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  • FIRST POST
    • edinburgher
    • By edinburgher 16th May 17, 8:21 AM
    • 10,618Posts
    • 55,111Thanks
    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 4
    • dunstonh
    • By dunstonh 16th May 17, 9:25 PM
    • 88,168 Posts
    • 53,390 Thanks
    dunstonh
    You are wrong.
    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.
    • username12345678
    • By username12345678 16th May 17, 9:52 PM
    • 69 Posts
    • 24 Thanks
    username12345678
    87.2% of actively managed UK equity funds underperformed their benchmarks in 2016 but in 2015 only 22.2% underperformed. These numbers don't take in to account funds that are closed by providers.

    The FCA's 2016 report on the subject concluded that active management generally struggles to beat the market after costs (link to report in FT link below).

    I'd thought that active management had an advantage in the more niche areas where equities hadn't been analysed to death but Monevator has linked research showing this isn't the case and the graph posted up thread emphasises this.

    https://www.ft.com/content/3fceed90-13ae-11e7-b0c1-37e417ee6c76
    • thetimewill
    • By thetimewill 16th May 17, 10:03 PM
    • 40 Posts
    • 6 Thanks
    thetimewill
    Hello again Redski,
    Thanks for the reply and info. I moved the funds to Vanguard for the following
    reasons: partly cost...partly disappointment with Fidelity service , and partly curiosity!
    I still have other investment with Fidelity but I have a respect for Vanguard,
    Regards,
    Billy
    • bostonerimus
    • By bostonerimus 16th May 17, 10:20 PM
    • 352 Posts
    • 191 Thanks
    bostonerimus
    Whatever the relative performances of active vs passive I think that a multi index tracker fund that does some automatic rebalancing is by far the best way for the average person to invest. It provides simplicity and diversity and avoids all the active manager hype and hyperbolae. A passive approach will not give the maximum potential returns, but it will maximize the probability of success. If people want to save a bit on fees they can reproduce a multi-index fund with individual ETFs and rebalance themselves.
    • hennerz
    • By hennerz 16th May 17, 10:22 PM
    • 171 Posts
    • 32 Thanks
    hennerz
    You are wrong.
    Originally posted by dunstonh


    Ok, keep your head in the sand trying to pick the 1 in 10 funds that beat the market...
    • dunstonh
    • By dunstonh 16th May 17, 10:47 PM
    • 88,168 Posts
    • 53,390 Thanks
    dunstonh


    Ok, keep your head in the sand trying to pick the 1 in 10 funds that beat the market...
    Originally posted by hennerz
    I seem to manage it regularly. As do many other investors in the UK. Mainly as they are not blinkered to the passive bias that some people like you have. Where passive is best, it should be used. Where managed is best, it should be used.

    ....70pc of actively managed European funds beating the best European tracker over 10 years. Among Asia funds, 55pc of active portfolios beat the best tracker over a decade, while the figure for the UK was 52pc.
    Forty-eight per cent of global funds with human managers outperformed the best passive fund over 10 years, compared with 38pc of Japanese funds. In last place were active US funds, only a third of which managed to beat the top tracker.
    Overall, 50pc of active funds beat tracker funds over the past decade. The figures are net of fund charges (and remember this includes the charges back from the bundled days and not unbundled world we live in now. These are UK domiciled funds priced in GBP.
    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.
    • cashbackproblems
    • By cashbackproblems 16th May 17, 11:21 PM
    • 1,648 Posts
    • 631 Thanks
    cashbackproblems
    Wow loving this i have just opened an account and set up a monthly dd. Also will be selling all of my vanguard holdings from hl in the coming days and transferring, once the press gets hold of this and people are aware HL are going to lose a lot of money. Ifa also!
    • cashbackproblems
    • By cashbackproblems 16th May 17, 11:44 PM
    • 1,648 Posts
    • 631 Thanks
    cashbackproblems
    Obviously there are many sectors and geography conventrations i want which vanguard dont currently offer so for then i will keep hl
    • Pincher
    • By Pincher 17th May 17, 12:54 AM
    • 6,516 Posts
    • 2,487 Thanks
    Pincher
    Been waiting for months, and it's finally happened.

    It will take years building up the ISA, so no hurry.

    Accumulation units, please. It's an ISA.



    Junior ISA

    "You can also open Junior ISAs for your children or grandchildren, up to the 2017/18 tax-year limit of £4,128 per child."

    Easy option for parents. Serious money when the kid turns 18.




