Vanguard has unveiled a new digital guidance service designed to help first-time investors overcome what it believes is the biggest barrier to investing, confidence.
During an exclusive preview at the launch of its inaugural British Money Mindset Report, Liz Waldron, Head of Product & Client Experience, and James Norton, Head of Retirement & Investments, demonstrated Vanguard’s new Targeted Support service, which aims to bridge the UK’s advice gap by giving new investors personalised guidance without the cost or complexity of full financial advice.
The launch comes as Vanguard’s research suggests Britain is on the verge of a new wave of investing, particularly among younger generations, but many people still lack the confidence to get started.
Gen Z is leading a new generation of investors
Vanguard’s British Money Mindset Report found that 1.5 million Britons have become first-time investors over the past two years, with Gen Z accounting for more than a third (37%) of them, equivalent to almost 780,000 new investors.
The report estimates that those new Gen Z investors have contributed around £25 billion of new investment inflows.
However, the research also suggests that younger investors are taking a very different route into investing than previous generations.
Around one in three (33%) Gen Z investors said cryptocurrency was their first investment, compared with just 9% of Gen X investors and 2% of over-62s. Older investors were much more likely to begin with shares or investment funds.
Vanguard believes this underlines the importance of providing better education around long-term investing and diversified portfolios.
Confidence, not interest, is the biggest barrier
Introducing the new service, Liz Waldron, Head of Product & Client Experience, described the launch as “a real mission moment” for Vanguard.
“Our research shows nearly seven in ten UK savers would love to invest in the future,” she said.
“But many don’t because of fear, a lack of confidence and a lack of understanding.”
The research found 68% of people currently holding cash savings plan to start investing within the next two years, rising to 91% of Gen Z and 84% of Millennials.
Despite that enthusiasm, confidence among UK investors remains low.
According to the report:
- 70% of people say they lack confidence in their investment knowledge
- 58% of non-investors say they don’t know enough to get started
Vanguard says this “confidence gap” is preventing millions of people from taking their first investment step.
Investors don’t know where to begin
James Norton, Head of Retirement & Investments, said Vanguard’s client support teams hear the same questions every day from prospective investors.
“The first is confusion,” he said.
“People ask us, ‘How do I start? What do I do? Where do I go?'”
Many also struggle to understand the difference between tax wrappers such as ISAs and pensions and the investment funds that sit inside them.
Others become overwhelmed by choice.
Although Vanguard offers around 75 carefully curated funds, Norton said many customers still need “that extra help” and “that nudge” before they feel comfortable investing.
A guided journey for first-time investors
The new Targeted Support service walks customers through a simple step-by-step process.
Rather than immediately recommending investments, it first checks whether investing is appropriate. For example, customers with expensive debt are encouraged to pay that off before investing.
The journey then asks about financial goals, investment timeframe, regular savings habits and attitude to risk before recommending an appropriate investment fund and tax wrapper.
Throughout the process, Vanguard has embedded short educational guides covering:
- What a Stocks and Shares ISA is
- Why regular investing matters
- The benefits of investing over the long term
- Why markets naturally rise and fall
- How investment risk changes over time
Research conducted by Vanguard found that people’s intention to invest increases by 133% when investing concepts are easy to understand, highlighting the importance of education alongside guidance.
Making investing less intimidating
One feature Vanguard has deliberately built into the journey is preparing investors for market volatility before they invest.
Educational prompts explain that market falls are a normal part of long-term investing, helping first-time investors understand that short-term losses are to be expected rather than feared.
After completing a short three-question risk assessment, users receive an investor profile and a recommended Vanguard fund.
Interestingly, Norton revealed Vanguard deliberately moved away from labels such as “adventurous” and “cautious” after testing showed people interpreted them differently.
Instead, investor profiles focus on long-term investment objectives using plain English and simple visuals.
Closing the confidence gap
The demonstration lasted less than ten minutes—significantly shorter than many prospective investors expect.
In fact, Vanguard’s research found 87% of UK savers believe starting an investment plan requires a lot of effort.
“Our message is that starting an investment programme to set you up for long-term investment success doesn’t have to be difficult,” Norton said.
Early users appear to agree.
Participants who tested the service said they appreciated that it acknowledged the anxiety many people feel about investing, with one describing it as “a friendly relationship rather than a business transaction”, while another said it “takes away that fear”.
For Vanguard, that is exactly the outcome it is hoping to achieve.
By combining education, personalised guidance and simple investment recommendations, Vanguard hopes to close what it calls Britain’s “confidence gap” and encourage millions more savers to become long-term investors.
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
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