New fee for Vanguard mutual [and brokerage accounts - July 2023 updates]

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Booper
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by Booper »

Harry Livermore wrote: Tue Jun 06, 2023 12:38 pm
Booper wrote: Tue Jun 06, 2023 12:33 pm
hotajax wrote: Tue Jun 06, 2023 11:46 am If you don't have $5 milliion, you're simply a burr under their saddle. You have to accept the fact that at one time, you helped them grow, but now you're the ugly girl at the party, and it's time to walk. No use complaining, ever since Bill McNabb left, the company has a new corporate mission to degrade service. They had to know what will happen.
I don't know who Bill McNabb is (was?). Can you fill me in, and how your experience with company changed once he left?
He was the CEO right after Bogle, and before the current CEO, Tim Buckley.
Cheers
Thank you.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by Cheez-It Guy »

hotajax wrote: Tue Jun 06, 2023 11:58 am Not sure i it has as much to do with charging you for individual accounts as much as it is a corporate-wide de-emphasis of customer service. Seriously, how long until they hit you with account fees, even if you go e-statements? How many Flagship bennies do you have left? I don't have $5 million, and I cannot think of a single Flagship bennie I still enjoy for investing $1 million.
They give you free trades for non-Vanguard mutual funds. I used that several years ago to sell an American Funds holding with no fee. You can purchase closed funds on an annual basis including Primecap. Many people have done that. You can purchase institutional shares if you buy in enough quantity.
jebmke
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by jebmke »

hotajax wrote: Tue Jun 06, 2023 11:46 am If you don't have $5 milliion, you're simply a burr under their saddle. You have to accept the fact that at one time, you helped them grow, but now you're the ugly girl at the party, and it's time to walk. No use complaining, ever since Bill McNabb left, the company has a new corporate mission to degrade service. They had to know what will happen.
Where did you end up going?
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
jebmke
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by jebmke »

jeffyscott wrote: Tue Jun 06, 2023 12:50 pm
jebmke wrote: Tue Jun 06, 2023 6:16 am
Cheez-It Guy wrote: Tue Jun 06, 2023 6:08 am
sport wrote: Mon Jun 05, 2023 7:55 pm
Cheez-It Guy wrote: Mon Jun 05, 2023 7:12 pm Not a paper one.
Is it possible to get a paper year-end statement even if all the other documents are sent electronically?
That's a question for Vanguard if you are brave enough. They seem to be moving in an all-or-nothing direction with the possible exception of tax forms, so I kind of doubt it.
Until 2022 I would have said yes. I was getting a December Household Statement in the mail but all other docs were electronic. I did not get a year-end statement for 2022.
I don't think year end statements exist, in any form, for brokerage accounts (obviously, there's a Dec 31 statement, but it only covers that month, or maybe a quarter in some cases). That was something that the old mutual fund only accounts had.

And long ago, you could choose paperless for all but that year end consolidated statement and tax forms and qualify for fee waivers (I think at that time $50K or $10K per fund was all you needed to avoid fees, even with paper everything).
Right; my HH has a mix of brokerage and MF. But I don't miss the Dec. printed statement. I do print one out and put it with the copy of my will and some other stuff to make it easier for someone if I croak in an unplanned way.

The December statement also has the full year income items which you need to reconcile the statement to the tax statements.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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KlingKlang
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by KlingKlang »

I just received my nine separate notices for our family Vanguard brokerage accounts in the mail yesterday. One of these accounts is for a trust registered under an employee identification number. Do I get the printed statement fee waiver for all accounts, just the trust account, or none of them?
esetter
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by esetter »

I can understand and, a bit reluctantly, accept a fee to offset mailing costs. However, I do not understand the need for a per account fee if the only statement being mailed is a consolidated account statement, not individual account statements.
hotajax
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by hotajax »

@Booper

You asked how things changed since Bill McNabb, the former CEO, retired from that job. I will tell you the high points of what has changed since Tim Buckley attempted to fill Bill McNab's shoes.
Customer Service Call Center: It used to be that both John Brennan, the CEO who preceded Bill McNab, and Bill McNab, would actually take their turns in the call center, speaking to account holders. At one time, Vanguard was very conscious about keeping everyone satisfied when a call came in. They prided themselves on Customer Service. Call now and see how long it takes you to speak with someone.
Flagship Services: You had a dedicated rep. You'd call him on his line, leave a message, and they would call you back. Try that now.
Expedited Trading: If you needed to place a trade requiring a registered agent ( Series 7 license ), you got head of the line privileges for being a Flagship customer.
Fees: Many fees were waived off if you were in the Flagship level of service. Some were free, some got charged when you exceeded a certain number of certain types of transactions.

There may be others services that I forgot about, but these are things that I definitely remembered, and was able to partake of.

