I just found out that Vanguard is adding a new minimum account fee for portfolios under £32,000: £4 per month (£48 per year) instead of their usual 0.15% fee.
Vanguard used to be one of the cheapest platforms for investing. With these changes, are they still the best choice? If not, does anyone have recommendations for better alternatives?
Edit: I’m in the UK and use Vanguard for my Stocks & Shares ISA (mainly ETFs), in case that affects your advice.
Fidelity has really taken over as the low-cost leader in the past few years.
Vic said:
Fidelity has really taken over as the low-cost leader in the past few years.
They’ve become my go-to. I’m surprised at how solid they are as a bank too.
Vic said:
Fidelity has really taken over as the low-cost leader in the past few years.
They’ve become my go-to. I’m surprised at how solid they are as a bank too.
Same here. Their banking is excellent, and their credit card is a decent backup too.
@Nico
The 2% cashback card with auto-deposit into a brokerage account is a sweet deal, especially with SPAXX yielding over 4%.
I’d go with Fidelity. Their website and app are much more modern, and their customer service is far superior. I was with Vanguard for years and wish I’d switched sooner.
Dakota said:
I’d go with Fidelity. Their website and app are much more modern, and their customer service is far superior. I was with Vanguard for years and wish I’d switched sooner.
Vanguard has made some website improvements this year, but it’s still not on par with other brokers. At least it’s no longer totally unusable.
@Hollis
I find the updates mostly cosmetic. They’ve added complexity instead of improving functionality. It’s not great.
Arden said:
@Hollis
I find the updates mostly cosmetic. They’ve added complexity instead of improving functionality. It’s not great.
Ironically, I liked their old site better too.
Dakota said:
I’d go with Fidelity. Their website and app are much more modern, and their customer service is far superior. I was with Vanguard for years and wish I’d switched sooner.
Vanguard has made some odd decisions recently. I’ve got a lot with them, so I can’t fully divest, but I’m slowly moving funds elsewhere.
@Remy
You don’t need to sell. You can transfer assets in-kind to Fidelity or Schwab unless you’re in Vanguard-only funds.
Is this fee only for the UK?
Zeph said:
Is this fee only for the UK?
Yes, I’m UK-based and got the email. They titled it “Upcoming changes to terms and conditions…” which made it easy to miss the fee increase buried inside.
@Dalen
I noticed that too. Very sneaky of them.
Vanguard used to be great for beginner investors, but this new fee makes them less appealing. For small portfolios, a £48 annual fee on a £10,000 account is 0.48%, which is high.
If you’re looking for alternatives, Trading212 and InvestEngine are free for Stocks & Shares ISAs. If you prefer a bigger name, AJ Bell Dodl charges 0.15% with no trading fees, which is still cheaper.
@Dale
The £48 fee decreases as a percentage as your account grows. Once you’re at £20,000 or £40,000, it’s down to 0.24% and 0.12%, respectively. So it’s only steep for very small accounts.
What happens when your account is over £32,000? Is the fee still 0.15%?
Han said:
What happens when your account is over £32,000? Is the fee still 0.15%?
Yes, it goes back to 0.15% above £32,000.
Han said:
What happens when your account is over £32,000? Is the fee still 0.15%?
Yes, it goes back to 0.15% above £32,000.
And it caps at £375 for portfolios over £250k.
I’ve just opened a Fidelity account to move my ISA. The £4 monthly fee will put off smaller investors just starting out. It seems like a bad move by Vanguard.