Fidelity vs Vanguard UK: Best Platform for UK Investors in 2024?

Since I first wrote this article back in 2022, finances have – yet again – changed dramatically for households and individuals across the UK. What’s most interesting, however, is that some of the biggest names in investing, such as Fidelity, have changed their packages. Therefore, I’m back with a fresh look at which platform, between Fidelity and Vanguard, is the best for British investors right now.

As with my other head-to-heads, I’ll be breaking down packages from both platforms on their portfolio services, financial products, advice, apps, and how much they charge you.

If you don’t have time to read the full article, let’s start with everyone’s favourite part – the quick overview.

Fidelity vs Vanguard: Quick Overview

Here’s how these two major platforms measure up against each other in the main categories:

• Portfolios: Fidelity and Vanguard appeal to investors with DIY and automated portfolio options to choose from.
• Products: Both services run a good gamut – you can invest in junior ISAs, general accounts, stocks ISAs and SIPPs through either option.
• Advice: Vanguard seems to be the best choice here with lots of in-depth support, calculators and beginner’s guides. That said, Fidelity isn’t that far behind.
• Representative Fees: Fidelity charges a flat rate fee of 0.35% representative and an extra dealing fee of £7.50 on any online share, ETF, and investment trust deals. Service fees decrease to as much as 0.2% the more money you pay in or invest. Vanguard, similarly, goes clear and concise with account fees of 0.15% on anything up to £250,000 invested. Ongoing costs of 0.06% to 0.79% apply otherwise, as do fund transaction costs.
• Minimum Investments: Since writing this article, Fidelity appears to have changed its tactics and now charges as low as £25 for the minimum investment on its main products. Vanguard, meanwhile, lets you start investing monthly from £100, or for single investments, it’s as little as £500.
• Apps and Programs: Both Fidelity and Vanguard offer highly flexible, user-friendly apps, programs and online guides.

What is Fidelity?

Fidelity is a hugely popular investment service that has actually been around longer than most other names in online investing. In fact, it was part of the investment scene long before the internet was even a concept.

Fidelity’s client base is truly enormous, as they currently help more than a million people worldwide to manage their investments. They offer a couple of appealing account options, but dig down deeper and you will find plenty of trading and investment choices beneath the surface.

What is Vanguard?

Vanguard has also been around for a long time – since the 1970s, and is considered one of the biggest fund traders in the world. They’ve only been offering their investing platform to UK users since 2017, however, the Vanguard name is one that many will recognise.

Interestingly, Vanguard’s main appeal – or potentially its achilles heel – lies in the types of funds you can invest in through the platform. However, rather than spoil the surprise, let’s start breaking down these authorised and regulated services to see how they operate in practice.

Fidelity vs Vanguard: Products Available

Let’s actually dive deep into what you can invest in through both Fidelity and Vanguard. To make things easier on you, I’ve split this section into one after the other, so it’s easy for you to compare. The good news is that both services offer a good range of products – but the bad news is deciding which is likely best for your needs!

Fidelity Products

At the time of writing, Fidelity offers five main investment products:

• Junior ISA
• Junior SIPP
• Investment Account
• SIPP
• Stocks and Shares ISA

Beyond these products, there’s a retirement service where Fidelity’s experts offer you tailored guidance based around what you’d like to achieve when you stop working. For example, if you need help navigating the complexities of pension drawdown, you don’t even need a SIPP with Fidelity to get started.

Vanguard Products

Vanguard offers similar investment products to Fidelity at the time of uploading:

• General Account
• ISA
• Junior ISA
• Personal Pensions
• Stocks and Shares ISA

As with Fidelity, Vanguard is also extremely retirement-friendly, offering pension transfer services and advice alongside its main products and packages.

There’s also a wealth of education and guidance available though Vanguard’s website – and, honestly, it’s one of the best investment platforms for beginners in this regard. I find their phrasing very refreshing – the last thing you want to be is confused.

Fidelity Minimum Investments

Fidelity generally expects you to pay into its accounts from a minimum of £25, though it’s worth scanning through the different products to make sure you’re clear on what to pay in.

