Vanguard is the cheapest platform for passive index fund investing. Hargreaves Lansdown (HL) offers the widest range of investments and the most comprehensive platform. AJ Bell sits between them — competitive on price with broader fund choice than Vanguard. The right choice depends on how much you are investing, what you want to invest in, and how hands-on you want to be.
Fee Comparison — Vanguard vs HL vs AJ Bell
| Fee type | Vanguard | AJ Bell | Hargreaves Lansdown |
|---|---|---|---|
| Platform fee (ISA/GIA) | 0.15% (capped £375/yr) | 0.25% (capped £3.50/mo for shares) | 0.45% on first £250k; 0.25% on next £750k |
| SIPP platform fee | 0.15% (capped £375/yr) | 0.25% (capped £120/yr in drawdown) | 0.45% (capped £200/yr) |
| Trading fee (shares) | Not available | £1.50–£9.95 | £11.95 (£5.95 with regular investing) |
| Regular investing fee | £0 | £1.50 | £1.50 |
| Typical fund OCF | 0.06%–0.22% | Varies by fund | Varies by fund |
Annual Cost on a £50,000 ISA (Passive Funds)
| Portfolio size | Vanguard | AJ Bell | HL |
|---|---|---|---|
| £10,000 | £15/yr | £25/yr | £45/yr |
| £50,000 | £75/yr | £125/yr | £225/yr |
| £100,000 | £150/yr | £250/yr | £375/yr |
| £250,000 | £375/yr (capped) | £625/yr | £875/yr |
| £500,000 | £375/yr (capped) | £750/yr (shares capped at £42/yr) | £1,000/yr+ |
At large portfolio sizes (£500,000+), the fee caps mean AJ Bell and HL become much more competitive for share-based portfolios.
Investment Range Comparison
| Investment type | Vanguard | AJ Bell | HL |
|---|---|---|---|
| Vanguard index funds | ✅ All | ✅ Yes | ✅ Yes |
| Third-party funds (non-Vanguard) | ❌ No | ✅ 2,000+ funds | ✅ 4,000+ funds |
| UK shares | ❌ No | ✅ Yes | ✅ Yes |
| US shares | ❌ No | ✅ Yes | ✅ Yes |
| Investment trusts | ❌ No | ✅ Yes | ✅ Yes |
| ETFs | Vanguard ETFs only | ✅ Hundreds | ✅ Hundreds |
| Ready-made portfolios | ✅ LifeStrategy | ✅ AJ Bell funds | ✅ HL Multi-Manager |
Who Each Platform Suits
Vanguard — Best For:
- Long-term passive investors who want ultra-low costs
- Those happy with Vanguard’s own fund range (LifeStrategy, index trackers)
- Pension and ISA savers who set-and-forget
- Investors with portfolios up to £250,000 (the 0.15% fee is hard to beat)
AJ Bell — Best For:
- Investors who want low costs but more fund choice than Vanguard
- Those who want to invest in shares and investment trusts alongside funds
- Regular investors using the £1.50 dealing rate
- SIPP investors who want the fee cap in drawdown
Hargreaves Lansdown — Best For:
- Investors who want the widest possible range of investments
- Active traders who want UK and international shares
- Those who value a premium service, mobile app, and research tools
- Very large portfolios (£500k+) where the cap on shares makes HL very cheap
Worked Example
Amara, 35, invests £500/month into a Stocks and Shares ISA. She wants to build a simple index fund portfolio using the global tracker. Over 20 years, her portfolio reaches approximately £230,000.
- On Vanguard: Platform fees: 0.15% = £345/year at that point. Total fund cost (OCF ~0.12%): £276/year. Total: ~£621/year.
- On AJ Bell: Platform fees: 0.25% = £575/year. Fund OCF varies. Total: ~£900/year.
- On HL: Platform fees: 0.45% (first £250k) = £1,035/year (though partially capped for share-based portfolios). Total: significantly higher for fund-based investing.
For passive fund investing, Vanguard’s cost advantage compounds significantly over 20+ years.
Platform Safety — Are Your Investments Protected?
All three platforms are:
- Regulated by the Financial Conduct Authority (FCA)
- Covered by the Financial Services Compensation Scheme (FSCS) up to £85,000 per firm for investments
- Required to hold client assets separately from their own — your investments are not at risk if the platform goes bust
Transferring Between Platforms
You can transfer an ISA or SIPP between platforms without losing the tax wrapper. This is called an in-specie transfer (investments transfer as-is) or a cash transfer (investments are sold then transferred). Always use the formal transfer process — withdrawing and re-depositing counts against your annual allowance.
For more, see the best investment platforms UK guide, index funds guide UK, and SIPP guide UK.