Vanguard was founded in 1975 and launched their DIY UK platform, Vanguard Investor, in 2017. Vanguard is one of the world’s largest fund managers offering low cost investing accounts, stocks and shares ISAs, junior ISAs and SIPPS.
Vanguard is authorised and regulated by the Financial Conduct Authority and currently holds investments for over 20 million users worldwide. What makes Vanguard stand out from the competition is that it is owned by investor funds, and therefore is totally committed to positive outcomes for its investors, offering low cost index tracking funds which are some of the cheapest to invest available.
In this Vanguard review we look at the service provided by Vanguard and how it competes in a crowded market for your business.
Vanguard Investor Product Range Overview
Vanguard offers the following products:
- Stocks and Shares ISA
- Junior ISA
- General Investment Account
- Personal Pension
Unfortunately Vanguard Investor only allows you to buy Vanguard funds, of which there are around 75, which is great if you are a passive investor but less so if you are looking for shares in a specific company. Their LifeStrategy funds provide investors with readymade investments to suit novice and passive investors. Each LifeStrategy fund holds between 6,000 and 20,000 shares and bonds from across the globe, effectively helping to reduce your exposure to risk and ensuring you can take advantage of the low costs available at Vanguard.
In 2019 Vanguard also launched the Vanguard Active UK Equity Fund, aimed at long term investors seeking to invest in the shares of UK companies at a typically low cost whilst remaining actively managed.
Vanguard Investor ISA Review
Vanguard Investor stocks and shares ISA offers all the tax benefits of investing with an ISA and gives investors the option to choose which funds go into their ISA from 75 different options, as well as ready made options for the more novice investor. There is also the option of adding money and selecting your funds at a later date if you need more time to make a confident decision.
The Vanguard ISA also permits the full 2020 annual ISA allowance, however, there is no traditional cash ISA available.
As always Vanguard have made this a low cost option with no charges for switching holdings, dealing, making payments or exit fees. Your account can also be totally managed online for convenience and you can withdraw your funds whenever you like.
For parents looking to invest in Vanguard, they also offer a Junior ISA with the option of a ready made portfolio or choosing your funds yourself. Unlike the stocks and shares ISA, there is no access to these funds until your child turns 18, however, you are free to transfer to another provider at any time.
There is important information available on the Vanguard website with regards to the key features of the Vanguard ISA which you should read before considering transferring an ISA across to Vanguard.
Vanguard Investor SIPP Review
Vanguard have a decent SIPP offering to help customers save for retirement. There are various options, such as transferring an existing SIPP across or investing £100 per month with a £500 lump sum to get your investments off the ground. There are over 75 funds to choose from, including the ready made Vanguard Target Retirement Fund, consisting of thousands of bonds and shares in one package in order to effectively manage your exposure to risk. Customers can choose a fund that matches their year of retirement and Vanguard will take care of the rest, ensuring your investments are constantly changing as you draw closer to retirement age, decreasing shares and increasing bonds in order to achieve stability.
Vanguard Investor Platform Review
The obvious downside with the Vanguard Investor Platform is that in terms of funds Vanguard will only accept investments from their own Vanguard index funds. However, this is balanced out by the low cost fees on offer at Vanguard which would impact your bottom line favourably over time.
Due to the fact that Vanguard is aimed at investors who can withstand a long term holding period, it is an important consideration that the total expense ratio is generally lower on ETFs than for equivalent mutual funds, and therefore, over time, these lower costs will favourably impact your bottom line.
The other main issue with the Vanguard Investors platform is their failure to offer a mobile app to their customers. However, as investing in Vanguard is more suited to passive investors, perhaps this is not a bad thing as there is little advantage to constantly checking your investments with this kind of strategy. That being said, in this day and age, most tech savvy investors would expect an app.
In terms of usability we found the platform to be really user friendly and easy to navigate with adequate security and a decent search functionality. However, it did lack price alerts which would be a great addition to the Vanguard Investor offering.
Research Service and Tools Review
Vanguard are offering very limited charting tools which really lets them down, that being said, for passive investors this needn’t be an issue.
There are however, a number of financial services tools available which focus on retirement planning including a pension calculator as well as educational tools and an investing personality calculator, asset mixer tools and a calculator to provide you with the total cost of investing.
