Should you see a worker in the financial services sector kicking a wall today, or muttering slowly whilst tearing up a newspaper, or taking off their shoes and walking into the sea, Reggie Perrin style, then spare a thought (and perhaps a few coppers) for the poor dabs.
Because fund giant Vanguard – famed for its cheap trackers and its all-in-one LifeStrategy products – is now enabling UK investors to invest in its own funds directly.
This means we can now put money into its funds without having to use a third-party platform such as Hargreaves Lansdown.
And with Hargreaves’ shares having fallen as much as 5% on the news, City traders seem to believe Vanguard’s launch will spark a renewed price war.
Which is nice – for us investors, anyway. Not so good for rivals.
- Vanguard says it will levy an annual fee of 0.15% on up to £250,000 invested with it.
- There will be no account fee on the excess above £250,000.
- The platform fee is thus capped at £375 a year for even the largest portfolios.
- The minimum lump sum investment is £500. Monthly savings start at £100 a month.
- There are no initial or dealing charges, and no cost levied by Vanguard for transfers in.
Vanguard’s 0.15% platform fee will levied be on top of the ongoing charges that you pay for whatever Vanguard funds you own.
For example, if you opened your Vanguard account by investing £20,000 into its 60% LifeStrategy fund, you’ll pay:
Fund charge of 0.22% x £20,000 = £44
Account fee of 0.15% x £20,000 = £30
Total annual fee = £74
Some Vanguard funds boast even lower fees. For instance, its FTSE 100 Index Unit Trust charges just 0.06%. So £20,000 invested into that fund on the Vanguard platform would cost a total annual levy of 0.21%, or £42 a year.
Vanguard is currently offering ISAs and non-ISA accounts, but no SIPP. It plans to add a SIPP option to the platform “within the next year”.
The new Vanguard site has the website address www.vanguardinvestor.co.uk. (Vanguard says it will eventually retire its existing UK website).
The FAQ is pretty comprehensive, if you have any particular questions.
The Vanguard platform looks hard-to-beat cheap
Vanguard is not the first fund provider to enable us to invest directly into its funds without using a platform.
For instance, I’ve held a small proportion of my portfolio directly in Legal & General tracker funds for many years. (And no, it’s not cheapest! Even us investment bloggers have our foibles. Besides, I favour platform diversification).
But Vanguard’s offering is more transparent (and cheaper) than Legal & General’s, as fans of the US group would expect.
With Legal & General you pay much higher ongoing charges than with some competitor trackers, but there’s no platform fee. In contrast, Vanguard is explicitly breaking out the platform fee. This enables you to compare costs more directly.
The big question then: How do those costs compare with the others you’ll find in our comparison table?
Well, I’m not the Monevator expert on platform charges. Also, anyone who has tried to navigate the nightmare of comparing one particular portfolio invested on a particular platform with another platform knows there can be more quirks, hidden corners, and labyrinthine passages than you’d find in a medieval city.
Caveats and costs lurk around every corner!
That said, I believe Vanguard’s new offer looks pretty darn compelling.
For those wanting to hold Vanguard funds it looks substantially cheaper to do so directly via its new investment platform than via a percentage-fee charging rival.
For fixed-fee brokers, it could still be cheaper to go with one of the alternatives if you have a large portfolio. You’ll have to run your own numbers.
But for small portfolios of Vanguard funds, going direct again looks cheapest.
Holding Vanguard ETFs with rivals instead of Vanguard funds1 with Vanguard could also be cheaper for some investors with large portfolios.
For instance, our table notes that AJ Bell caps its quarterly platform fee for shares (including ETFs) at a maximum of £7.50 for an ISA, or £25 for a SIPP. That means platform charges are capped at £30 and £100 a year respectively.
Do remember that’s before ETF dealing fees and the ongoing charges on your Vanguard ETFs. Still, there could be savings to be had on larger portfolios.
Low cost barbarians at the gate
To be honest it’d be nice to find some bigger holes to poke in this new Vanguard platform.
