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  • FIRST POST
    • edinburgher
    • By edinburgher 16th May 17, 8:21 AM
    • 10,730Posts
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    edinburgher
    Vanguard direct to customer offering confirmed
    • #1
    • 16th May 17, 8:21 AM
    Vanguard direct to customer offering confirmed 16th May 17 at 8:21 AM
    Looks like Vanguard are taking the wraps off their new direct to customer offering - wonderful

    https://www.ft.com/content/6821ce50-3976-11e7-821a-6027b8a20f23

    I know that this has been on the cards for some time, but it's nice to see some specifics confirmed (0.15% admin costs for £500+)

    Another article:

    https://www.theguardian.com/business/2017/may/16/vanguard-funds-investment-isa-uk-fees-hargreaves-lansdown-fidelity
    Last edited by edinburgher; 16-05-2017 at 8:24 AM.
Page 2
    • EdSwippet
    • By EdSwippet 16th May 17, 9:21 AM
    • 593 Posts
    • 564 Thanks
    EdSwippet
    No platform charge if £250k or more invested.
    Originally posted by cloud_dog
    No further platform charge once assets reach and then exceed £250k. But 0.15% on the first £250k.
    • cloud_dog
    • By cloud_dog 16th May 17, 9:34 AM
    • 3,251 Posts
    • 1,813 Thanks
    cloud_dog
    Still nowhere near as low as Halifax Share Dealing fixed fee platform charge of £12.50 per annum.
    Originally posted by Audaxer
    We don't pay a ISA platform charge (TD Direct and X-O) but, we do not invest / hold OIECs and do have to pay for trades.

    I make use of the regular investment feature (TD £1.50) for 'administrative' trades, i.e. re-balancing etc but, do incur normal charges on my active / trading investments.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • edinburgher
    • By edinburgher 16th May 17, 9:51 AM
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    edinburgher
    I'm not sure this is such a great deal - unless I am missing something.

    If Vanguard are charging 0.15%, this doesn't work well for larger investors. For example, if you had over £10k, you would be better to own the Vanguard investments through say Halifax at £12.50/yr? Even cheaper through iWeb once you've paid the account opening fee?

    What am I missing?
    Originally posted by mgarl10024
    They offer JISAs - iWeb/Halifax/BOS either don't or aren't currently offering new accounts
    • ian-d
    • By ian-d 16th May 17, 10:00 AM
    • 367 Posts
    • 87 Thanks
    ian-d
    Think I'll stick with HL for now; I'm struggling enough to make decisions over products and methods of investing that throwing in another provider just makes my head spin.
    • coyrls
    • By coyrls 16th May 17, 10:01 AM
    • 918 Posts
    • 957 Thanks
    coyrls
    Itís a good offering but I donít think itís going to lead to a price war. As had been mentioned, price conscious investors with significant ISA investments will already be on a fixed price platform such as Halifax Share Dealing; somebody with a £250K ISA would have to make 30 or more full priced trades a year before the Vanguard ISA offering was cheaper. Investors who are already with Hargreaves Lansdown have already made a conscious or unconscious decision to pay above the market rate for the perceived advantages of HL and a new offering with only Vanguard funds on offer is unlikely to make them move.Undoubtedly Vanguard will pick up a sector of the market that are bought in to the Vanguard philosophy and that have existing smaller ISA investments or who are new ISA investors but I donít think this sector is big enough to disrupt the existing market.
    • edinburgher
    • By edinburgher 16th May 17, 10:09 AM
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    edinburgher
    Vanguard will pick up a sector of the market that are bought in to the Vanguard philosophy and that have existing smaller ISA investments or who are new ISA investors but I don’t think this sector is big enough to disrupt the existing market.
    Originally posted by coyrls
    Vanguard seem to be exceptionally good at growing their business. I can see them picking up a lot of praise from comparison sites/MSE-type outlets as a great choice for new investors.

    At that point, I suspect that they will pick up quite a bit of business from new accounts and that the laziness of the average Brit (I'm thinking utility switches here) will lead to considerable AUM as people stick with a 'good enough' provider.

    I can definitely see that changing the existing market for the better.
    • cloud_dog
    • By cloud_dog 16th May 17, 10:15 AM
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    • 1,813 Thanks
    cloud_dog
    I can definitely see that changing the existing market for the better.
    Originally posted by edinburgher
    I agree, they can only have a positive impact on our local market. Would just like them to expand in to SIPPs.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • koru
    • By koru 16th May 17, 10:23 AM
    • 1,276 Posts
    • 644 Thanks
    koru
    I guess they had to decide whether to target people on fixed fee platforms or percentage fee platforms. They decided on the latter, as it is most of the market, and easier to beat.
    koru
    • hutman
    • By hutman 16th May 17, 10:28 AM
    • 76 Posts
    • 26 Thanks
    hutman
    can we transfer out of hl to vanguard? makes sense for me since all my s&s isa funds are vanguard on hl.
    • edinburgher
    • By edinburgher 16th May 17, 10:42 AM
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    edinburgher
    Yes, but it will cost you £25+VAT as a cash transfer, or £25+VAT per holding as a stock transfer. There is also a £25+ VAT account closure fee. I believe that I still have an old acc with HL somewhere as I was too cheap to pay the closure fee
    • edinburgher
    • By edinburgher 16th May 17, 10:56 AM
    • 10,730 Posts
    • 56,062 Thanks
    edinburgher
    I agree, they can only have a positive impact on our local market. Would just like them to expand in to SIPPs.
    Originally posted by cloud_dog
    The Citywire article quotes Vanguard as wanting to provide a SIPP soon
    • enthusiasticsaver
    • By enthusiasticsaver 16th May 17, 12:52 PM
    • 4,674 Posts
    • 8,768 Thanks
    enthusiasticsaver
    We are with Halifax share dealing which is flat fee so although we only invest in Vanguard I don't think it would be worth our while to switch as our portfolio is over £150k. Also they don't do sipps.
    5 weeks to go until early retirement in December . Debt free and mortgage free.

