New Investment Platform Entrant Vanguard Already Most Popular With UK Investors
Despite only entering the UK market 2 years ago, consumer media Which?’s annual survey of customer satisfaction has seen budget U.S.
13 online investment platforms were assessed for their customer satisfaction scores, with the Which?
The survey asked members if they would recommend the providers they hold accounts with
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The top five platforms on the UK market, based on the survey’s customer satisfaction scores were Vanguard with 76%, HL with a rating of 74%, AJ Bell
Hargreaves Lansdown lost its top spot on pricing despite customers being very happy with the range of tools and platform’s ease of use. HL charges account holders a tiered 0.45% a year on the first £250,000 invested, 0.25% on the next £250,000-£1m and 0.1% on £1m-£2m. Transactions, withdrawals and closing an account are also additionally charged. Vanguard charges customers a 0.15% platform fee capped at £375 a year on amounts up to £250,000, after which it is 0%. There are also fund charges of about 0.06%-0.8%.
Which? calculated that if an investor were to make contributions of £5000 a year into funds with up to four purchases and sales a year it would cost them £8 with Vanguard and £23 with Hargreaves Lansdown. On £50,000 the cost would be £75 for a Vanguard account holder and £225 if the investments were made through an HL account.
Steps have recently been taken by the FCA to force investment platforms to make it easier for customers to switch between providers in the hope that doing so will help bring down fees and improve customer service. Hargreaves Lansdown has never been among the cheapest online investment platform options but has maintained its dominant market share by providing a very high level of service, user-friendly platform and wide variety of investment options. However, it appears that Vanguard is now offering a comparable level of service and product, more cheaply.
The platforms that were rated lowest of the 13 by the survey’s respondents were Barclays and Santander’s offerings, which both received a customer satisfaction score of just 42%, followed by Bestinvest with a score of 53%.
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