Those looking for a personal investment service are spoilt for choice in the modern age. You can invest money through apps, websites, standalone programs and more. But what is there really for you to tell between them? Some investment services will let you pay in a little bit of money to get started, while others will exclusively deal in larger amounts. The focus of my latest showdown here, therefore, is a pair of investment platforms which may appeal to people looking to put more money into investments than the average app user.
Both Vanguard and Hargreaves Lansdown (also known as HL) are hugely popular online wealth management services. Both have a variety of ways in which you can grow and manage your funds over time. But between Vanguard and Hargreaves Lansdown, which is likely to perform best over time or be the best option for your unique set of circumstances? Let’s take a look.
Vanguard vs Hargreaves Lansdown: Summary
- Both Vanguard and Hargreaves Lansdown are investment platforms offering ISAs, ETFs, stocks and shares, and SIPPs.
- Vanguard has some of the lowest fees online, with no annual charges applying after £250,000. Hargreaves Lansdown’s fees stop after £2,000,000.
- Hargreaves Lansdown offers 2,500 funds, while Vanguard offers 77 options within its own remit.
- The Vanguard system is owned by its shareholders and users. Hargreaves Lansdown’s equity is at least 46% owned by its staff and founders.
- You will need to invest at least £500 to use Vanguard, while you can start from £1 at Hargreaves Lansdown.
- Both services offer financial advice and personal guidance.
Vanguard vs Hargreaves Lansdown
What is Vanguard?
Vanguard is a UK investment service which has been around since the mid-70s. In fact, it’s popular with many people for its cost-effective wealth management services. Vanguard appeals to more than 20 million people worldwide, and it is technically owned by its users.
Vanguard offers passive investment and active investment opportunities, as well as tracker funds and attractive fees. You’ll also have a choice of three basic plans from the get-go.
What Investment Options Do They Offer?
Vanguard offers a variety of different investment options and opportunities, all of which are likely to appeal to newbie investors and seasoned traders alike. You can choose to invest in index funds, bonds, ETFs and mutual funds. Vanguard will also let you narrow down ETFs into their ‘select’ range, as well as international bonds. You can also make cash investments if you wish.
Vanguard will also let you choose the model of investment which appeals best to you. For example, you can actively manage funds, which means that you request managers to take control of your investments for you, or you can passively manage your funds. These are automated and tend to demand lower costs than the alternative.
There are around 77 different funds for you to invest in here, which means you should at least have plenty of choice to get started with.
However, while you can invest in SIPPs, set up junior ISA accounts and stocks and shares ISAs, there is no lifetime ISA option, nor are there any banking services.
Is Vanguard Good for Beginners?
Vanguard tends to be a good option for beginners thanks to its shareholder approach, and thanks to the fact that their options tend to carry low expense rates. As a long-established company, they are also in a prime position to offer newbie investors more support and guidance than most. As far as usability goes, yes, there are apps and services out there with a little more accessibility in terms of user interfaces, but for the sheer amount of services on offer, Vanguard really does offer a competitive, appealing service to most beginners.
Do They Offer Financial Advice?
Yes. Vanguard has its own set of services, and what may be appealing to many first-time investors is the fact that their advisors don’t work through commission. This means that, from the get-go, you can set up with an advisor who has complete control of your portfolio, and who has your best interests at heart.
What’s more, their system allows you to check in with an expert advisor whenever you like. This means that you will always have someone available who is managing your case. This is likely to be very appealing to most beginner investors.
What is the Minimum You Need to Invest?
You can open up a Vanguard account from as little as £500. This might sound like a fair amount of cash for some people to invest, however, that’s likely because there are plenty of services out there which let you invest for much less. That being said, you can also get started here from as little as £100, or a combination. This rate is actually pretty competitive when you consider similar services offering ISAs, stocks and pension options.
What Are Vanguard’s Fees?
Vanguard actually works out as one of the cheapest wealth management and investment services online right now. As of the time of writing, you’ll only receive a rate of 0.37% on anything up to £20,000 in the Lifestrategy fund. Compared to other competitors, you are likely to save more than 1% on fees by going via Vanguard.
However, Lifestrategy might not work out to be the best option for all investors, particularly as there is more fund diversity elsewhere. While Vanguard charges low fees, there also doesn’t seem to be pension services here.
You’ll expect to pay up to 0.15% on accounts each year until you invest more than £250,000. From there, it’s free. You won’t be charged for internal or external transfers, or for selling funds.
Is My Money Safe With Vanguard?
Vanguard makes sure to FCA-protect your funds, which means that even if the company does go under, your money will be returned to you. This means you can expect your money invested through the platform to be pretty safe and secure.
Vanguard reportedly reserves all their customer through a single account, though again, this is overseen by the FCA for regulatory purposes. Should Vanguard go out of business, your funds may be transferred elsewhere, if it is at all an option.
What is Hargreaves Lansdown?
Hargreaves Lansdown is a popular name in high-value investments, particularly as they are market leaders in large portfolio support. Anyone investing up to £100,000 will likely find the service and their fees to be particularly good value.
HL users will also find that there is a wide variety of funds you can invest in, as well as ETFs. It tends to be very popular with most people getting started with investing, as their site offers a series of impartial guides.
