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

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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

Northern Flicker wrote: Thu Aug 11, 2022 12:04 am and less secure than more recent systems
I am not reading more into your statements than claimed - this is your claim once again. Look at all the big exploits of recent years for evidence. Was it a legacy system hacked at CapOne or a new system? It was their cloud rollout. Many more examples out there.
Vuln-scans, DAST-scans, pen-tests, etc are performed against new and old systems. Potential exploits in new platforms could be more easily introduced between pen-tests since they are being updated more often - since the software is newer they may have Vulns the Vuln-mgmt systems don't have content for yet and if they are exploited the IOCs may not yet be detectable by SIEM/XDR solutions. But again - if you don't understand this just look back at recent exploits that have been in the news and you will see more times than not - it's the newer platforms getting compromised.
Don't tell people they should upgrade based upon the theory the legacy platform is somehow less secure. This is unnecessary FUD.
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

beyou wrote: Wed Aug 10, 2022 11:48 pm
Also note your marketing of products from Vanguard are just not valid complaints at all. PAS, really ? Pretty much EVERY broker out there sells something like PAS at higher cost, compared to Vanguard, including Fidelity. And bond active funds ? Bonds are much tougher to operate index funds compared to stocks, and as a result most bond funds yes are active, but Vanguard’s active bond funds are among the lowest cost bond funds out there. Nobody beats Vanguard at low cost bond funds.

All Brokers have these products - no dispute.
I was merely pointing out that Vanguard is, ironically, the only one actively trying to sell them to me to illustrate this isn't the Vanguard of yesterday - it has become just another broker - albeit one with poor customer service. For folks being forced to switch to brokerage accounts its a good time to evaluate if Vanguard is the brokerage account for you.
I am glad you have hours to wait on hold for Vanguard during working hours - I do not.
Last edited by SmileyFace on Thu Aug 11, 2022 6:25 am, edited 1 time in total.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Only the hours to lament about perceived shortcomings and injustices at a company with whom you no longer have a custodial relationship.

SmileyFace, separate topic and obviously completely unsolicited feedback, but I think your avatar would look so much better with a transparent background, which is possible with PNG format. Ever considered it?
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

SmileyFace wrote: Thu Aug 11, 2022 6:08 am
beyou wrote: Wed Aug 10, 2022 11:48 pm
Also note your marketing of products from Vanguard are just not valid complaints at all. PAS, really ? Pretty much EVERY broker out there sells something like PAS at higher cost, compared to Vanguard, including Fidelity. And bond active funds ? Bonds are much tougher to operate index funds compared to stocks, and as a result most bond funds yes are active, but Vanguard’s active bond funds are among the lowest cost bond funds out there. Nobody beats Vanguard at low cost bond funds.

All Brokers have these products - no dispute.
I was merely pointing out that Vanguard is, ironically, the only one actively trying to sell them to me to illustrate this isn't the Vanguard of yesterday.
I am glad you have hours to wait on hold for Vanguard during working hours - I do not.
Vanguard does seem to be the most intrusive, with giant, screen filling pop-ups promoting PAS when I log on. In contrast, Schwab has a small item near the top of the screen about their advisory services, it doesn't fill the screen and doesn't block anything or require me to dismiss in order to see the accounts. I don't recall seeing anything at all on E-trade or Fidelity.
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

Cheez-It Guy wrote: Thu Aug 11, 2022 6:21 am Only the hours to lament about perceived shortcomings and injustices at a company with whom you no longer have a custodial relationship.

SmileyFace, separate topic and obviously completely unsolicited feedback, but I think your avatar would look so much better with a transparent background, which is possible with PNG format. Ever considered it?
Since I no longer had skin in the game I tried NOT to reply to this thread. Watched it for a couple of days and several pages - even saw your prompt early on mentioning me and that old comparison page and decided it's relevance had dwindled so didn't jump in nor mention/reference the page. But then some misinformation started and I broke down. Forgive me. 😀 I have been helping my Father with his bills and finances and he is still at Vanguard. I can call the banks with him on speakerphone when we are together on a Saturday morning - it annoys me I can't do that with Vanguard.