New mgmt leaves a lot to be desired.
chinchin
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by chinchin »

Booper wrote: Tue Jun 06, 2023 12:13 pm
chinchin wrote: Tue Jun 06, 2023 11:55 am As a Vanguard Owner (TM) at Fidelity, I approve of Vanguard Brokerage Services charging their clients for paper statements, so I don't have to pay for it.
Does Fidelity charge you to buy and sell Vanguard funds?
I buy Vanguard ETFs for no charge at Fidelity. I also buy Vanguard mutual funds at Chase with zero commissions and fees.
not financial advice
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munemaker
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by munemaker »

I just reviewed all my YTD Vanguard account transactions. I couldn't find any fees. The reason I am with Vanguard is the low cost. The first time I see a fee, I will just move to Fidelity, where I already have an account. Hopefully that doesn't happen.
doobiedoo
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by doobiedoo »

Below is what is on the Vanguard web site at
https://investor.vanguard.com/client-be ... count-fees

Image

It's still somewhat ambiguous.
But my interpretation is that
the "How you can avoid the fee" column applies to both Brokerage accounts and Mutual fund-only accounts. but the e-delivery exemption only applies to brokerage accounts. Thank you to user jeffyscott for pointing that out.

For completeness here is the rest of that web page:
Image
Last edited by doobiedoo on Tue Jun 06, 2023 4:50 pm, edited 2 times in total.
capran
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by capran »

jeffyscott wrote: Tue Jun 06, 2023 12:28 pm
capran wrote: Tue Jun 06, 2023 8:59 am
HueyLD wrote: Tue Jun 06, 2023 5:28 am
capran wrote: Mon Jun 05, 2023 10:31 pmWe called today and were told in broken English that the fee would begin on September 1, and that the only way to avoid the fee is to have 5 million or set up e statements. We have three Brokerage accounts- IRA and Roth (hers) , My Roth (converted from my IRA over the past 10 years) and a joint taxable account. All were converted to Brokerage within last 2 years, and since the only thing we have are Brokerage accounts, I wonder if the phone person was giving me wrong information. She certainly did NOT say having brokerage accounts is a way to avoid the fee. So much for their "Flagship" service. I guess it's like "5 mil is the old 2 mil".
It is unfortunate that you were given misleading information by a poorly trained third party servicer to which Vanguard “cheaply” outsourced their customer service. I have no problems with outsourcing as Vanguard is not the first or the last U.S. company to offshore their back office operations.

So, your best source of information is what VG wrote on their website like this one:

https://investor.vanguard.com/client-be ... count-fees

“ Brokerage accounts:

$25 for each account. Vanguard Brokerage Services® won’t assess the fee if a client’s total qualifying Vanguard assets are at least $5 million.

How you can avoid the fee:

If you’re the primary account owner, you can eliminate the fee on brokerage accounts by signing up for e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates. In addition, Vanguard Brokerage Services does not charge the fee to clients who have an organization or a trust account registered under an employee identification number (EIN) or brokerage accounts enrolled in an advisory program serviced by an affiliate of Vanguard.”

“ Mutual fund-only accounts:

$25 for each Vanguard mutual fund. We'll waive the fee if you have at least $5 million in qualifying Vanguard assets”

I think unhappy VG customers should complain to VG management about their anti-customer pricing and poor customer service. Any if complaints fall on deaf ears, they should be willing to walk with their feet. It is so sad that the company founded by Saint Bogle is now greedier than the Wall Street.
Interesting. The letter that we got from Vanguard is quite different. It says There are only 4 ways to avoid the fee: 1) sign up for e delivery,2) enrolled in an advisory service with Vanguard 3)5 mil, 4) clients who have an organization or trust registered under an employee identification number. Hopefully later this year we'll be re-doing trust to a simple which will make it easier to do changes.
There's no difference at all, that's exactly what it says at the link for brokerage accounts.
I cut and pasted this from their link and thought that meant they do a work around for 50k.

"Individual 401(k) & Individual Roth 401(k) plans$20 for each Vanguard mutual fund in each account.

We'll waive the fee for all participants in the plan if at least one participant has at least $50,000 in qualifying Vanguard assets."
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jeffyscott
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by jeffyscott »

doobiedoo wrote: Tue Jun 06, 2023 4:11 pm It's still somewhat ambiguous.
But my interpretation is that the "How you can avoid the fee" column applies to both Brokerage accounts and Mutual fund-only accounts.
There is nothing ambiguous about it, in that column it says: you can eliminate the fee on brokerage accounts by signing up for e-delivery of statements

This was also communicated to those with mutual fund only accounts with balances under $1 million last summer (when the exemption was $1 million+). Signing up for e-delivery has no impact on fees charged to the mutual fund only accounts.
doobiedoo
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by doobiedoo »

jeffyscott wrote: Tue Jun 06, 2023 4:36 pm
doobiedoo wrote: Tue Jun 06, 2023 4:11 pm It's still somewhat ambiguous.
But my interpretation is that the "How you can avoid the fee" column applies to both Brokerage accounts and Mutual fund-only accounts.
There is nothing ambiguous about it, in that column it says: you can eliminate the fee on brokerage accounts by signing up for e-delivery of statements

This was also communicated to those with mutual fund only accounts with balances under $1 million last summer (when the exemption was $1 million+). Signing up for e-delivery has no impact on fees charged to the mutual fund only accounts.
Aahhh! I see [said the blind man].
I think you are correct.
000
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by 000 »

A lot of the angst in this thread seems to be due to misunderstandings of Vanguard's revenue and cost structure.

