m in drawdown (of both my pension and Isa) and not earning income. I’ve also done this before the Isa deadline when I was never going to reach the £20,000 in the current year with income.

2. Transfer the whole Isa to another provider (hopefully one with the same fund options) and transfer it back in again minus £5,000 to 10,000. I estimate due to transaction charges the buy and sell spread each time I do this will cost me £100 or more. I’m also taking the risk that I’m out of the market/s for a time and could lose dividends.

3. Sell it all to cash, transfer out somewhere friendly, partial transfer-out some money and transfer back into Fidelity again.

What a faff, in 2024. I feel it is trapping my investments. At no time are all four funds going to be aligned so I’m happy to sell them all. I feel the money is stuck there until I retire.

I understand that Isa transfers cost providers time and money but I’ve seen other providers simply bring in a £35 fee for doing so. That is another gripe, but at least you know where you stand. Providers are always willing to get your transfer-in but have very inflexible transfer-out options. 

Am I just being a Grinch or is it about time these big investment platforms moved with the times? via email

Angharad Carrick of This Is Money says: It does seem bizarre that in 2024 major investment platforms are behind the times when it comes to Isa transfers.

Some of the legacy platforms have been forced to modernise, with the introduction of subscriptions and things like fractional shares and proxy voting, as a wave of challengers sweep the market.

The three options you lay out seem an unnecessarily complicated and expensive way to transfer your money. 

And as you say, when it comes to transferring Isas in from another provider, Fidelity is more than happy to help. It will even cover up to £500 if your current provider charges exit fees.

When it comes to transferring some of your money out, though, you realised that it is not as straightforward.

You said that you had tried on a couple of occasions to transfer cash out to a new provider and it has bounced back. 

Each time you were told that Fidelity did not allow partial transfers.

It has locked you into the product and, given you own four funds in your Isa wrapper, it is unlikely that you will be ready to sell all of the funds at the same time.

On Fidelity’s website it says that ‘it is not possible to request a partial cash or asset transfer’. 

More recently, you were told that ‘Fidelity do not offer partial transfers as a standard service’ but you could request the sales team to approve a transfer.

So now it seems that your plans to move the cash that you invested over 25 years is at the discretion of Fidelity’s sales team. 

This seems strange and there is nothing about what criteria the sales team will use to approve partial transfers.

I contacted Fidelity to ask why it wouldn’t allow you to sell some of your assets and transfer the cash out.

It said: ‘Customers who want to transfer money they have invested in an Isa during the current year must transfer their funds in full. 

‘In most scenarios, we do not process partial transfers out of an Isa account, but clients with relationship managers, who are able to support their client through the process, can arrange approval from their signing authorities. 

‘In these cases, we can process partial transfers out of an Isa account from previous year subscriptions only.

‘Given the complexities involved with partial transfer requests, we have deliberate controls and protocols around partial Isa transfers to help us manage some of the complexities and can only facilitate those which meet the requirements of the necessary approval process. 

‘However, we do support partial Sipp and general investment account transfers as standard.’ 

So it seems that unless your request is approved by the sales team, you will have to consider your three options to move your cash. 

This seems like a silly solution to something that could be sorted relatively quickly by the provider. In terms of the criteria for the approval, it seems we are none the wiser. 

Unfortunately, Fidelity is not alone in dragging its feet on partial Isa transfers and it may be wise to read the terms and conditions of the platform you use, so you are clear on the rules.