Opening a s&s ISA with Vanguard?

dave_hendy

I am about to open my first s&s ISA by transferring a cash ISA from Virgin Money to Vanguard. Looking on the web site I should be able to do this direct with Vanguard, is that correct or do I have to go through a 3rd party?


Confused

lpgm

Yes, Vanguard UK lets you open an ISA directly with them. But remember to get Vanguard to do the actual transfer of money from Virgin. Why the confusion about a third party?

dave_hendy

Mainly because a lot of posts I have read people talk about investing with Vanguard but are doing it through someone. I wondered if you had to as it would seem easier to go direct?

lpgm

If you open an ISA with Vanguard, you can only buy Vanguard funds in it. If you open an ISA on a 'platform', you can buy different products from different companies. Both are easy. It's up to you.

dave_hendy

Thanks for clearing that up. Vanguard is OK for me, Lifestyle 60 will work for me!

jsinc

dave_hendy wrote: »

Mainly because a lot of posts I have read people talk about investing with Vanguard but are doing it through someone. I wondered if you had to as it would seem easier to go direct?

They're doing that because other platforms may be cheaper. For example I use iWEB to hold Vanguard 80%, who charge £25 to open an account then £5 per trade (no % account fee). Fund costs are the same everywhere so for those who just buy and hold once a year it may work out cheaper overall elsewhere.

Can compare charges here: http://www.comparefundplatforms.com/
Or using Snowman's spreadsheet here: https://forums.moneysavingexpert.com/discussion/5583030/coolly-comparing-investment-platform-charges-snowmans-spreadsheet#1

dave_hendy

I am really after something I can open and forget about for 10+ years. I thought Vanguard seemed reasonable on costs.

Alexland

dave_hendy wrote: »

I am really after something I can open and forget about for 10+ years. I thought Vanguard seemed reasonable on costs.

If you intend to leave it for 10 years without trading then the iWeb £25 setup and initial £5 trade might be cheaper and simpler than paying a Vanguard 0.15% platform charge each year. Depends on account valuation.

If you get the Accumulation version of the fund (same 0.22% fund managers fee automatically deducted within the fund) then there will not be distributions that would otherwise require reinvesting incurring further trade fees on iWeb.

Alex

george4064

dave_hendy wrote: »

I am really after something I can open and forget about for 10+ years. I thought Vanguard seemed reasonable on costs.

For simplicity (and if you're happy with Vanguard funds only) then you will be absolutely fine with Vanguard.

Remember to submit your 'ISA Transfer' request with Vanguard, not with your current provider. Once you have submitted your request with Vanguard, they will speak with your current (soon to be 'old') provider and arrange things.

Make sure you fill out the ISA transfer request form carefully and make sure you have completed it as required, any issues on the form will cause delays to your transfer.

Hope it all goes smoothly for you!

jsinc

dave_hendy wrote: »

I am really after something I can open and forget about for 10+ years. I thought Vanguard seemed reasonable on costs.

They are but reasonable to me = lowest possible at equivalent risk. https://larrybates.ca/t-rex-score/ is a good site for visualising the effect of fees. e.g. Plugging in 20k at 4% pa for 10 years:

Vanguard: at 0.47% pa charge (0.15% platform fee + 0.22% fund fee + approx 0.1% transaction costs). Over 10 years you lose 14% of gains, or £1311 in fees.

iWEB: starting with £19970 (after £25 + £5 charges then same 0.22% fund fee + 0.10% transaction costs). Over 10 years you lose 10% of gains, or £927 in fees.

iWEB aren't necessarily cheapest or best for you. Just an example comparison and it's a no-frills platform. Should also weigh up what you're most comfortable with and likelihood of just getting the transfer done. If that means Vanguard then cool (it’s probably where I’ll be moving some SIPP funds to at same 0.15% when they open their Personal Pension).

dave_hendy

I will fill in the transfer this weekend as my fixed rate cash isa finishes today.