The great news here is that, since publishing this guide originally back in 2022, Fidelity has actually halved its average minimum investment threshold. That’s great news for anyone just getting started in investing, but remember to keep a close eye on your finances regardless!

Vanguard Minimum Investments

Vanguard, in general, offers either a monthly or single investment minimum. It’s £500 to pay in one go, and £100 if you want to set up monthly transfers in.

Now – I still think this is a great deal. Yes, Fidelity might offer the lower entry rate, but you do pay for a certain level of expertise with Vanguard, and have access to its exclusive funds.

But, if you’re just dipping your toe into the investment waters this year, I can hardly blame you for wanting to experiment with £25 over at Fidelity first.

Fidelity vs Vanguard: Investment Options

Once you’ve picked the account that appeals to your needs (and available capital), it’s time to check out how you can invest through the services.

Fidelity, once again, has made some sweeping changes here over the years, so let’s start breaking down what they all look like in practice.

Fidelity’s Investment Options

Fidelity lets you invest in any of the following:

• Shares
• ETFs
• Funds
• Investment Trusts

Depending on your experience with investing and your attitude to risk, you can choose between one of three portfolio management options:

• Easy Invest
• Navigator (formerly known as Pathfinder)
• Select 50
• Investment Finder

Easy Invest

Easy Invest is Fidelity’s entry-level investment service, offering dedicated help for newbie investors at an annual total of £2.90 based on $1,000 paid in for the year.

This service connects you to the Fidelity World Index Fund, giving you access to lots of well-known company instruments. It’s the best option if you’re just getting started and want help from a real advisor.

Navigator

Navigator is Fidelity’s actively managed investment service, which builds up based on your answers to a risk questionnaire. You therefore agree to Fidelity’s Multi Asset Team deciding on what to invest for you, based on expert research.

Navigator is a good choice for investors who want to explore their options but who don’t feel confident to manage all of the decision-making on their own. This service used to be called Pathfinder, and you can choose between income funds and growth funds.

Select 50

Select 50 is a little like Navigator but without some of the customisation. That said, as the name suggests, you can pick up to 50 recommended funds from Fidelity’s experts to carefully enter the investment game.

You can even choose a template version of Select 50, the Select 50 Balanced Fund, which arrives with specially selected investments.

Investment Finder

Fidelity’s Investment Finder is for the more adventurous investors out there. This tool helps you filter out the service’s various funds and options and build your own package. If you’re somewhat experienced with investing or prefer to get into the game without the close management, this could be the right choice for you.

Vanguard’s Investment Options

Vanguard offers a similar approach to Fidelity in that you can choose between ready-made and DIY portfolios. 

The main difference between Vanguard and Fidelity is the former lets you choose from its own fund collection, meaning there’s arguably not the variety you’d expect at Fidelity.

Let’s take a quick look at some of the funds and services available through Vanguard.

Vanguard LifeStrategy

At present, Vanguard offers five LifeStrategy funds that offer different blends of bonds and shares. That means you can pick a fund that’s weighted more toward stability, or another that drives higher potential returns.

For example, the LifeStrategy 20% Equity fund splits shares at 20% and bonds at 80%, a low-risk option. The high-risk fund in the range is the 100% equity model, with zero bonds.

Vanguard Target Retirement

There are 11 Target Retirement funds available through Vanguard, and as the name suggests, they are designed to complement your finances when you retire. The idea is that these funds move you away from higher risks the closer you get to retiring.

The Target Retirement Fund 2065, for example, is an 80% shares, 20% bonds split. It’s fairly high risk. However, if you’re set to retire by 2035, there’s a lower risk split of 30% bonds and 70% shares. The lowest risk available is for people aged at least 64, with a half-and-half split.

Fidelity vs Vanguard: Fees

Naturally, fees are going to be a big factor in you deciding whether or not to opt for either of the platforms. Thankfully, both services are open about what they charge you (and are pretty competitive to boot).

Fidelity Fees

Fidelity charges a standard service fee of 0.35%, but the service advises this is a typical representation – it can go as low as 0.2% depending on what’s in your account. There’s a £7.50 charge for any deals you make online through ETFs, shares and investment trusts.