You see, for our lauding its cheap funds – and for celebrating the pressure it puts on the wider industry to drive down costs – we’ve been accused in the past of being a sneaky Vanguard promotional site.
In reality, Vanguard has never even advertised with us. And it didn’t care to send us a press release to announce its new service.
Ho hum.
Fact is though, with this very competitively priced platform, Vanguard is likely to provide massive disruption to the incumbents.
While we like to argue the toss between this and that tracker fund, the average person would do fine just investing in Vanguard’s cheap passive offerings, or even its all-in-one options such as LifeStrategy and its target date funds.
Heck, it even has (low cost) active funds if you really must.
Rivals have some thinking to do. The lack of a Vanguard SIPP account at launch gives them some breathing space there. Some may be able to find a niche serving harder-to-please clients, such as expat investors.
But most are probably going to fall back on star active fund managers and heavy advertising to try to keep the Vanguard threat at bay. They should be aided in this by rival fund groups, who have just as much to lose from Vanguard gobbling up yet more market share.
Low-cost rival platforms are in trouble because they’re not cheap enough. Higher-cost offerings touting wunderkind active funds have the flow of history against them. Only a handful of these platforms were making good profits to begin with.
Monevator readers are in clover!
Finally, one of my spies in The City has sent in this documentary footage of the kerfuffle that the launch has already kicked off. (Sensitive readers should look away now).
The news alot of us have been waiting for I’m sure! Glad to see that theyve also introduced very low minimum investment amounts, will certainly help for ISA drip feeding passive investors.
This may be the provider for my LISA if and when they support it.
Amazing, but personally I’m quite surprised at the platform fee charge – it seems higher than I’d have expected. I appreciate it may be their style to reduce it as AUM increase.
‘Normal’ people paying 0.25% with YouInvest or Charles Stanley may think it’s not worth bothering to switch for 0.1% a year.
Now that iWeb have brought their entry fee back down to a reasonable level, I’d have thought it’s the best for most people who want to do the Vanguard thing.
I also don’t think it will affect HL that much – it’s different market segments.
I note that the ISA is a flexible ISA meaning withdrawals for emergency/pensions gaps can be paid back in within that tax year without impacting your allowance.
Not sure which other providers have this feature available.
re: Flexible ISA, Charles Stanley have offered flexibility with their ISA account since March this year.
Darn it! After much research I just opened an ISA and JISA with Charles Stanley and holding Vanguard within them. Now time to shift again or hold out for a CS response?
I was initially excited about this, but after second thoughts think this is a bit disappointing.
My ISA with Halifax costs £12.50 per year. I can buy Vanguard funds, including Lifestrategy 60% at 0.22%.
If I had, say, £50,000 invested the platform would cost me £12.50 plus dealing – £2 per month if a regular investment is set up. So £36.50 per year. And this would stay the same even as my portfolio (hopefully) rises.
Vanguard would cost £50,000 x 0.15% = £75.
That’s good news!
Do you think this is a start and soon they will extend to other european countries, such as France?
Claire
The FAQ page isn’t loading for me, but does anyone know if you can transfer in a stocks and share ISA? I might move mine from Cavendish, I haven’t subscribed anything this FY so far.
Look forward to seeing your next comparison table. Random thoughts: It certainly looks cheap compared with HL etc particularly for new investors starting out. But for investors with bigger sums it looks quite expensive compared with Interactive Investor. I wonder if this is just the beginning and Vanguard will lower fees? Certainly in the US with the vast economies of scale they are substantially less expensive.
I have a Help to Buy ISA (cash) which I’d like to convert to a Lifetime ISA (shares) this year. Can this be done through the Vanguard platform?
As others have commented above, whilst this is a strong offer from Vanguard, several existing platforms remain cheaper. e.g. Interactive Investor, Halifax SD, Iweb etc.
What are the equivalent charges for these Vanguard funds in IWEB please Tom ?
@Mark Senior @Others — Yep, as also noted by me in the piece. 🙂
Here’s that link again to our article on comparing all-in fees from one platform and another:
http://monevator.com/work-out-cheapest-platform/
Can only be good news for investors, but the current fee cap is far too high at £375.