    I was thinking about consolidating some small pension pots, so a SIPP with flexible draw down would be good. If you think about it, what better wrapper should "Target Retirement Funds" reside?
    • Redski69
    • By Redski69 17th May 17, 7:01 AM
    • 22 Posts
    • 12 Thanks
    Redski69
    Wow loving this i have just opened an account and set up a monthly dd. Also will be selling all of my vanguard holdings from hl in the coming days and transferring, once the press gets hold of this and people are aware HL are going to lose a lot of money. Ifa also!
    Originally posted by cashbackproblems
    Why will IFAs lose money ? The services they offer are different to those of the D2C market as are their customer base. Advised clients aren't solely driven by price, yes it's a factor but not Number 1. DFM affiliation for model portfolios etc. via IFAs, tax planning etc. is way out of Vanguards remit here.

    Also, guidance here for you should be NOT to sell all your Vanguard holidings ! Keep them invested in the market but instead request HL to Re Register them across to your new Vanguard account.

    There's no point exposing yourself to Cash Out into the market when you can stay invested and simply transfer administration of your assets to another Platform.

    Hope that helps !
    • koru
    • By koru 17th May 17, 8:58 AM
    • 1,233 Posts
    • 620 Thanks
    koru
    ....70pc of actively managed European funds beating the best European tracker over 10 years. Among Asia funds, 55pc of active portfolios beat the best tracker over a decade, while the figure for the UK was 52pc.
    Forty-eight per cent of global funds with human managers outperformed the best passive fund over 10 years, compared with 38pc of Japanese funds. In last place were active US funds, only a third of which managed to beat the top tracker.
    Overall, 50pc of active funds beat tracker funds over the past decade. The figures are net of fund charges (and remember this includes the charges back from the bundled days and not unbundled world we live in now. These are UK domiciled funds priced in GBP.
    Originally posted by dunstonh
    Could you provide a source for these figures?
    koru
    • cloud_dog
    • By cloud_dog 17th May 17, 9:38 AM
    • 3,021 Posts
    • 1,613 Thanks
    cloud_dog
    Also, guidance here for you should be NOT to sell all your Vanguard holidings ! Keep them invested in the market but instead request HL to Re Register them across to your new Vanguard account.
    Originally posted by Redski69
    I've seen the term 're-register' holdings across from HL to Vanguard (for example) but does this negate the HL transfer out per holding charge and therefore you would only incur the closure costs (assuming you only hold Vanguard, and assuming you actually closed your HL account(s))???
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • Redski69
    • By Redski69 17th May 17, 9:46 AM
    • 22 Posts
    • 12 Thanks
    Redski69
    I've seen the term 're-register' holdings across from HL to Vanguard (for example) but does this negate the HL transfer out per holding charge and therefore you would only incur the closure costs (assuming you only hold Vanguard, and assuming you actually closed your HL account(s))???
    Originally posted by cloud_dog
    On the Hargreaves site, you'll see it referenced as Transfer Out (as stock) - meaning you keep the assets invested in the market but they transfer ownership administration to your new ISA provider.

    They charge you £25 per asset line for the privilege too. They're an expensive Platform and put additional fees like this in place too, to deter people from leaving.

    However, what you will find is that many new Providers processing the Re-Registration of the assets to them for you will pay the Exit Fees on your behalf ... it is always worth asking as I've seen this as market practice historically.

    Hope this helps ...
    • Audaxer
    • By Audaxer 17th May 17, 9:56 AM
    • 210 Posts
    • 59 Thanks
    Audaxer
    I seem to manage it regularly. As do many other investors in the UK. Mainly as they are not blinkered to the passive bias that some people like you have. Where passive is best, it should be used. Where managed is best, it should be used.
    Originally posted by dunstonh
    How do we know which actively managed funds are best, as I thought we can't really use past performance as a guide? Seems even more difficult to know what selection of active funds to pick for a portfolio to beat a good multi-asset passive fund. For instance, can you list a portfolio of actively managed funds (or a mixture of active and passive) for a £100k investment with an overall 40/60 equity/bond allocation, that can better a VLS40 over the long term. I'm not saying there isn't one, but if it's that easy to identify such funds I'd be interested in knowing what would be the best active and passive funds to include in such a portfolio.
    • ColdIron
    • By ColdIron 17th May 17, 10:02 AM
    • 3,162 Posts
    • 3,598 Thanks
    ColdIron
    Also will be selling all of my vanguard holdings from hl in the coming days and transferring
    Originally posted by cashbackproblems
    I hope that isn't an ISA unless your investment is small
    • Pincher
    • By Pincher 17th May 17, 10:05 AM
    • 6,516 Posts
    • 2,487 Thanks
    Pincher
    So slow
    Registered my interest months ago, and got this e-mail at 16:52, on Tuesday.

