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This Vanguard vs eToro comparison assesses the two investment platforms. Vanguard and eToro are reputable platforms, but which one has the edge?
Vanguard and eToro are both solid options for investors. Vanguard is better for long-term investors, while eToro may be better for traders. Unlike Vanguard, eToro also does not offer an ISA or SIPP.
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- Vanguard vs eToro Comparison Overview
- Company Backgrounds
- User Ratings
- Vanguard vs eToro Fees
- Account Types
- Platform Tools
- Assets
- User Interface
- Depositing and Withdrawing
- Customer Support
- Sign-up Bonuses and Friend Referral Schemes
- Pros and Cons
- Is eToro Better Than Vanguard?
- Vanguard vs eToro Comparison Summary
Vanguard vs eToro Comparison Overview
| Vanguard | eToro | |
|---|---|---|
| User ratings | 4.0/5.0 | 4.4/5.0 |
| Notable fees | 0.2% fund management fee 0.15% account fee | Social Investing Copy trading eToro Academy |
| Account types | GIA ISA SIPP Junior ISA | GIA Demo account |
| Platform | Website and app | Website and app |
| Tools | None | Social investing Copy trading eToro Academy |
| Markets | Funds | CFDs Forex Stocks and funds Cryptocurrencies Commodities and indices |
| Minimum deposit | £500 lump sum or £100 monthly | £10 |
| Investment style | DIY Long-term investing | DIY Trading |
| Sign-up bonus | None | None |
74% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you can afford to take the high risk of losing your money.
Company Backgrounds
Vanguard is an online investment platform founded in 1975. Vanguard came to the UK in 2009 and has over 50 million users worldwide. Read more in my Vanguard review.
eToro is a social investment and multi-asset brokerage company over 30 million users. The social aspect of eToro lets you connect with other traders and copy their portfolios. eToro was founded in 2007 and has been in the UK since 2013. Read more in my eToro review.
Vanguard and eToro are popular and well-established companies. They are available in many countries and have users around the globe.
User Ratings
Trustpilot
Vanguard has an average score of 4.1 out of 5.0 on Trustpilot. Of the reviews, 76% are great or excellent. Meanwhile, eToro also has an average score of 4.4 out of 5.0 on Trustpilot. Of the reviews, 71% are great or excellent.
Both platforms are popular on Trustpilot. eToro is rated better, with a gap of 0.4 points between the two.
What Is Trustpilot?
Overall, there are over 150 million reviews on Trustpilot. You can generally get a good understanding of the legitimacy and customer-friendliness of a company.
Vanguard vs eToro on Reddit
On Reddit, there is no direct comparison thread. However, users recommend Vanguard and eToro for different situations. Vanguard is more commonly mentioned for long-term investors. eToro is recommended as a trading platform.
Vanguard vs eToro Fees
| Vanguard | eToro | |
|---|---|---|
| Sign-up free | None | None |
| Deposit fee | None | 0.5% for non-US deposits |
| Withdrawal fee | None | $5 per withdrawal |
| Inactivity fee | None | $10 after one year |
| Commission | None | – |
| Account fee | 0.15% per year, capped at £375 | None |
| Fund management fee | 0.2% on average | None |
| Trading fee | 0.0%-0.1% | – |
| Other | 0.02%-0.15% one-off ETF fee £7.50 to buy at live price (optional) | 0.1% for currency conversion |
Vanguard charges a percentage-based account fee, while eToro charges for deposits and withdrawals. Both are different fee structure types.
For example, with Vanguard, you would pay a fee of £82 per year on a £20,000 investment (LifeStrategy 60 fund). The fee differs depending on how much you invest. With eToro, you must pay 0.5% for UK deposits and $5 for withdrawals.
When comparing the 0.5% fee with eToro to Vanguard’s account fee of 0.15%, Vanguard is cheaper than eToro. Yet, it’s difficult to compare because their fee structures differ.
Account Types
With Vanguard, you can take advantage of the full range of UK savings accounts:
- General investment account (GIA)
- Individual Savings Account (ISA)
- Self-invested Personal Pension (SIPP)
- Junior ISA
eToro does not offer tax-advantaged savings accounts. However, the broker offers a demo account and a money account. CFDs are a high-risk investment; most investors will lose money from trading them. They are not suitable for beginners.