Underwhelmed, to be honest.
Vanguard could have provided a better, more flexible, and cheaper direct-to-customer offering simply by outsourcing to Halifax or another flat-fee platform.
I think the value will really come when the SIPP arrives. Halifax ISA currently beats Vanguard in terms of charges (£12.50 fixed per annum).
SIPP, on the other hand, is slightly more expensive with no alternatives. I’m with BestInvest on 0.3% per annum and will happily go to Vanguard for a cheaper long-term ride.
Fantastic! Vanguard has been recommended to me by many people and I’m interested in getting started.
Hopefully this will be a great choice for a beginner like me.
I wonder how sustainable the flat-fee platforms are? Alliance Trust Savings has hiked its fixed fees several times, now standing at £120 pa. Apparently it has only just become profitable. So, unless ATS is unusually inefficient, I’m guessing the likes of iWeb, Halifax and Interactive Investor are making losses.
So perhaps Vanguard wanted to make sure it picked a fee model that was sustainable from the start. It isn’t really their style to win business, then hike fees.
@Gaz, yes you can, should be possible electronically, but worst off they’ll fill in as much of the transfer form in as they can automatically then you have to print it off and fill out the rest yourself and post it back to Vanguard.
In terms of your holdings, Vanguard ones are moved seamlessly, non-Vanguard ones are sold and the proceeds are either transferred as cash or automatically invested in to Vanguard fund(s) of your choosing when they arrive in the Vanguard account.
Glad to see this has launched. If I’m reading correctly I could buy ETFs with no dealing fees, which I can’t do with Charles Stanley Direct. It is a shame that its a £100 monthly minimum though. I’d like to have seen a £25 or even £50 a month option.
Right on point I think, @ivanopinion. We saw all kinds of fee kerfuffle after RDR, and then lots of hikes 18 months later.
As I said in my piece, most platforms make no money. Even this platform fee here for Vanguard probably barely covers the cost of running a lot of the accounts it will get.
For someone like Halifax, earning £12.50 a year can surely only be a loss leader. One phone call a year to customer support in a year would be enough to destroy any margin, at a guess. (And it is just a guess, but I recall that when a big and official post-RDR review was done a couple of years ago, only a couple of platforms were actually found to be profitable, albeit they were *very* profitable…)
I don’t disagree about the cost model for Halifax but in addition to the £12.50 per year, there is also a £12.50 per trade fee.
Whilst Vanguard may not have its own SIPP, I’ve just spoken with my SSAS service – https://ssas.co – it’s just spoken with Vanguard. It was told Vanguard does accept direct investment from full SIPPs and SSAS (trusts).
@Padawan
Yes, I think this is the only way (that I know of) to avoid ETF dealing fees, as long as you are happy to wait until the next dealing time (twice daily).
The FAQs say:
“As with dealing in and out of Vanguard OEICs and unit trusts, our standard ETF trading service is free. ETF trade instructions are batched and dealt at 10am or 2pm depending when we receive instructions. If you would prefer to buy or sell a Vanguard ETF at a live market price, there is a small dealing fee of £7.50 per transaction to cover our brokerage costs.”
Cheers, I’ll maybe wait a few weeks, just to see if any other competitors drop their fees, otherwise I can’t see any reason not to move my portfolio over there.
I just noticed from the FAQs that they have no exit charges and no charges for transferring funds out.
There are some excellent full service SIPPs. The value is in allowing multiple providers under one SIPP. This makes transferring cash within one pension between providers trivial and avoids the painful process of a pension transfer. You go provider 1 -> SIPP bank account (this is an account in your name, used only by your SIPP) -> provider 2. You can even do it all in the same day.
I really wish there was an ISA manager that would allow the same thing. A single account, but multiple providers underneath.
One of the things Vanguard direct is terrible for is leverage. The costs of using a margin account with Vanguard are really high.
