Vanguard Closes Short-Lived German Consumer Platform

Vanguard Group, which manages $2.03 trillion in 82 U.S. traded ETFs, has closed its direct-to-consumer (D2C) investment platform in Germany less than two years after it opened.

The Vanguard Invest platform was shuttered, the Malvern, Pennsylvania-based company said, following a strategic review of its German business which determined it had not achieved the “necessary scale to operate efficiently”.

Vanguard’s exit highlights the difficulty of the D2C market in Germany. Earlier this year, Bloomberg reported Fidelity International was looking for a buyer for its German platform FIL Fondsbank.

The group entered the German market in 2017, offering investors access to its funds via financial intermediaries and investment platforms before launching a personal investment platform in February last year.

"We have yet to achieve the necessary scale to continue operating the Vanguard Invest service efficiently," a spokesperson said. "As a result, we have taken the difficult decision to close our Vanguard Invest platform.”

The company said it's reviewing options regarding how German investors can continue to purchase Vanguard products. Vanguard manages $30 billion on behalf of German investors, the spokesperson said.

Vanguard Closing European Units

Last month, the firm’s ETFs reached €100bn assets under management in Europe for the first time on the back of strong inflows this year.

Despite this closure of its investment platform, Germany has been a key growth driver for the asset manager in Europe, with roughly one million German individuals invested in Vanguard products.

In March, Vanguard closed its U.K. financial advice arm less than two years after launching after failing to attract enough clients.

The group said its U.K. Personal Investor Service platform is one of the fastest growing in the UK, housing more than 550,000 investors and amassing $3 billion net inflows this year.

"As investors increasingly adopt Vanguard's low-cost ETFs through intermediaries and investment platforms—many as part of their monthly savings plans—we will continue to invest in our offering to give investors the best chance of investment success,” it said.