Vanguard: New Minimum Monthly Account charge

eskbanker

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 emoji is probably appropriate - this thread isn't about the performance of their investments but the change in platform fees....

jbrassy

Alexland 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.

Without knowing the types of investment you hold (or would be open minded to hold) and the trade pattern you expect to occur then it's very hard to comment. For example AJ Bell have charges in addition to the 0.25% for fund trades, regular investing and adhoc exchange trading which can soon add up.

Currently invested with Vanguard:
80% in: FTSE Global All Cap Index Fund (Acc)
20% in: Global Bond Index Fund - Hedged (Acc)

My strategy is to invest 80% equities, 20% bonds. I rebalance the fund once a year. I don't intend to add funds to the SIPP as it's an old pension - I just want to leave it and let it grow. 

With AJ Bell, I'm thinking of changing it slightly, so I'd be:
80% in: HSBC FTSE All-World Index C Acc
20% in Vanguard Global Bond Index Fund - Hedged (Acc)

I appreciate that the change would mean I would be invested in fewer small caps. However, the HSBC fund has a 0.13% ongoing charge whereas the Vanguard FTSE Global All Cap Index Fund has a 0.23% ongoing charge. I think tracking the FTSE All-World rather than FTSE Global All Cap would still provide adequate diversification and returns. Unless someone can present a strong case for why I'm wrong and the benefits of investing in small caps outweigh the costs?

rjmachin

I have a S&S ISA account with Vanguard, currently with £5520 in VLS80, contributing £200 per month.

I hope to increase contributions going forward.

I also have a S&S LISA with AJ Bell, currently with £31800 in "Invesco FTSE All-World ETF Acc GBP", putting the full £4000 per year.

I am happy with the risk level of the All World ETF, so do not need to stay in VLS80.

In Vanguard, I am currently paying £1.77 every quarter (increasing as contributions go in), so around 60p per month.

I am wondering between 3 options:

1. Stay with Vanguard, pay the extra £3.40 per month - Not my favoured option
2. Transfer to AJBell, pay 0.25% account fee (£1.15 per month), plus the £5 monthly fee for ETF (or £1.50 per VLS80?)
3. Transfer to InvestEngine, no fees or dealing charges, just the same OCF as other platforms

I was thinking of AJBell, as I have my LISA with them, until I just wrote that it has a £5 dealing fee for ETF's.   The LISA is okay as it is just 2 deals per year (£4k and £1k off the government)

Are there any other platforms I should consider?
Is InvestEngine the leader?

jbrassy

rjmachin said:

I have a S&S ISA account with Vanguard, currently with £5520 in VLS80, contributing £200 per month.

I hope to increase contributions going forward.

I also have a S&S LISA with AJ Bell, currently with £31800 in "Invesco FTSE All-World ETF Acc GBP", putting the full £4000 per year.

I am happy with the risk level of the All World ETF, so do not need to stay in VLS80.

In Vanguard, I am currently paying £1.77 every quarter (increasing as contributions go in), so around 60p per month.

I am wondering between 3 options:

1. Stay with Vanguard, pay the extra £3.40 per month - Not my favoured option
2. Transfer to AJBell, pay 0.25% account fee (£1.15 per month), plus the £5 monthly fee for ETF (or £1.50 per VLS80?)
3. Transfer to InvestEngine, no fees or dealing charges, just the same OCF as other platforms

I was thinking of AJBell, as I have my LISA with them, until I just wrote that it has a £5 dealing fee for ETF's.   The LISA is okay as it is just 2 deals per year (£4k and £1k off the government)

Are there any other platforms I should consider?
Is InvestEngine the leader?

I think Invest Engine is the best one to go for. If I could transfer my SIPP to Invest Engine, that's where I would go. Invest Engine allow ISA transfers, but not SIPP transfers.

Albermarle

rjmachin said:

I have a S&S ISA account with Vanguard, currently with £5520 in VLS80, contributing £200 per month.

I hope to increase contributions going forward.

I also have a S&S LISA with AJ Bell, currently with £31800 in "Invesco FTSE All-World ETF Acc GBP", putting the full £4000 per year.

I am happy with the risk level of the All World ETF, so do not need to stay in VLS80.

In Vanguard, I am currently paying £1.77 every quarter (increasing as contributions go in), so around 60p per month.