On the avatar - yes! - I downloaded a PNG. It was over the 100x100 requirement and in my haste to downsize it I inadvertently saved it as a JPG and uploaded it. Some day I will fix it.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

There's nothing to forgive. You're good! I forgot about your dad. Makes sense. I just wanted to trot out the old message board trope / straw man of someone complaining they didn't have enough time for something whilst simultaneously taking the time to argue about the same thing on the internet. It's tongue-in-cheek, and I do it too.

My avatar used to have a background for similar reasons, and making it transparent at the desired scale exceeded the file size limit, but then I found a sketchy Chinese website to reduce the file size without changing scale. I already had the scale maxed out. It was one of these websites (I think the Panda one):

https://compresspng.com/
https://tinypng.com/

You should stop wasting time arguing with me and get it done for your legions of fans.
rkhusky
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

Northern Flicker wrote: Wed Aug 10, 2022 11:54 pm
rkhusky wrote: Wed Aug 10, 2022 9:17 pm
Northern Flicker wrote: Wed Aug 10, 2022 8:06 pm
rkhusky wrote: Wed Aug 10, 2022 7:51 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm Do you want your bank account ACH credentials stored in a legacy platform?
Perhaps they will make the mutual fund accounts really old school and remove the web interface. Go back to the days of mailed-in deposits and hardcopy statements, with appropriate charges for the latter.
Would you prefer that to having your account on the more modern platform?
It worked fine for me in the past.

And it might curb the inclination for watching the markets too closely. And the temptation to market time.
You can have Vanguard lock down your on line access and do everything by phone and with paper.
But that wouldn't be as much fun as Vanguard forcing it on mutual fund accounts.
TedSwippet
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Re: New fee for Vanguard mutual accounts

Post by TedSwippet »

exodusNH wrote: Wed Aug 10, 2022 10:15 am
TedSwippet wrote: Wed Aug 10, 2022 10:02 am ... or maybe

- are a US nonresident, or perhaps a US nonresident alien.
That's a good point. It may have to do with Vanguard not wanting to deal with non-US residents, regardless of citizenship status. Kind of a "don't ask / don't tell" situation.

Moving to the brokerage platform changes your ownership from direct registration to street name. (This is one of the reasons they can't force you off it it.) This has no practical implications for the vast majority of people, but for a case like yours, I can see where it might cause a problem.
I am about 95% certain it will be internal Vanguard policy, rather than any specific regulation or other tax thing, either US or international, that creates this restriction. Nonresident, and especially nonresident alien, triggers their panic buttons. In my case, these are IRA accounts (trad, Roth), retained from time worked in the US in the past. Under the US/UK tax treaty, all are all fully protected from tax, including any IRA to IRA transfers, until actual withdrawal. Maybe problematic for residents of other countries I suppose, but the UK should be fine.

I have wondered for a while how the unstoppable force of Vanguard brokerage account conversions would handle meeting the immovable object of refusal to allow this for non-residents. I guess I am starting to see an answer. Added charges is one of the least worst end-points. The others are ever more costly account fees combined with relentlessly degrading platform capabilities, or summary eviction from Vanguard.

This last one is really undesirable, since I have no alternatives. Interactive Brokers, Fidelity, Schwab and so on will simply not open IRA accounts for nonresident aliens. So the potential for a forced, huge, unwanted, and retirement-destroying tax bill. I am essentially captive to Vanguard's whims here around what they do, or do not do, to mutual fund only accounts. Hardly a worry-free retirement savings framework!
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

Cheez-It Guy wrote: Thu Aug 11, 2022 7:09 am You should stop wasting time arguing with me and get it done for your legions of fans.
I don't believe I have any fans here - but done! New updated look.
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retiredjg
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

:happy That's a relief.
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

alex_686 wrote: Tue Aug 09, 2022 2:37 pm
jeffyscott wrote: Tue Aug 09, 2022 1:09 pm I didn't realize that most ETFs are owned via advisors, that does also help explain the popularity of them, since so much is not self managed by individual investors.
The trick here is not that they are owned by advisors (which they must, as they are a exchange traded stock) that ETFs operate just like all of the other exchange traded stocks. One size fits all. If you build your brokerage platform on this it must run on rails, so ETFs runs on rails.