Whilst investing using margin/leverage is much higher risk, I am seriously tempted to go down the passive with leverage route for an investment company and any non wrapped holdings. The costs to borrow on a platform like Interactive Brokers are so low that interest cost is largely irrelevant – it is all volatility risk and margin calls.
This is all driven by coming to the conclusion that (a) I do not have the time to invest actively in individual securities, (b) finding suitable investments in sleepy backwaters is getting much harder now the financial crisis has been and gone and (c) passive with leverage scales really well, it works just as well for £100K, £1M, £10M and probably £100M.
Great news I’ve got my online application done and transfer ISA paperwork in the post to my current provider. I am in Lifestyle 60/40 keep it simple!
I agree at first glance sticking to Interactive Investor will be the cheaper option for me. However, platform diversification has been something on my mind for a while so I’ll give it some serious thought to move my Vanguard passives direct to their direct platform and then leave my (dirty) actives and other ETF’s with II.
Just one additional thought. Currently with II they have a negotiated deal with Vanguard so there is no ‘initial charge’ for purchases of Vanguard Funds through the II platform (many others have the same I’m sure). I wonder if this will still stand or if Vanguard will pull the plug to make their offering more attractive?
Just looking through and they only seem to offer the Acc. class of funds. Just a quirk of mine but I prefer the Inc. variant.
This is very interesting.
Would this have any impact on the passive investing portfolio on this website?
@John – if you haven’t already seen from the Monevator table, iWeb are currently £25 set-up fee, £5 to trade, and no quarterly charge at all for Dealing and ISA (not sure about SIPP costs). For a while they put the set-up fee to £200, which may feed in to the ‘cheap platforms aren’t profitable’ argument above.
If you’re buying ETFs only, x-o is worth looking at – no set-up fee, no quarterly charge for Dealing and ISA. It doesn’t do funds, and the website is super no frills.
Both seem to have reasonably sensible owners, but obviously I’m not recommending them, DYOR etc. etc.
Note that while Vanguard’s funds might be cheaper direct, their ETFs can be held for free at IWeb and HL (outside tax wrappers) and HLs SIPP cap for ETFs is 200, not the quoted 375. Apart from price I think I’d want a SIPP with a broker, for the range of funds and services they offer, than with a sole provider like Vanguard.
Still, pressure on prices is good
I was really excited about this and started an ISA transfer from Cavendish this evening. I had to cancel it because the Vanguard website infuriatingly doesn’t allow you to paste your password. For people like me who use a password manager that basically makes their system unusable (or at least extremely frustrating).
Shame, but the difference only works out a few pounds for me at the moment, so being able to log in easily is probably worth that!
@Sharpespur
I almost missed the income version of the funds too, but there’s a tickbox on the top right of the fund listings to show them.
iWeb is £25 one-off fee (FOREVER!), and only £5 to trade -What can be cheaper ???
I began investing in ISAs at start of 2016 and am with HL. Initially i was attracted by the range of fund/ETF/IT information in one place, the ease and efficiency of using the service, the ability to chart performance and construct future portfolios, see portfolio analysis etc.
The cost of 0.45% didnt seem much at the start. While all of those first impressions of the service remain in place, Im concluding I can get most of the service elsewhere for free with a little bit of legwork – most of which has been revealed to me by this site.
So now im of the view that whilst the all in one package is very good, its just not worth 0.45% p.a. When you take the impact over time of these charges, and consider the risk of having all ones eggs in a single basket, i will use HL for this years ISA and then shift to a direct model. I have a general idea that when I hit FIRE and the withdrawal stage I will have say 2 SIPPs, and meybe 3 ISA platforms – enough to counter the risk of platform failure and not so many that i get confused in my dotage.
Vanguard offering this (like others eg Fundsmith or L&G etc) is all going in favour of the private investor.
Rock on.
I’m in a similar situation to you @SurreyBoy, I’ve been with HL for a while now and have several Vanguard trackers in there, and to be honest the simplicity of that and the super easy app on the iPhone etc give a level of convenience I gladly pay for. BUT…maybe the time has come to investigate whether taking some of those investments, or at least future investments elsewhere would make sense is here.
