In this article we compare two popular investment platforms – InvestEngine and Vanguard Investor. InvestEngine* is an investment platform that aims to be a one-stop shop for DIY investors also looking for a robo-advice service. In contrast, Vanguard is an asset management company with the point of difference that it is owned by the funds that people invest in, rather than by shareholders. This makes the two platforms seem like quite different propositions on the surface, however the key similarity that both can be used to buy Vanguard ETFs. We will explain all of the important points so that you can choose the platform that will help you save the most money and give you the freedom and diversification you are looking for.
We also show you how you could get a welcome bonus of up to £50* with InvestEngine.
InvestEngine vs Vanguard - which is better?
| InvestEngine* | Vanguard | |
| Services | 10 Managed growth portfolios
Free DIY investing service with access to more than 690 ETFs Auto-invest savings plan |
LifeStrategy funds
Target Retirement funds Personal financial advice for retirement planning |
| Products | ISA, GIA (General Investment Account), SIPP | ISA, GIA (General Investment Account), Junior ISA, SIPP |
| Minimum investment | £100 (Minimum investment of £10 per week for auto-invest savings plan) | £500 or £100 monthly investment |
| Platform fees | 0.25% per annum managed platform platform charge (DIY is free)
0.15% - 0.25% ETF annual charge (the average ETF charge is 0.14% pa within growth portfolio according to InvestEngine) 0.07% market spread (InvestEngine estimate) |
0.15% (capped at £375 for accounts over £250,000)
Additional underlying fund charges |
| Money to the Masses Offer | Invest at least £100 with InvestEngine via this link and receive a welcome bonus of up to £50*. The bonus will be paid once you invest at least £100 in your portfolio (Terms and conditions apply. Capital at risk). | N/A |
| Customer reviews (Trustpilot) | 4.6 out of 5.0 | 4.1 out of 5.0 |
InvestEngine vs Vanguard - services
InvestEngine* is an interesting proposition because it is a hybrid of two types of platform: a robo-advice service and a DIY investment platform. It offers 10 low-cost, diversified managed ETF portfolios, similar to what you can get with the likes of Nutmeg and Moneyfarm*. However, on top of this robo service, InvestEngine also allows those investors looking to take a more hands-on approach to pick their own investment funds too. This means that InvestEngine is able to combine the managed portfolio option provided by most robo-advice services and enhance it with some of the DIY investment options offered by full-scale investment platforms, such as Hargreaves Lansdown*. What's more, it is able to offer this service at a lower price point, albeit at the cost of less investment choice. This low-cost DIY option makes it a cost-effective way to invest, including in Vanguard ETFs.
Vanguard Investor is different as it offers a way to invest, but only via its own range of passive funds, such as its popular LifeStrategy or Target Retirement funds. On top of its investment options, Vanguard also includes some useful investment guides and tools.
InvestEngine vs Vanguard - products
While both InvestEngine* and Vanguard offer stocks and shares ISAs, General Investment Accounts and pensions, there are gaps in the additional wrappers they have in their ranges. Vanguard has a Junior ISA, but not a Lifetime ISA. InvestEngine has neither. This may not be an issue for many investors as both InvestEngine and Vanguard have the essential products you would expect from an investment platform, but the absence of a Lifetime ISA (and junior ISA for InvestEngine) will mean investors looking specifically for those options may choose to seek out a competitor such as Hargreaves Lansdown*, which offers both. If you are particularly interested in those products, check out our article on the best Junior ISAs and our guide to Lifetime ISAs.
InvestEngine vs Vanguard - minimum investment
If you want to open an account with Vanguard Investor, it will require a larger initial outlay than with InvestEngine*. If you want to put in a lump sum, the minimum investment is £500 with Vanguard, while it is only £100 with InvestEngine. For regular investments, Vanguard requires at least £100 per month, while InvestEngine requires at least £10 per week for its auto-invest savings plan.
