Vanguard: New Minimum Monthly Account charge

Alexland

Jami74 said:

This is pretty much me. The S&S ISA was a simple way to try investing for the first time and gave me the confidence to open a SIPP too. I have a tiny amount invested, think it's cost me about a fiver over the last year. I was planning to make regular deposits in 2025.

If you have a tiny SIPP then there are several websites with referral links to PensionBee easily found via google (eg nutsaboutmoney - complete application before 31-Jan-25) who are offering £50 bonus (£40 from them and £10 tax relief) to new customers and although the fees for their lowest cost 'tracker' strategy (an 80/20 multi asset portfolio) are not cheap at 0.5% you only need to stay a year and if the account valuation is small enough it could be a healthy % return. I have a tiny SIPP that's only £150 (which I only opened as the cashback from L&G was more than the required contribution) that I was thinking of moving to PensionBee under their offer.

mark_cycling00

Good news is that junior ISAs are not affected. 

So little Poppy who's up 25% over 2 years but can't even use the toilet, is not affected. 

Alexland

mark_cycling00 said:

Good news is that junior ISAs are not affected. 

So little Poppy who's up 25% over 2 years but can't even use the toilet, is not affected. 

Yeah but why would you pay Vanguard for a JISA when you can invest in most, possibly all, of the the same funds with no platform fees at HL or Fidelity? Unless the kids want to own exchange traded assets which would incur trade fees on those platforms. Kids can be so picky. I've got an 8 year old who has more than doubled his money and only paying 0.10% total at Fidelity as he is in discounted funds.

Royng54

My portfolio is currently under £32,000, so the £4 per month fee doesn’t seem like much, but I’m concerned about whether I’ll be able to make back the £48 per year in returns.

That said, I really appreciate Vanguard’s investment products and the overall quality they offer. However, I’m wondering if there are any other platforms that might be cheaper and provide similar—or even better—features and services.

Does anyone have recommendations or advice on alternative platforms that are worth considering?

incus432

Yes plenty. Although the £48 pa you pay on 32k is not bad but will rise as your funds do. You need a capped rate then.  I think almost all platforms will let you hold Vanguard.  Start here https://monevator.com/compare-uk-cheapest-online-brokers/.

I've used several over the years and AJ Bell is my favourite (42 pa cap on ETFs) .

Alexland

Royng54 said:

My portfolio is currently under £32,000, so the £4 per month fee doesn’t seem like much, but I’m concerned about whether I’ll be able to make back the £48 per year in returns.

That said, I really appreciate Vanguard’s investment products and the overall quality they offer. However, I’m wondering if there are any other platforms that might be cheaper and provide similar—or even better—features and services.

Does anyone have recommendations or advice on alternative platforms that are worth considering?

Without knowing the types of investment you hold (or would be open minded to hold), the type/value of accounts you hold them in and the trade pattern you expect to occur then it's very hard to comment. If it's complicated maybe start a new thread for us to make suggestions?

dunstonh

The increase in charge makes sense.  DIY providers tend to get a glut of very small investment values and small regular contributions.   These would be loss-making on their existing charge, and as the FCA's consumer duty is another hit on cross subsidies from larger investors, this is an inevitable outcome once the provider no longer wants loss making accounts.

That said, I really appreciate Vanguard’s investment products and the overall quality they offer. However, I’m wondering if there are any other platforms that might be cheaper and provide similar—or even better—features and services.

The products are no different to any other platform in terms of tax wrapper. Indeed, Vanguard don't offer the full range of tax wrappers.    The software provider using by Vanguard is FNZ which is used by 70% of the biggest platforms.  However, Vanguard restricts its offer to only using Vanguard funds.  Indeed, it restricts it further as it does not offer the full range of Vanguard funds.   Ironically, you have to use a different platform if you want the full range.  

So, don't be worrying about alternative provider products being inferior.    Its not the products but the software and the financial standing that matter most.

jimjames

Royng54 said:

My portfolio is currently under £32,000, so the £4 per month fee doesn’t seem like much, but I’m concerned about whether I’ll be able to make back the £48 per year in returns.

You've not said how much your portfolio is at the moment but the £4 a month isn't additional, it replaces the current fees. If you have say £20k then you'll already be paying £30 per year so it's not an increase of £48 but only £18.

I hope that everyone who is focused on these costs is also switching bank accounts and insurance products as those are likely to be far more productive for saving money than this,

jbrassy

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.

Albermarle

People thinking of moving to cheaper platforms ( even free in some cases) should be aware that there will be nothing to stop some of them imposing new charges in future, when they have built up their customer base to an acceptable level.