They get the expense ratio on your fund no matter where you hold it.

Most brokerage (and definitely old fund-only) accounts are probably a net loss for them. Sorry, that's how the numbers work. Either there are going to have to be non-fund side fees or there is little financial incentive to maintain the accounts.

Judging by the rage over converting to mutual-funds-in-a-brokerage-account and over a $25 fee for gobs of paper mailing, it seems that adding in a revenue structure specific to the non-fund side is a no go.

Vanguard probably could have played this better. Somehow finding a way to during one of their last ER reductions to not lower the ER for old style accounts (technically would be done by creating new share classes or by lowering the fund ER and adding a tiny account level AUM fee) would have kept the fees where people seem to prefer them: where they aren't obvious.
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Mel Lindauer
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Re: New fee for Vanguard mutual accounts

Post by Mel Lindauer »

adestefan wrote: Sat Aug 27, 2022 6:50 pm
Munir wrote: Sat Aug 27, 2022 6:28 pm
Cheez-It Guy wrote: Sat Aug 27, 2022 5:05 pm
Munir wrote: Thu Aug 25, 2022 11:59 am It looks like a number of investors who are unhappy with Vanguard, including our Boglehead administrator, are congregating on this specific conversation. I'd like to also hear from contrarian views.
For clarity, what are you considering to be the contrarian view?
Views that praise/support Vanguard and the reasons why.
It’s about time Vanguard did something to try and force the conversion. Maybe someday they’ll finally be able to stop supporting two systems.

I’m also glad they raised the limit for free paper statements in all accounts. The world needs less paper and transportation waste.
But now Vanguard is going to be charging $25 per brokerage account (just got the notification in the mail today). IRAs, Roths, and Joint accounts are each subject to the $25 charge. So a couple with two IRAs, two Roths and a joint account would be subject to a charge of $125 per year. (No charge if you have $5mil or more.)
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fsrph
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Re: New fee for Vanguard mutual accounts

Post by fsrph »

Mel Lindauer wrote: Tue Jun 06, 2023 6:25 pm
adestefan wrote: Sat Aug 27, 2022 6:50 pm
Munir wrote: Sat Aug 27, 2022 6:28 pm
Cheez-It Guy wrote: Sat Aug 27, 2022 5:05 pm
Munir wrote: Thu Aug 25, 2022 11:59 am It looks like a number of investors who are unhappy with Vanguard, including our Boglehead administrator, are congregating on this specific conversation. I'd like to also hear from contrarian views.
For clarity, what are you considering to be the contrarian view?
Views that praise/support Vanguard and the reasons why.
It’s about time Vanguard did something to try and force the conversion. Maybe someday they’ll finally be able to stop supporting two systems.

I’m also glad they raised the limit for free paper statements in all accounts. The world needs less paper and transportation waste.
But now Vanguard is going to be charging $25 per brokerage account (just got the notification in the mail today). IRAs, Roths, and Joint accounts are each subject to the $25 charge. So a couple with two IRAs, two Roths and a joint account would be subject to a charge of $125 per year. (No charge if you have $5mil or more.)
Isn't there also no charge if you select electronic statements?

I'm trying to figure out if I convert to the brokerage platform and choose e statements there should be no fee. But can I still get tax documents via regular mail?

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie
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Gort
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Re: New fee for Vanguard mutual accounts

Post by Gort »

:idea:
Mel Lindauer wrote: Tue Jun 06, 2023 6:25 pm
adestefan wrote: Sat Aug 27, 2022 6:50 pm
Munir wrote: Sat Aug 27, 2022 6:28 pm
Cheez-It Guy wrote: Sat Aug 27, 2022 5:05 pm
Munir wrote: Thu Aug 25, 2022 11:59 am It looks like a number of investors who are unhappy with Vanguard, including our Boglehead administrator, are congregating on this specific conversation. I'd like to also hear from contrarian views.
For clarity, what are you considering to be the contrarian view?
Views that praise/support Vanguard and the reasons why.
It’s about time Vanguard did something to try and force the conversion. Maybe someday they’ll finally be able to stop supporting two systems.

I’m also glad they raised the limit for free paper statements in all accounts. The world needs less paper and transportation waste.
But now Vanguard is going to be charging $25 per brokerage account (just got the notification in the mail today). IRAs, Roths, and Joint accounts are each subject to the $25 charge. So a couple with two IRAs, two Roths and a joint account would be subject to a charge of $125 per year. (No charge if you have $5mil or more.)
Sign up for e-delivery and there will be no charge in the brokerage account platform.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by Cheez-It Guy »

munemaker wrote: Tue Jun 06, 2023 4:03 pm I just reviewed all my YTD Vanguard account transactions. I couldn't find any fees. The reason I am with Vanguard is the low cost. The first time I see a fee, I will just move to Fidelity, where I already have an account. Hopefully that doesn't happen.
Well, avoiding them is not really a mystery. If you're satisfied otherwise, I'd suggest making the minimal effort to keep up with fee policy changes and adapt accordingly (or if judged unreasonable, then move as you suggest). But don't just stand on the tracks and let the train hit you at some point.
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

