Vanguard launches advice service with 0.79% 'all-in' fee

Vanguard launches advice service with 0.79% 'all-in' fee

Vanguard has launched its financial advice service in the UK, charging an 'all-inclusive' ongoing fee of 0.79 per cent.

The headline cost will incorporate annual platform charges of 0.15 per cent, ongoing fund charges of 0.12 per cent, transaction costs and an advice fee of 0.5 per cent.

Vanguard said it would not charge an initial, or any other, fee. The service will be targeted at clients with assets of £50,000 or more.

The company is to focus on providing restricted advice to those saving for retirement, though its emphasis will remain on investment advice rather than encompassing areas such as protection or full-scale tax planning.

Sean Hagerty, Vanguard's head of Europe, said: "For some investors, the cost of advice is a barrier. The data indicates people can pay more than 1.5 per cent for advice, platform, and fund management charges. It’s not uncommon to see fees north of 2 per cent.

"With people living longer and working longer, these costs have the potential to make a considerable dent on their hard-earned retirement savings.”

Vanguard's service will see clients invested solely in its own funds and will operate on a tiered basis. Those holding pots between £50,000 and £99,999 receiving a digital service, with financial plans reviewed annually.

Those with assets between £100,000 and £749,999 will have access to a team of financial planners, who will provide telephone or video-based financial planning support.

Clients with £750,000 or more will have a dedicated financial planner and will receive support either via video or in person in Vanguard's London office.

Hagerty said Vanguard would be upfront with those clients who needed advice it could not provide.

He said: "[If someone needs advice we cannot offer] we might say our advised proposition is not for you. We will be very clear about that.

"For example if someone asks us about a defined benefit transfer, we will say we just can’t serve you."

Hagerty added Vanguard had a "handful" of advisers and would hire more if demand required it, with the aim of recruiting a combination of early career and more experienced advisers.

The financial planning team is led by James Norton, a certified financial planner who previously worked at Evolve Financial Planning and Killik & Co.

Hagerty said Vanguard had sought to automate as much of the advice process as possible, including portfolio construction and rebalancing - but that there would need to be a "uniquely human interaction" for other parts, such as during market downturns.