Frequency of Vanguard Costs and Charges

Saga

Vanguard's document on its costs and charges states:

the total cost of investing = account fee + (on-going costs [incl. OCF] + transaction costs + one-off costs)

The only documented costs and charges frequencies I can find is for the online account fee (0.15% pa, annual charge accrued daily) and, in the Prospectus, for the OCF (accrued daily, charged monthly).  I presume (always a very, very bad idea...) the transaction costs and one-off costs are per trade?

Also, it states Vanguard take 0.20% of any interest they receive on cash held. Again, how often is this calculated and charged?

Can someone confirm or correct any or all of the above please? 

jimjames

Vanguard charge the 0.15% account fees every quarter. All other fees are part of the fund and you never see or pay them explicitly.

Saga

jimjames said:

Vanguard charge the 0.15% account fees every quarter

Thanks.  Yes I missed that: "It is an annual charge calculated daily and deducted in arrears on a quarterly basis."

jimjames said:

All other fees are part of the fund and you never see or pay them explicitly.

OK, but how, for example, is an investor supposed to know if and when Vanguard have made an error in the fees taken if all it gives is a per cent value but not how and when that proportion is applied?

dunstonh

Saga said:

jimjames said:

Vanguard charge the 0.15% account fees every quarter

Thanks.  Yes I missed that: "It is an annual charge calculated daily and deducted in arrears on a quarterly basis."

jimjames said:

All other fees are part of the fund and you never see or pay them explicitly.

OK, but how, for example, is an investor supposed to know if and when Vanguard have made an error in the fees taken if all it gives is a per cent value but not how and when that proportion is applied?

You read your statement and calculate it for yourself.  if you cannot calculate it yourself, then you pay someone that can.

Thrugelmir

Saga said:

jimjames said:

Vanguard charge the 0.15% account fees every quarter

Thanks.  Yes I missed that: "It is an annual charge calculated daily and deducted in arrears on a quarterly basis."

jimjames said:

All other fees are part of the fund and you never see or pay them explicitly.

OK, but how, for example, is an investor supposed to know if and when Vanguard have made an error in the fees taken if all it gives is a per cent value but not how and when that proportion is applied?

That's the function of external auditors. Though Vanguard will have an internal compliance/audit function. Reputatation is paramount to companies providing financial services. 

GeoffTF

Saga said:

OK, but how, for example, is an investor supposed to know if and when Vanguard have made an error in the fees taken if all it gives is a per cent value but not how and when that proportion is applied?

"OK, but how, for example, is an investor supposed to know if and when Vanguard have made an error in the fees taken if all it gives is a per cent value but not how and when that proportion is applied?"

You cannot. You have to trust Vanguard and the regulator (FCA or the Central Bank of Ireland). The stated transaction costs are not representative of the real transaction costs anyway, as Vanguard has made clear. We still do not have full costs disclosure. Full costs disclosure would favour market weighted trackers.

gee9fam

I had naively assumed all platforms where a percentage charge was payable would calculate this on a daily basis. I recently moved an old pension to Fidelity (ETF fund) as well as ensuring an ISA account with them held only an ETF to make use of their reduced charging (£45 capped). I couldn’t reconcile the November service fee so asked for clarification and was advised the fee was charged on funds held on the first day of the month rather than on a daily basis.

Reply as follows: “I confirm our Service Fee is calculated at 00.01am on the first of every month, as you placed your sells for your funds on the 10 November 2021, the charge for that month had already been calculated for how your portfolio was at the time.”

I have an account with II that is fixed fee and I’m sure in the past an HL account was charged on daily balances. Any one else come across this? Still waiting for a reply on a subsequent query from Fidelity regarding their charges.

Albermarle

gee9fam said:

I had naively assumed all platforms where a percentage charge was payable would calculate this on a daily basis. I recently moved an old pension to Fidelity (ETF fund) as well as ensuring an ISA account with them held only an ETF to make use of their reduced charging (£45 capped). I couldn’t reconcile the November service fee so asked for clarification and was advised the fee was charged on funds held on the first day of the month rather than on a daily basis.

Reply as follows: “I confirm our Service Fee is calculated at 00.01am on the first of every month, as you placed your sells for your funds on the 10 November 2021, the charge for that month had already been calculated for how your portfolio was at the time.”

I have an account with II that is fixed fee and I’m sure in the past an HL account was charged on daily balances. Any one else come across this? Still waiting for a reply on a subsequent query from Fidelity regarding their charges.

I presume over a long period of time , it will all even out . In any case if you are only paying £3.75 a month maximum, so hardly seems worth worrying about .

Albermarle

Thrugelmir said:

Saga said:

jimjames said:

Vanguard charge the 0.15% account fees every quarter

Thanks.  Yes I missed that: "It is an annual charge calculated daily and deducted in arrears on a quarterly basis."

jimjames said:

All other fees are part of the fund and you never see or pay them explicitly.

OK, but how, for example, is an investor supposed to know if and when Vanguard have made an error in the fees taken if all it gives is a per cent value but not how and when that proportion is applied?

That's the function of external auditors. Though Vanguard will have an internal compliance/audit function. Reputatation is paramount to companies providing financial services. 

It seems Thrugelmir, one of the most prolific posters, has been banned .

ColdIron

Maybe not, it says his profile is private

dunstonh

ColdIron said:

Maybe not, it says his profile is private

Hover over his icon on the post - it says banned.