Mel Lindauer wrote: Tue Jun 06, 2023 6:25 pm
adestefan wrote: Sat Aug 27, 2022 6:50 pm
Munir wrote: Sat Aug 27, 2022 6:28 pm
Cheez-It Guy wrote: Sat Aug 27, 2022 5:05 pm
Munir wrote: Thu Aug 25, 2022 11:59 am It looks like a number of investors who are unhappy with Vanguard, including our Boglehead administrator, are congregating on this specific conversation. I'd like to also hear from contrarian views.
For clarity, what are you considering to be the contrarian view?
Views that praise/support Vanguard and the reasons why.
It’s about time Vanguard did something to try and force the conversion. Maybe someday they’ll finally be able to stop supporting two systems.

I’m also glad they raised the limit for free paper statements in all accounts. The world needs less paper and transportation waste.
But now Vanguard is going to be charging $25 per brokerage account (just got the notification in the mail today). IRAs, Roths, and Joint accounts are each subject to the $25 charge. So a couple with two IRAs, two Roths and a joint account would be subject to a charge of $125 per year. (No charge if you have $5mil or more.)
But the fee can be avoided by opting for electronic statements. It was $20 last year with the waiver level at $1M instead of $5M.
retire2022
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by retire2022 »

All

I got six copies of the same letters discussed previously, and immediately logged onto Vanguard and switched to e-delivery.

Hopefully I won't get charged $150(25x6) for having six accounts.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by Cheez-It Guy »

retire2022 wrote: Tue Jun 06, 2023 8:39 pm All

I got six copies of the same letters discussed previously, and immediately logged onto Vanguard and switched to e-delivery.

Hopefully I won't get charged $150(25x6) for having six accounts.
I'm sure you won't. You did what they wanted.
retire2022
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by retire2022 »

Cheez-It Guy wrote: Tue Jun 06, 2023 8:43 pm
retire2022 wrote: Tue Jun 06, 2023 8:39 pm All

I got six copies of the same letters discussed previously, and immediately logged onto Vanguard and switched to e-delivery.

Hopefully I won't get charged $150(25x6) for having six accounts.
I'm sure you won't. You did what they wanted.
Well with their sub-par customer service, we shall see, they took forever to give me Flagship status after contacting them several times.
tomd37
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by tomd37 »

retire2022 and others,
I am wondering if we have to go off the Legacy system and onto the new system when/if we select to get statements online to avoid the annual charges. I would prefer, at this late stage in life, to stay on the Legacy system. Also $125 in fees per year has no impact on us. Also wondering if I were to pass first would they require my spouse, as my designated primary beneficiary, to go to the new system.
Tom D.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by 000 »

New brokerage platform + e-delivery = no $25 fees

Either platform + $5 million assets = no $25 fees

Anything else = $25 fee per account (legacy platform each fund is an account)
retire2022
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by retire2022 »

tomd37 wrote: Tue Jun 06, 2023 9:01 pm retire2022 and others,
I am wondering if we have to go off the Legacy system and onto the new system when/if we select to get statements online to avoid the annual charges. I would prefer, at this late stage in life, to stay on the Legacy system. Also $125 in fees per year has no impact on us. Also wondering if I were to pass first would they require my spouse, as my designated primary beneficiary, to go to the new system.
Are you on brokerage account or Mutual Fund?

I assuming Mutual Fund is your definition of legacy, yes you will be charged a fee per account.

I am on brokerage account, and Vanguard is forcing us to pay for printing of statements and confirmation unless you choose e-delivery, no fee.
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munemaker
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by munemaker »

Cheez-It Guy wrote: Tue Jun 06, 2023 7:05 pm
munemaker wrote: Tue Jun 06, 2023 4:03 pm I just reviewed all my YTD Vanguard account transactions. I couldn't find any fees. The reason I am with Vanguard is the low cost. The first time I see a fee, I will just move to Fidelity, where I already have an account. Hopefully that doesn't happen.
Well, avoiding them is not really a mystery. If you're satisfied otherwise, I'd suggest making the minimal effort to keep up with fee policy changes and adapt accordingly (or if judged unreasonable, then move as you suggest). But don't just stand on the tracks and let the train hit you at some point.
The way I read the notice on their website, if you take electronic delivery of statements and other notices, you won't be charged the fee. I do that and so far have not seen a fee.

Mun
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by tomd37 »

Yes, mutual funds is what I refer to as the legacy system. Sorry for not being more definitive initially.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by Cheez-It Guy »

munemaker wrote: Tue Jun 06, 2023 9:26 pm
Cheez-It Guy wrote: Tue Jun 06, 2023 7:05 pm
munemaker wrote: Tue Jun 06, 2023 4:03 pm I just reviewed all my YTD Vanguard account transactions. I couldn't find any fees. The reason I am with Vanguard is the low cost. The first time I see a fee, I will just move to Fidelity, where I already have an account. Hopefully that doesn't happen.
Well, avoiding them is not really a mystery. If you're satisfied otherwise, I'd suggest making the minimal effort to keep up with fee policy changes and adapt accordingly (or if judged unreasonable, then move as you suggest). But don't just stand on the tracks and let the train hit you at some point.
The way I read the notice on their website, if you take electronic delivery of statements and other notices, you won't be charged the fee. I do that and so far have not seen a fee.

