Vanguard vs Nutmeg: what’s the difference?

Summary 

• Nutmeg is the largest digital wealth manager in the UK. In 2023, it won YourMoney.com’s ‘Best investment platform for user experience’ award.

• Vanguard is an investor-owned company offering reduced investment costs. It has been endorsed by Which? for six consecutive years.

• Unbiased can match you with a qualified financial adviser who can help you with your investment strategy and portfolio management.

What is the difference between Vanguard and Nutmeg?

When choosing between Vanguard or Nutmeg, consider whether you prefer low-cost investing or a personalised service.

Vanguard focuses on low-cost, straightforward investing. Their main principle is keeping fees low to ensure that investing is affordable for everyone.

With Vanguard, you can access a range of index funds and exchange-traded funds (ETFs). The fees are minimal, and their strong customer service ensures you get the help you need.

On the other hand, Nutmeg offers a convenient option with personalised investment management through its robo-advisers.

The fintech company focuses on providing a tailored investing experience, which results in higher fees. However, Nutmeg’s customer service is known for being supportive and accessible.

Nutmeg vs Vanguard: what services do they provide?

Nutmeg and Vanguard offer comprehensive investment services, each with its unique approach. 

Below is a breakdown of each of their services.

Nutmeg services

Nutmeg specialises in personalised investment management using robo-advisers.

They offer investment in various portfolios, including those that are:

• Fully-managed

• Fixed allocation

• Socially responsible

• Thematic

They are covered by the independent Financial Services Compensation Scheme (FSCS) and regulated in the UK by the Financial Conduct Authority (FCA).

Vanguard services

Vanguard specialises in low-cost investing with a broad range of index funds and ETFs.

They offer investment products such as:

• Pensions

• Individual savings accounts (ISAs)

• General investment accounts

• Environmental, social and governance (ESG) funds

Like Nutmeg, Vanguard is regulated by the FCA and covered by the FSCS.

Vanguard vs Nutmeg: how do the fees compare?

Investment fees can have a huge impact on your investments, so it's vital you understand any fees. 

Here's how Vanguard and Nutmeg fees compare.

Vanguard fees

Vanguard fees fall into the low-cost price bracket, averaging around 0.20% for ongoing costs and an average account fee of 0.15%.

They cap the annual account fee rate at £375 for investors with over £250,000 in their accounts. 

Due to its company structure, where investors are stakeholders, Vanguard can charge low management fees.

This lower fee bracket makes it affordable for most investors. Vanguard's minimum investment amount is £100 monthly or a £500 lump sum.

Nutmeg fees

Nutmeg falls into a higher cost bracket due to its personalised services. Its fees are percentages of assets under management (AUM) based on the chosen investment style.

This platform doesn't charge startup, trading, transaction, or exit fees. They provide an example of the annual fees for a £20,000 investment under each of the following investment styles:

• Fully managed: 0.98%, or £196

• Thematic investing: 1.02%, or £204

• Smart Alpha: 1,09%, or £218

• Socially responsible investing: 1.07%, or £214

• Fixed allocation: 0.68%, or £136

Nutmeg's minimum investment amounts are £100 for lifetime and junior ISAs, while ISA, general investment, and pension investments require a £500 minimum.

Neither Vanguard nor Nutmeg impose maximum investment amounts.

Vanguard vs Nutmeg: who has better customer service?

Good customer service is essential when investing, particularly as the stakes increase when handling investors' money.

Vanguard customer service

Vanguard client services are reliable and responsive, with multiple contact options. You can reach them via phone for immediate assistance or use their online support for non-urgent queries.

They also offer a live chat on their website, making getting help quickly easier. Of course, investors can use the customer service features on the upcoming Vanguard app as another contact option.

Nutmeg customer service

Nutmeg provides customer service through various support channels, including its app.

For urgent queries, you can contact them via phone, email, Nutmail, or live chat. Nutmeg customer service is praised for being accessible, ensuring you get help when needed, and making you feel valued.

