Vanguard direct to customer offering confirmed

enthusiasticsaver · 16 May 2017 at 12:52PM

We are with Halifax share dealing which is flat fee so although we only invest in Vanguard I don't think it would be worth our while to switch as our portfolio is over £150k. Also they don't do sipps.

bostonerimus · 16 May 2017 at 1:01PM

I buy directly from Vanguard in the US (I live in the USA). Fees on the core funds are 0.05% and there is no platform fee and it is free to trade Vanguard mutual funds. However, there are restrictions that limit trading frequency.

dunstonh · 16 May 2017 at 1:07PM

I was surprised it wasn't cheaper. For an in-house offering with just ISA or unwrapped, I expected it to be cheap. SIPP administration and regulatory requirements are higher than ISA/unwrapped. So, no surprise they have not got that in place for now. And the whole of market/fund supermarket involves higher costs as well. So, again, you would expect it to be cheaper.

I am not sure it is worth moving in most cases. I would prefer whole of market access and you can get that at costs near that amount. And those with larger investments where the cap could apply are unlikely to have all their investments with Vanguard (some might if they Vanguard fanboys but as Vanguard are not the best in passive in every sector, it creates limitations).

JohnRo · 16 May 2017 at 1:39PM

I think it's fair to say this is their opening salvo, as others have noted. My initial 'excitement' at the news soon gave way to indifference and some concern.

If this does start a price war they have far more dry powder that all the other platforms combined. I am not a Vanguard fan, that doesn't mean I dislike them, I hold VWRL in my index portfolio.

A massive overreaction perhaps, but what I'm concerned about is that they start, albeit slowly, to drive the fees in the UK platform market down to unsustainable levels for many of the current operators, some who have yet to turn a profit on their direct platforms.

That far from ushering in a golden age for investors, they're seeking to monopolise and control, strangling the competition and ultimately stifling greater choice and investment freedom, by either driving the opposition out of business or into some sort of inferior bargain basement service or having them switch off their loss making direct platforms.

On the other hand, as it stands currently, they're just another welcome addition to the fray.

username12345678 · 16 May 2017 at 1:55PM

I was expecting a low fixed-fee charge so i'm a little underwhelmed.

I'll stick with my original plan for an iweb sipp if Vanguard use a similar pricing structure as their isa's.

edinburgher · 16 May 2017 at 2:07PM

Your link is to your own machine, not to a website

Redski69 · 16 May 2017 at 2:27PM

hutman wrote: »

can we transfer out of hl to vanguard? makes sense for me since all my s&s isa funds are vanguard on hl.

I believe they're only offering Vanguard Assets, so if you hold any other assets outside of Vanguard via HL then you'll either need to nuke them into Cash for a Transfer Out or leave them behind ... although I'm not sure HL do partial Re-Registrations out?

This offering is an interesting one.

They might feel the pain of launching this, in terms of increased regulatory demands, Customer Service requirements, ongoing platform / product enhancements etc. And all they are getting for all that extra work is 15bps, woo.

From a Customers point of view, they're only offering Vanguard Funds. So that’s not good either.

Customers vote with their feet and money and pretty much a majority have voted to put their money with the most expensive provider …. Hargreaves Lansdowne when there have always been cheaper options out there.

Ultimately, Customers want :
- Value for money - this doesn't mean cheapest!
- A Trusted Brand
- Good Customer Service

Currently, you cant have a SIPP, you cant buy Shares either and not being able to have all your assets in one place will be a Deal Breaker for some & I think for that reason other players in the marker will be un-phased by this.

Let's see what HL Trading Update on Thursday brings.

Audaxer · 16 May 2017 at 2:31PM

enthusiasticsaver wrote: »

We are with Halifax share dealing which is flat fee so although we only invest in Vanguard I don't think it would be worth our while to switch as our portfolio is over £150k. Also they don't do sipps.

It definitely wouldn't be worth your while as you would have a platform fee of over £225 instead of £12.50.

MPN · 16 May 2017 at 2:54PM

I'm currently with Fidelity for my S&S ISA's but mainly hold active funds in my portfolio so really the Vanguard platform at present is no use to me, however I am looking into switching to a fee based platform such as Halifax/IWeb.

bostonerimus · 16 May 2017 at 2:59PM

I hope Vanguard's move will highlight the basic Bogle rule of keeping fees to a minimum. There is still as nasty perception in the UK that you can regularly buy market beating performance by paying extra for an actively managed fund. That will work for some people in some years, but some active funds will lag the market and for the majority of investors a low cost tracker approach is the best way to go. I've been investing with Vanguard in the US for the last 20 years and the fees on my funds range from 0.04% to a max of 0.12%. Those are my only fees. I've usually kept a roughly 60/40 asset allocation........although I'm now letting the equity percentage drift up and I'm close to 70/30. Over my 30 years of investing by sticking to a 60/40 asset allocation in tracker funds I've averaged 8% annual return. So by doing not much other than following a few simple rules, and having a low cost lifestyle, I was able to retire debt free at age 52.

Vanguard direct to customer offering confirmed

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