Mun
If you are on the brokerage platform, that is correct. If you are on the older mutual-fund-only platform, fees should be expected even with e-delivery for assets levels less than $5 million, but you likely would have seen that last year if it applied to you.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by jeffyscott »

000 wrote: Tue Jun 06, 2023 9:05 pm New brokerage platform + e-delivery = no $25 fees

Either platform + $5 million assets = no $25 fees

Anything else = $25 fee per account (legacy platform each fund is an account)
That's a nice, concise, summary. :thumbsup
Last edited by jeffyscott on Tue Jun 06, 2023 10:17 pm, edited 1 time in total.
miamivice
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by miamivice »

I am simply going to say:

Vanguard knows how to tick off a lot of customers who quietly hold accounts (worth billions) at Vanguard. That takes skill.

I personally am in the middle of moving $1.3 million assets to Fidelity because of the letter that I received. Honestly, whatever platforms Vanguard has and their cost structure to maintain is "not my problem".

At Vanguard's request, I upgraded to a better platform. It just isn't the one that Vanguard was hoping I would upgrade to. :D

(I suppose you could say - why don't I discuss my concerns with my Vanguard Advisor. Well I would, expect Vanguard fired them. And apparently removed all other capabilities to message Vanguard with questions.)
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by exodusNH »

miamivice wrote: Tue Jun 06, 2023 10:16 pm I am simply going to say:

Vanguard knows how to tick off a lot of customers who quietly hold accounts (worth billions) at Vanguard. That takes skill.

I personally am in the middle of moving $1.3 million assets to Fidelity because of the letter that I received. Honestly, whatever platforms Vanguard has and their cost structure to maintain is "not my problem".

At Vanguard's request, I upgraded to a better platform. It just isn't the one that Vanguard was hoping I would upgrade to. :D

(I suppose you could say - why don't I discuss my concerns with my Vanguard Advisor. Well I would, expect Vanguard fired them. And apparently removed all other capabilities to message Vanguard with questions.)
If you continue to hold Vanguard funds, they continue to get the ER dollars from you without the cost of providing you an account.
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munemaker
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by munemaker »

Cheez-It Guy wrote: Tue Jun 06, 2023 9:50 pm
munemaker wrote: Tue Jun 06, 2023 9:26 pm
Cheez-It Guy wrote: Tue Jun 06, 2023 7:05 pm
munemaker wrote: Tue Jun 06, 2023 4:03 pm I just reviewed all my YTD Vanguard account transactions. I couldn't find any fees. The reason I am with Vanguard is the low cost. The first time I see a fee, I will just move to Fidelity, where I already have an account. Hopefully that doesn't happen.
Well, avoiding them is not really a mystery. If you're satisfied otherwise, I'd suggest making the minimal effort to keep up with fee policy changes and adapt accordingly (or if judged unreasonable, then move as you suggest). But don't just stand on the tracks and let the train hit you at some point.
The way I read the notice on their website, if you take electronic delivery of statements and other notices, you won't be charged the fee. I do that and so far have not seen a fee.

Mun
If you are on the brokerage platform, that is correct. If you are on the older mutual-fund-only platform, fees should be expected even with e-delivery for assets levels less than $5 million, but you likely would have seen that last year if it applied to you.
My wife and I each have both brokerage accounts and mutual fund accounts at Vanguard. I just reviewed statements for the mutual fund accounts for 2022 and YTD 2023 and see no evidence that any fees are being charged. We do receive electronic statements. We have significantly less than $5M total in all our accounts combined. It would seem that, according to their rules, our mutual fund accounts should be charged the fees, but they do not seem to be, as far as I can tell. Is anyone else in a similar situation?

Mun
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by Mudpuppy »

munemaker wrote: Wed Jun 07, 2023 12:04 am My wife and I each have both brokerage accounts and mutual fund accounts at Vanguard. I just reviewed statements for the mutual fund accounts for 2022 and YTD 2023 and see no evidence that any fees are being charged. We do receive electronic statements. We have significantly less than $5M total in all our accounts combined. It would seem that, according to their rules, our mutual fund accounts should be charged the fees, but they do not seem to be, as far as I can tell. Is anyone else in a similar situation?
Did you have more than $1M in combined assets in 2022? You only needed $1M in 2022 to not be charged the fee, but they're bumping that up to $5M for 2023. I had less than $1M last year and was assessed the fee for being on the old platform, even though I was signed up for e-delivery (electronic statements, notifications, etc.). They refunded the fee when I converted to the brokerage platform within a month of the fee being assessed.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by jebmke »

miamivice wrote: Tue Jun 06, 2023 10:16 pm I am simply going to say:

Vanguard knows how to tick off a lot of customers who quietly hold accounts (worth billions) at Vanguard. That takes skill.