The education section at Vanguard can only be described as limited, primarily in the form of articles with some video offerings discussing investment products, retirement planning, and the general economy. However, as Vanguard has positioned themselves as a buy-and-hold solution, it stands to reason that their investors won’t need streaming data and dynamic charting facilities.
Vanguard Investor Fees and Charges Review
There can be no doubt that this is where Vanguard’s strong suit lies, with highly competitive low fees that not many providers can match.
Vanguard is free of any fees when it comes to transferring out, switching funds, withdrawing money and closing accounts. Their annual account fee is just 0.15% per annum on investments up to £250,000 capped at £375. This is less than half of the industry average which highlights what great value Vanguard is offering. As a comparison Hargreaves Landsdown are charging 0.45% and you can expect to pay 0.35% at Fidelity.
For accounts of over £250,000 there is no annual account fee.
For fund charges Vanguard yet again comes in far lower than the industry average with ongoing charges that range from 0.06% to 0.08%.
Guide to opening a Vanguard Investor account
Opening an account with Vanguard is relatively quick and can all be done online.
You will need your name, address, mobile phone number, debit card details, bank account details, National Insurance Number and Date of Birth.
Verification is usually done instantly but can take up to five business days if additional verification is needed.
Guide to transferring your investments to Vanguard Investor
Vanguard offer a transfer service for ISAs and retirement funds free of charge. They do require you to fill out an ISA transfer form which can be found on their website and it is important to note that transferring a cash ISA across to Vanguard will mean it is automatically turned into a stocks and shares ISA.
Most transfers take up to 30 business days but this depends on your existing provider so can vary.
Vanguard Investor Customer Service Review
Vanguard offer phone support, Monday to Friday, from 9am to 5pm, however, the amount of time you spend waiting on hold is reliant on the size of the account you hold with them, so for smaller account holders this could be a disappointment. They don’t offer any live chat facility which is a let down.
Who is Vanguard Investor Suitable For?
Vanguard is most suited for buy-and-hold investors, whereas active traders will find the broker disappointing due to lack of a strong trading platform. Investors looking for a low cost model will also be rewarded with Vanguard’s highly competitive fee structure, making it the ideal provider for retirement savers and long term investors.
For anyone new to investing Vanguard offers really low costs and is perfect for investors considering a long term solution.
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Vanguard Investor FAQ
How do I contact Vanguard Investor?
Vanguard can be contacted via email or phone (0800 587 0460) available Monday to Friday 9am to 5pm.
You can also contact Vanguard via secure message from your account.
Is Vanguard Investor any good?
Vanguard is a reliable, low cost offering for exchange traded funds (ETFs) and mutual funds, however, if you are after comprehensive trading tools and in depth education then Vanguard may not be up to the standard you are looking for.
Vanguard UK will definitely fall short of the mark for investors looking for short term investment opportunities, with a distinct lack of charting tools and only Vanguard index funds to choose from.
If you are looking for financial advice concerning your individual circumstances, then Vanguard Investor is unable to offer you assistance in this area and you would be better to source investment advice from a financial adviser.
How do I withdraw my money from Vanguard Investor?
Withdrawals from your Vanguard account are quick and easy to do online via your account. Simply select Payments from the ‘My Portfolio’ menu and select ‘Money Out’
How do I close my account at Vanguard Investor?
Closing your account at Vanguard is free of charge, unlike a lot of other platforms on the market. To close your account with Vanguard simply send them a secure message by logging onto your account, ensuring that you have sold your investments and withdrawn or transferred your cash already.
How safe is Vanguard Investor?
Investing with Vanguard is as safe as it gets with any online provider and being covered by the Financial Services Compensation Scheme you can get back up to £85,0000 should Vanguard cease trading for any reason.
Vanguard UK is also authorised and regulated by the Financial Conduct Authority.
That being said, there are associated risks with placing your money in a stocks and shares ISA, as unlike a cash ISA that guarantees you a rate of return, with a stocks and shares ISA, your initial investment can go down as well as up, depending on how your chosen funds perform.
Who owns Vanguard Investor?
Vanguard has no outside owners which is a bonus, as it means there are no conflicting loyalties. It is in fact owned by its funds, and therefore owned by their Vanguard shareholders.
Being client owned has advantages for Vanguard in that any profits are returned to shareholders in the form of lower costs, meaning that as a client of Vanguard, you get to keep more of what you earn on your investments.