    http://view.e-vanguard.com/?j=fec411777367017c&m=fe911372756c077577&ls=fe1f15 777d6701747c1072&l=ff6a167076&s=fe511177736c0d7d73 11&jb=ffce15&ju=fe4e157573620c7b7c1c&r=0

    A little miffed. Everybody else already opened an account by 16:52. So, the people who are keen and waited come last, heh?

    Instead of getting account number 00000001, I'll be 00009999 now.
    • BananaRepublic
    • By BananaRepublic 17th May 17, 10:10 AM
    • 816 Posts
    • 570 Thanks
    BananaRepublic
    Excellent. They will be getting money from me once the SIPP is launched, assuming similar charges to the ISA, presumably a bit more as it involves more work.
    • Redski69
    • By Redski69 17th May 17, 10:13 AM
    • 22 Posts
    • 12 Thanks
    Redski69
    Registered my interest months ago, and got this e-mail at 16:52, on Tuesday.

    http://view.e-vanguard.com/?j=fec411777367017c&m=fe911372756c077577&ls=fe1f15 777d6701747c1072&l=ff6a167076&s=fe511177736c0d7d73 11&jb=ffce15&ju=fe4e157573620c7b7c1c&r=0

    A little miffed. Everybody else already opened an account by 16:52. So, the people who are keen and waited come last, heh?

    Instead of getting account number 00000001, I'll be 00009999 now.
    Originally posted by Pincher
    I'd manage your own expectations accordingly as to the level of Customer Service you're expecting here Pincher !

    Vanguard will quickly feel the pain of launching this, in terms of increased regulatory demands, customer service requirements, ongoing platform / product enhancements etc etc etc. And all they are getting for all that extra work is 15bps ? Good luck to them with that !

    You not be might be account number 00000001, but you might be complaint number 00000001 !

    • cashbackproblems
    • By cashbackproblems 17th May 17, 10:40 AM
    • 1,648 Posts
    • 631 Thanks
    cashbackproblems
    On the Hargreaves site, you'll see it referenced as Transfer Out (as stock) - meaning you keep the assets invested in the market but they transfer ownership administration to your new ISA provider.

    They charge you £25 per asset line for the privilege too. They're an expensive Platform and put additional fees like this in place too, to deter people from leaving.

    However, what you will find is that many new Providers processing the Re-Registration of the assets to them for you will pay the Exit Fees on your behalf ... it is always worth asking as I've seen this as market practice historically.

    Hope this helps ...
    Originally posted by Redski69

    yes this is why I wont be doing this due to the £25. However luckily my holdings in Vanguard with HL are relatively small e.g. 10k and I realise I lose the ISA allowance for this year but I wont be able to use the full 20k anyway.. so makes sense to just sell cash out and buy back in. I already have opened my account so process wont take more than few days.
    • cloud_dog
    • By cloud_dog 17th May 17, 10:43 AM
    • 3,021 Posts
    • 1,613 Thanks
    cloud_dog
    On the Hargreaves site, you'll see it referenced as Transfer Out (as stock) - meaning you keep the assets invested in the market but they transfer ownership administration to your new ISA provider.

    They charge you £25 per asset line for the privilege too. They're an expensive Platform and put additional fees like this in place too, to deter people from leaving.

    However, what you will find is that many new Providers processing the Re-Registration of the assets to them for you will pay the Exit Fees on your behalf ... it is always worth asking as I've seen this as market practice historically.

    Hope this helps ...
    Originally posted by Redski69
    Yes, I understand that. It was the use of the term 're-register' which threw me as opposed to transferring out; perhaps the re-registration term is the more business appropriate but not one I (as a layperson) was familiar with.

    So, your assertion that you should not sell and just re-register cannot be held as absolutely appropriate, i.e. the full costs of transfers and the risk of being out of the market needs to be considered; also, the probability that a transfer involving lines of stocks "generally" appear to take longer than an account transfer of just cash (historically has tended to be the case). Although the timewilltell recent experience has cast a significant doubt over my above comment about transfer times.

    Perhaps the investment industry have implemented 'Faster Transfers' just like the banking industry implemented 'Faster Payments'...
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
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