Not having an ISA is bad because you must pay taxes on your investment gains. This is why Vanguard is preferable in terms of account types.
Platform Tools
While Vanguard has all the essentials, eToro offers more tools. This includes social trading and leverage trading. While the latter is for advanced investors, social trading is an interesting feature.
Experienced investors can connect with like-minded individuals. Beginner investors can learn from other investors and even copy portfolios.
eToro also has more functionality for researching stocks. This is a huge advantage of eToro vs Vanguard.
Assets
Both Vanguard and eToro offer funds. You are limited to buying one of 83 Vanguard funds with Vanguard. Vanguard funds are among the most popular funds.
Meanwhile, eToro also offers cryptocurrencies, CFDs, forex, and commodities. eToro currently offers 3,000 stocks. eToro has more funds and also offers other assets. Thus, unless you are after specific Vanguard funds, eToro is the preferable platform.
User Interface
Vanguard and eToro offer an app and a web platform. Both fulfil their purpose, and navigating the platforms is not too difficult. The Vanguard website is also simple and user friendly. It is designed to be functional and easy to navigate.
The eToro website is more complex compared to Vanguard. This may confuse beginners, but experienced investors may appreciate having more options.
Thus, both platforms are user friendly. Which of the two you prefer depends on your preferences.
Depositing and Withdrawing
Vanguard has a minimum deposit of a £500 lump sum or a £100 monthly direct debit. There are no fees for depositing and withdrawing money. Deposits are instant if you pay by card, and withdrawals take up to five business days.
With eToro, you can start from £10, but there is a fee for depositing and withdrawing. Because eToro has a money account, withdrawing may be quicker and easier.
eToro has a lower minimum investment amount, making it easier for new investors to start. Withdrawals to the money account are instant, which is faster than Vanguard.
Customer Support
eToro has good customer support. However, I am not a fan of Vanguard’s customer service. When I transferred my old workplace pension into my Vanguard SIPP, customer support was unhelpful and told me things that were not true. So if you are looking for competent customer support, Vanguard is not for you.
Good customer support is essential for beginners to receive help when needed. If customer support is important to you, I recommend eToro over Vanguard.
Sign-up Bonuses and Friend Referral Schemes
Vanguard and eToro do not offer a sign-up bonus. eToro has a friend referral scheme. If you refer a friend, you can get $50 (around £40) for each friend who trades at least $100 (around £88).
Pros and Cons
eToro Pros and Cons
| eToro Pros | eToro Cons |
|---|---|
| Wide range of assets to invest in Social trading enables users to copy portfolios Demo account available Easy-to-navigate platform Lots of research tools and tutorials | No SIPP available Currency conversion charge for UK investors The Copy Trader function may lead to poor investment choices |
Vanguard Pros and Cons
| Vanguard Pros | Vanguard Cons |
|---|---|
| One of the cheapest investment platforms on the market Access to all Vanguard funds No charge for opening and maintaining an ISA The platform is easy to use and navigate | Customer support is slow and not always helpful There are limited tools available to research funds You cannot buy individual stocks |
Is eToro Better Than Vanguard?
eToro is not necessarily better than Vanguard. Which of the two platforms is better depends on your investment strategy, asset type, and trading activity.
eToro is more suitable for traders and offers a variety of stocks and other assets. Vanguard is more for passive investors who want to buy and hold a fund long term. Each platform has its merits.
Vanguard vs eToro Comparison Summary
Vanguard and eToro are two solid DIY investment platforms. Vanguard is a great platform to buy Vanguard funds, and eToro is great for traders. Both belong to the best investment apps available in the UK.
The outcome of this comparison is as follows:
- User ratings: eToro
- Fees: Vanguard
- Account types: Vanguard
- Investment markets: eToro
- User interface: Tie
- Depositing and withdrawing: eToro
- Customer support: eToro
- Sign-up bonus and friend referral scheme: eToro
Overall, eToro wins in more categories than Vanguard. This does not mean that eToro is universally better. Vanguard is cheaper for long-term investors and offers tax-advantaged accounts. Which broker is right for you depends on your investment plan.
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