Investors are a savvy bunch. You are probably one of them. Looking for value at every turn, scrutinising every product under the sun, trying to squeeze every last morsel of value you can. I salute you.
You want your investing platform to be no nonsense, to be easy to use, to offer great ETFs to diversify your investing and of course, you want to keep those fees as low as possible.
Because the lower your fees the more money stays in your pocket.
You’d be forgiven for immediately thinking of Vanguard here, but while Vanguard certainly meets all of those criteria, I reckon there is another platform that deserves a bit of your attention.
Nothing stands still for too long in this investing space. Or anywhere for that matter. Vanguard has long been considered to be nigh untouchable. Like Liverpool football club in the 80s for all you football lovers out there! Man Utd in the 90s and Spurs… well, unfortunately, never really.
But like all things, rest on your laurels too long and someone is going to come and knock you off your perch.
InvestEngine is a relatively new player on the scene. Sporting a fresh looking website, and helping new investors every step of the way as they navigate the myriad options of investing, they are offering an entirely free platform for you to get moving and working towards your financial goals.
Vanguard is long established
To suggest right now that they are bigger than Vanguard would be wrong. Plain wrong. Vanguard has 30 million customers on their books, with about 7.5 trillion dollars of assets under management. That doesn’t happen without doing something right. A quality outfit with years of experience and most importantly it has earned the respect among its users.
To even suggest that Vanguard are bothered about Invest Engine right now could be compared to Sir Alex Ferguson dismissing Manchester City as noisy neighbours in 2009… but fast forward a decade and it’s plain to see the reds have been eclipsed by the blue half of Manchester and it will be incredibly tough for United to regain that top spot. Right now, Vanguard is all about being the best, winning trophies, if you like, and to be fair, they probably carry the most weight for long term investors right now. They’ve earned that title.
However, if they take their eye off the ball at all, there will surely be someone quite happy to take their top spot.
Enter the challenger
This is where I reckon InvestEngine has the chops to truly challenge Vanguard. Maybe not today, maybe not tomorrow. But let’s see how these two teams match up in fulfilling your investing needs.
Oh and of course, this blog is not sponsored by anyone, these are my views and definitely not financial advice! This blog is based around a football metaphor… come on… It’s entertainment! Make sure to talk to a real financial advisor if you need real financial help.Seriously. I’m SERIOUS
Strength in depth
Let’s kick off with strength in depth – well, there is no point in even comparing size. Vanguard absolutely dwarfs invest engine in by all metrics really,. That’s a quick early lead, and one nil to Vanguard.
What about choice? Well on Vanguard you can only buy Vanguard’s products. Generally that’s not a problem as far as I’m concerned. They have all kinds of stuff from UK based ETFs VUKE that follow the FTSE 100 to things like VUSA to track the massively popular S&P 500, to all world index funds VWRL. Their LifeStrategy products, too, are a very popular way to invest with Vanguard – a blend of their products all wrapped up in one convenient package.
Invest Engine has over 400 ETFs at the time of writing.
It’s a huge number to choose from and perhaps there is more choice than the casual investor needs. It already offers some of Vanguard’s own ETFs and there are more to come. In fact, every ETF I invest in with Vanguard is is already on InvestEngine, which makes me think… why should I pay Vanguard a platform fee instead of going free on other platforms?
More on that just a bit later.
In any case Invest Engine dominating on choice here, and equalise to level up the score.
£100 minimum to open with InvestEngine and after you get started, you can add anything you like. With Vanguard it’s £500 as a single deposit, or a minimum of £100/month.
Both platforms profess to be the easy way to invest in the stock market with sensible diversified products, but Invest Engine is the more accessible one of the two options with their lower barrier to entry. That’s another one in the onion bag for Invest Engine.
InvestEngine allow you to buy fractional shares where Vanguard do not. By way of an example, say a share in the S&P 500 costs £100. But you only have £50. InvestEngine will let you buy half a share. With Vanguard you have to wait to have enough to buy one whole unit. InvestEngine add to their tally in the goals scored column.
Neither platform charges customers to get their money on board. Great! Let’s just say they have canceled each other out here.
This is the price you pay to a company for using the product it offers. For all the wonderful services they offer. For making your life easy. For taking away all the pain of actually buying stocks and shares in the real world, this is the cut they take.
Imagine an agent for a football player taking a slice of a transfer for doing all the dirty work of getting a player a nice new fat contract. Or like an estate agent. They take a cut when you use their services to sell your house. They advertise, they print brochures, arrange viewings, all that sort of stuff. They save you time, certainly and probably money too, so when choosing a platform for investing, you need to see if what you are paying for is worth it.
Vanguard is 0.15% per year to use the platform plus the cost of any funds you buy. 0.15% as a platform fee is miniscule when you consider the peace of mind this buys and the track record of results that vanguard has. After this, the price of each fund is different but costs between 0.07% and 0.78%. So the whole picture means anything between 0.22% and 0.93%.
InvestEngine has zero platform fees if you choose to build your own portfolio and a flat 0.25% for any of their managed products, plus the cost of whatever ETFs and so on that make up that managed portfolio.
The cheapest platform around
What this means is that if you are happy building your own portfolio, then it’s cheaper to do it with InvestEngine, and you would think this might be enough to shade another point here, but a comparison between a managed scenario with InvestEngine and Vanguard’s Lifestrategy products for example, is a little harder to make.
Both choices at 0.15% and 0.25% are such low cost options compared to other providers. What ETFs you buy will affect the overall price though, so I’m gonna say a competitive midfield means they cancel each other out here. A tip of the cap to InvestEngine for a totally free option though for those that want to try it.
Invest Engine’s mobile app isn’t brilliant. I think it lacks a bit of zip compared to T212 or Freetrade. But at least they have one! Vanguard has no UK facing app to speak of. It just seems like such an own goal in this day and age.
An age where investing has never been so accessible why Vanguard would let something like this go is a bit beyond me. Their website too, while functional, feels like something I would have built in 2004. Vanguard doesn’t seem to want to move with the times, sticking stoically to what made them great and without really moving on too much.
InvestEngine’s website is absolutely jam-packed full of risk warnings and information, particularly geared towards new starts.
Vanguard too, to be fair, but on opening an account with InvestEngine you get asked all kinds of questions on how you want to invest, your idea of risk, what your goals are and how you would feel about bad news like a sudden drop in the market for example. It’s isn’t too heavy and it brings awareness of what to expect. I have another video of what the sign up process is like if you are interested in finding out more, linked below so check it out when you have finished this one.
Overall, InvestEngine gets the upper hand here and scores a nice team goal.
What about the biggest factor of all perhaps – trust?
Vanguard has been doing it for years. Over 40 in fact. A great track-record of no messing about, a kind of “if it’s not broken, don’t fix it” kind of approach.
InvestEngine is still very new. Of course they are regulated here properly in the UK by the FCA and take part in the FSCS scheme like all other platforms worth your time and energy, but InvestEngine just hasn’t got that history that Vanguard has just yet. So for trust and sentiment and historical goodness, Vanguard’s stature sees it comfortably over the line.
Overall that a score of 4-2
Plenty of great things about both these platforms, each with man of the match worthy components. depending on what is most important to you, you might disagree with the score.
If you are interested in a comparison between Trading 212 and Vanguard, I have you covered for that too!