Time is valuable thing though. I’m not convinced that the hassle factor and time expenditure is worth a few quid a year (but I also know I might be making excuses so I suppose I’d better do some sums. Dammit Vanguard!)
I hold about 20% of my portfolio in LF 40% and soon I’m looking to draw an income from my portfolio. I can’t find information on how much income LF pay out. What place do LF have when drawing income? Helpful to know where i can go for this info
Well, interactive investor is £0 to set up and £1.50 to buy, if you set up monthly regular investments. Even if you don’t want to invest the same sum each month you can set one up then cancel the day after your purchase, so it’s cheap as chips.
I have 6 Vanguard funds in my ISA, the same 6 again in my SIPP. The total cost of monthly trades on Vanguard funds per annum is £108 in each account.
II charge £80 p.a. for holding an ISA or a SIPP, but in each case it is offset against dealing fees, so if your trades add up to over £80 p.a. there is basically no cost for holding the account; it is solely the cost of trades that you need to consider.
The comparison works as follows: your minimum cost with II is £80 p.a. Your cost with Vanguard is 0.15%. Vanguard is cheaper on any portfolio up to £53,333, at which point their 0.15% reaches £80 and the charges are equal. After that, you need to consider how many funds you want to invest in (monthly trades at £1.50, or £18 p.a., would cost the same as the commission on a further £12,000 held with Vanguard) and how much you are putting in. Each £12k stage above £53k is a further increment by which II is cheaper than Vanguard.
Id have to pay Vanguard £375 p.a. which would be over triple what I pay II.
Also, I have a couple of ishares funds that I hold with II and I may buy more.
I’ll move my kids’ ISAs and SIPPs to Vanguard as I’m happy to lose diversity of fund choice in favour of lowering trading costs, but the main ISA rates are not attractive at all.
Will the Vanguard account allow transfers between fund types for free inside your Vanguard account as they do in the US? If so what are the implications for capital gains tax if outside an ISA? Does a fund swap equate to a sale and purchase?
The US platform (in which I have a small investment from a stint in the US) is very user friendly and easy to manage, I hope the UK one is as good; shame about the fees here in UK though.
I have an ISA and dealing account with iWeb. I am gradually selling in my dealing account and buying in my ISA. Over the last year I have done 10 trades across the accounts, costing me £50. But if I transferred to Vanguard I would pay £750 per year. In addition I don’t just invest with Vanguard, which I would have to do at present if I transferred.
I welcome Vanguard’s entry into the market, but they are not in the least competitive with the flat fee brokers for larger accounts.
Instead of charging more for larger accounts, a really radical thing to do would be to offer discounts on management fees with increased sized investments.
@Naeclue
> But if I transferred to Vanguard I would pay £750 per year.
Vanguard effectively caps account fees at £375.
Agreed that iweb is still better for you (and me) though.
@Jon – he has a trading account and an isa account. £375 x 2 = £750.
@Alex P
It’s not very clearly stated on the website or T&Cs but this applies across all holdings (ie, at client level). I’ve just confirmed this with Vanguard by phone.
So an individual investor would never pay more than the £375
ah thanks – that does make quite a difference. It still amounts to up to 250 trades on Interactive Investor though, so not something I will be using for myself. If they open up a LISA, I’ll be dragging my entire family over to the PC to open accounts though!
@Subbuteo
“Will the Vanguard account allow transfers between fund types for free inside your Vanguard account as they do in the US? If so what are the implications for capital gains tax if outside an ISA? Does a fund swap equate to a sale and purchase?”
I’m pretty sure the answer is yes, a swap is a disposal for CGT, even if the two funds are both sub-funds in the same umbrella scheme. See at the bottom of this:
https://www.gov.uk/government/publications/shares-and-capital-gains-tax-hs284-self-assessment-helpsheet/hs-shares-and-capital-gains-tax-2015
@tom, @tony b, @Naeclue spot on iWeb takes some beating for cost. I’ve just opened an ISA with them made four trades and not paid any dealing charges, do you think you get five free trades for your initial £25.