InvestEngine vs Vanguard - fees
Vanguard Investor charges a flat fee of 0.15%, capped at £375 for accounts over £250,000, which makes it one of the best-value options in the market. However, if you just want to buy Vanguard ETFs, InvestEngine* is actually one of the cheapest ways to do this. This is because it does not charge any platform fee, transaction fee or account opening fee, while Vanguard does. The downside is it does not offer every Vanguard ETF or the popular Vanguard LifeStrategy funds range, as they are unit trusts.
For a wider choice of Vanguard ETFs or to invest in the Vanguard LifeStrategy fund range, the Vanguard Investor platform will be most cost-effective for many people. However, Interactive Investor* is one of the cheapest ways to buy and hold Vanguard ETFs and the Vanguard Lifestrategy funds within an ISA or SIPP, if you have at least £96,000 invested in Vanguard funds within your ISA, or £104,000 invested in a SIPP. Interactive Investor also offers access to thousands of investment trusts, ETFs, unit trusts and shares – not just access to Vanguard funds or ETFs.
The fees for InvestEngine only apply to its managed portfolios, which have a platform charge of 0.25% per annum. This is less than many of its competitors, including Nutmeg and Moneyfarm. There is an ETF annual charge (according to InvestEngine, the average ETF charge is 0.14% per annum within its 'growth' portfolio) and a market spread (estimated by InvestEngine to be 0.07% per annum on its ETFs), which is the difference between an ETF buy and sell price. This brings the total cost of a managed InvestEngine portfolio to approximately 0.46% per annum.
InvestEngine currently doesn’t charge a platform fee on its DIY investment portfolios for both its Stocks and Shares ISA or General Investment Account ,however, investors will still pay ETF charges and a market spread totalling an average of 0.21%. Those choosing to invest in a DIY SIPP will have to pay an annual SIPP fee of 0.15% - though this is capped at £200 per year - on top of the managed SIPP portfolio fee of 0.25%.
InvestEngine vs Vanguard - customer reviews
InvestEngine* has a Trustpilot score of 4.6 out of 5 based on more than 1,100 reviews. Approximately 81% of reviewers rated it five stars, while 4% rated it with one star. Happy customers mentioned the ease of use and simplicity of the platform. The few negative reviews reference poor customer service.
Vanguard has a Trustpilot score of 4.2 out of 5.0 based on more than 3,000 reviews. Approximately 63% of reviewers gave five stars, while 14% gave one star. Customers who rated it five stars wrote about the high level of customer service, while those who rated it at one star complained about a slow process when it comes to transferring accounts.
Summary: InvestEngine vs Vanguard
If you are looking to invest in a range of funds and investment types, InvestEngine* will be the natural choice over Vanguard because it offers more than just access to Vanguard funds. It does not charge a platform fee for DIY investing through a stocks and shares ISA or GIA and offers robo-investing options. However, if you are looking to invest in Vanguard funds, the downside to InvestEngine is that it does not offer the full range of Vanguard ETFs or the popular Vanguard LifeStrategy funds range. This will be a dealbreaker for investors set on LifeStrategy, though it does not mean that Vanguard Investor is the only option as Interactive Investor offers a good-value route too.
If you are contemplating whether to invest in Vanguard directly through Vanguard Investor, through InvestEngine or through another platform such as Interactive Investor, the decision will largely be guided by how much you are likely to invest. This is because investing over £250,000 with Vanguard will cap your fees at £375, rewarding big pots with a lower relative cost.
Both InvestEngine and Vanguard Investor are good-value platforms that offer the key investment wrappers, the crucial difference is in the range of investments available and range of Vanguard funds available. For more details on both options, read our InvestEngine review and Vanguard Investor review.
If a link has an * beside it this means that it is an affiliated link. If you go via the link Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. But as you can clearly see this has in no way influenced this independent and balanced review of the product. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - InvestEngine, Hargreaves Lansdown, Interactive Investor, Moneyfarm
