Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

ISA millionaires don’t happen by chance. They’re committed to the cause. And the recipe for becoming an ISA millionaire contains a few rare ingredients: the ability to max out your annual ISA allowance; a portfolio that’s well-diversified and able to withstand the test of time; a commitment to reinvesting income, to get any gains working as hard as they can and the discipline (and means) to let it mature, like a fine wine.

Even though this might feel like an impossible task for most of us, there are lessons we can learn from this dedicated and steadfast approach to saving (such as time in the market can help increase your chances of investing success and the importance of being tax-efficient).

Understand: why time is important in investing

Learn: how to be tax-efficient

To see what else I could learn, I spoke to relationship manager Bhavi Alagaratnam, about four of her clients - aged 86, 76 and husband and wife couple 65 and 64 - who’ve managed to build up a £1million+ ISA pot. I also ran a report to see which funds our ISA millionaires are investing in… if you can’t be an ISA millionaire, perhaps you might want to invest like one? Here’s what she shared with me.


About Bhavi Alagaratnam - Senior Wealth Relationship Manager

Bhavi has been with Fidelity for ten years and has undertaken various roles within this time. Bhavi is currently a senior relationship manager within the Fidelity Wealth Management service, supporting our ultra-high net worth clients in achieving their investment goals. Clients who invest over £250k, including within pensions, are assigned a relationship manager who will work alongside them on their investment journeys to achieve their financial ambitions. Relationship managers support their clients through guidance and portfolio reviews, they also work closely with Fidelity Wealth Management financial advisers so their clients can get the right support exactly when they need it.

Is your ISA fit for purpose? Ask yourself these questions

If you’re not an ISA millionaire, ISAs are used for more ‘shorter-term’ financial goals and planning (although investing should always be considered for the long term - at least five years). Whereas Self-Invested Personal Pensions (SIPPs) are seen more as a vehicle to save for your retirement, or indeed, of passing on your wealth to your loved ones.

To see if your ISA is fit for purpose, here’s what Bhavi suggests you should ask yourself:

  • What’s your investment objective for this portfolio? Growth or income?
  • What are your goals? What is this money to be used for (property purchase, a child’s wedding, retirement plans)?
  • What’s the time horizon? When do you think you’ll be drawing on this?
  • What other savings and investments do you have outside of this portfolio? Do you have portfolios of different risk elsewhere?
  • What’s your risk tolerance on a scale of 1-5? To help you put this in context, I’d generally say that at the lower end ‘1’ aims to marginally beat inflation (of course with the sustained periods of high inflation rates that we’ve seen this has been a tall order). Whereas ‘5’ is at the top end, where you are comfortable that you understand that markets ride in cycles and you’re happy to ride out 30-40% drops.
  • How do you feel when there are big drops in the market?
  • How confident are you when it comes to investing, and how did you put your current portfolio together?

Building a 2024-ready ISA portfolio - tips from a relationship manager

We fear losses more than we appreciate gains - it’s otherwise known as loss aversion. As a result, we often pay our portfolio more attention when it’s not delivering the results we want. That’s not to say it’s the right way to go about it. Here’s what Bhavi had to say.

Despite the markets behaving themselves at the start of the year, there’s a continuing sense of uncertainty with a number of critical economic and geopolitical events waiting in the wings. Here are just some of the things on my mind when talking to my clients.

“Is the global economy heading towards a recession - especially as the UK slipped into a technical recession at the end of 2023? What will be the outcome of the various elections this year, including major elections in the US and UK? What’s next for AI? Will interest rates start to fall?

“It’s challenging to know the answers to these questions for certain, let alone to predict what’s going to happen in the stock market this year and to investments and savings. That said, despite the geopolitical tensions, cost of living and inflationary concerns, having a well-diversified ISA can help to cope with some of the market volatility we see too often during times of uncertainty.

Be prepared: learn what to do when volatility strikes

Diversification helps to spread the risk and there are many ways this can be achieved - such as across different geographical regions, asset classes, sectors and more. The key question to consider is if the risk of your portfolio matches the length of time you are investing for. Helping clients understand how diversified they are is key to what I do. You can see just how important diversification is in the video below as no asset class stays on top all the time, in all economic conditions.”

If you’re not sure if your portfolio is diversified or not, and don’t have a relationship manager, here’s how to look under your portfolio’s bonnet to check exactly what you’re investing in.