Forget the above new broker different way of doing things I’m easily confused.
@Jon. Thanks for clarification. Even so £375 is still 75 iWeb trades per year, not something I will ever get anywhere near.
It’s all good, and will probably USE the passive part of my portfolio with them, but Caveat Investor.
Where the funds are domiciled: the Global Small Cap Index fund is domiciled in Ireland as well as the Global Bond. I haven’t checked each, only the ones I am interested in. This could have impact on those with bigger pots as the protection no the £50k FSCS; and with Brexit god knows how EU investments will be treated.
I used to think Vanguard only did this with their ETFs but apparently no.
Moreover, HL, the more expensive platform, cap their platform fee on shares and ETFs in ISAs at £45 (0.45pc of 10k), and don’t charge anything when they are in the general account. So holding ETFs, even vanguard’s own, is cheaper in Halifax or even HL.
Well, as you’d expect with a ‘Monevator’ name like Maximus, I’m all in favour of this type of announcement. I bet some of those Account Management Caesars are quaking in their, um sandals.
Should be interesting to see what SIPP product Vanguard come up with too…
Well – i posted yesterday that the HL service was very good but not really worth the 0.45%. Today the fund prices havent been updated – with no message on the site as to why. So perhaps not that great afterall.
This sounds awesome. Thanks for the tip of guys! I haven’t put any money into an ISA for a while but I think I’ll finally put an end to the hiatus
So far Vanguard’s website/platform looks to be user friendly. Interaction and communications using the secure message facility works well with quick response. My ID was not verified so I had to upload documentation. Once uploaded ID was verified within a hour or so lifting the temporary account restrictions. People are missing the point – if this development by Vanguard encourages more people to invest for their future it can only be a positive. The model has worked well in United States so hopefully will do so here in the UK. Waiting to see what they will offer in respect of pension.
Is the £100 a month minimum per fund or can you split that up and put for example £25 into 4 funds?
@No Cash Jay – Vanguard platform/direct – the Lump sum minimum is £500 and regular minimum £100 per fund/etf.
Your maths assumes 1 VG fund. My kids’ JISAs have 6: the 4 active factor etfs, the ftse global all cap fund and the EM fund. On VG’s platform you can invest monthly for free. On Halifax that would cost £156.50 per year. It would be cheaper to stay with Vanguard until the portfolio reached £104,333 in value.
Nice to see their entry into the market but too expensive for me currently, I’ll stick with my iWeb ISA. I’ll be interested to see their SIPP charges when that comes along.
Can’t find comments
It says 61 Comments but no comments showing & the ‘Next Comments’ link goes nowhere.
It now says 62 Comments (got mine then) but the ‘Previous Comments’ not only hurts the eyes, it also goes nowhere.
It’s the free trades. If you’re investing a relatively small sum (say, £4,128 into a JISA) the free trades allow you to make monthly contributions that would otherwise be compromised by the price of doing so. The more funds your portfolio is spread across, the greater the savings. For instance, I’ve transferred my children’s JISAs in because they are each split between 4 vanguard etfs and 2 index funds, maybe 3. Thus I can make 7 trades in each JISA, every month, for free – 14 in total. Even if I were using the cheapest alternative out there, that would be 14 x £1.50 = £21 per month or £252 per year across both kids’ JISAs.
Hmm my replies to people seem to be getting tacked on to the end of the thread. Sorry if the above comments seem garbled!
65 Comments but they are still invisible.
@all — Comments should be working now, sorry for the disruption!
I have a Life Strategy Fund in an ISA with Charles Stanley where their platform charge is 0.25% and no dealing or other charges. Considering Vanguards account fee of 0.15% plus fund charge of 0.22%, it’s still cheaper to stay with Charles Stanley.
@No Cash Jay
I opened a general account with £500; they’ve just settled an adhoc purchase of £50 into LS80%
They’ve also set up a DD for £50 a month into LS80% – so I’m assuming that will be actioned.
