Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • edinburgher
    • By edinburgher 16th May 17, 8:21 AM
    • 10,673Posts
    • 55,732Thanks
    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 3
    • bostonerimus
    • By bostonerimus 16th May 17, 2:59 PM
    • 838 Posts
    • 421 Thanks
    bostonerimus
    I hope Vanguard's move will highlight the basic Bogle rule of keeping fees to a minimum. There is still as nasty perception in the UK that you can regularly buy market beating performance by paying extra for an actively managed fund. That will work for some people in some years, but some active funds will lag the market and for the majority of investors a low cost tracker approach is the best way to go. I've been investing with Vanguard in the US for the last 20 years and the fees on my funds range from 0.04% to a max of 0.12%. Those are my only fees. I've usually kept a roughly 60/40 asset allocation........although I'm now letting the equity percentage drift up and I'm close to 70/30. Over my 30 years of investing by sticking to a 60/40 asset allocation in tracker funds I've averaged 8% annual return. So by doing not much other than following a few simple rules, and having a low cost lifestyle, I was able to retire debt free at age 52.
    Last edited by bostonerimus; 16-05-2017 at 3:11 PM.
    • Eco Miser
    • By Eco Miser 16th May 17, 3:27 PM
    • 2,977 Posts
    • 2,757 Thanks
    Eco Miser
    There is still as nasty perception in the UK that you can regularly buy market beating performance by paying extra for an actively managed fund.
    Originally posted by bostonerimus
    In the US too, if the blogs I've read are any guide.
    Eco Miser
    Saving money for well over half a century
    • koru
    • By koru 16th May 17, 3:44 PM
    • 1,257 Posts
    • 638 Thanks
    koru
    Some nice touches: no fee to transfer funds out and no exit charges.
    koru
    • dunstonh
    • By dunstonh 16th May 17, 3:54 PM
    • 89,435 Posts
    • 54,896 Thanks
    dunstonh
    There is still as nasty perception in the UK that you can regularly buy market beating performance by paying extra for an actively managed fund.
    Mainly as it is true in the UK. One of the few countries where that is the case. Unlike many other countries where passive is better.

    Most of the passive vs managed research comes from the US and cannot be applied to the UK directly. In the US it does make sense to be in passive.
    Last edited by dunstonh; 16-05-2017 at 7:36 PM.
    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 a Financial Adviser local to you.
    • StellaN
    • By StellaN 16th May 17, 4:09 PM
    • 178 Posts
    • 52 Thanks
    StellaN
    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.
    Originally posted by MPN
    Most people who hold some active funds and also have a decent size investment portfolio will still be better off with a flat fee based platform such as Halifax etc. rather than any percentage based platform even at 0.15%.
    • Redski69
    • By Redski69 16th May 17, 4:14 PM
    • 22 Posts
    • 12 Thanks
    Redski69
    Most people who hold some active funds and also have a decent size investment portfolio will still be better off with a flat fee based platform such as Halifax etc. rather than any percentage based platform even at 0.15%.
    Originally posted by StellaN
    Are we talking cross purposes here, mixing the Annual Management Charge of the Fund with the Platform Fee of who you hold the account with, ie. Hargreaves, TD, Halifax etc. ?

    Also, it looks like the Halifax may charge less than say HL on the Annual Fee via a Flat Rate, but looking at their Trade Charges (applied to ALL investment options?) they pull your pants down on a Buy or Sell in a mutual fund @ £12.50 per deal ... so a switch charges you on the Buy AND Sell leg !?

    Other platforms are free for Fund Dealing.

    So, I guess if you aren't a Frequent Trader, it isn't so bad ...
    Last edited by Redski69; 16-05-2017 at 4:24 PM.
    • koru
    • By koru 16th May 17, 4:46 PM
    • 1,257 Posts
    • 638 Thanks
    koru
    Mainly as it is true in the UK. One of the few countries where that is the case. Unlike many other countries were passive is better.

    Most of the passive vs managed research comes from the US and cannot be applied to the UK directly. In the US it does make sense to be in passive.
    Originally posted by dunstonh
    That's a big assertion. I agree that there's more research into the US market than in relation to the UK, but I wasn't aware of any rigorous analysis that demonstrates that the UK is any better endowed with managers who can reliably outperform the market than elsewhere. I don't want to go off topic here, and turn this into another debate on passive v active. No doubt you have explained the basis for this comment on other threads, so can you direct me to them? I'll comment there, if necessary.
    koru
    • Redski69
    • By Redski69 16th May 17, 4:51 PM
    • 22 Posts
    • 12 Thanks
    Redski69
    I hope Vanguard's move will highlight the basic Bogle rule of keeping fees to a minimum. There is still as nasty perception in the UK that you can regularly buy market beating performance by paying extra for an actively managed fund. That will work for some people in some years, but some active funds will lag the market and for the majority of investors a low cost tracker approach is the best way to go. I've been investing with Vanguard in the US for the last 20 years and the fees on my funds range from 0.04% to a max of 0.12%. Those are my only fees. I've usually kept a roughly 60/40 asset allocation........although I'm now letting the equity percentage drift up and I'm close to 70/30. Over my 30 years of investing by sticking to a 60/40 asset allocation in tracker funds I've averaged 8% annual return. So by doing not much other than following a few simple rules, and having a low cost lifestyle, I was able to retire debt free at age 52.
    Originally posted by bostonerimus
    - There's a difference between Fund Charges and Platform Fees.