You can generally expect 0.35% on anything less than £25,000 – based on their stocks and shares ISA.

This rate decreases as you invest more money into your chosen product, and again, representative, you could pay 0.3% on anything between £250,000 and £1 million. Save or invest over £1 million, and there’s no service fee for your second year onwards.

Keep in mind, of course, that there are performance fees, bid-offer spreads and fund manager buy or sell charges that apply depending on the company who manages your selected fund. Fidelity assures us these start from as little as 0.05%.

If you’re interested in knowing more about what you’ll pay with Fidelity, check out their fees calculator.

Vanguard Fees

Vanguard charges ongoing costs of 0.20% on average across their funds. As you only ever invest in Vanguard funds through their service, this can make accounting for rates a little more predictable.

Vanguard also serves a lower account fee at the start, with 0.15% applicable per year on all accounts. That means you don’t benefit from the extra savings if you invest seven-figure sums through Fidelity, but it’s a flat rate that proves reasonable value across the board.

There’s even a cap to how much you pay in annual fees if you invest more than £250,000 – you’ll never pay more than £375 a year.

Additional charges do apply if you use Vanguard’s managed portfolio service, however – there’s a complete costs and charges breakdown available via their website.

Fidelity vs Vanguard: Advice & Learning Resources

Part of Fidelity’s long running appeal lies in their wide range of advice on all things investments, meaning that it’s well worth considering their various guides and calculators available.

Vanguard, meanwhile, does go into considerable depth when it comes to analysis and figures, meaning that you can really dive in deep into a world of stats. This might put a few newbie investors off, but ultimately, it is all for the better. There’s a lot of information here.

Fidelity vs Vanguard: Is My Money Safe?

Yes! Let’s keep this simple. Both Fidelity and Vanguard are regulated by the FSCS (Financial Services Compensation Scheme), which means that any investments you place with either service are protected up to £85,000. That, of course, is if anything was to happen to either platform. Which is extremely unlikely.

Fidelity vs Vanguard: Pros and Cons

If you’re considering using Fidelity for its low entry fees, take a look at these quick pros and cons before making any deposits.

Pros

• Large variety of funds, stocks, and ETFs to choose from
• One of the best-known and longest running investment services
• Low minimum investment rates, typically £25
• DIY and management services available

Cons

• Service charge might not be great value unless you invest six figures or more
• Ongoing rates vary depending on the companies you invest in

Fidelity Overall

I think Fidelity is a very safe pair of hands, regardless of whether you’re a new investor or an experienced saver. However, it’s not necessarily great value if you don’t have much to put in right away.

There are plenty of different account types and advice options here, too, meaning there’s lots to explore if you’re just comparing the market.

Vanguard Pros and Cons

Vanguard certainly takes things quite close in this battle, so let’s break down the final pros and cons.

Pros

• Very low service charge of 0.15%
• Service charge is capped if you invest more than £250,000 in a year
• Offers exclusive funds and services
• Lots of flexibility between bonds and shares available

Cons

• You can only invest in Vanguard’s exclusive funds
• No “millionaire waiver” on service fees

Vanguard Overall

Vanguard is a great choice for investors who are happy to rely on managers to handle their money for them, with a range of impressive balanced funds. However, there’s a lack of variety in the instruments available.

Like Fidelity, Vanguard offers a good range of account types, it’s just a shame it lacks the fund variety of its rival.

Fidelity vs Vanguard: Verdict?

Fidelity vs Vanguard was always going to be a tough battle as these are two well known , long-running names with lots of great options to pick from. 

Vanguard may be the best choice if you are looking to invest in a simple, passive, low fee option such as their LifeStrategy or Target Retirement funds. Although Fidelity also offers a passive investment option through it’s Select 50 Fund.

Whether you choose Fidelity or Vanguard may come down to the funds on offer. Both are excellent platforms depending on your requirements. If you are set on particular Vanguard funds then you may want to go with their platform. However if you want a wider range of options to choose from with competitive fees, then Fidelity is likely to be a better choice.