The key here is I’ve seeded the account with the minimum cash amount – £500
(as I was interested in getting one of my kids to start saving small monthly sums)
@David
>it’s still cheaper to stay with Charles Stanley.
No, it isn’t.
@ David
Charles Stanley charge you their platform fee of 0.25% and Vanguard will charge you their fund fee of 0.22%. Total of 1%.
Vanguard platform will charge you 0.15% plus the fund charge of 0.22%. Total of 1%. Vanguard does however offer free switches between funds and in respect of etf’s no purchase/sell fees if happy to have your instructions grouped with their bulk transactions twice a day. Vanguard also have a habit of reducing costs when economies of scale kick in.
Perhaps this will be a wake-up call to platforms such as that of Fidelity whose website is poor and where customer service is worse.
@William
Where do you get 1% from for both platforms?
I make it 0.47% for CSD and 0.37% for Vanguard.
@David.
You pay 0.22% to Vanguard for your LifeStrategy fund either way. They don’t magically waive their costs for anyone!
The only difference is your platform fee. With Cavendish it’s 0.25% and with Vanguard it’s 0.15%.
@ Linda
Apologies – for the oversight. But the point was attempting to make was that the fund charge and platform fee with Vanguard was cheaper.
Just transferring my Fidelity ISA (Vanguard Lifestrategy) to Vanguard ISA. *Maybe* iWeb would be slightly cheaper but I’m certainly better off than staying with Fidelity. It’s 0.15% v 0.35%. It doesn’t sound like much but using a compound interest calulation, even with my modest nest egg, assuming I keep paying in the same amount on top over 20 years and a growth rate of 7%, the difference is about £12000 having subtracted the respective fee as a comparison. Just 0.2% made all that difference…
So, it’s cheaper to go with Vanguard, so my next step will be to transfer my Charles Stanley ISA to Vanguard. Thanks for all the comments.
I still find share trading in the UK expensive compared to Sweden. Swedish broker Nordnet lets you trade for free for portfolios up to 80K SEK (approx 8000£), and charge per trade fees as small as 10p (1SEK). Encouraging for new and small investors to find their feet.
Nothing much to add (but want to subscribe to future comments).
As others have said, initially exciting, and great for people starting out, though as the portfolio’s get larger, II (and others) seem to come out on top.
…also really hoping they hurry up with their SIPP, and LISA offerings too.
Ditto about the SIPP. I read it’s on its way later in the year. Currently with Bestinvest but I think Vanguard will be more competitive.
Remember Vanguard have the scale and economies of scale to maintain their charges. They may well reduce their platform charge over time like they have reduced their fund charges based on increased AUM.
Overall they have a competitive offering. In respect of etf’s you will be able to trade free if happy to have instruction actioned in bulk with all other instructions daily either am or pm.
Hopefully their SIPP offering will be equally competitive!
Transfer took just a few days from Fidelity to Vanguard. No hassle. Just had to upload ID.
Looking forward to switching my SIPP from Bestinvest to hopefully get a similar reduced charge.
Issues with Vanguard:
Unable to verify identity re. transfers in from another provider (hence identity verified).
Monthly investment minimum of £100.00 is not user friendly- i.e. A wish to invest £100 per month in total but split it between funds/etf’s, i.e. £90 in VWRL and £10 in VGOV.
No SIPP wrapper at launch is a major inconvenience.
The introduction of some videos re. Navigation of website and functionality would be beneficial. UK investors are familiar with and comfortable with existing platforms.
The amount of negative reviews of Vanguard’s US operation.
I think they are having teething problems with the site.
I verified my bank details. They emailed back to confirm but it still says the details need to be verified in the Regular Payments section.
It also says the ISA transfer is pending when as far as I can tell it’s gone through.
At this stage I will stick with HL and adopt Lars Kroiger’s investment portfolio. Either world tracker etf and UK Gilt etf or use ishares core world tracker with either UK Gilt or UK corporate bond or both.
