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I<\/span>t looks like Vanguard is no longer the undisputed consumer champion of old. Vanguard\u2019s<\/span> USP has been waning for a while but the recent announcement of a \u00a34 per month minimum charge for DIY investment services has put the tin lid on it. (Note: this price rise does not apply to Junior ISAs.)<\/span><\/p>\n Previously, Vanguard\u2019s DIY investors paid a 0.15% platform fee calculated on their account balance. That made Vanguard excellent value for beginners, young investors, and anyone who can\u2019t afford to put much away.\u00a0<\/span><\/p>\n But from 31 January 2025, customers will pay \u00a348 annually for portfolios worth less than \u00a332,000..\u00a0<\/span><\/p>\n This is a huge change.\u00a0<\/span><\/p>\n Anyone with a \u00a31,000 portfolio will pay \u00a348 in charges or 4.8% of their account balance.<\/span><\/p>\n Previously they would have paid \u00a31.50.<\/span><\/p>\n The numbers may not seem large until you consider that global equities post an average annual return of around 8%.<\/span><\/p>\n At that rate, most of the example investor\u2019s return will be consumed by fees. Precisely the fate that Vanguard\u2019s founder, John Bogle, worked to help people avoid.<\/span><\/p>\n As Vanguard itself says<\/a>, quoting Bogle:<\/span><\/p>\n Investors need to understand not only the magic of compounding long-term returns, but the tyranny of compounding costs; costs that ultimately overwhelm that magic.<\/p>\n<\/blockquote>\n Very true. And while all brokers are grappling with their own rising costs, an informed investor surveying the options will find that several other platforms are now more competitive than Vanguard for small portfolios.<\/p>\n Vanguard\u2019s \u00a348 minimum means the platform is now only worth considering once you\u2019ve amassed at least \u00a319,200 in an ISA \/ GIA or \u00a313,700 in a SIPP. (See below for our alternative picks).<\/span><\/p>\n You can sense-check your own numbers using the method we\u2019ve previously outlined: <\/span>How to work out which platform is cheapest for you<\/span><\/a>.\u00a0<\/span><\/p>\n Do that and if your portfolio is worth well over \u00a332,000 then you may be left wondering what all the fuss is about. <\/span>You won\u2019t see any fee hike at that level.<\/span><\/p>\n On the other hand\u2026<\/p>\n Disclosure: Links to platforms may be affiliate links, where we may earn a small commission. It doesn\u2019t affect the price you pay nor how we judge the brokers. This article is not personal financial advice. Your capital is at risk when you invest.<\/sup><\/p>\n The best Vanguard alternative right now is InvestEngine<\/a>. <\/span>InvestEngine\u2019s platform charges and dealing fees are precisely zero for all account types including SIPPs.<\/span><\/p>\n InvestEngine hasn\u2019t previously enabled SIPP transfers. But it\u2019s now making an exception for Vanguard customers.\u00a0<\/span><\/p>\n If you\u2019re wondering how InvestEngine can afford to offer its services for free, here\u2019s its own <\/span>explanation<\/span><\/a>.\u00a0<\/span>But please read our <\/span>zero commission broker<\/span><\/a> article, too.<\/span><\/p>\n InvestEngine is covered by the standard \u00a385,000 <\/span>FSCS investor compensation scheme<\/span><\/a>.\u00a0<\/span><\/p>\n Unlike Vanguard, InvestEngine is an ETF-only platform. I don\u2019t think that\u2019s a barrier though as ETFs are <\/span>now cheaper<\/span><\/a> than funds for many asset classes. And InvestEngine offers plenty of options, including non-Vanguard providers.\u00a0<\/span><\/p>\n Another zero-fee alternative is Prosper.<\/p>\n Prosper is every bit as cheap InvestEngine. Again, you can read its own explanation on how it makes money<\/a>.<\/p>\n Prosper is an app-only investing service, offering a limited number of index funds and ETFs \u2013 though Vanguard products are prominent. The range may be small but it has the main asset classes covered, and typically includes a competitive index tracker in each category.<\/p>\n Prosper also includes a SIPP in its account line-up, alongside an ISA and GIA as usual.<\/p>\n The firm itself is relatively new. But it is protected by the FSCS scheme.<\/p>\n These options are worth considering because they couple free fund trading with a low percentage platform fee:<\/span><\/p>\n There are a few more zero commission trading apps available but they don\u2019t occupy the same space as Vanguard. While such firms offer ETFs, they\u2019re primarily focussed on trading and speculating on high-risk assets.<\/span><\/p>\n Still, you can check many of them out via our <\/span>broker comparison table<\/span><\/a>.<\/span><\/p>\n There aren\u2019t any exit charges to pay if you\u2019d like to transfer your account away from Vanguard.\u00a0<\/span><\/p>\n Transferring is simple enough though it may take a few weeks.\u00a0<\/span><\/p>\n If your new broker doesn\u2019t offer a Vanguard product then your investment will be sold to cash and the money moved over instead.\u00a0\u00a0<\/span><\/p>\nHow Vanguard\u2019s price rise affects small portfolio owners<\/h2>\n
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Costly consequences<\/h4>\n
Vanguard alternatives for small portfolios<\/h2>\n
Cheapest Vanguard alternatives if you prefer better known brands<\/h3>\n
Close Brothers:<\/span><\/h4>\n
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HSBC Global Investment Centre:<\/span><\/h4>\n
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Fidelity:<\/span><\/h4>\n
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Santander Investment Hub<\/span><\/h4>\n
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Dodl by AJ Bell:<\/span><\/h4>\n
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Any other contenders?<\/h3>\n
Transfer day<\/h2>\n