What Investment Options Do They Offer?
As mentioned, Hargreaves Lansdown offers stacks of funds for you to invest in. With around 2,500 options to choose from, there appears to be more on offer here than at many other competitors. In the battle between Vanguard vs Hargreaves Lansdown, there is a clear winner in this section.
There is a basic stocks and shares ISA option available, as well as a SIPP, both of which appear to have competitive fees for anyone investing more than £250,000. HL offers a wide array of different options, too – meaning that there are lifetime ISAs, junior ISA options, savings accounts, general investment services and more.
Hargreaves Lansdown seems to be one of the most comprehensive investment platforms around, meaning that if you are really in the market to diversify, you should be onto a winner.
Is Hargreaves Lansdown Good for Beginners?
For the most part, yes. Hargreaves Lansdown is famous for its introductory guides, which are surprisingly impartial. While Vanguard’s fees and shareholder setup will appeal to many beginners, HL offers a more realistic approach for long-term investment that beginners will likely want to get involved with.
What’s also likely to appeal to people is the fact that you can get started from £1, however, fund investments are going to demand at least £100 in a lump sum. Once again, this puts the brand ahead of Vanguard.
Do They Offer Financial Advice?
Yes. Hargreaves Lansdown offers an impartial financial advice service where, much like Vanguard, you will receive support from a specific advisor who will be happy to manage your case. In fact, Hargreaves Lansdown has a comprehensive knowledge base, which means that some people may not feel they need to get in touch with advisors at all.
What is the Minimum You Need to Invest?
As mentioned, if you want to invest in basic stocks or funds, you are going to need to have at least £1 available. For a high-value investment service, this is likely to be very appealing. It’s certainly competitive with some of the emerging low-risk apps and services out there.
However, again, be aware that you are going to need at least £100 as a lump sum to invest in funds, or to deposit at least £25 per month through direct debit instruction. This shouldn’t set many investors back much, even those who are just getting started.
What Are Hargreaves Lansdown’s Fees?
Hargreaves Lansdown’s fees do seem to put them behind Vanguard a little, but only just. You’ll need to pay 0.45% on anything up to £250,000, and beyond that, there’s a fee of 0.25%. There are also trading fees up to £11.95 if you want to trade online, and this can vary. Invest more than £2,000,000, however, and you won’t have to pay anything on annual charges. Therefore, it’s likely to appeal to anyone with more than a little to put behind the counter.
Is My Money Safe With Hargreaves Lansdown?
Hargreaves Lansdown is protected by the FSCS, which means you will be able to recall anything up to £85,000 if the company goes bust. The company is a FTSE 100 mainstay, and with no banking services, they are likely to be one of the most secure investment platform services of its kind.
Hargreaves Lansdown also states that the staff involved in the company own 46% of the total equity, which by their own reasoning means they have significant interest in making sure the company stays afloat.
Now that we have looked at Vanguard vs Hargreaves Lansdown in detail, let’s run through a few pros and cons to close down the debate.
Vanguard vs Hargreaves Lansdown: Pros and Cons
Vanguard: Pros and Cons
- Vanguard is a great beginner’s investment platform, in the sense that it offers very competitive fees, and that its customers have significant stakes in the firm. What’s more, it is very easy to get started.
- However, compared to other likewise services, it is clear that Vanguard offers a little less in the way of services. Outside of basic stocks and shares, as well as junior ISA services and SIPPs, there’s not much more to say here. You can buy ETFs and bonds, but there’s more diversity elsewhere.
- You shouldn’t have to pay too much in terms of annual fees. In fact, there’s a rate of 0.15% which applies across the board, on anything up to £250,000, and from then on, you won’t have to pay a thing in yearly costs.
- There’s no pension wrapper, and some experts complain that you can only invest in assets within Vanguard itself. This could be a sticking point.
Hargreaves Lansdown: Pros and Cons
- Hargreaves Lansdown tends to be the best choice for people who want to invest lots of money in a variety of services. With 2,500 funds available, as well as multiple ISA options, it’s certainly one of the most diverse personal investment service platforms around.
- However, what sets Hargreaves Lansdown behind a little are the fees. You’ll need to pay 0.45% on anything up to £250,000, and even then, you’ll still be paying annual charges all the way up to £2,000,000.
- That being said, it’s a good choice for beginners. There are few platforms out there which offer quite so many introductory guides and tutorials. What’s more, the financial advisors here tend to be a little more hands-on.
- You can also invest from as little as £1, clearly beating Vanguard in this category, too.
Vanguard vs Hargreaves Lansdown: Verdict
I’ve chosen Hargreaves Lansdown as the winner here for the variety of funds and stocks, the range of services, the hands-on availability, and the sheer value for money. Vanguard has its perks certainly, but even for those investing a small amount of money, Hargreaves Lansdown supports you every step of the way.
While for my money, Hargreaves Lansdown wins the battle here, there are plenty of other avenues for those investors with less than a hundred or so to invest. In fact, you might find it beneficial to take a look at my guide to Freetrade vs Trading 212, which are both apps that let you trade without any form of commission.
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