Vanguard Prepares To Enter Investment Advice Industry In UK

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Britain’s financial watchdog has given US fund management giant Vanguard the go-ahead to begin providing investment advice.

In a move that will ramp up competition in the UK’s crowded wealth management sector, the Financial Conduct Authority (FCA) has granted Vanguard regulatory permission to begin providing retail investment advice. 

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In a letter to clients, Vanguard head of Europe Sean Hagerty said plans to enter the investment advice space were at an early stage and that no timetable had been established. 

Vanguard has become an aggressive competitor in the UK’s fund management industry, with its focus on low-cost passive funds helping it undercut many of its rivals’ prices. 

The popularity of index-tracking passive funds has grown in recent years, with investors increasingly shunning more expensive actively-managed alternatives. 

Vanguard has been crowned the fastest-growing fund manager in the world for seven consecutive years, and manages $5.6 trillion globally.

Since launching in the UK in 2009, the fund titan has built a reputation for winning over new clients by undercutting its rivals fees.

In 2017 Vanguard launched an online service selling its funds directly to UK investors, and in October slashed fees on almost half of its passive European funds.

“Investors should have access to advice that is robust, low-cost and that puts their interests first,” said Hagerty.

“Financial advisers will always play an important role in providing holistic wealth management and counsel to investors who want a more personalised service”.

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Vanguard last week announced the creation of a new team that will work alongside external financial advisers to provide them with portfolio analytics and consulting services. 

“The provision of advice will never be one size fits all, and it’s important that investors are able to access advice in a manner that suits their particular preferences,” said Hagerty.