Vanguard: New Minimum Monthly Account charge

deano3

Whilst the fee change is largely insignificant it doesn't sit well with me and feels like a move towards your app based trading 212 type broker, I'll be considering my position now with Vanguard. 

Hoenir

One large source of income. The deposit interest earnt on uninvested customer monies no longer exists. All retail platforms face the same challenge of replacing this. HL used to earn around a third of their revenue from this source. 

Those that are complaining about a £48 account fee probably aren't accounts that Vanguard are bothered about in the longer term. Many accounts were opened in the Covid era. That are now inactive and from Vanguard's perspective need to be closed. The minimum fee will weed these accounts out. 

Prism

If small increases to fees bother someone then I am suprised that they didn't move away from Vanguard a while ago due to the relatively high cost of their funds nowadays. Used to be cheap but the world has moved on.

InvesterJones

It's a shame. I'm thinking of the person who really needs something nice and simple, set once and forget - vanguard was a great option for them and the low fees meant the barrier to investing for the first time compared to savings accounts was low - which is precisely how many started out with tiny amounts just to dip their toes in the water.

Alexland

Prism said:
If small increases to fees bother someone then I am suprised that they didn't move away from Vanguard a while ago due to the relatively high cost of their funds nowadays. Used to be cheap but the world has moved on.

I think it really depends what Vanguard fund/etf you are investing in. I'm a pretty happy long term VEVE investor and don't know of any ETF that would do a better job of giving me low cost and liquid exposure to the FTSE Developed World Index that I want to hold as my main investment.

honeststeveo said:

@Alexland does this ninja method of avoiding investment fees offset the fact that you are then tied to VG funds or you'll incur more transaction costs and buy sell spread. I wonder how much the real saving is an whether its worth the bother.

The ninja method involves an in-specie transfer (re-regstration) of assets already invested between platforms without trading to arbitrage their fee models without time out of the market or incurring additional spread. It's for people that would want to hold the Vanguard fund/etf anyway.

Alistair31

Alexland said:

Prism said:
If small increases to fees bother someone then I am suprised that they didn't move away from Vanguard a while ago due to the relatively high cost of their funds nowadays. Used to be cheap but the world has moved on.

I think it really depends what Vanguard fund/etf you are investing in. I'm a pretty happy long term VEVE investor and don't know of any ETF that would do a better job of giving me low cost and liquid exposure to the FTSE Developed World Index that I want to hold as my main investment.

honeststeveo said:

@Alexland does this ninja method of avoiding investment fees offset the fact that you are then tied to VG funds or you'll incur more transaction costs and buy sell spread. I wonder how much the real saving is an whether its worth the bother.

The ninja method involves an in-specie transfer (re-regstration) of assets already invested between platforms without trading to arbitrage their fee models without time out of the market or incurring additional spread. It's for people that would want to hold the Vanguard fund/etf anyway.

Just over 3 weeks into a VG>iweb transfer and I wonder, how long have they typically taken when you have done it previously? 

jimjames

Swipe said:

They are now splitting the free across accounts and will no longer just take it from a General Account. So I now need to either set up a direct debit for fees or keep cash in my SIPP, ISA and GIA.

If you have a SIPP then that's the best place to pay the fees from in terms of tax efficiency. DD won't benefit from tax relief.

Part of the problem with the change is that the minimum fee is now stated in pounds not percentage. Some of those getting agitated by it are probably paying more now but don't realise it because it's "only" 0.15%. My ISA only has a couple of thousand in it so I would be impacted if it wasn't for the SIPP being taken into account.

Hoenir

InvesterJones said:

It's a shame. I'm thinking of the person who really needs something nice and simple, set once and forget - vanguard was a great option for them and the low fees meant the barrier to investing for the first time compared to savings accounts was low - which is precisely how many started out with tiny amounts just to dip their toes in the water.

Apps have made investing akin to having a flutter down the bookies. For the majority of people there only exposure to stock markets need be through their pension. 

Alexland

Alistair31 said:

Just over 3 weeks into a VG>iweb transfer and I wonder, how long have they typically taken when you have done it previously? 

It's not something I have personally done for a very long time.

I believe Aylesbury_Duck has probably done it the most times around here. This thread was memorable:
https://forums.moneysavingexpert.com/discussion/6295036/transfer-to-iweb-13-months-and-complete-at-last/p1

jimjames

Alistair31 said:

Alexland said:

Prism said:
If small increases to fees bother someone then I am suprised that they didn't move away from Vanguard a while ago due to the relatively high cost of their funds nowadays. Used to be cheap but the world has moved on.

I think it really depends what Vanguard fund/etf you are investing in. I'm a pretty happy long term VEVE investor and don't know of any ETF that would do a better job of giving me low cost and liquid exposure to the FTSE Developed World Index that I want to hold as my main investment.

honeststeveo said:

@Alexland does this ninja method of avoiding investment fees offset the fact that you are then tied to VG funds or you'll incur more transaction costs and buy sell spread. I wonder how much the real saving is an whether its worth the bother.

The ninja method involves an in-specie transfer (re-regstration) of assets already invested between platforms without trading to arbitrage their fee models without time out of the market or incurring additional spread. It's for people that would want to hold the Vanguard fund/etf anyway.

Just over 3 weeks into a VG>iweb transfer and I wonder, how long have they typically taken when you have done it previously? 

Mine was done very quickly but that was earlier this year