I am wondering between 3 options:

1. Stay with Vanguard, pay the extra £3.40 per month - Not my favoured option
2. Transfer to AJBell, pay 0.25% account fee (£1.15 per month), plus the £5 monthly fee for ETF (or £1.50 per VLS80?)
3. Transfer to InvestEngine, no fees or dealing charges, just the same OCF as other platforms

I was thinking of AJBell, as I have my LISA with them, until I just wrote that it has a £5 dealing fee for ETF's.   The LISA is okay as it is just 2 deals per year (£4k and £1k off the government)

Are there any other platforms I should consider?
Is InvestEngine the leader?

Not sure what you mean by leader?
For sure they are relatively new, low cost  and small.

Alexland

jbrassy said:

Currently invested with Vanguard:
80% in: FTSE Global All Cap Index Fund (Acc)
20% in: Global Bond Index Fund - Hedged (Acc)

My strategy is to invest 80% equities, 20% bonds. I rebalance the fund once a year. I don't intend to add funds to the SIPP as it's an old pension - I just want to leave it and let it grow. 

With AJ Bell, I'm thinking of changing it slightly, so I'd be:
80% in: HSBC FTSE All-World Index C Acc
20% in Vanguard Global Bond Index Fund - Hedged (Acc)

I appreciate that the change would mean I would be invested in fewer small caps. However, the HSBC fund has a 0.13% ongoing charge whereas the Vanguard FTSE Global All Cap Index Fund has a 0.23% ongoing charge. I think tracking the FTSE All-World rather than FTSE Global All Cap would still provide adequate diversification and returns. Unless someone can present a strong case for why I'm wrong and the benefits of investing in small caps outweigh the costs?

I'd agree that I don't think it's worth paying nearly twice as much for All-Cap compared to an All-World fund. I go further and strip out the EM (as I don't want it) and so hold developed world funds/etfs but that's just me.

Anyway you can get that HSBC All-World fund on Dodl (not that I have used it) owned by AJ Bell confusingly under their 'themed investment' options list at 0.15% platform fee (min £1 pm) and they have a few other bond funds for you to consider. They seem to offer separate government and corporate bond funds it's not as simple but maybe consider if a 3 fund portfolio would work for you eg 80/10/10? Unlike the main AJ Bell platform there are no trade fees on Dodl to contribute or rebalance the portfolio.

The main downsides of Dodl is that their charges might also increase and it would need to be a cash transfer with time out the market (during which time you could avoid a crash or miss a rally much bigger than the difference in platform fees) unless you can switch in and out of an investment that gives similar exposure and exists on both platforms.

Albermarle

trickydicky14 said:

jimjames said:

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,

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.

To put an £18 rise in platform fees in context, a £30K investment in a global index fund, could drop £10,000 in a week.
Even a more balanced/lower risk investment just in a mini crash could easily lose £3,000 in a matter of days.

orange-juice

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.

Hoenir

Albermarle said:

trickydicky14 said:

jimjames said:

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,

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.

To put an £18 rise in platform fees in context, a £30K investment in a global index fund, could drop £10,000 in a week.
Even a more balanced/lower risk investment just in a mini crash could easily lose £3,000 in a matter of days.

As long as it remains a bull market the focus will be on the fees rather than the investments held. 

NickBFS

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.

I am in a very similar boat: I have circa £12K in a Vanguard SIPP, which I opened in the year I retired to mop up what I could contribute in my final year and had not already invested in my work pension. Since I am now retired, that SIPP won't grow much and the £48 annually would therefore be a substantial increase in fees for the foreseeable future (even if the actual figure remains fairly modest). 

I was eyeing invest engine but, like you, noted that inbound SIPP transfers to them were not possible at this stage.

The cheapest alternative I found was dodl by AJ bell, which is 0.15%, with, however, some downsides:
1) the range of investments is very limited. My SIPP is currently entirely invested in VHVG. There is no direct equivalent  on dodl. The nearest would be HSBC FTSE All-World index fund, which is all-world rather than developed world (not necessarily a bad thing in itself even I would have preferred the latter);
2) as a consequence of 1), an in-specie transfer would be ruled out since dodl do not offer VHVG, so that would mean some (small) transactions costs and being out of the market until the transfer completes. Not a huge issue (especially taking into account the small investment at stake), but still...
3) as another poster noted, there is a risk that dodl might raise its fees if the 0.15% was adopted as a vanguard match. We are in crystal ball-gazing territory here, though.