    - With Platform Fees, you typically get what you pay for.

    - HL are one of the most expensive Platforms, but Customers flock to them because of the Customer Service offering.

    - They may be your only Fees in the US, but its standard market practice in the UK for the Platform Provider to charge you a Fee now we are in the post RDR world where Ongoing Fees are no longer paid to the Platform direct by the Fund Provider, to give pure transparency to Customers as to the charges they're paying - rather than it coming out your AMC of the asset and most investors being clueless that their Advisors put them in particular funds due to the healthy levels of Ongoing Commission that asset paid.

    - Unsure of the rationale behind your 60:40 allocation, but its also good to build a Cash element into your Portfolio to cover Fees. That prevents the disinvestment of assets out the market to cover your Fees - which HL will charge you a Fee on too - and no one like paying a Fee to pay a Fee!

    - Congrats on retiring at 52, I hope you're relaxing on a beach somewhere with a nice view watching your investments rise in the Bull Market.
    • bostonerimus
    • By bostonerimus 16th May 17, 5:58 PM
    • 838 Posts
    • 421 Thanks
    bostonerimus
    - There's a difference between Fund Charges and Platform Fees.

    - With Platform Fees, you typically get what you pay for.
    Originally posted by Redski69
    I know there's a difference. In the US Vanguard has no platform fees and no trading fees for Vanguard funds. US Vanguard service and tools is excellent....I hope that will be the case in the UK too.

    - HL are one of the most expensive Platforms, but Customers flock to them because of the Customer Service offering.
    US Vanguard is inexpensive and gives great service...let's hope that start to happen in the UK too.

    - They may be your only Fees in the US, but its standard market practice in the UK for the Platform Provider to charge you a Fee now we are in the post RDR world where Ongoing Fees are no longer paid to the Platform direct by the Fund Provider, to give pure transparency to Customers as to the charges they're paying - rather than it coming out your AMC of the asset and most investors being clueless that their Advisors put them in particular funds due to the healthy levels of Ongoing Commission that asset paid.
    Yep, I'd hate to have to invest in the UK as it can be a real a rip off.

    - Unsure of the rationale behind your 60:40 allocation, but its also good to build a Cash element into your Portfolio to cover Fees. That prevents the disinvestment of assets out the market to cover your Fees - which HL will charge you a Fee on too - and no one like paying a Fee to pay a Fee!
    My allocation is based on an efficient frontier for retirement investing balancing risk and return......now that I have guaranteed income from a pension I'm actually taking more risk in the portfolio and letting the percentage of stocks increase.

    - Congrats on retiring at 52, I hope you're relaxing on a beach somewhere with a nice view watching your investments rise in the Bull Market.
    Well that's right apart from the beach.....but I'm often on my porch drinking a beer
    Last edited by bostonerimus; 16-05-2017 at 6:00 PM.
    • bowlhead99
    • By bowlhead99 16th May 17, 6:38 PM
    • 6,686 Posts
    • 11,873 Thanks
    bowlhead99
    That's a big assertion. I agree that there's more research into the US market than in relation to the UK, but I wasn't aware of any rigorous analysis that demonstrates that the UK is any better endowed with managers who can reliably outperform the market than elsewhere. I don't want to go off topic here, and turn this into another debate on passive v active. No doubt you have explained the basis for this comment on other threads, so can you direct me to them? I'll comment there, if necessary.
    Originally posted by koru
    As you might imagine, after this forum has been running for over a decade there are literally hundreds of existing threads with thousands of posts that refer to the "active vs passive debate" in some way. Some populated by evangelists and some by moderates. Most people recognise that passive can be best for some areas and strategies and in other areas passives are less useful or do not even have a suitable index in which to invest.

    The US with one of the most efficient markets in the world is a good place to push passives. Also, passives have an advantage there because you pay taxes on the realised gains made inside mutual funds when the fund manager exits a position, whereas in the UK you typically do not, only when you actually dispose of your share in the fund as an investor in it. So, an actively managed fund in the US has a disadvantage compared to one that is more "passive, buy and hold with minimal churn", not just in terms of a US passive manager having a few basis points of trading costs saved, but also a chunk of tax saved. That sort of advantage is not felt by UK passive managers.

    In the UK, our main stock index the FTSE100 (which is itself over 80% of the FTSE all share) is a terrible index with high concentration in certain industries that dominate that market cap weighted index. So, active can improve diversification across market cap and industry. In the US, the S&P500 and Russell indices are more balanced in terms of mix.

    So, investing is not one size fits all, around the world.
    Last edited by bowlhead99; 16-05-2017 at 7:34 PM.
    • george4064
    • By george4064 16th May 17, 7:05 PM
    • 819 Posts
    • 865 Thanks
    george4064
    I don't see what incentive Vanguard will have to branch out and offer investment products from others, does any one have info that's their intent?

