Vanguard has launched a new financial advice service in the UK, with a 0.79% all-inclusive charge
Published April 2021
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The value of investments, and the income from them, can go down as well as up, so you may get back less than you invest.
Known for their low fee index tracker funds, Vanguard plan to charge 0.79% a year for a limited financial advice service.
The offering will focus on providing restricted advice to those investing for retirement and won’t include more complex areas such as protection or bespoke tax planning.
The service will recommend a range of Vanguard-only funds, and will manage them on your behalf. With period rebalancing taking place ‘as appropriate’.
The 0.79% charge is broken down into an advice fee of 0.50%, a 0.15% admin levy, and the remaining 0.14% attributed to the ongoing charges of the recommended tracker funds.
Vanguard’s standalone tracker funds currently have ongoing charges ranging from 0.06% for their FTSE 100 Unit Trust up to 0.29% for the FTSE All-World High Dividend Yield ETF.
For reference, traditional advisors on average charge an initial fee of 2.4%, followed by 1.9% a year in fund and advice costs, according to the Financial Conduct Authority (FCA).
The service is currently only offered to individuals with at least £50,000 of investable assets, with those investing over £100,000 offered video-based conversations and phone support, and those with over £750,000 getting their own financial planner and face-to-face meetings.
Vanguard will coordinate alerts for when customers should move their money or receive up-to-date advice. This could be triggered periodically when its appropriate to reduce the level of investment risk to as retirement gets closer.