Mutual funds do not run on rails. Every "network connection" between a fund family and brokerage is bespoke. Will accounts be at a omnibus level (where the brokerage does all of the reporting) or at the account level (The fund may do the reporting here). Trade limits are by fund. Calculating break points is another. Who will reconcile what. I worked in operations. Mutual funds required far more work then stocks or bonds.

Note, the lexicology of the industry. You have Asset Managers, or those who run funds. Public, private, mutual funds, ETFs, whatever. i.e., the institutional side. Then you have client facing side or the retail side - that of the advisors. i.e., even the most bare bones DIY brokerage is considered a "advisor".
Alex, I wanted to go back to this, as I did not understand some of your comments there. Can you explain what you meant, with regard to what is considered to be held via an advisor? Did you mean that any assets held in a brokerage account are considered to be held via an "advisor"?

The comments were related to this quote from a Rich Powers that were posted:
...financial advisors have carried the water as it relates to their (ETFs) adoption at Vanguard and elsewhere in the marketplace, and most of those financial advisors will custody their assets at some other discount brokerage platform, or they might be at a broker dealer.

...and so the rough number here is about 10 percent of our ETF AUM is on a Vanguard platform and the balance is held at some other discount brokerage.


Does the first part mean that most people that own ETFs utilize an advisor of some sort (including robo-advisors) or does it just mean that they are held in some sort of brokerage account?

The second part seems clear, about 90% of assets in Vanguard ETFs are not held in a Vanguard brokerage account.
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Re: New fee for Vanguard mutual accounts

Post by vineviz »

jeffyscott wrote: Thu Aug 11, 2022 8:06 am
Does the first part mean that most people that own ETFs utilize an advisor of some sort (including robo-advisors) or does it just mean that they are held in some sort of brokerage account?
Possibly not most people, but I’d find it plausible that most ETF assets are in accounts managed by advisors.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

vineviz wrote: Thu Aug 11, 2022 8:11 am
jeffyscott wrote: Thu Aug 11, 2022 8:06 am
Does the first part mean that most people that own ETFs utilize an advisor of some sort (including robo-advisors) or does it just mean that they are held in some sort of brokerage account?
Possibly not most people, but I’d find it plausible that most ETF assets are in accounts managed by advisors.
Right, I should've said it that way, since he was talking about where/how assets are held.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

SmileyFace wrote: Thu Aug 11, 2022 7:57 am
Cheez-It Guy wrote: Thu Aug 11, 2022 7:09 am You should stop wasting time arguing with me and get it done for your legions of fans.
I don't believe I have any fans here - but done! New updated look.
Wow! Nice!

New updated look -- like the Vanguard website and app?!

But I like it! (Unlike the website and app changes)

I am now a fan!
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beyou
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Re: New fee for Vanguard mutual accounts

Post by beyou »

SmileyFace wrote: Thu Aug 11, 2022 6:08 am
beyou wrote: Wed Aug 10, 2022 11:48 pm
Also note your marketing of products from Vanguard are just not valid complaints at all. PAS, really ? Pretty much EVERY broker out there sells something like PAS at higher cost, compared to Vanguard, including Fidelity. And bond active funds ? Bonds are much tougher to operate index funds compared to stocks, and as a result most bond funds yes are active, but Vanguard’s active bond funds are among the lowest cost bond funds out there. Nobody beats Vanguard at low cost bond funds.