    As an outfit that pride themselves on keeping costs as low as possible I suspect all they're doing is offering direct affordable access to their own products and in house services, without the need to stump up a six figure lump sum.
    Originally posted by JohnRo
    I don't have any inside info, but I would be very surprised if Vanguard offered anything other than Vanguard products.
    Last edited by george4064; 16-05-2017 at 7:10 PM.
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £9,136.98/£12,000 (76%)
    • MrWizard
    • By MrWizard 16th May 17, 7:39 PM
    • 26 Posts
    • 1 Thanks
    MrWizard
    If we transfer do they transfer the block of money at current fund price or at the price that we bought it. I'm with HL so probably want to move soon.
    • MarcoM
    • By MarcoM 16th May 17, 7:59 PM
    • 432 Posts
    • 45 Thanks
    MarcoM
    has anyone tried to ask HL about reducing their fees?

    also how difficult do you think it would be to transfer
    an isavfrom hl to vanguard? matter of weeks or days?

    thanks
    • ColdIron
    • By ColdIron 16th May 17, 8:08 PM
    • 3,374 Posts
    • 3,948 Thanks
    ColdIron
    I don't have any inside info, but I would be very surprised if Vanguard offered anything other than Vanguard products.
    Originally posted by george4064
    Vanguard chap interviewed on Sky's Ian King said - never say never but no current plans at all presently
    • thetimewill
    • By thetimewill 16th May 17, 8:27 PM
    • 40 Posts
    • 6 Thanks
    thetimewill
    Hello all,
    For your interest, I have transferred an ISA from Fidelity to Vanguard. All monies are in VLS funds and the transfer was completed within 2 hours of my online request. "Every little helps".
    Regards
    Billy
    Last edited by thetimewill; 16-05-2017 at 8:30 PM. Reason: omission
    • george4064
    • By george4064 16th May 17, 8:32 PM
    • 819 Posts
    • 865 Thanks
    george4064
    Hello all,
    For your interest, I have transferred an ISA from Fidelity to Vanguard. All monies are in VLS funds and the transfer was completed within 2 hours of my online request. "Every little helps".
    Regards
    Billy
    Originally posted by thetimewill
    That doesn't sound right at all, transfers are usually more like a matter of weeks.

    What did you actually transfer from Fidelity to Vanguard? Was it cash, unit trusts or shares/ITs?
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £9,136.98/£12,000 (76%)
    • hennerz
    • By hennerz 16th May 17, 8:46 PM
    • 171 Posts
    • 32 Thanks
    hennerz
    Mainly as it is true in the UK. One of the few countries where that is the case. Unlike many other countries where passive is better.

    Most of the passive vs managed research comes from the US and cannot be applied to the UK directly. In the US it does make sense to be in passive.
    Originally posted by dunstonh
    Oh dear. Not correct...



    https://www.etfstrategy.co.uk/vanguard-calls-for-fees-health-warning-on-funds-67345/
    • Redski69
    • By Redski69 16th May 17, 8:47 PM
    • 22 Posts
    • 12 Thanks
    Redski69
    That doesn't sound right at all, transfers are usually more like a matter of weeks.

    What did you actually transfer from Fidelity to Vanguard? Was it cash, unit trusts or shares/ITs?
    Originally posted by george4064
    Agreed, I'd wager it's a Re-Registration of assets to be administered on Vanguards Platform from Fidelity ; rather than a Tranfser Out which involves a Sell Down of assets to cash and a re-buy.

    In answer to the earlier posters question too, HL will give you the current price on the units rather than the price you bought the assets at.

    However rather than cashing out into the market, guidance would steer you towards re-reg'ing the assets over transferring them out in cash.

    HL also have an Exit Fee but speak nicely to you new platform & they'll probably cover that for you ;o)
    • thetimewill
    • By thetimewill 16th May 17, 8:58 PM
    • 40 Posts
    • 6 Thanks
    thetimewill
    Hello George and Redski,
    It may not sound correct to you but I can assure you my transfer has taken place as described. IE my VLS funds ( previously with Fidelity) are now with Vanguard and the correct balance is showing on my Vanguard account.I have also placed a small amount in cash with Vanguard to cover future charges.
    Regards, Billy
    • Redski69
    • By Redski69 16th May 17, 9:14 PM
    • 22 Posts
    • 12 Thanks
    Redski69
    Hello George and Redski,
    It may not sound correct to you but I can assure you my transfer has taken place as described. IE my VLS funds ( previously with Fidelity) are now with Vanguard and the correct balance is showing on my Vanguard account.I have also placed a small amount in cash with Vanguard to cover future charges.
    Regards, Billy
    Originally posted by thetimewill
    No that makes perfect sense Billy. You've just re-registered the assets from administration by Fidelity to through Vanguards platform now and timings make sense as Vanguard is your Fund Provider for the assets you hold in the market.

    I misread your note that you'd transferred the assets, as in a Transfer Out which means selling them to cash and then rebuying them in the new platform - but you hadn't done that - my mistake !

    What made you leave Fidelity, just Price ?
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,130Posts Today

8,397Users online

Martin's Twitter