The operation offered a Financial Planning service for 0.79% per annum, promoting this as significantly less than the 1.5% or 2% charged by other Financial Planners.

In a statement today the company said it had decided to close the Financial Planning arm after concluding that clients wanted, “other, more adaptable forms of Financial Planning from Vanguard.”

The US-owned company, which has a major UK platform and fund operation, said: “We launched the service for clients of our existing platform with specialised retirement needs. However, after careful consideration, we have concluded that our clients are looking for other, more adaptable forms of Financial Planning from Vanguard. We have therefore taken the difficult decision to close the retirement planning service.

The Financial Planning service will close on 31 May and clients will have the option to revert to being a self-directed investor on the Vanguard UK Personal Investor platform, or to transfer to another adviser. Vanguard is referring clients to unbiased.co.uk, thepfs.org/yourmoney/find-an-adviser/ and vouchedfor.co.uk.

Vanguard declined to say how many customers used the Financial Planning service. It does not publicly disclose how many customers are advised or non-advised.

It added: “We are committed to the development of further financial guidance and advice services, to give investors the best chance of investment success.”

Vanguard's UK Personal Investor (UKPI) platform has 480,000 customers and Vanguard said it had become "increasingly clear" that while investing with Vanguard is growing in popularity UK retail investors were "looking for different forms of help from us than the current highly specialised retirement planning offer."

The average age of an investor on Vanguard's UK platform is 38 and a third of investors are under 30.

Vanguard’s website promoted the Financial Planning service to clients as: “Manned by qualified Financial Planners and supported by the very latest technologies, we believe it provides exceptional value to investors.

“Knowing the experts at Vanguard Personal Financial Planning have got your finances covered will give you genuine peace of mind. Combined with our low costs, this know-how has the potential to significantly boost your retirement nest egg and make sure more of your savings stay with you.   

“It’s not uncommon for people to pay more than 1.5% per year in advice, platform and fund management charges. Sometimes they can even pay northwards of 2%. What’s more, there may be initial consultation fees, performance-related charges and a host of other hidden costs. Not at Vanguard.”

The service charged a Financial Planning fee of 0.5% plus an account fee of 0.15% (capped at £375), fund management costs of 0.14% and zero exit or entry fees. Combined these charges formed a total fee of 0.79%.

The company said its lower Financial Planning fee could add £230,000 to a 38-year-old investor’s retirement portfolio if they started with £100,000 and invested £1,000 over a 30 year period, based on a 5% gross annual return.