All Brokers have these products - no dispute.
I was merely pointing out that Vanguard is, ironically, the only one actively trying to sell them to me to illustrate this isn't the Vanguard of yesterday - it has become just another broker - albeit one with poor customer service. For folks being forced to switch to brokerage accounts its a good time to evaluate if Vanguard is the brokerage account for you.
I am glad you have hours to wait on hold for Vanguard during working hours - I do not.
I have not waited on hold in 20 years, and the website can handle most of my needs. There was exactly one time I had a function they had to perform for me and had to call, vs online service. This was recent, a one-time need (which is likely why not on the website), and was fast and accurate.

And it is nothing special as a broker, agreed, but it still is something special for mutual funds, particularly fixed income. If you are one of those 100% VTSAX/VTI guys, then any broker including Vanguard can meet your simple needs.

As far as marketing PAS type products, my other broker used to call me regularly, and I just said no thanks, and asked to stop calling about it (which after many calls they finally stopped). Nobody has EVER called me from Vanguard about PAS. Yes I see ads online, but they can be ignored. Why is it so upsetting that Vanguard introduced a service that other brokers have, at a much lower price, and markets it ? Would you prefer it is not an option for those who need it ? Or a high cost option (which then really would make them more like every other broker) ? Or not advertise it (keep it a hidden secret) ?

Nobody likes to wait on hold, so for those with frequent hand holding needs, maybe Vanguard is not the right broker. But if most of your needs are met online, they are fine and are the only brokerage that gives low cost access to ALL their funds (vs just some of their funds at varying fees elsewhere).

They have NEVER been appropriate for ALL. With historical $3k per fund minimums (sometimes $10k or $50k) certainly many new investors were locked out or forced into a balanced fund to keep all assets in one fund. They always had fees to drive desirable behavior (online vs paper statements, now brokerage vs fund-only). Many other brokers have same. But none have the mutual fund lineup in full. That and good enough service has kept me. I am well aware of what other brokers can offer in terms of hand holding, sometimes better website functionality etc, but in the end the fund product is most important, that is why you are there.

If you only buy ETF and lower min investor class funds, Etrade is an excellent choice for currently free trades of the investor class funds (and those admiral that were merged with former investor class funds). But this is the firm that used to call me couple times per year to market their high cost PAS equivalent. Fidelity also calls many customers for same sales pitch and charges $75 to buy Vanguard funds. None though offer ALL Vanguard funds, but they do have most. Also etrade customers have reported long wait times on the phone recently, something I never personally experienced.
Last edited by beyou on Thu Aug 11, 2022 8:42 am, edited 1 time in total.
retiringwhen
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Re: New fee for Vanguard mutual accounts

Post by retiringwhen »

rkhusky wrote: Thu Aug 11, 2022 7:15 am You can have Vanguard lock down your on line access and do everything by phone and with paper.
But that wouldn't be as much fun as Vanguard forcing it on mutual fund accounts.
[/quote]

I would put the odds of phone/US mail only support for MF-only platform customers at over 50% in 2028 and 95% by 2030.

As long as Vanguard has online access to the old platform, they will have to keep 30+ (maybe 50 years!) years worth of legacy systems integrated with some part of the new infrastructure. The carrying costs are and would continue to be huge, anyone who says that is not true has never managed a legacy migration project.

For example, my current project involves trying to shutdown a 40+ year old system with a "brand new" replacement. The carrying costs of the maintenance of the old system are probably 30% of the cost of entire effort. That 30% cannot be saved until the legacy code is completely turned off. Sadly, because the new systems is not 100% ready, continued enhancements must be made to the legacy code to meet operational requirements.

There is a concept called the Strangler Fig Pattern that uses an incremental process of wrapping and replacing functionality to kill off an old system. It is pretty clear that this pattern is a good template for how Vanguard has been managing their upgrade to date.

Vanguard has two choices with the MF-only platform, migrate and replace the functionality in the new system, or retire the functionality. They have been clear for almost 8 years that retire the functionality is their execution path. Any process that does not succeed in shutting down the systems would be seen as a failure by Vanguard's leadership.

