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Will Vanguard platform always be this limited?

I've recently looked into doing three things via the Vanguard platform, and failed with all three.
1) Open an investment fund for young relatives, via a bare trust. VG say they don't currently do this.
2) Transfer an ISA and a SIPP to Vanguard via in specie transfer. They only do cash transfers. I've read that transfers (especially from HL, where the funds currently are held) can take weeks, so that would mean I could be out of the market for weeks.
3) In connection with the above, VG says they currently don't offer SIPP drawdown. 
Does anybody have any idea or opinion whether these limitations might just be because VG are keeping things simple initially? I think I read that they plan to offer SIPP drawdown eventually, but no idea of time frame. As far as 1) and 2) are concerned, I can't find any information on whether they will offer these eventually.

(Nearly) dunroving
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Comments

  • Prism
    Prism Posts: 3,835 Forumite
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    The main limitation is that you can only invest in Vanguard funds. That rules it out for me instantly. Its also not especially cheap and as you say has other issues. Its easy enough to go elsewhere.
  • csgohan4
    csgohan4 Posts: 10,600 Forumite
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    you can buy VG funds from other platforms like Iweb, halifax, HL e.t.c
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • dunstonh
    dunstonh Posts: 118,558 Forumite
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    Will Vanguard platform always be this limited?

    Never say never but almost certainly it will be.   After all, they spent all that money getting FNZ to build a personal pension for them when FNZ already had a SIPP available.   If the planned to go whole of market, why spend that money?

    Also, if you are going to cut charges to be at the cheap end, you generally do not offer more specialist/niche services as you want to cater for the mass market. Not the expensive things that not many will use.

    3) In connection with the above, VG says they currently don't offer SIPP drawdown. 

    Probably down the coding of the new personal pension and wanting to get it rolled out knowing that getting it ready for drawdown functionality and payroll etc would take longer. There is more money in the accumulation stage than the decumulation stage. It also allows costs to be spread more.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • dunroving
    dunroving Posts: 1,881 Forumite
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    Prism said:
    The main limitation is that you can only invest in Vanguard funds. That rules it out for me instantly. Its also not especially cheap and as you say has other issues. Its easy enough to go elsewhere.
    That's not a problem for what I was hoping to transfer - already in Vanguard funds only. 
    (Nearly) dunroving
  • dunroving
    dunroving Posts: 1,881 Forumite
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    csgohan4 said:
    you can buy VG funds from other platforms like Iweb, halifax, HL e.t.c
    I was hoping to transfer from a HL platform (0.45% pa fees) to Vanguard (0.15% fees). It was a very specific transfer of some very specific funds, purely to save on fees. I don't need the bells and whistles of Hargreaves Lansdown, and wasn't planning to make many, if any, changes to the funds that these particular moneys are invested in. As it was all in VG funds already, I thought that would make it simple enough for an in specie transfer, but I thought wrong.
    (Nearly) dunroving
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
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    edited 27 August 2020 at 5:08PM
    dunroving said:
    wasn't planning to make many, if any, changes to the funds that these particular moneys are invested in. As it was all in VG funds already, I thought that would make it simple enough for an in specie transfer, but I thought wrong.

    Part of the reason for Vanguard to create a consumer-facing investment platform is to get people to invest in their own funds.  And with a single-provider platform, once people have signed up to become an investor the investment management funds revenue is perhaps a bit more 'sticky' because if you sell out of a Vanguard fund you may buy another one (due to it being a hassle to move elsewhere) whereas if you had sold out of a Vanguard fund on someone else's platform you might replace it with an HSBC or Blackrock one or L&G or whatever. So with a cheap front end they can encourage people to come and buy what they have to offer, and increase the fund management revenue. They are willing to offer the platform service for a pretty low fee (15bps and capped) because they are making money on the investment management side.  It's really just a doorway to welcome you into the world of investing in their products.

