US investment giant Vanguard aims to shake up the financial advice market with the launch of a cut-price service tomorrow.
Already known for low fees for its funds, which track markets rather than using skilled managers to pick investments, Vanguard will charge 0.79 per cent a year for financial advice – including the cost of the investment funds and platform fee.
The move could send shockwaves through an industry where the fees of fund managers and financial advisers often add up to more than double this.
Cut-price financial advice: US investment giant Vanguard will charge customers 0.79% a year
Traditional financial advisers charge an initial fee of 2.4 per cent, followed by 1.9 per cent a year in fund and advice costs on average, according to the Financial Conduct Authority.