Vanguard: New Minimum Monthly Account charge

jbrassy

Aidanmc said:

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?

Looks like it yes. Started by the same guy who founded Tandem Bank.

Hoenir

Alexland said:

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.

In practice the challenges are immense. No shortage of ideas that fail to achieve commercial viability for a whole variety of reasons. 

GeoffTF

ColdIron said:

22225 said:

With my ISA with Vanguard I have LS 100 and Global All Caps. I believe the closest Dodl have is FTSE World Index tracker. So that's the most similar thing to sell up and then transfer them to?

FTSE Russel don't do a World Index (although MSCI do).

Yes, they do:

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-developed-world-ucits-etf-usd-distributing/overview

timmy963

They are trying to have their cake and eat it too. It's like they had a meeting and asked how can they shaft everybody.

They are not only a bad platform for those with large sums due to being percentage based, but now they are one of the worst platforms for those starting off their investment journey due to flat starting fees.

This coupled with the fact you can only buy Vanguard funds, I can't see any reason why anyone would want to use their platform any more.

EthicsGradient

If people do want something to balance the non-small-cap nature of a FTSE All World Index fund, there is Vanguard's Global Small Cap Index OEIC, with 0.31% ongoing charge. Morningstar shows the HSBC FTSE All World Index fund as 82% Giant/Large companies, and 18% Medium, and the Small Cap OEIC as 1% Large, 34% Medium, 62% Small and 13% Micro. A ratio of perhaps 87% All World and 13% Small Cap would get you about 10% Small/Micro, which I think is the percentage of the total market that the groups are based on.

MeteredOut

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.

On what basis do you think this only affects loss making customers?

Albermarle

timmy963 said:

They are trying to have their cake and eat it too. It's like they had a meeting and asked how can they shaft everybody.

They are not only a bad platform for those with large sums due to being percentage based, but now they are one of the worst platforms for those starting off their investment journey due to flat starting fees.

This coupled with the fact you can only buy Vanguard funds, I can't see any reason why anyone experienced in this area with an understanding of financial matters,would want to use their platform any more.

I have added to your post.   

Maybe because they advertise a lot and are probably better known than most financial providers?
Their Life strategy and target retirement funds are well aimed at their target market.

Also the fact they only sell their own funds, is an advantage in many ways, as many customers do not really understand clearly the delineation  between platform and funds,( as we see from many posts)  so the fact that it is all Vanguard seems sensible to them .

incus432

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. 🤷‍♂️

That's to do with the fund not the platform though. They have all sorts. What are you invested in?

honeststeveo

boingy said:

InvesterJones said:

It's a shame. I'm thinking of the person who really needs something nice and simple, set once and forget

The trouble is "set and forget" doesn't work for more than a few years. The industry has always been one of changes, mergers and acquisitions and, particularly in the case of pensions, one of the govt messing about with the rules. So you have to be prepared to make changes to make the most of your money.

I'm still mildly miffed that when I started a personal pension in the 80's the deal was that you could take your pension at age 50. Somewhere along the line that changed to 55. In reality I couldn't have afforded to take any pension at 50 but it still feels a bit unfair that they can change the rules like that. Don't get me wrong. I have benefitted hugely from throwing money into a pension at the start of my career, even though I had other money pressures at the time, so it's only a very minor gripe.

Yes your right re set and forget not working gets frustrating if you accrue non-transferable benefits with a provider whos offering becomes uncompetitive or poor service etc. So with the latest rise in the minimum pension age some have obtained a protected right to take their pension at 55 if they held their pension with Fidelity for example. So if you have a pension with them and the right is important to you then you are pretty much stuck with them for better or worse. What a horrible, unfair and complex mess of a pension system we have in this country!

Totally agree with you that it is very unfair that the rules get changed with pensions after you've committed. Goes against the principle you have in almost all areas of law and finance where if the provider changes the rules they have to release you from the contract.

jbrassy

ColdIron said:

22225 said:

With my ISA with Vanguard I have LS 100 and Global All Caps. I believe the closest Dodl have is FTSE World Index tracker. So that's the most similar thing to sell up and then transfer them to?

Do you mean the FTSE All World Index? FTSE Russel don't do a World Index (although MSCI do). The All World Index doesn't include small caps like your All Cap Vanguard fund but other than that it's pretty close. HSBC do one which is probably available via AJ Bell. Cheaper as well at 0.13% OCF rather than your current 0.23%

This is a decent guide to the various MSCI and FTSE (and Solactive) Global/World indices. Helpful if you want to decide what type of exposure you're looking for, e.g. developed and/or emerging markets, large, medium, or small caps, etc.

https://www.bankeronwheels.com/best-international-etfs/