Vanguard Fund : Direct or with Hargreaves Lans

Ciprico

I find the costs involved in investing very complicated, I hope someone can enlighten...

I am looking to place £20k in an ISA with lower risk Vanguard Fund for long term 5 years+ as part of pension



Vanguard fees:
Account fee 0.15%, and they unhelpfully say
"OCFs range from 0.06% to 0.80% p.a. As well as the OCF, funds have transaction and incidental costs" which they confirm after purchase....


Hargreaves say (I already have HL ISA)
"Free to buy and sell funds with a low cost reinvestment service"
+ Annual charge (0.45%)
and I'll pretty sure when I have bought funds with HL there were dealing costs..


Could anyone point me in the right direction....

Alexland

You are either adding to an ISA or a Pension not both. Maybe you mean add to an ISA to draw upon in retirement? Most people would find a pension more suitable.

If you intend to invest in a Vanguard fund in a S&S ISA then Vanguard Investor have a lower platform fee at 0.15% compared to HL at 0.45%. Neither platforms charge trade fees on funds.

However if investing a £20k lump sum then iWeb would probably be the cheapest platform at £25 setup then £5 for the trade. Or if you will contribute regularly then Halifax Share Dealing at £12.50 per year then £2 per scheduled trade.

The Vanguard fund manager OCF cost and fund manager internal transaction costs will be the same on all four platforms. Although you may find some funds on Vanguard Investor are not available on the other three platforms.

Beware if going low risk you might find there are cash savings accounts that do just as well and you money might not keep up with inflation.

Alex

dunstonh

Vanguard Fund : Direct or with Hargreaves Lans

You are looking at two extremes here. HL is one fo the most expensive platforms. Vanguard one of the cheapest. Although Vanguard is own brand investments only.

and they unhelpfully say
"OCFs range from 0.06% to 0.80% p.a. As well as the OCF, funds have transaction and incidental costs" which they confirm after purchase....

Its not unhelpful. They cant price until they know what investments you are buying.

Hargreaves say (I already have HL ISA)
"Free to buy and sell funds with a low cost reinvestment service"
+ Annual charge (0.45%)
and I'll pretty sure when I have bought funds with HL there were dealing costs..

HL would have the same OCF and transaction charges as Vanguard. No dealing costs unless you go with direct assets rather than UT/OEICs.

as part of pension

Vanguard dont offer a pension. So, straight away, that removes them as an option. They have a pension coming but it wont be whole of market and its been "coming" for a long time and not yet arrived.

londoninvestor

123mat123 wrote: »

Vanguard fees:
Account fee 0.15%, and they unhelpfully say
"OCFs range from 0.06% to 0.80% p.a. As well as the OCF, funds have transaction and incidental costs" which they confirm after purchase....

The comprehensive table of charges that Vanguard provide.

The fund-level charges (the first four columns of numbers) will all apply to the same fund invested in through HL too.

On top of those, you add 0.15% for Vanguard (that's the fifth column of numbers on the document) and 0.45% (although lower once you have a portfolio over £250k) for HL.

Alexland

londoninvestor wrote: »

On top of those, you add 0.15% for Vanguard and 0.45% (although lower once you have a portfolio over £200k) for HL.

Thanks for linking to the table but technically that PDF includes the 0.15% Vanguard Investor platform fee so you just add an extra 0.30% if buying the same Vanguard funds via HL.

If the OP is under 40 then it's worth considering a S&S LISA with HL or AJ Bell for a 25% government bonus (on up to £4k per tax year until age 50) and they can withdraw without penalty from age 60. In some situations (eg basic rate tax payer with no salary sacrifice) this can even beat a pension contribution.

Alex

londoninvestor

Alexland wrote: »

Thanks for linking to the table but technically that PDF includes the 0.15% Vanguard Investor platform fee so you just add an extra 0.30% if buying the same Vanguard funds via HL.

Aha yes - edited to clarify.

Alexland

londoninvestor wrote: »

Aha yes - edited to clarify.

I wonder when Vanguard will update that PDF for fund transaction costs occurring in 2019?

dunstonh

Alexland wrote: »

I wonder when Vanguard will update that PDF for fund transaction costs occurring in 2019?

Transaction costs are required to be quoted from January 2018 (ex Ante). 2019 is the first year of post Ante disclosures.

Ciprico

Thanks for the replies, all very helpful.

Sadly I am well over 40, when I say pension I should have said saving for when I retire. I do already make significant pension (salary sacrifice) contributions to avoid higher tax.

Will investigate iWeb, and cash ISAs..

Many Thanks

Matt