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Vanguard to wade into UK advice sector

Famously low-cost, its arrival could herald a big change for wealth management fees


US passive investing giant Vanguard has been granted regulatory approval to provide retail advice in the UK by the Financial Conduct Authority.

In a letter to clients seen by International Adviser; Sean Hagerty, head of Europe, Vanguard explained that “these efforts are at an early stage” and there “is not currently a timescale for bringing a proposition to market”.

“We are committed advocates of the value advisers add and will continue to invest in the services and support we provide to help traditional investors.

“The provision of advice will never be one-size-fits-all. Investors should have access to advice that is robust, low cost and puts their interests first.”

What impact on fees?

The pervasive low return environment means that charges and fees have been increasingly under the microscope.

The arrival of Vanguard in the advice space has the potential to trigger a few shock waves, as established players in the market deal with the investment giant, which has put lower costs at the heart of its operations, worldwide.

In February 2017, world famous investor Warren Buffett used his annual letter to shareholders to heap effusive praise on Vanguard’s founder, the late Jack Bogle.

“If a statue is ever erected to honour the person who has done the most for American investors, the hands down choice should be Jack Bogle,” the Berkshire Hathaway founder told investors.

“For decades, Jack has urged investors to invest in ultra-low-cost index funds.”

A spokesperson for Vanguard, however, told International Adviser that it is “too early to speculate” about what impact the move will have on fees in the UK.

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