Let’s hope Vanguard UK platform has teething problems as opposed to importing the customer service issues that they seem to be having in the USA. I agree their fund offering is good. If we can persuade HL to introduce regular etf investments charged at £1.50 in line with investment trusts – it would be beneficial.
I have opened an ISA and 2 JISAs on the new Vanguard platform. It works perfectly for me. Also, there has been some confusion as regards minimum investments. Once your account is open, you can make a monthly investment of, for instance, £100 and have that £100 split between more than one fund.
In fact, if you are investing small sums, then it is a no brainer. My kids’ JISAs are split between about 6 different funds/etfs. On monthly basis, that would be 72 investments per year and so over £100 on the next cheapest platform, as opposed to free with VG. Also, the various niggles that arise out of cashflow issues usually lead to me making all sorts of rebalancing/faffing trades that weren’t in my original plan. these quickly add up on any other platform, as they are not usually made within a super-discounted “regular investment” plan. The VG is very good and I recommend it.
@ Alex P
That was my biggest gripe – the website would’nt let me split my monthly investment across funds/ etfs. I found this frustrating. I have raised this with Vanguard. Hopefully niggles like this will be addressed.
I contacted them yesterday about issues I had. I’m glad to say they got back to me within a few hours. They admitted having a few problems with the new website.
Issues with Vanguard addressed. Will use Vanguard ISA for Lifestrategy fund as 0.15% platform fee competitive when compared to HL 0.45%. If etf’s used the non-capped platform fee with nil charges for purchase/sell of etf’s is competitive compared to HL – as HL charge £11.95 for purchase/sell. Regular investment into etf’s is now viable. At this time continued use of either investment trusts or etf’s in HL SIPP pending Vanguard’s offering. Another benefit of Vanguard ISA is that it is flexible allowing for withdrawals as required with ability to replace withdrawn monies within the same tax year.
Instructed Vanguard to transfer in Junior ISA from HL. Investment Trust sold quickly but monies still sat with HL after a month. Last two emails to HL ignored. Just how long does it take to transfer cash proceeds to new platform provider. Delay plus ignoring client emails is unacceptable and echos negative comments posted to Trustnet re HL. Perhaps HL have become complacent. If this is the level of service HL delivers now then new entrants like Vanguard may well do well. How much ISA money has HL lost to Vanguard. If HL don’t care about clients and their reputation then future decisions to transfer SIPP to Vanguard in the future will be easier to make. Vanguard have demonstrated high level of customer service to date. Vanguard service and cost will win out.
To follow on from William’s comment, another thing I noticed about Vanguard was how quickly the monthly payment was invested. The next day. With Fidelity, it seemed to be three or four days, going through various stages.
It’ll be interesting to see how other providers respond.
So, transferred my son’s J-ISA from Youinvest. A single fund (lifestrategy 100), sold to cash for £1.50 to avoid £25 transfer fee.
Would like to transfer my ISA, but the cost of selling/transferring everything means >10 year payback on the cheaper fees.
H-l is even worse as they charge a fee for account closure!
Until such time as transfers can be done more fairly you are trapped unless you want to take the hit.
Just checked Vanguard’s site about the SIPP:
“Not right now, but we’re working on bringing you a SIPP towards the end of 2018.”
Can anyone comment on the Vanguard platform’s functionality / ease of use? My father had his BT shares transferred into selftrade – it’s awful!
Very simple to use so far, only one holding, so some of the charts and detailed views are a little wasted. Easy to add new cash and top-up holdings etc.
The website’s very clear and well laid out. I’ve had no issues with the Vanguard at all. They also reply to questions very promptly.
So far, much better than Bestinvest and Fidelity, particularly as it doesn’t take them 4 days to invest each contribution like it does it with those companies.
Been a customer for a few months now, so far so good but their platform has a few bugs in there. e.g. failed to invest the opening account transfer for my wife (nearly 3 weeks in and still being “looked at by IT”) and also shows incorrect values when I switch between my own and my 2 sons’ J-ISAs.
So Vanguard is cheapest for funds, ETFs, ISAs etc. but can you buy/trade individual shares
for UK or abroad?
thanks