There is a common misconception that you can only invest in one ISA portfolio in a single tax year. While it’s true that you can only invest in a single ISA of each type in a given tax year, there is no limit to the number of portfolios that can exist within it.
Multiple ISA portfolios: Summary Table
| Can I have more than one ISA portfolio? | Yes, you can |
| Why would I want multiple ISA portfolios? | For different investment goals, risk levels, flexibility, and cost averaging |
| Some types of ISA portfolios to hold? | Low-risk portfolios (mostly cash & investment grade corporate bonds) to high-risk portfolios (mostly equity) |
| How many types of ISA portfolios does Moneyfarm have? | 7 types of portfolios |
For ultimate flexibility on our platform, we allow investors to hold more than one portfolio within the same ISA. This means having portfolios with different risk levels all in one transparent, manageable place.
Before the end of the tax year on April 5th, now is the time to take advantage of your yearly ISA allowance. You can open a portfolio that’s built around your goals in just a few clicks to get started.
How to open an additional portfolio
Setting up a second ISA portfolio is easy. All you need to do is sign in to your account, click ‘Add portfolio’ and go through that short process again.
You’ll be given options again for the chosen risk level of the portfolio, which are decided by the suitability algorithm we use. It’ll match you with portfolios that suit your financial situation. Once this is selected, you’re ready to go.
Alternatively, you can get edit your risk level by getting in touch with a member of our investment consult team – they’re on hand to discuss your situation and recommend the best course of action.
Our team will be able to help you with lower risk portfolios and even cash portfolios as a way of holding your money within the ISA wrapper. Moneyfarm cash portfolios are also, currently, free from fees.
Why would I want multiple portfolios?
There are a few reasons you might want an additional portfolio within your ISA wrapper. The most common, though, is that people want to move their money out of cash but they don’t want to commit it all to a medium or high-risk portfolio. So, they can get a low-risk second portfolio to hold their money before then moving it over to their main portfolio.
Multiple portfolios allow investors to practice pound cost averaging from within their ISA wrappers. This is the process of contributing regular, more modest amounts into your investments to average out the cost of the assets over a longer timeframe. In theory, it can help to protect against market fluctuations for more secure long-term growth.
Perhaps you wanted to contribute to your account before the ISA allowance resets on April 6th, but you haven’t yet fleshed out your plan for what to do with it in terms of risk levels and investment goals. Once it has been added and attributed to the 2020/21 tax year, you could then move money between portfolios to drip-feed it into a higher risk portfolio over time, or move it all over once you’ve made a more concrete plan.
Ultimately, a second portfolio can provide additional flexibility. If you think your financial planning could benefit from one or want to discuss your situation in more detail, please get in touch with our investment consult team.
FAQ
Can I have multiple portfolios in an ISA?
Yes, you can, but it depends on the product provider. With Moneyfarm, you can have multiple portfolios for different financial goals, objectives, and risk levels. For example, you can have a retirement portfolio, a socially responsible portfolio, a children’s fund portfolio, and so on.
How much do I need to open an ISA portfolio?
With Moneyfarm, you need at least £500 to open a portfolio.
Is it wise to have multiple ISA portfolios?
Multiple ISA portfolios are brilliant because you don’t have to open various investment accounts to achieve a specific financial goal. Also, numerous portfolios for each financial goal can help track exactly how much progress you’ve made towards each goal.
How does having multiple portfolios affect ISA allowance?
Having multiple portfolios does not affect your ISA allowance, as you can only contribute to one type of ISA each tax year. You can contribute into one type of ISA account and then move the funds into the different portfolios in the ISA.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
