Vanguard, one of the world’s largest asset managers, has been offering its investment funds in the UK since 2009.

Investors have had access to them mostly via brokerages and financial advisers, as Vanguard engaged directly only with those ready to invest £100,000 in one go.

Now Vanguard has opened its doors to a wider audience – the company’s new online platform, launched this month, will be available to anyone with a spare £500.

The new market entrant will certainly require competitors to review their pricing structures, however, the platform’s longer-term impact on the wider market will be limited, unless it is developed.

Vanguard is known for its low-cost passive mutual and exchange-traded funds (ETFs), and its investment platform’s key selling point is also price.

With an administration fee of 0.15 percent per annum (capped at £375 per year; no fee is charged for account balances above £250,000), it is much cheaper than Hargreaves Lansdown, the UK’s largest brokerage, which charges up to 0.45 percent.

This is music to UK self-directed investors’ ears, regardless of how wealthy they are.

As our Global Wealth Managers Survey indicates, the desire to avoid management fees is the number one driver for UK millionaires opting to use an execution-only platform.

And according to our Retail Banking Insight Survey, the high cost of advice ranks second among mass affluent consumers.

So at first glance the vast majority of UK self-directed investors should waste no time in transferring their accounts to Vanguard’s platform as quickly as they can.

Hargreaves Lansdown’s share price fell by 8.5 percent following Vanguard’s announcement.

But it is not that simple.

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UK investors are indeed price-sensitive, but they also self-direct because they want to be in charge of at least some of their investments.

They also want to diversify their portfolios, in order not to keep all their assets with one provider. Vanguard’s online service, however, will offer access only to Vanguard’s products, which is very much a step backwards in terms of choice.

The level of brand loyalty in the UK also remains high; although Vanguard has a strong brand, so do other established UK brokerages.

Many of these brokerages are also tied to well-known banks, providing greater convenience as well. And, Vanguard’s products will still be accessible via incumbents’ platforms.

The likes of Hargreaves Lansdown cannot ignore the new entrant’s fee schedule.

The quick response among incumbents is likely to be a reduction in price or the introduction of discounts for existing clients, which should be enough to keep the majority of accounts.

If Vanguard really wants to disrupt the market, it has to take further steps.

In the US, its personal adviser services, a human-digital hybrid advised offering, has been successful in attracting assets.

Should Vanguard add a similar service to its UK platform, things would get much more interesting indeed.