Exciting Vanguard News For UK Customers!

[martinspoonboy]

For the UK based mustachians out there, Vanguard have launched there own platform (although they're not calling it a platform, due to only providing Vanguard options) in the UK! Hallelujah! This cuts out the middle men fees that have blighted UK investors and made us extremely jealous of our US counterparts for so long. 

Just thought I'd put this here as it might be of interest to any UK'ers' that hadn't heard the good news! I for one am unbelievably excited.

[jade]

thanks martinspoonboy.
Will look into this!

[jade]

hi again,

I just checked it out. I think unless I am missing something, in my case with a Lifestrategy 60 through Charles Stanley Direct, it's still cheaper to stay with them. They charge 0.25% platform fee for funds under £500k (which is what I have), however for Vanguard directly:

If you invest the ISA maximum of £20,000 into the LifeStrategy 60% Equity Fund you will pay:

No pre-set dilution levy or initial charge
An annual ongoing charges figure on the fund of 0.22% x £20,000 = £48.00
An annual account fee of 0.15% x £20,000 = £30.00
Making a total of £78 each year
This example is based on the assumption that the value of your investment doesn't move over the course of the year. In practice, we calculate it daily and charge it quarterly, so it will change with the value of your investment.

I guess it will be different for each investor - I just wanted to check I got it right? Appreciate the heads up as I will compare in future for other investments too.

Cheers

[martinspoonboy]

Am I right in thinking that you have to pay the ongoing fund charge if your with CSD anyway? So in effect it's:

CSD: 0.25 platform fee + 0.22 fund fee = 0.47
Vanguard Direct 0.15 (vanguard platform fee) +0.22  fund fee = 0.37.

[jade]

Hiya,

I am not sure... I am a newbie to all this :) I just called CSD and they said they charge a 0.25 platform fee and apparently 0.22 for TER (total expense ration) / OCF (ongoing charges fund) which they said isn't exactly a fee as "it's factored in to the original fund price"? Is that the 0.22% you are referring to, too?

I am not sure if I am comparing the same things but if I am, would the difference be worth moving? I have found CSD very good but would look to move if it would make a difference, especially as the investment grows.

thanks!

[martinspoonboy]

Yeah, that's the one. As they say it's the cost of the fund as opposed to a fee. So the 0.22% will remain in place regardless of where you are investing in the fund. It's the platform fee of 0.25 that is higher than the Vanguard 0.15.

I wouldn't want to advise as I'm also new to investing. Going direct seems like the best option for me personally and unless I'm missing something, it seems cheaper than doing it through any middle-man platform.

I guess there's withdrawal fees to think about. Not sure what CSD's policy is on this. Also, if CSD's customer service is ace, that could be worth 0.1% whilst you learn your trade.

As I said, I'm a million miles from a financial advisor, but knowing what your options are is half of the game so thought I would share :)

[jade]

ah, ok I understand, thanks. It's good to find out about that extra 0.22% as the info was a bit buried with CSD.
I will look into CSD withdrawal fees and no worries, I am not expecting any advice, it's just helpful to know what our options are. thanks again! :)

[Jamese20]

yes it looks like vanguard are doing a direct ISA account which is fantastic!!

as soon as my debt is reduced significantly i will be pumping up my ls100 fund up with them for sure!

[jade]

Yeh, I had just found that too! Excellent news.

[AnswerIs42]

Vanguard ETFs held in HL ISA: 0.45% platform fee, capped at £45
Vanguard ETFs held in Vanguard ISA: 0.15% platform fee, capped at £375

Meh. Think I'll stick with HL, thank you very much.

[jade]

Sounds like that makes sense for you, AnswerIs42. :)

So, if all other things are equal in my case, Vanguard direct has a platform fee of .15% which is better than my current .25% with CSD. At my current £14k investment, that's £14 a yr I think (and growing with investment). Obviously we can't compare experiences as vanguard UK is new, but wondered if anyone in the US or elsewhere had any experiences or thoughts on which might be better (a platform or direct) other than on fees?
Or any other knowledge like capped fees on funds that I'm not aware of?

Thanks for your help!

[Bloodbuzz]

I got really excited about this at first too as i'm all in Lifestrategy 100, but it turns out that for me it is more expensive than what i'm currently paying with IWeb.
Oh well, ill keep an eye on Vanguard's fees in case they drop any lower in the future.