Vanguard Personal Investor review

The launch of Vanguard Personal Investor is an exciting development from the world's largest managed funds provider. That it's one of the first platforms to offer a zero brokerage deal for ASX products certainly makes for an eye-catching headline.

But as always, there's a big catch – you only get free brokerage if you're investing in Vanguard exchange traded funds (ETFs) or managed funds.

The brokerage fee to buy ASX shares is $9 per trade and you can't access any non-Vanguard ETFs.

Also read: Compare share trading platforms to get the lowest fees

What are the fees?

• Brokerage fee for Vanguard ETFs: $0
• Brokerage fee for ASX shares: $9
• Investment management fee: 0.29% on managed funds and 0.27% on exchange traded funds.
• Withdrawals/deposits: $0
• Account opening/closing: $0
• Minimum investment: $500 per trade
• ETF management fees (MER): Business as usual – there are no discounts here

The news marks an interesting turn for the investment firm and may go some way into explaining why there are no Vanguard ETFs on micro-investment apps CommSec Pocket or Raiz Invest.

In a note to the press at launch, Vanguard Australia’s Managing Director Frank Kolimago said it was an important step for the company toward catering for customers.

“For more than 20 years, Vanguard has helped Australians work toward their financial goals, but we recognise that we could make investing with us a more seamless experience," said Kolimago.

“We are launching this new offer to investors during a time when market volatility is high, as the uncertainty of the impacts of the coronavirus continue to roil markets. But this challenging period will eventually pass. And Personal Investor will help long term investors to be well positioned to benefit when it does.”

Which shares are available on the Vanguard Personal Investor?

According to a Vanguard spokesperson, you only have access to the 300 biggest ASX-listed companies by market cap – also known as the S&P/ASX 300 index. Seemingly the only ETFs available are ASX-listed Vanguard funds.

There's a minimum investment of $500 per transaction for both shares and Vanguard ETFs. This is a little out of the ordinary – typically, trading platforms require a minimum initial investment of $500; however, that minimum is normally dropped for subsequent trades into the same company or ETF.

Global shares and ETFs are not yet on offer, but Vanguard has promised they're working on it.

Are the fees worth it?

While common in the US, apps with zero brokerage fees are a rarity in Australia and mostly in the realm of robo-advisers or specific to US stocks only, for example, Stake or Interactive Brokers.

On the plus side, it could be a good strategy for investors that want to regularly transfer money into their ETF of choice over the course of a year.

Average broker fees in Australia are around $10-$30, depending on the size of the investment. This means frequent trades or investments into an ETF can have a big impact on profits over the course of a year.

The other fee worth mentioning is the ETF management fee (MER), which is charged by every ETF provider and taken out of the fund's returns.

You can check out our list of Australia's cheapest ETFs here and take a look at what kinds of fees are usually charged – bearing in mind, performance figures are post-fee.

The other downside is there's no mobile version of the app yet, you'll need to sign-up on your browser to access it.