How to look under the bonnet of your portfolio

Bhavi carries out portfolio reviews with her clients to help them look at where and what they’re invested in. It’s possible to do it yourself and we have tools online that can help you do a similar thing.

First, log in at Then select the account that you’d like to review and pick a benchmark to compare it against (I wouldn’t worry too much about this, you just need a comparison. If in doubt, I’d go for the MSCI World PR USD - but you can learn more about the individual benchmarks when you select one from the list).

This will pull up an online analysis. To access and download the full X-ray report, click on ‘Export’.


There’s a lot of information in this report, but here are the top sections that Bhavi suggests investors focus on.

  • Asset allocation - this will show you what the proportion is of each asset class that you hold.
  • Country exposure - it gives you a breakdown of where in the world you’re invested.
  • Stock sectors - percentage breakdown of the types of sector you’re invested in - such as cyclical (which means sectors which are affected by the economy) or defensive (less volatility) - as well as the industries you’re invested in, for example real estate, technology, healthcare, energy and so on.
  • Return analysis - in an ideal world investing would give you high returns for low risk, but that’s not realistic. The X-ray report analyses the volatility of your portfolio versus return. So, on the horizontal axis you have the volatility and the further to the right it is, the riskier it is. On the vertical access you’ve got the return. So, the higher it is, the higher the return and the lower it is, the lower your returns are.
  • Top 10 underlying holdings - which shows your largest holdings.
  • Holdings overlap - this is particularly interesting. You might think because the funds you’ve chosen are different, you’re well diversified. However, on closer inspection you might see there’s duplication. It’s not always a bad thing, but it is good to have a transparent view.

The benefit of tax-free returns and maxing out your allowances

Even if you’re not an ISA millionaire, there’s a lot to be said for making the most of your ISA allowance as you can, which the chart below shows. ISAs were only launched in 1999, so I can only show you what maxing out your allowances looks like from then (if you’re wondering how ISA millionaires even exist on our platform, before ISAs there were Personal Equity Plans - which were a tax-efficient means for UK residents to invest in shares of UK companies and these converted into ISAs by 2008).

Back to the example. Let’s say Adil makes full use of his ISA allowance for over 20 years. If he'd invested in the FTSE All-Share (assuming he paid no charges) his total gains would have been tax free. And while he’d ‘only’ have invested £273,760, his returns would be almost double at £531,540.

This example is for illustrative purposes only. The value of investments can fall as well as rise, so you may get back less than you invest. Past performance is not a reliable indicator of future returns. The return shown here does not take account of charges which would reduce these amounts.


What an ISA millionaire’s portfolio looks like

To show us what this all looks like in practice, I asked Bhavi to run a report on some of her clients. Their ages reflect the fact that to become an ISA millionaire, it takes patience and time. She’s then commented as to why they’re investing the way that they are. It’s important to note that each client has a formal annual review to check their portfolio is still aligned to their goals and circumstances. But if their circumstances change, for whatever reason, Bhavi’s on hand to re-valuate their portfolio.

Portfolio one

Client Profile: 86-year-old man with adult children. This client has a scientific background and had a successful career which enabled him to build up significant savings inside an ISA over the years. He has cash savings readily available to use, an investment account and is currently drawing from a pension for income.

Bhavi’s Comments:My client retired just over 30 years ago and accessing his tax-free cash led to the start of his investment journey. He has self-managed his investments to date and enjoys spending time monitoring funds and stock indexes. As my client views the ISA as a long-term investment and targets capital growth, he is comfortable with taking on a higher level of risk and has therefore focussed the portfolio on equities. The investment goal for the ISA is to leave it to his family. My client’s strategy has been to focus on a relatively smaller number of funds, particularly focusing on the US.

Portfolio two

Client profile: 76-year-old married man with adult children, who has managed his ISA investments on his own to date for over 20 years. He has recently consolidated his investments with Fidelity, to have everything under one roof for simplicity and ease of management. He also has a significant pension pot running alongside the ISA, as well as cash readily available.

Bhavi’s comments:My client has been retired for about 25 years after running a successful business. The objective for the SIPP and ISA will depend on the Spring Budget and any changes we see. My client initially thought about drawing annually from the SIPP, with the overall longer-term objective being to leave the SIPP to the family. The ISA is viewed as a savings vehicle, where my client could make his money work harder than it would in a current account, with the objective of capital growth. In terms of a set objective for the ISA, this is unknown at this time and my client would like the pot to keep working hard for him.

