Vanguard has launched a low-cost financial planning advice service tailored towards investors planning for retirement. The service offers personalised pension saving advice for those who have more than £50,000 to invest for an all-in cost of 0.79%.
Vanguard's personal financial planning service aims to provide investors with a comprehensive financial plan that takes factors such as the chosen retirement date, desired retirement income and attitude to risk into consideration. It hopes to provide a tailored investment portfolio made up of a mix of low-cost equity and fixed-income funds. The portfolio is managed on the investors' behalf being rebalanced as appropriate with risk reduction as retirement approaches. The personalised financial plan is then reviewed and updated annually in order to keep it on track.
Vanguard is renowned for its low-cost fees, charging a platform fee of just 0.15%, capped at £375. The charge for its personal financial planning is 0.79%, comprising of an advice fee (0.50%), ongoing fund charges (0.12%), transaction costs (0.02%) and platform fee (0.15%).
Sean Hagerty, Head of Vanguard, Europe, says “We strongly believe that many people will benefit from taking financial advice, particularly in preparation for retirement. However, research, including a recent FCA report, shows that over 90% of the UK’s adult population do not currently take advice.
“For some investors, the cost of advice is a barrier. The data indicates people can pay more than 1.5% for advice, platform, and fund management charges. It’s not uncommon to see fees north of 2%. With people living longer and working longer, these costs have the potential to make a considerable dent in their hard-earned retirement savings.”
Vanguard personal financial planning service: Key points
- Minimum age requirement: 18
- Residency requirement: UK
- Minimum investment requirement: £50,000
- Fees: 0.79%
- Entry or exit fees: No
Vanguard's personal financial planning service: How much do you need to invest?
Investors will need at least £50,000 in order to invest using Vanguard's personal financial planning service. The more you invest, the more bespoke the service becomes. We have summarised the investment tiers below, as well as the type of service investors should expect:
Investors with a minimum of £50,000 to invest
Investors will receive a digital financial planning 'experience' with a personal financial plan, implemented and managed by Vanguard and reviewed annually. Clients have access to its service team for administrative support.
Investors with a minimum of £100,000 to invest
Investors with over £100,000 receive, in addition to the £50,000 package, access to a team of financial planners, who are on hand to provide telephone or video-based financial planning support. Investors will receive an annual review from a financial planner as well as being able to arrange a review when they experience a change in circumstances.
Investors with a minimum of £750,000 to invest
Investors with over £750,000 will be supported by a dedicated financial planner who is able to provide face-to-face support via video or in-person at Vanguard’s offices in London.
Is Vanguard's personal financial planning service worth it?
Vanguard's personal financial planning service could be a good fit for those with uncomplicated financial affairs who want easy access to low-cost retirement planning advice. For an in-depth review of Vanguard Investor, check out our independent Vanguard Investor review. It is worth remembering that the service only provides restricted advice, meaning it can only provide recommendations on its own range of equity and fixed-income funds. Additionally, the advice that investors receive is limited to retirement planning which won't suit investors that require advice in other areas such as wealth management, mortgages, tax and insurance. Those looking for a more comprehensive alternative may want to consult an independent financial adviser who can provide advice on all types of retail investment products from providers from across the whole market. Those considering independent financial advice should check out our article "10 tips on how to find a good financial adviser".