Buying Vanguard ETF's via ASX or direct - pros and cons?

The only thing I can think of is that via ASX (via the platform I use, Commsec) will give me a nice consolidated view of all my equities, instead of having to look across two platforms. What other reasons would one have for deciding to use your existing trading platform vs. going direct?

 

avoiding the 0.2% (capped at $600) admin fee charged by Vanguard

 

Sorry just to be clear, you save $600 if you go direct or don't go direct?

 

You pay a fee to use the Vanguard Personal Investor platform. = Direct

Account Fee
An Account Fee of 0.20% per annum, based on the total portfolio value of your account, including any cash held, capped at $600 per annum, per account. This is calculated daily and deducted quarterly in arrears.

 

So going back to my original question, why would one use this compared to just buying from the ASX? (other than getting access to other funds that aren't listed).

Is it for people who regularly buy and sell ETF's? Are the transaction fees cheaper than say, Commsec?

 

Brokerage with Vanguard is zero but annual admin fee of 0.2% makes it more expensive than using a broker if you have enough assets.

Eg 12 trades on Selfwealth = $9.50 * 12 = $114 annually
$57,000 invested in VPI = $114 annually

 

Maybe going direct is more suitable for long-term investing with regular contributions and dividend reinvesting?
Kind of you set everything up and forget it for ten years.

 

Why is that any easier with direct rather than via a broker?

 

Yeah I'm a bit confused. With a broker you pay a once of acquisition fee. If you go direct it's an ongoing yearly fee. Surely broker is better for long term holds?

 

Vanguard wholesale doesn't have the 0.2% fee, but there are higher minimums to open the account.

Many people focus too much on the (already small) fees, yet there are also massive psychological benefits with being able to set up automatic BPay purchases via the vanguard platform.

Automation to prevent tinkering would probably save most people far more than fee difference.

 

The small cost isn’t a focus for me either. I agree about looking at the big picture. You say direct allows you to simply set up auto purchases? This is exactly what I’m looking to learn more about. What other benefits are there? I’m sure there are more.

 

The wholesale funds are less tax effective as well which many people discovered last year
The problem with pooled funds — Passive Investing Australia

Another option is a broker called pearler who have a strong focus on automation and don’t have the 0.2% fee either. Best of both worlds?

 

A good review, including fees below link

Vanguard Personal Investor: A Review - Sustainable Living

What’s On Offer
The Vanguard Personal Investor account offers access to:

• Vanguard managed funds with a very low initial investment of $5,000
• Brokerage free buying and selling of Vanguard Australian listed ETFs from as little as $500
• The ability to trade in Australian ASX listed shares, minimum of $500 investment, with a fee for brokerage

You no longer need a financial adviser to buy directly with Vanguard, and there are no fees to open or close the Vanguard Personal Investor account.

However, Vanguard Personal Investor is only available on a website browser and does not have a mobile phone App version.

Cont..

 

That was a good article thank you. I really enjoyed reading that.

Although I have to admit the last paragraph wasn't very clear for me. He says:

it looks like using HostPlus there is a crossover point around $300,000 where it becomes cost-effective to use their direct options​

Looking at the chart, it didn't seem all that evident why 300k was the inflection point where it makes sense to move from pooled to direct. The numbers don't seem to tell a very obvious story...or maybe I'm just a bit blind to the point he was making.

Also that new Vanguard Super product looks exciting. I wonder if it’s still on track to come out in a few months.

 

Yes they are, but the key point is that using automation, whether by using personal investor or wholesale or Pearler platform, even in a less tax efficient structure will still benefit most people over the long term more than the cost/fees/tax inefficiency.

I agree Pearler is a fantastic option. I most likely would have gone that path if it was around when I began.

 

You just set up a recurring BPay in your online banking (eg. every payday) and it sends it to Vanguard, you get the end of day pricing when they receive it. Each fund has a different BPay code. The instructions can be found here:
https://www.vanguard.com.au/personal/en/bpay

The only other benefits I can think of:
- Wholesale unit prices are much smaller (eg. VGS equivalent is currently $2.64 each) and you can purchase part units so all your funds are working rather than having to buy in chunks which is great for DRP.
- Comprehensive EOFY tax statement

 

I think the point is that due to the additional fixed annual costs (Eg $180 p.a. plus brokerage) of a direct ETF option, you need a decent balance to make it worthwhile.

Eg at $100k, HostPlus ChoicePlus cost is quite high at 0.58%. At $300-$500k it starts to get down below 0.3% total cost

 

For investors previously on wholesale funds, yes BPay is still supported, but not for the VPI investors if I understand this page correctly

https://www.vanguard.com.au/persona...-contributions-into-my-vanguard-managed-funds

 

gotcha. I was looking purely at the tax implications (since that was the main point of the post).

 

Very nice thank you.

Seriously they should have a simple comparison matrix of this on their site. I can't be the only one to wonder about the differences.