Vanguard set to compete with Hargreaves on D2C

Vanguard John James

Vanguard, one of the world’s largest fund groups, has its sights on the likes of Hargreaves Lansdown and Nutmeg as it prepares to launch a direct-to-consumer offering.

Separately, the fund group known for its low-cost passives is also looking to expand its active investments with the launch of a global fund range next year.

Speaking to Money Marketing, Vanguard Europe managing director John James says the service is part of a “10-year plus strategy” and will be available to direct clients in the next six months.

He says: “We’ll be competing with Hargreaves and Nutmeg where people can come direct. The great thing about advisers is that 10 years ago they would say this is competition, today this is just making the pie bigger. We know advisers are serving a certain segment of the UK population.”

The direct offering will be limited to Vanguard products, reflecting its US business model.

James says the minimum investment amount will be “reasonably accessible”, but did not disclose at what level this will be set.

He says: “History tells us there’ll be a segment of the population that will want to do investments on their own.

“Our offer will serve another segment of the UK population and it could very well be that once people get to a certain asset size with us they’ll also seek advice.”

The company says more than a third of UK advisers have assets with Vanguard.

The firm is planning to launch its global actively managed funds next year, diversified into equities and fixed income.

James says: “The timing is right. We’ve been in the UK for seven years and we feel we’ve built a good line up of core building blocks in the passive space, in the Life Strategy series and target-dated funds. We want to make sure we also help advisers on the active side. It’s a natural extension and evolution.”

Yellowtail Financial Planning managing director Dennis Hall says: “Vanguard is replicating its US model in the UK with a simplified robo-advice solution and that is to be expected. I don’t think it is of any threat to advisers.”