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Investment provider InvestEngine has seen £13million worth of assets transferred to its platform in one week after rival Vanguard announced it would start charging a monthly fee for small-scale investing.
The platform said its average daily Isa transfers have increased 4,000 per cent since Vanguard’s announcement, with typical daily sign-ups increasing 366 per cent during the same period.
Meanwhile, competitor Trading 212* told This is Money it has seen an increase in transfer requests by more than 2,000 per cent.
The surge in transfers to these platforms comes as Vanguard changing its fee structure to introduce a £4 monthly fee for Sipp, Isa and general account holders who have a balance of less than £32,000.
The world’s second largest fund manager, which currently charges 0.15 per cent on any balance, capped at £375 per year, told investors last week that it will begin charging monthly from January.
Vanguard has introduced a £4 monthly fee for Sipp, Isa and general account holders who have a balance of less than £32,000
Those who have invested more than £32,000 will keep paying the 0.15 per cent charge on their balance, meaning that small scale investors are likely to be hardest hit by the change.
Vanguard said the new fees are ‘necessary to help Vanguard cover the rising cost of serving our clients’.
Vanguard customers will now pay £48 for its service, meaning it is no longer one of the lowest cost options for investors.
Both InvestEngine and Trading 212 are now two of cheapest investing options available.
According to InvestEngine, it has seen some 1,200 transfers in the past week, undoubtedly stemming from its fee-free DIY portfolio offering*, which it said is its largest pull-factor as its research shows more than half of investors’ top priority is a low fee platform.
Andrey Dobrynin, co-founder and managing director, InvestEngine, said: ‘The influx of new customers in recent days is testament to the importance of low fees for investors.
‘We’ve long known this and want investors to keep as much of their returns as possible, which is why fee-free options have been part of our ethos since our inception.’
Meanwhile, a spokesman for Trading 212 said: ‘We’ve been in contact with Vanguard to ensure these requests are fulfilled in the quickest way possible for the investors.
It said that a very small percentage of transfers have currently complete – and it cannot put a figure on the amount that has been transferred in.
DIY INVESTING PLATFORMS
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