Can I combine my investment accounts?

Hi all,

I have 6 different investment policies with Zurich and Standard Life, all invested into the same tracker. Can I combine them into a single policy, or is that always stupid given Exit Tax?

I'd love to only have one policy to keep track of for life admin / simplification purposes, and I know I could do this by cashing out and reallocating all my funds to my lowest-cost policy (it allows top-ups). But I don't want to destroy compound returns by triggering Exit Tax early!

What if I wait until each policy reaches the 8-year mark, then cash out (tax would be due anyway) and reinvest as a top-up into my lowest-cost policy? Does this make sense or am I missing anything obvious? For example, could the time spent "out of market" between cashing out and reinvesting constitute a real risk for missing out on market movements to an extent that it matters for long-term returns? Are there any other considerations I've missed?

Thanks in advance!

You could contact Zurich and Standard Life and ask them to combine the policies, without cashing them in. Then you would have 2 instead of 6. Not sure if they do this, but no harm in asking.

penguins said:

What if I wait until each policy reaches the 8-year mark, then cash out (tax would be due anyway) and reinvest as a top-up into my lowest-cost policy? Does this make sense or am I missing anything obvious?

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You're not missing anything, yes you can do this. The chances of a big market move in the 2-3 days it would take to do this are extremely small.

AJAM said:

You could contact Zurich and Standard Life and ask them to combine the policies, without cashing them in. Then you would have 2 instead of 6. Not sure if they do this, but no harm in asking.

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They can't do this. Cancelling a life assurance policy triggers an exit tax event.

Probably too much to hope for but this anomaly was raised in the 'Funds Sector 2030: A Framework for Open, Resilient & Developing Markets' consultation.

You can freely move pension funds to lower cost products but Life Assurance Exit Tax makes this tricky for life assurance investments.

Not saying that they'll even consider it but I might hold off on consolidation until we get an update on the changes (if any) that are going to be made in the LAET space.


Gerard

www.bond.ie

Thanks everyone, it sounds like I should hold off for now, and wait for either the 8-year tax or (who knows) a regulatory change!