Portfolio three and four

Client profiles: 65-year-old husband (Mr X) and 64-year-old wife (Mrs X) with adult children. These clients are both avid readers of financial literature and they enjoy self-managing their respective ISA portfolios together. He is semi-retired, and previously saved income while working as a director of a business. She is semi-retired and previously saved money while working as a partner at a law firm. They both have cash savings readily available as well as other investment accounts and are receiving income from the business.

Bhavi’s comments: “My clients are semi-retired, and are currently working together, with the view they may continue to do so for another 10 years or so. Together they have built up savings from their respective careers and have saved these with a long-term view. They were also contributing to their pensions which they’ve now consolidated through Fidelity. When they do need to draw on money, they have sufficient funds to take an income from the ISA, so their income will be tax free. They’ve both chosen to centre their portfolios geographically, using Fidelity funds, and have a long-term view with no set time horizon at this stage as to when they may wish to draw down. We’ve spoken in the past about their investing focussing on being tax efficient with the dividend allowance reducing or continuing to focus on capital growth. My clients will be able to speak to me about de-risking their portfolios if they wish to, in the future.

Learn - about transferring your investments to Fidelity

Our ISA millionaires’ top 10 funds

If you’re interested in how to invest like a millionaire, here are the top funds that were most popular with our ISA millionaires as of 9 February 2024. Of course, these customers could well hold shares as well as other accounts and investments elsewhere, so it’s impossible to draw definitive conclusions. But it gives you a glimpse into what an ISA millionaire’s mindset is like.

Unlike the SIPP millionaires we showcased late last year, whose top funds favoured low-cost index funds, our ISA millionaires lean towards actively managed funds.

That’s not to say they’re averse to an index fund. But these sit closer to the second half of the table.

Much like our SIPP millionaires, it’s perhaps expected that on a Fidelity platform, many long-standing customers will have opted for Fidelity index funds and actively managed funds - six out of the ten funds are Fidelity funds.

Unlike SIPP millionaires, cash funds don’t make it into the top ten. However, full disclosure, 88% of our ISA millionaires do hold some cash in their ISA account. At time of writing, we currently offer 3.45% interest on cash held in your account or in the Cash Management Account.

Learn: We offer interest on cash and have a range of cash-like funds

As with any investment decision you make, please do your own research to make sure it aligns with your own goals and circumstances. Here are our ISA millionaire’s most popular funds.

  1. Fidelity Global Special Situations Fund
  2. Fidelity European Fund
  3. Fidelity Special Situations Fund
  4. Fundsmith Equity Fund
  5. Fidelity Index US Fund
  6. Fidelity European Trust
  7. Legal & General US Index Trust
  8. Fidelity Open World Fund
  9. Fidelity Index World Fund
  10. Legal & General UK Index Trust

Source: Fidelity International, March 2024

Looking for more support?

You don’t have to be a millionaire to take financial advice, but we do recommend that it’s best suited to anyone with over £100k to invest (which can include your pension) as there are other ways of investing more cost-effectively if you have less than that. We offer one-off or ongoing advice depending on your needs. You can find out more about financial advice here. You can also request a call back from a financial adviser.

If on the other hand you have over £250k to invest (including your pension) you’re automatically assigned a Wealth relationship manager - like Bhavi - or a financial adviser depending on your needs. As a Wealth Management member, you get access to an exclusive range of benefits. You can read more about Wealth Management here.

Over your working life, you may have multiple pensions and possibly ISAs. It can be helpful to bring them together into one place so you can get a clearer picture of where your money is invested and make any adjustments if you need to. 

Fidelity offers an award-winning SIPP and ISA, that you may want to consider if you’re looking to consolidate your investments. We offer a wide range of investment options with plenty of guidance and support to help with your decisions. You’ll also receive £200 to £2,000 cashback if you apply to transfer by 1 April ‘24, Exclusions, T&Cs apply.

Got a burning question you want to ask? Why not drop us a line. Click here to ask an expert your question.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). It’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our transfer factsheet. If you are in any doubt whether or not a pension transfer is suitable for your circumstances we strongly recommend that you seek advice from one of Fidelity’s advisers or an authorised financial adviser of your choice. Select 50 is not a personal recommendation to buy or sell a fund. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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