Who has better reviews: Nutmeg or Vanguard?

Researching other investors' reviews can help you get a better picture of Vanguard or Nutmeg's customer service and offerings.

Nutmeg reviews

Nutmeg receives positive reviews from its clients; they appreciate its personalised services and customer support.

Nutmeg scored 4.1/5 on Trustpilot, based on around 2,000 reviews. Customers highlight the platform's ease of use and transparency and the prompt feedback from customer care.

Vanguard reviews

Vanguard also garners favourable reviews, with clients praising its customer service, low fees, and range of investment options.

Based on approximately 3,000 reviews, Vanguard's score on Trustpilot is 4.1/5. For the most part, Vanguard's customers are happy with the product and service.

Can you open accounts with Vanguard and Nutmeg?

You can open an account with Vanguard or Nutmeg.

Vanguard offers various account types, such as pensions, ISAs, and general investment accounts, each with different tax implications.

Monitoring and managing your investments is vital to avoid unexpected tax liabilities such as capital gains tax (CGT).

Nutmeg also provides ISAs and general investment accounts, but it manages investments for you through its robo-adviser service, potentially simplifying tax reporting.

Understanding each platform's account types and tax implications ensures you can effectively manage your investments and minimise your tax obligations.

Is Nutmeg or Vanguard better for investing guidance?

Nutmeg and Vanguard offer investing guidance in different ways, such as through human brokers and robo-advisers.

Vanguard investing

Vanguard investing is ideal for those who prefer a DIY approach to low-cost options. They offer a wide range of ETFs and index funds, making it easy to build a diversified portfolio. 

Vanguard provides educational resources and tools to help you make informed decisions, but they don't offer personalised advice.

Nutmeg investing

Nutmeg excels in providing personalised investment guidance through its robo-adviser service.

They create tailored portfolios based on your risk tolerance and goals. Nutmeg handles your investment decisions, which is great if you prefer a hands-off approach. 

What are the advantages and disadvantages of Vanguard?

Below are the advantages and disadvantages of Vanguard.

The pros of using Vanguard 

• Low fees

• It offers a wide range of funds

• The company has a strong global reputation

The cons of using Vanguard 

• There is limited personalisation

• It has a complex interface

• There are minimum research tools compared with its rivals

What are the advantages and disadvantages of Nutmeg?

Below are the advantages and disadvantages of Nutmeg.

The pros of using Nutmeg 

• It offers a personalised portfolio

• You benefit from a user-friendly platform

• You can get comprehensive support

The cons of using Nutmeg 

• It has higher fees than Vanguard

• They require minimum investments for specific products

• Nutmeg has limited fund choices

Nutmeg vs Vanguard: which is better for you?

You should opt for Nutmeg if you prefer:

• Personalised guidance: Nutmeg's robo-adviser service creates tailored portfolios based on your risk tolerance and goals, which is ideal for hands-off investors.

• Convenience: If you want investment decisions handled for you with minimal effort.

• Support services: Nutmeg offers comprehensive customer support, making it suitable for those who value guidance and assistance.

You should consider choosing Vanguard if you prefer:

• Low-cost investing: Vanguard offers minimal fees and a wide range of index funds and ETFs, which is ideal for cost-conscious investors.

• A DIY approach: If you enjoy managing your investments independently without needing personalised advice.

• Long-term investing: Vanguard's low fees make it advantageous for those looking to build wealth over time with a diversified portfolio.

Get expert financial advice

When comparing Nutmeg and Vanguard, Nutmeg offers distinct advantages and suitability based on individual investor needs.

Vanguard stands out for its low-cost, DIY investing approach with a wide array of funds, which is ideal for independent and cost-conscious investors.

In contrast, Nutmeg offers personalised robo-adviser-managed portfolios, catering to those seeking convenience and tailored investment strategies. 

If you want guidance with your investment strategy, Unbiased can match you with a qualified financial adviser who can provide personalised financial advice tailored to your specific situation.