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    • bostonerimus
    • By bostonerimus 16th May 17, 1:01 PM
    • 1,106 Posts
    • 620 Thanks
    bostonerimus
    I buy directly from Vanguard in the US (I live in the USA). Fees on the core funds are 0.05% and there is no platform fee and it is free to trade Vanguard mutual funds. However, there are restrictions that limit trading frequency.
    • dunstonh
    • By dunstonh 16th May 17, 1:07 PM
    • 89,513 Posts
    • 55,949 Thanks
    dunstonh
    I was surprised it wasn't cheaper. For an in-house offering with just ISA or unwrapped, I expected it to be cheap. SIPP administration and regulatory requirements are higher than ISA/unwrapped. So, no surprise they have not got that in place for now. And the whole of market/fund supermarket involves higher costs as well. So, again, you would expect it to be cheaper.

    I am not sure it is worth moving in most cases. I would prefer whole of market access and you can get that at costs near that amount. And those with larger investments where the cap could apply are unlikely to have all their investments with Vanguard (some might if they Vanguard fanboys but as Vanguard are not the best in passive in every sector, it creates limitations).
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • JohnRo
    • By JohnRo 16th May 17, 1:39 PM
    • 2,458 Posts
    • 2,213 Thanks
    JohnRo
    I think it's fair to say this is their opening salvo, as others have noted. My initial 'excitement' at the news soon gave way to indifference and some concern.

    If this does start a price war they have far more dry powder that all the other platforms combined. I am not a Vanguard fan, that doesn't mean I dislike them, I hold VWRL in my index portfolio.

    A massive overreaction perhaps, but what I'm concerned about is that they start, albeit slowly, to drive the fees in the UK platform market down to unsustainable levels for many of the current operators, some who have yet to turn a profit on their direct platforms.

    That far from ushering in a golden age for investors, they're seeking to monopolise and control, strangling the competition and ultimately stifling greater choice and investment freedom, by either driving the opposition out of business or into some sort of inferior bargain basement service or having them switch off their loss making direct platforms.

    On the other hand, as it stands currently, they're just another welcome addition to the fray.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • username12345678
    • By username12345678 16th May 17, 1:55 PM
    • 130 Posts
    • 55 Thanks
    username12345678
    I was expecting a low fixed-fee charge so i'm a little underwhelmed.

    I'll stick with my original plan for an iweb sipp if Vanguard use a similar pricing structure as their isa's.
    • edinburgher
    • By edinburgher 16th May 17, 2:07 PM
    • 10,730 Posts
    • 56,062 Thanks
    edinburgher
    Your link is to your own machine, not to a website
    • Redski69
    • By Redski69 16th May 17, 2:27 PM
    • 22 Posts
    • 12 Thanks
    Redski69
    can we transfer out of hl to vanguard? makes sense for me since all my s&s isa funds are vanguard on hl.
    Originally posted by hutman
    I believe they're only offering Vanguard Assets, so if you hold any other assets outside of Vanguard via HL then you'll either need to nuke them into Cash for a Transfer Out or leave them behind ... although I'm not sure HL do partial Re-Registrations out?

    This offering is an interesting one.

    They might feel the pain of launching this, in terms of increased regulatory demands, Customer Service requirements, ongoing platform / product enhancements etc. And all they are getting for all that extra work is 15bps, woo.

    From a Customers point of view, they're only offering Vanguard Funds. So that’s not good either.

    Customers vote with their feet and money and pretty much a majority have voted to put their money with the most expensive provider …. Hargreaves Lansdowne when there have always been cheaper options out there.

    Ultimately, Customers want :
    - Value for money - this doesn't mean cheapest!
    - A Trusted Brand
    - Good Customer Service

    Currently, you cant have a SIPP, you cant buy Shares either and not being able to have all your assets in one place will be a Deal Breaker for some & I think for that reason other players in the marker will be un-phased by this.

    Let's see what HL Trading Update on Thursday brings.
    Last edited by Redski69; 16-05-2017 at 2:51 PM.
    • Audaxer
    • By Audaxer 16th May 17, 2:31 PM
    • 558 Posts
    • 244 Thanks
    Audaxer
    We are with Halifax share dealing which is flat fee so although we only invest in Vanguard I don't think it would be worth our while to switch as our portfolio is over £150k. Also they don't do sipps.
    Originally posted by enthusiasticsaver
    It definitely wouldn't be worth your while as you would have a platform fee of over £225 instead of £12.50.
    • MPN
    • By MPN 16th May 17, 2:54 PM
    • 236 Posts
    • 79 Thanks
    MPN
    I'm currently with Fidelity for my S&S ISA's but mainly hold active funds in my portfolio so really the Vanguard platform at present is no use to me, however I am looking into switching to a fee based platform such as Halifax/IWeb.
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