Vanguard: New Minimum Monthly Account charge

zagfles

Alexland said:

zagfles said:

Why not? Some "ninjas" on iweb might want to rebalance their portfolio without paying a few £ in transaction fees, so they transfer to Vanguard, rebalance, then transfer back. 

Those are the super-ninjas Shhh we are not suppose to talk about that loophole!

However for a regular ninja with multiple investments they could just oddly weight their Vanguard account such that when the assets transfer the totality of assets now on iWeb are at the target rebalanced allocation. Unless there have been big market movements or they are an ancient ninja and have accumulated assets where the rebalancing requires movement of assets in excess of what they were able to contribute to Vanguard in which case they could perform the super-ninja move.

With the Vanguard fee changes the ninjas will become legendary remembered only by us few.

And now that Vanguard have defeated the regular ninjas with their cunning minimum fee (and caught innocent peasants/small investors in the crossfire) they'll move their attention to the super-ninjas.

They'll have to more careful about innocent bystanders though. Transfer out charges for investments held for a short time? But the all-seeing great wise spirit may threaten them with eternal damnation. 

When's the movie out?

Alexland

zagfles said:

When's the movie out?

I'm hoping it's a bit like 1993's TMNT3 but with Jim Henson workshop recreating Jack Bogle as the sensai rat.

In the sequel the ninjas could start wasting Dodl's time with the HSBC All World as another popular (and cheaper than Vanguard's version) fund they can move to iWeb but they are deeply conflicted as the £1pm minimum brings great shame and dishonour.

ZeroSum

If you have a look at what happened to the energy market a few years back whereby a load of smaller market newbies tried to undercut the big boys, and ultimately when bust. Yes most of it was because of the price shocks due to war in Ukraine, however it started a few years earlier in 2018

Are these new cheaper platforms sustainable? The fact that Vanguard have gone the otherwise, does this mean others may follow suit?

Whilst it's rubbish for those just starting out, I'm not sure I'd be confident of having a serious amount of money with one of the newbies. 

Someone else mentioned Dodl being an alternative, however they charge 0.25% so would hit the £4 pcm at a bit over £19k

If I was starting out, It's unlikely I'd be using Vanguard. If I had about £15k and was looking at being over £30k in the next couple of years, I'd just stick with them for the sake of about a tenner a year for a couple of years.

It doesn't affect me, but wife has a couple of small pensions that were looking to put in a self managed platform, that was going to be Vanguard, so need to now look at alternative 
The likes if pension bee are still very expensive by comparison.

22225

Dodl is 0.15

Albermarle

OldScientist said:

jbrassy said:

Hoenir said:

dgpur said:

Alexland said:

dgpur said:

The fund has been performing much better recently, and was one people advised to go for at the time. I accept that I first funded in late 2019, so I was willing to give it longer for obvious reasons. I’m essentially a lazy investor, and don’t want to be messing around with rethinking/guessing a different path. But the fee change has just put me right off. I can’t see the value.

Hmm you've got me wondering what it might be for something to perform poorly over that period. Did it have a heavy slug of bonds something like VLS40/60 or one of their Target Retirement funds that is coming up in the next few years perhaps? If so then a lot of investors who were in lower risk multi asset funds not just from Vanguard but with other fund managers were disappointed with returns during that period and it was a problem with the assets themselves unwinding valuations from a period of ultra low interest rates not the fund management.

LifeStrategy 60% Equity Fund. As I noted I’m a fairly lazy investor, in the sense that I went with the general suggestion. I wanted to not worry and over many years see some progress. But I put in £10 grand, it immediately lost money, and it took 26 months to get back above what I put in. I know funds rise and fall and investing is long term, but my robo investments with Wealthify and Nutmeg barely struggled at all over that same period. With my Vanguard fund still being sluggish. I’m aware that there can be a lot of reasons for that, but the extra cost in fees has made me feel like walking anyway. Feels like they want to slough off those who aren’t deep pocketed investors.

If you are concerned over £33 a year. Then stock market investments may not be for you. Reach the giddy heights of a £100k invested. Then your fund can be gyrating up or down by £1,000 or more in value within 24 hours. 

What you're talking about is irrelevant. If you have £100k invested, it will fluctuate that much in value irrespective of what investment platform you use. That is not what people are concerned about and it is not in their control.

Platform fees and fund fees are within the gift of investors. It's not about how much you pay in pounds and pence, it's about the compound losses these fees impose over the long run.

And comparing those fees is non-trivial since, to a large extent, it depends not only on the fee structure, but also on how you are using the account. For example,

Monthly contributions at iweb would each cost £5 (for a total of £60 per year). Whether this is a good deal compared to vanguard depends on the total amount invested (e.g., the breakeven would be at £40k, below this Vanguard would be better even with the new fee).

However, if only one transaction per year is made (i.e., a total of £5 per year), then iweb is much cheapere than vanguard (and most other platforms).

The non-trivial part arises because the platforms each have their own charging idiosyncrasies that need to be weighed up against how the accounts will be used, so individual circumstances have to be factored in.

However, this change to vanguard's fee structure definitely makes them less attractive for those with small amounts.

I think this only applies for ISA's. Iweb have extra charges for a SIPP, that Vanguard does not have.

ZeroSum

22225 said:

Dodl is 0.15

Must've been an outdated Web page I was looking at, as i definitely saw 0.25%

Alexland

ZeroSum said:

22225 said:

Dodl is 0.15

Must've been an outdated Web page I was looking at, as i definitely saw 0.25%

Dodl has always been 0.15% here's the announcement from when it launched
https://www.ftadviser.com/platforms/2021/11/29/aj-bell-to-launch-app-based-d2c-platform-charging-0-15/
You may have been thinking of the main AJ Bell platform that charges 0.25% plus often transaction fees.

orange-juice

ZeroSum said:

If you have a look at what happened to the energy market a few years back whereby a load of smaller market newbies tried to undercut the big boys, and ultimately when bust. Yes most of it was because of the price shocks due to war in Ukraine, however it started a few years earlier in 2018

Are these new cheaper platforms sustainable? The fact that Vanguard have gone the otherwise, does this mean others may follow suit?

Whilst it's rubbish for those just starting out, I'm not sure I'd be confident of having a serious amount of money with one of the newbies. 

Someone else mentioned Dodl being an alternative, however they charge 0.25% so would hit the £4 pcm at a bit over £19k

If I was starting out, It's unlikely I'd be using Vanguard. If I had about £15k and was looking at being over £30k in the next couple of years, I'd just stick with them for the sake of about a tenner a year for a couple of years.

It doesn't affect me, but wife has a couple of small pensions that were looking to put in a self managed platform, that was going to be Vanguard, so need to now look at alternative 
The likes if pension bee are still very expensive by comparison.

Hasn’t MSE always been been about personal risk tolerance but prioritising costs over most other things while hoping the worst never happens and if it did, that the guard rails were in place to protect you ? Whether it was using a new energy supplier, insurer, broadband provider, bank etc… 

Manu08manu

Also have had an account with Vangard. A Stocks and Share ISA, with LS80, and have gone with Barclays with 0.25% fees. so £10 increase, but better than paying a £33 increase

madlyn

I have a LS 60% S&S ISA with just over £700 in and a SIPP with just over 1k, both opened in Nov 2021. I did plan on making regular contributuions to both, but a change in cash flow and personal circumstances put a stop to that and I've done nothing with either for about 2 years.
I really have no clue what to do with these accounts, but I am in a position to start paying into one of them again.