Vanguard financial planning service (closing) 27 February at 8:53PM edited 27 February at 8:55PM in Pensions, annuities & retirement planning 13 replies 944 views

Sharktail

We launched Vanguard Personal Financial Planning to provide specialised planning services for clients preparing for retirement. However, after careful consideration, we have concluded that investors are looking for other, more adaptable, forms of financial planning and guidance from Vanguard. We have therefore taken the difficult decision to close the service. 

Though they are refunding all fees for the service 

gm0

Not sure how hard they really pushed it in terms of effective marketing

Clearly the cost and staff leverage of doing this under the regulations as they are hasn't worked out for them at the volumes they could attract to a tied wealth management lite concept.  And their now somewhat better calibrated business plans tell them it is loss making or insufficiently profitable at expected volumes and growth.

And so they have killed it off quite quickly.  Doing that shows more common sense than many a corporate when executives are trapped in their own reputation management concerns and suffering from sunk cost fallacy.

There is no doubt a story underneath this about the why and how at VG specifically.  Many others have travelled this road. NU/Aviva etc. prior.

I doubt this wealth mgt lite for the masses idea can be done by an established player (rather than a regulation skimping robo startup) without some significant redesign around regulation.  Which would split the market into flexible full advice at the top and something with a different shape and a different consumer protection/liability design below.  In order to drive out cost, to close the advice gap, but without leaving the consumer unprotected (So some kind of regulated product/FSCS protected approach). 

No sign of that solution (or any other) to the advice gap from FCA.  A bit spicy in terms of decision risk to the cvil servant mindset vs continuing with the status quo and admiring the ongoing problems with that.

Albermarle

I doubt this wealth mgt lite for the masses idea can be done by an established player (rather than a regulation skimping robo startup) without some significant redesign around regulation.

Although Fidelity ( and HL I think), are still pushing their relatively low cost financial advice services

NedS

I'm guessing Vanguard only wanted to offer a service based around the relatively narrow range of available Vanguard funds and thus their clients probably found that restrictive and not worthwhile.

artyboy

I wonder if it was initially a reaction to Vanguard executives thinking "those Nutmeg and Wealthify people are doing ok, can we get in on the action"... in other words, a low-ish cost pseudo comfort blanket for investments.

But personally I always thought it was a bit out of kilter with their KISS business model, fair play to them for not dragging it out in an attempt to save face.

Albermarle

However they have a new? product. A managed ISA.
 A S&S ISA with some active portfolio management. Just very basic investment advice related to the ISA only.
0.3% charge on top of usual platform and fund charges.
I think could be popular with some of the newbie investors .
Managed ISA | Vanguard UK Investor (vanguardinvestor.co.uk)

cluckvolt

I’m currently using this service and got the message they are closing it (happy to receive the fees refund .

I’ve got a call scheduled for next week with Vanguard to discuss the next step, and i will probably transfer back to their non-advised pension service, at least initially.

Are there any other providers worth looking at? I used to be with Nutmeg, but moved to VG for their competitive pricing.

I like to think i can managed this myself, but in reality I’m far too hands off and don’t check in on investments often enough, so really I could do with a managed service.

NoMore

cluckvolt said:

but in reality I’m far too hands off and don’t check in on investments often 

This is probably actually a good thing for most DIY investors

dunstonh

Are there any other providers worth looking at? I used to be with Nutmeg, but moved to VG for their competitive pricing.

Vanguards advice fee was 0.50%.  That matches the most common ongoing advice charge for full advice.  However, for smaller values you tend to find full advice tiers around 0.75-1.00%.

Nutmeg is not an advice service (either restricted like Vanguard or full).    its effectively a flow chart leading to a couple of portfolio choices.

xylophone

A bit spicy in terms of decision risk to the cvil servant mindset vs continuing with the status quo and admiring the ongoing problems with that.

My minister right or wrong?

Albermarle

I like to think i can managed this myself, but in reality I’m far too hands off and don’t check in on investments often enough, so really I could do with a managed service.

A couple of Vanguards ( more expensive) competitors offer advice services similar to the one Vanguard has just dropped. Fidelity and HL

Otherwise you are looking at a more comprehensive personal service from an IFA, which will probably cost a bit more