I personally am in the middle of moving $1.3 million assets to Fidelity because of the letter that I received. Honestly, whatever platforms Vanguard has and their cost structure to maintain is "not my problem".

At Vanguard's request, I upgraded to a better platform. It just isn't the one that Vanguard was hoping I would upgrade to. :D

(I suppose you could say - why don't I discuss my concerns with my Vanguard Advisor. Well I would, expect Vanguard fired them. And apparently removed all other capabilities to message Vanguard with questions.)
Please post later how this goes and your impressions after being with Fidelity. Do you keep any funds i your settlement account, typically?
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by munemaker »

Mudpuppy wrote: Wed Jun 07, 2023 12:38 am
munemaker wrote: Wed Jun 07, 2023 12:04 am My wife and I each have both brokerage accounts and mutual fund accounts at Vanguard. I just reviewed statements for the mutual fund accounts for 2022 and YTD 2023 and see no evidence that any fees are being charged. We do receive electronic statements. We have significantly less than $5M total in all our accounts combined. It would seem that, according to their rules, our mutual fund accounts should be charged the fees, but they do not seem to be, as far as I can tell. Is anyone else in a similar situation?
Did you have more than $1M in combined assets in 2022? You only needed $1M in 2022 to not be charged the fee, but they're bumping that up to $5M for 2023. I had less than $1M last year and was assessed the fee for being on the old platform, even though I was signed up for e-delivery (electronic statements, notifications, etc.). They refunded the fee when I converted to the brokerage platform within a month of the fee being assessed.
Ah...now I see. So I have a decision to make.

Mun
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by HueyLD »

munemaker wrote: Wed Jun 07, 2023 6:47 am
Mudpuppy wrote: Wed Jun 07, 2023 12:38 am
munemaker wrote: Wed Jun 07, 2023 12:04 am My wife and I each have both brokerage accounts and mutual fund accounts at Vanguard. I just reviewed statements for the mutual fund accounts for 2022 and YTD 2023 and see no evidence that any fees are being charged. We do receive electronic statements. We have significantly less than $5M total in all our accounts combined. It would seem that, according to their rules, our mutual fund accounts should be charged the fees, but they do not seem to be, as far as I can tell. Is anyone else in a similar situation?
Did you have more than $1M in combined assets in 2022? You only needed $1M in 2022 to not be charged the fee, but they're bumping that up to $5M for 2023. I had less than $1M last year and was assessed the fee for being on the old platform, even though I was signed up for e-delivery (electronic statements, notifications, etc.). They refunded the fee when I converted to the brokerage platform within a month of the fee being assessed.
Ah...now I see. So I have a decision to make.

Mun
If you have a trust account, be forewarned that you may encounter many bumps in the conversion process.

Anyway, wish you all the luck in the world.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by Booper »

exodusNH wrote: Tue Jun 06, 2023 10:27 pm
miamivice wrote: Tue Jun 06, 2023 10:16 pm I am simply going to say:

Vanguard knows how to tick off a lot of customers who quietly hold accounts (worth billions) at Vanguard. That takes skill.

I personally am in the middle of moving $1.3 million assets to Fidelity because of the letter that I received. Honestly, whatever platforms Vanguard has and their cost structure to maintain is "not my problem".

At Vanguard's request, I upgraded to a better platform. It just isn't the one that Vanguard was hoping I would upgrade to. :D

(I suppose you could say - why don't I discuss my concerns with my Vanguard Advisor. Well I would, expect Vanguard fired them. And apparently removed all other capabilities to message Vanguard with questions.)
If you continue to hold Vanguard funds, they continue to get the ER dollars from you without the cost of providing you an account.
This is of course, true. But it also ignores a lot of other things, such as all the future decisions a customer will make.

For example, say in 10 years I decide to seek financial advice. Vanguard has an offering for that, and its very expensive (compared to the ER of the individual funds). If my money is already at Vanguard, I'm probably more likely to seek out their offering for that than if my money is elsewhere. Similarly, say in 5 years I decide to open a new account (say for a child). If my money is now at Fidelity or Schwab, I'm probably more likely to purchase their funds for that account. After all, one of the consequences of indexing is that the funds somewhat become commodities.

So I guess what I'm saying above is there's a concept of customer lifetime value. And it seems like getting a customer to keep their funds with a company seems like a good way to maximize that value for the company.

Also, addressing the cost point: companies spend money in all sorts of ways to retain customers. Like, a lot of the money spent on marketing and advertising is not just to attract new customers, but also to remind existing customers that they made a good decision. I mean, if Pepsi spends a ton of money next year on advertising and marketing, and Coke spent none, then presumably Coke would lose some customers.

