Vanguard: New Minimum Monthly Account charge

trickydicky14

eskbanker said:

trickydicky14 said:

Yes it's not the end of the world as I know it. I'm paying something like £10:50 every 3 months on I think 30k so yes a rise but too much of one and hopefully I'll go over the 32k mark soon.
And as you point out, folks need to also focus on other arears of increase that are a lot more than this.

Hopefully that's missing a 'not', or otherwise your view of an extra £6pa is likely to differ from others!

Yes I need stronger glasses.

mark_cycling00

If vanguard encourage their loss making customers to move to a "free" platform then it probably brings forward the date when that "free" platform has to start charging.

Alexland

mark_cycling00 said:

If vanguard encourage their loss making customers to move to a "free" platform then it probably brings forward the date when that "free" platform has to start charging.

Yup and expensive platforms will continue to decline and new free platforms may emerge to undercut the previous free platforms provided the business model of offering a really good deal to attract customers and build a valuable business doesn't stop working.

dunstonh

Vanguard has been my least well performing investment (was experiencing a loss for ages), so I guess that money is about to shift to my best performing. 🤷‍♂️

The fact it is vanguard has nothing to do with the performance.   The performance will be down to the assets it invests in.   As Vanguard have one of the largest range of index trackers in the UK, there will be areas which have had a poor time and areas that have done well.    Of course, past performance is no guide to the future and of then the areas that have not done well in this cycle will do much better in the next and the areas that have been best in this cycle will be poor in the next.

Hoenir

Alexland said:

mark_cycling00 said:

If vanguard encourage their loss making customers to move to a "free" platform then it probably brings forward the date when that "free" platform has to start charging.

Yup and expensive platforms will continue to decline and new free platforms may emerge to undercut the previous free platforms provided the business model of offering a really good deal to attract customers and build a valuable business doesn't stop working.

No one is going to launch a loss making platform unless there's a decent return to be had at the end of the day. Same principle applies to any business model. There's no money to be made in offering share trading to small value retail investors.  

jimjames

dgpur said:

Vanguard has been my least well performing investment (was experiencing a loss for ages), so I guess that money is about to shift to my best performing. 🤷‍♂️

How did you manage to invest in Vanguard? My understanding is that Vanguard is a mutual so you can't buy shares in it?

equitydealer

For anyone that is interested, I've got written confirmation from Vanguard (feel free to send your own secure message to them) that any transfers out that complete by March will not be subject to the new fee structure. If anyone wants out, get those transfer requests in with your new provider.

jbrassy

orange-juice said:

jbrassy said:

So these fee changes are a bit of a blow to me personally. I only have a circa £10,000 SIPP (transferred in from an old company pension) with Vanguard, so the £4 a month fee is a significant increase from 0.15% per annum.

I've been doing a bit of research, and I notice Invest Engine offer a SIPP with zero fees. However, I believe they currently do not offer SIPP transfers.

The cheapest option I've found thus far is AJ Bell which charge a 0.25% platform fee. While this is a 0.1 percentage point increase compared to before, I could potentially offset this by investing in non-Vanguard funds with lower fees, but nevertheless track the same benchmark. 

Would be good to know if there are any SIPP providers I have missed which are cheaper than AJ Bell which allow you to transfer-in SIPPs? Help is much appreciated.

There’s a new kid on the block called Prosper, offering different accounts at zero/low fees.

I’m not 100% certain that they accept transfers but could be another one to consider.

Thanks. I've just briefly looked into this. The chat bot said they do accept SIPP transfers. They also offer the same HSBC and Vanguard funds as AJ Bell, so I will certainly look into this further.

Aidanmc

jbrassy said:

orange-juice said:

jbrassy said:

So these fee changes are a bit of a blow to me personally. I only have a circa £10,000 SIPP (transferred in from an old company pension) with Vanguard, so the £4 a month fee is a significant increase from 0.15% per annum.

I've been doing a bit of research, and I notice Invest Engine offer a SIPP with zero fees. However, I believe they currently do not offer SIPP transfers.

The cheapest option I've found thus far is AJ Bell which charge a 0.25% platform fee. While this is a 0.1 percentage point increase compared to before, I could potentially offset this by investing in non-Vanguard funds with lower fees, but nevertheless track the same benchmark. 

Would be good to know if there are any SIPP providers I have missed which are cheaper than AJ Bell which allow you to transfer-in SIPPs? Help is much appreciated.

There’s a new kid on the block called Prosper, offering different accounts at zero/low fees.

I’m not 100% certain that they accept transfers but could be another one to consider.

Thanks. I've just briefly looked into this. The chat bot said they do accept SIPP transfers. They also offer the same HSBC and Vanguard funds as AJ Bell, so I will certainly look into this further.

Is Prosper app only?

Alexland

Hoenir said:

No one is going to launch a loss making platform unless there's a decent return to be had at the end of the day. Same principle applies to any business model. There's no money to be made in offering share trading to small value retail investors.  

Sure there is money to be made if you can accumulate random customers for a few years at a cheap / free price and then gradually increase the price boiling the frog being careful that not too many of those you want to keep choose to leave. You start with a business worth nothing then you can then sell it to someone that wants to run it as a cash cow who can then filter out the unprofitable customers.

Even at the later stage of maturity the business might still get random new customers to control the churn by offering signup / referral incentives or just advertising heavily on the benefits of investing to find people who are not price sensitive.

It's like the bank switching where they pickup loads of us who are only after the incentives but they must pickup enough long term customers to make it worth running the offer.

It's very hard to structure a promotion to only appeal to profitable customers without significantly reducing how many of them would apply as it wouldn't get the same level of public awareness. Better to get a random mix and then squeeze out the ones you don't want or make them profitable by increasing their charges