    If someone will move money to them and buy a Vanguard fund when they were not already a holder of a Vanguard fund, that's great for them as they grow their assets under management, and associated management fees, allowing them to split costs over a bigger capital or revenue base, so they can be more profitable; they don't mind that the platform service isn't really a moneyspinner.

    However if you are already using them elsewhere, and have a bunch of Vanguard funds in a pension that someone else is looking after, while they get the management fees on the Vanguard funds you're using - you are already paying them for their core business of managing funds.  If you transfer those holdings in specie to their platform, they don't earn a penny more in management fees (though perhaps the fee revenue becomes a little more 'sticky' as previously mentioned). So without getting incremental management fee income they would just get the hassle of giving you an account, some compliance and customer onboarding rigmarole, ongoing customer service and tax reporting work etc, and earn a bit of money towards running the fund platform and pensions administration services... which is a sideline that's unlikely to be making them a huge amount of money.   

    You could imagine they would much prefer to get a new client who wasn't already a Vanguard user, than get your transferring business which comes with no more fund income but a load of customer service work in exchange for some small platform admin income.  So in-specie transfers are probably understandably not their biggest priority to figure out how to administer.  I wouldn't count on them being keen to focus on implementing that; it's simply something that they might offer at some point if they have the time and money to focus on it and they think that not offering it will cost them serious revenue opportunities, or a regulator forces them to.

    They have said that offering drawdown will be a feature they offer in the future, but as it was not something that they could definitely get fully up and running before the current tax year started they didn't want any customers to start funding a pension or transfer one in hoping they could take a drawdown in 2019/20 and then not be able to process it before they ran out of tax year. So when launching the SIPP product they said it would follow along as a later service, and since then we have had Covid etc so there is still no finalised timeline.

    I expect they will get a drawdown product up and running in the not too distant future (i.e. sometime this tax year or next), but if you did move your pension to them you could always move away later if that aspect of the service wasn't any good, or priced competitively enough, or never launched at all (latter seems unlikely).
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    10 Posts
    edited 27 August 2020 at 8:53PM
    I think they will need to offer in-specie SIPP pension transfer from 1st February?

  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    10 Posts
    edited 27 August 2020 at 5:05PM
    I think they do allow transfers of Vanguard funds into their ISA (as long as the funds are offered on their platform).

    Below is taken from their key-features-isa-gia.pdf

    Can I transfer existing ISAs and investments to Vanguard?Yes, generally this is possible as confirmed during the online application process and explained further below. In most cases, you should be able to transfer any existing holdings in Vanguard funds to us without needing first to convert them to cash (a direct transfer facility sometimes called “re-registration”). Please note that, if you wish to transfer Vanguard fund holdings to us from an account currently held with another provider, all such Vanguard fund holdings will be transferred


  • barnstar2077
    barnstar2077 Posts: 1,568 Forumite
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    I think they do allow transfers of Vanguard funds into their ISA (as long as the funds are offered on their platform).

    Below is taken from their key-features-isa-gia.pdf

    Can I transfer existing ISAs and investments to Vanguard?Yes, generally this is possible as confirmed during the online application process and explained further below. In most cases, you should be able to transfer any existing holdings in Vanguard funds to us without needing first to convert them to cash (a direct transfer facility sometimes called “re-registration”). Please note that, if you wish to transfer Vanguard fund holdings to us from an account currently held with another provider, all such Vanguard fund holdings will be transferred


    I emailed them recently about a transfer, they said that the funds in my existing pension would be sold and then re bought in the VG SIPP.  They added no caveats regarding VG funds not being needed to be sold etc.
    Think first of your goal, then make it happen!
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    10 Posts
    edited 27 August 2020 at 8:52PM
    Yes, I think you are right in that is the current situation in relation to the Vanguard SIPP Personal Pension.  I think the FCA's PS 19/29 means that they'll have to offer in specie transfer of funds into their SIPP Personal Pension from February, but I'm not sure.  For ISAs I think they do offer in specie transfer.


    Edited to correct my mistake in referring to it as a SIPP instead of a Personal Pension and to correct the mistake where I referred to PS19/20 instead of PS19/29.
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