I don't think there's some guaranteed right or wrong answer here. Like, I'm guessing that the company internally had debates just like this when deciding on this policy. And who knows if the answer they came up with is right or wrong. Only time will tell, and it's unlikely that anyone here will have access to the data to determine if it was a win or not for them.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by catlady »

Got the email this morning re: $25 per account on the mutual fund platform unless we move to a brokerage account. Employment reasons make it easier to stay on the mutual fund platform so we will pay the $100/yr fee and skip a night out to make up for it.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by TOM1964 »

exodusNH wrote: Tue Jun 06, 2023 10:27 pm
If you continue to hold Vanguard funds, they continue to get the ER dollars from you without the cost of providing you an account.
Who is "they?" There is no "Vanguard." We are talking about two different entities: Vanguard Group Incorporated (VGI) charges you an ER, then pays Vanguard Marketing Corporation (VMC) to handle your account.

Are you saying that if Schwab handles the account, VGI does not have to pay them anything out of the expense ratio? I'm asking sincerely, I don't know the answer.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by HueyLD »

catlady wrote: Wed Jun 07, 2023 11:24 am Got the email this morning re: $25 per account on the mutual fund platform unless we move to a brokerage account. Employment reasons make it easier to stay on the mutual fund platform so we will pay the $100/yr fee and skip a night out to make up for it.
It will be $25 PER FUND, not per account.

Depending on how many funds you hold, it could cost you several hundred dollars.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by jeffyscott »

TOM1964 wrote: Wed Jun 07, 2023 11:32 am
exodusNH wrote: Tue Jun 06, 2023 10:27 pm
If you continue to hold Vanguard funds, they continue to get the ER dollars from you without the cost of providing you an account.
Who is "they?" There is no "Vanguard." We are talking about two different entities: Vanguard Group Incorporated (VGI) charges you an ER, then pays Vanguard Marketing Corporation (VMC) to handle your account.

Are you saying that if Schwab handles the account, VGI does not have to pay them anything out of the expense ratio? I'm asking sincerely, I don't know the answer.
Vanguard pays nothing to Schwab, or anyone else, if you hold Vanguard mutual funds there. This is why there are transaction fees. Some mutual fund companies do pay Schwab and are either NTF or have lower transaction fees ($49.95 rather than the $74.95 charged for Vanguard, Fidelity, and Dodge & Cox).

I don't know if Vanguard mutual funds pay Vanguard brokerage for the funds held there.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by exodusNH »

TOM1964 wrote: Wed Jun 07, 2023 11:32 am
exodusNH wrote: Tue Jun 06, 2023 10:27 pm
If you continue to hold Vanguard funds, they continue to get the ER dollars from you without the cost of providing you an account.
Who is "they?" There is no "Vanguard." We are talking about two different entities: Vanguard Group Incorporated (VGI) charges you an ER, then pays Vanguard Marketing Corporation (VMC) to handle your account.

Are you saying that if Schwab handles the account, VGI does not have to pay them anything out of the expense ratio? I'm asking sincerely, I don't know the answer.
Correct. That's why zero commission is a big deal -- the brokerage earns nothing.

Schwab is hoping that you keep money in their settlement fund, which pays peanuts, eventually use their funds, or pay for advice.

They can also monetize your information and activity.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by rkhusky »

HueyLD wrote: Wed Jun 07, 2023 11:37 am
catlady wrote: Wed Jun 07, 2023 11:24 am Got the email this morning re: $25 per account on the mutual fund platform unless we move to a brokerage account. Employment reasons make it easier to stay on the mutual fund platform so we will pay the $100/yr fee and skip a night out to make up for it.
It will be $25 PER FUND, not per account.

Depending on how many funds you hold, it could cost you several hundred dollars.
It’s a bit confusing because on the mutual fund platform each fund is a separate account.
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Re: New fee for Vanguard mutual accounts

Post by Broken Man 1999 »

Mel Lindauer wrote: Tue Jun 06, 2023 6:25 pm
adestefan wrote: Sat Aug 27, 2022 6:50 pm
Munir wrote: Sat Aug 27, 2022 6:28 pm
Cheez-It Guy wrote: Sat Aug 27, 2022 5:05 pm
Munir wrote: Thu Aug 25, 2022 11:59 am It looks like a number of investors who are unhappy with Vanguard, including our Boglehead administrator, are congregating on this specific conversation. I'd like to also hear from contrarian views.
For clarity, what are you considering to be the contrarian view?
Views that praise/support Vanguard and the reasons why.
It’s about time Vanguard did something to try and force the conversion. Maybe someday they’ll finally be able to stop supporting two systems.

I’m also glad they raised the limit for free paper statements in all accounts. The world needs less paper and transportation waste.
But now Vanguard is going to be charging $25 per brokerage account (just got the notification in the mail today). IRAs, Roths, and Joint accounts are each subject to the $25 charge. So a couple with two IRAs, two Roths and a joint account would be subject to a charge of $125 per year. (No charge if you have $5mil or more.)
Or, sign up for e-delivery and pay $00.00! At least a choice is available.

Your five account example is what DW and I have. I do wonder (but do not care enough to research) if the Household Statement counts as one, or each account in the Household Statement being counted individually.

Eh, life continues.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by TOM1964 »

jeffyscott wrote: Wed Jun 07, 2023 11:49 am
Vanguard pays nothing to Schwab, or anyone else, if you hold Vanguard mutual funds there. This is why there are transaction fees. Some mutual fund companies do pay Schwab and are either NTF or have lower transaction fees ($49.95 rather than the $74.95 charged for Vanguard, Fidelity, and Dodge & Cox).

