Well, I’m not quite sure what to say. So I’ll just say a big thank you – to Steve for writing such a nice thing last week, and to the many of you who’ve sent condolences and messages. This industry can be a very supportive place when we put our minds to it, and although I haven’t been able to reply to everyone, every single note, DM, tweet and email is very much appreciated.

Mum would never forgive me if I didn’t pivot that into a naked cash-grab, so if you are feeling flush (and judging by recent results from Nucleus and Transact, at least some people are), then an excellent way to dispose of excess capital is to join the fight against MS by chipping in here. You’ll only end up spending it on hard seltzers to drink in the park otherwise…


A few years ago I was in the States doing some stuff for a client (I realise that makes me sound like part of the proscribed pharmaceutical industry rather than financial services but I’m really not) and had the chance to go visit Vanguard inside its hollowed-out volcano in Pennsylvania. I’m kidding, of course. It’s really hidden inside a Wandavision-style alternative reality about a quarter mile from the Malvern JC Penney store.

The Vanguard folks I met were super nice and took me through VPAS, which stands for Vanguard Personal Advisory Services. This provides a remote advice service with some nice tech, a nice person on the phone, a set of recommendations – fiduciary standard recommendations – and a personalised portfolio of Vanguard ETFs for about 0.3% a year.

I asked the Vanguard dude how they could possibly do it for that little, and he asked me if I could guess the marginal cost of putting someone into a Vanguard ETF. I said I couldn’t, and he said he couldn’t either because it’s too small to calculate and that they were embarrassed to be charging as much as 0.3%.

That was a good line, and it came back to me the other day as I read about Vanguard’s new UK advised proposition. It’s kind of limited at the moment, and it’s 0.79% all in rather than 0.3%, but the direction of travel is pretty clear. Though if I’d ever tried to launch something aimed at the retirement market without drawdown functionality in place in any of my old jobs I’d have been given a frightful beating and quite right too.

Vanguard enjoys fund flows from advisers very much, and so is naturally keen to say that it’s aiming at a different part of the market than that which you serve. Nonetheless, the average total cost of ownership for a typical IFA client is in the sort-of 1.6% to 1.9% range (and before you start grousing, I know some are lower, but some are well above 2% as well), and so I don’t think it can be a total accident that the total cost of this is just under half that amount.

No, it’s not holistic financial planning. No, it’s not whole of market. No, it’s not face-to-face. But it is proper regulated advice, with a proper investment proposition held in proper custody and proper technology on the front of it. For less than half the price.

The US price point was meant to do two things. First, to scare off competitors thinking of low-cost offerings (though no-one told Schwab). Second, it was pitched far enough away from the cost of dealing through an RIA that while the two services weren’t identical, there was enough of a cost differential to make the client think about what she really valued and what she was paying for.

I think the same dynamic will play out here. It’s hard to get folk to change purchase channel; self-directed investors are well served, and financial planning clients are similarly spoiled. But there is a middle ground, and pretty much every adviser has at least some clients who came for the initial advice and stayed for the basic annual review, and they might be the sort of client who’d spot something like this.

Maybe there is a magic seam of non-advised clients who’ve just been hanging out waiting for something cheaper to come along. Maybe not. You might be turning up your nose at this new development, but I’ve yet to see Vanguard do anything stupid, and this will bear careful watching.

One final thought on it – for as many quarters as I care to remember, most advised platforms’ top 10 funds by flow have had a strong Vanguard representation in them. I wonder if we’ll see some allegiances shift?


  • Punchy Q1 numbers are coming in from the listed platforms – both Transact and Nucleus doing well. There is some pent-up demand out there (please see above JustGiving link…)
  • We’ve got a big treat for HomeGames this week – John Rowland, MD of FS public affairs supremos Cicero/AMO will be talking politics, economics, lobbying and other filth. His session last year was one of the greats and we’re chuffed to have him back. Join us here at 12.30pm or on the YouTubes Next week’s guest is Pete Matthew. And you all know Pete. It will be similarly treat-y.
  • Mike Barrett can go back to sleep until July.
  • And your music choice this week resists mawkish sentimentality and replaces it with thunderous metal because why not? Please make room in your life for Gods Go First by Omnium Gatherum. Heads down, horns UP.

I won’t be doing the Update next week but I’ve got a good excuse. One of the others will ably take my place, and I’ll see you in a fortnight. Take it easy, and thanks once again.