Vanguard vs Hargreaves Lansdown: what is the difference?

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If you want to invest your money, you might have heard of Vanguard and Hargreaves Lansdown. They are two of the biggest investment platforms in the UK. However, what exactly are they, and how do they compare? 

In this article, I will explain the main differences between them and help you decide which one is better for your investing needs.

What is Vanguard?

Vanguard is a company that offers low-cost investment funds. These funds are called index funds or exchange-traded funds (ETFs). They are designed to track the performance of a market, like the UK stock market, the US stock market, or the global bond market.

This means that they try to avoid beating the market by picking the best stocks or bonds. Instead, they aim to match the market by holding a large number of stocks or bonds.

What is Hargreaves Lansdown?

Hargreaves Lansdown is a company that offers a wide range of investment options and services. It is the largest investment platform in the UK, with over 1.6 million customers. It allows investors to buy and sell different types of investments, like funds, shares, ETFs, and investment trusts. It also provides guidance and research tools to help investors make informed decisions.

Hargreaves Lansdown has an open architecture. This means that it offers products from many different providers, not just its own. It has over 3,000 funds to choose from, including active and passive funds.

It also has a wealth shortlist, which is a selection of funds that its experts recommend. It also has ready-made portfolios, which are pre-built collections of funds that suit different goals and risk levels.

How do Vanguard and Hargreaves Lansdown compare?

  • Vanguard and Hargreaves Lansdown are two companies that help you invest your money.
  •  They have different fees, products, and services that you need to compare before choosing one.

Fees

Fees are the money that they charge you for using their platform and products. Vanguard has lower fees than Hargreaves Lansdown, but Hargreaves Lansdown has more options and features.

Products

These stand for which you can invest in, like funds, shares, or ETFs. Funds are collections of stocks or bonds that follow a market or a theme. Shares are parts of a company that you can buy or sell.

ETFs are like funds, but they trade like shares. Vanguard and Hargreaves Lansdown offer different types of products, like ISAs, GIAs, JISAs, SIPPs, and LISAs. These are different ways to save money without paying taxes or getting extra money from the government.

Services 

Vanguard offers simple and low-cost services like LifeStrategy funds and Target Retirement funds. These are funds that make investing easy for you by choosing and changing the stocks and bonds for you.

Hargreaves Lansdown offers more services than Vanguard, like Wealth Shortlist, Ready-made portfolios, Foreign currency exchange, and Spread betting and CFDs. These are services that give you more advice, choice, and flexibility but also more risk and cost.

Which is better: Vanguard or Hargreaves Lansdown?

There is no definitive answer to which is better between Vanguard and Hargreaves Lansdown. It depends on your personal preferences, goals, and circumstances. Here are some questions to ask yourself to help you decide:

  • How much do you want to invest, and how often do you want to trade?
  •  What type of investments do you want to invest in, and how much choice do you want?
  •  How much guidance and research do you need, and how confident are you in making your own decisions?
  •  How much do you care about fees, and how much are you willing to pay for extra services?
  •  What are your investment goals, and what is your risk tolerance?

In general, Vanguard is better if you want to invest in low-cost funds, mainly if you invest large amounts and trade not frequently.

Some FAQs

What is the main difference between Vanguard and Hargreaves Lansdown?

Vanguard is a low-cost platform that offers passive index funds and ETFs. Hargreaves Lansdown is a more flexible platform that offers active and passive funds, shares, ETFs, and other services.

Which platform has lower fees?

Vanguard has lower fees than Hargreaves Lansdown, but it also has fewer options and features. Vanguard charges a 0.15% annual account fee, capped at £375 for accounts over £250,000.

Hargreaves Lansdown charges a 0.45% annual management charge fee, capped at £45 for stocks and shares or lifetime ISA and capped at £200 for a self-invested personal pension.

Which platform has more products?

Hargreaves Lansdown has more products than Vanguard. Both platforms offer ISAs, GIAs, JISAs, and SIPPs. 

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