I don't know if Vanguard mutual funds pay Vanguard brokerage for the funds held there.
Yes, VGI certainly does pay VMC for servicing accounts. It's all detailed in the CRS form dated 6/1/2023 that triggered this thread!

"We receive compensation from VGI for marketing, distribution, and shareholder servicing services provided by us and our registered representatives in support of Vanguard products...We also receive compensation from VGI associated with offering brokerage services to our clients...derived from investments in Vanguard proprietary products and payments of the funds' expense ratios to VGI or other affiliates."
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by EricJ »

miamivice wrote: Tue Jun 06, 2023 10:16 pm Vanguard knows how to tick off a lot of customers who quietly hold accounts (worth billions) at Vanguard. That takes skill.

I personally am in the middle of moving $1.3 million assets to Fidelity because of the letter that I received. Honestly, whatever platforms Vanguard has and their cost structure to maintain is "not my problem".

At Vanguard's request, I upgraded to a better platform. It just isn't the one that Vanguard was hoping I would upgrade to. :D
I feel the same. Other brokers will give me hundreds or thousands in bonuses for me to move my assets there. I wish this were punishing for Vanguard, but perhaps it's exactly what they want to encourage to lower their costs and increase their competitors' costs. I guess it's a win-win for me and Vanguard if I move out.
I was also in the process of moving a parent's assets from Edward Jones to Vanguard. Now I'm calling Fidelity instead. Another account bonus, and parents like their paper statements, and Fidelity's are nice and pretty and printed on thick paper; just what some seniors want to see.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by jebmke »

EricJ wrote: Thu Jun 08, 2023 11:54 am
miamivice wrote: Tue Jun 06, 2023 10:16 pm Vanguard knows how to tick off a lot of customers who quietly hold accounts (worth billions) at Vanguard. That takes skill.

I personally am in the middle of moving $1.3 million assets to Fidelity because of the letter that I received. Honestly, whatever platforms Vanguard has and their cost structure to maintain is "not my problem".

At Vanguard's request, I upgraded to a better platform. It just isn't the one that Vanguard was hoping I would upgrade to. :D
I feel the same. Other brokers will give me hundreds or thousands in bonuses for me to move my assets there. I wish this were punishing for Vanguard, but perhaps it's exactly what they want to encourage to lower their costs and increase their competitors' costs. I guess it's a win-win for me and Vanguard if I move out.
I was also in the process of moving a parent's assets from Edward Jones to Vanguard. Now I'm calling Fidelity instead. Another account bonus, and parents like their paper statements, and Fidelity's are nice and pretty and printed on thick paper; just what some seniors want to see.
We really have no idea how many customers and related asset value have been ticked off since there seems to be no data, only anecdotes.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by munemaker »

Does anyone know when the fee will be charged?

My wife and I each have legacy accounts as well as brokerage accounts, including traditional, Roth and taxable accounts. We have more than $1M and less than $5M at VG, so we will get hit with a bunch of fees for each fund.

We will probably move all our business to Fidelity. I am just wondering if I have enough time to do this before the fee hits.

Mun

edit: I really feel bad about leaving VG. We have been with them for around 40 years. I originally picked them due to low cost and no fees. Never dreamed it would come to this. We also have accounts at Fidelity. I don't need much in the way of customer service or hand holding, but on the few occasions that I do, Fidelity seems to be a lot better, and their web site is better too. Also (avoiding any political discussion), I don't like how VG has been voting my shares. I guess it is just time to leave.
Last edited by munemaker on Thu Jun 08, 2023 12:38 pm, edited 1 time in total.
exodusNH
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by exodusNH »

munemaker wrote: Thu Jun 08, 2023 12:14 pm Does anyone know when the fee will be charged?

My wife and I each have legacy accounts as well as brokerage accounts, including traditional, Roth and taxable accounts. We have more than $1M and less than $5M at VG, so we will get hit with a bunch of fees for each fund.

We will probably move all our business to Fidelity. I am just wondering if I have enough time to do this before the fee hits.

Mun
Someone reported September.

Make sure you pull down your cost basis for everything, but especially your pre-2012 purchases.
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Re: New fee for Vanguard mutual accounts [June 2023 update]

Post by miamivice »

exodusNH wrote: Thu Jun 08, 2023 12:22 pm
munemaker wrote: Thu Jun 08, 2023 12:14 pm Does anyone know when the fee will be charged?

My wife and I each have legacy accounts as well as brokerage accounts, including traditional, Roth and taxable accounts. We have more than $1M and less than $5M at VG, so we will get hit with a bunch of fees for each fund.

We will probably move all our business to Fidelity. I am just wondering if I have enough time to do this before the fee hits.

Mun
Someone reported September.

Make sure you pull down your cost basis for everything, but especially your pre-2012 purchases.
Vanguard will send Fidelity your cost basis information It took me about a week to transfer. We did not pay any fees to transfer.

Call them and inquire about a bonus. I am receiving about $1050 bonus to move my accounts to Fidelity.
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