Given the current pace of evolution, I expect you will see significant reductions in functionality for MF platform accounts as early as the end of this year. If I were managing the migration, the first step will likely be for the Account Overview pages and various summary pages to no longer include those accounts. If you only have those accounts, then that functionality would simply be turned off. The next step is to turn off all online functionality for updating things in your profile including beneficiary designations, etc.

Once they get the number of accounts below a certain level, it will make sense to shut down all online access as it will be cheaper to staff a CSR team to do the work via mail and phone so they can shutdown successively more and more of the legacy system functions and save the maintenance costs and eventually end up with a very small system footprint (most likely outsourced to the lowest-cost bidder).
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

retiringwhen wrote: Thu Aug 11, 2022 8:40 am here is a concept called the Strangler Fig Pattern that uses an incremental process of wrapping and replacing functionality to kill off an old system. It is pretty clear that this pattern is a good template for how Vanguard has been managing their upgrade to date.
This is what I did in Europe. Too complicated to do clean cut 100%. Started with G/L and Cash management using a strategy that if we controlled the money and ledgers, eventually the feeder systems could get picked off in a systematic way. In Latin America and Asia I used a clean cut by country approach due to scale and some regulatory constraints.

To your other point, in Europe we had to do some re-work of continuing legacy systems to conform to the standard chart of accounts since the prior systems looked like a ransom note.

You do reach a tipping point where you have to declare a race to the end and rapidly shut down all remaining legacy -- otherwise you can bleed out or create significant internal control risks.

Not everybody gets their way. Legacy systems tend to have a lot of customization and in many cases, new implementations limit customization to enable lower cost maintenance and preserve upgrade paths.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

beyou wrote: Thu Aug 11, 2022 8:39 am I have not waited on hold in 20 years, and the website can handle most of my needs. There was exactly one time I had a function they had to perform for me and had to call, vs online service. This was recent, a one-time need (which is likely why not on the website), and was fast and accurate.
Good for you. Unfortunately that hasn't been my experience. I had to help my Father fix some Vanguard accounts and it couldn't be done online. I took a day to spend with him (had to be a weekday) and hold times were HOURS. We put in for a call back which didn't happen until very late in the day. Yes - the website can do most things. Until it can't - and there are several things that simply can't be done on the website.
beyou wrote: Thu Aug 11, 2022 8:39 am Why is it so upsetting that Vanguard introduced a service that other brokers have
It's not upsetting at all. It was merely a datapoint that I was using to point out how Vanguard has changed (since so many folks still seem to think they are somehow different or special). If you want a broker today - you have a lot of choices - Vanguard is no longer as different as it used to be.
beyou wrote: Thu Aug 11, 2022 8:39 am Fidelity also calls many customers for same sales pitch
My named Fidelity Rep called me once many years ago and simply asked me if I had any questions about my investments or if there was anything he could do to help. I explained that I was DIY and asked they never call again - and they never did. When I log in I can see the person's picture and choose when I need help - I can set up a phone appointment for a convenient time with them or simply call. If I set up a teleconference appointment I can explain what I am trying to do ahead of time (such as transfer my assets from Vanguard) and if they don't have the information or capability to do something they will have someone else on the call with them that does. Compare this to Vanguard where I spent an hour on the phone (after waiting hours for the callback) being transferred from person to person until finally someone was able to take an action (only to be transferred to someone else for the next action).
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

beyou wrote: Wed Aug 10, 2022 11:48 pm I have nothing against Fidelity, but note their history was high cost funds to which they added zero funds that cannot be held outside Fidelity (so gotcha).
To be clear - Fidelity had low cost index funds for many years before they added the zero funds. One can still choose their low cost index funds versus the zero funds (or if portability is important - go with ETFs from ishares or Vanguard).
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arcticpineapplecorp.
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Re: New fee for Vanguard mutual accounts

Post by arcticpineapplecorp. »

migrated accounts, now showing brokerage...

but still getting the message (pop up) at opening telling me to transition my acct to brokerage :confused

assume this message will disappear in a day or so??

have others who migrated seen this annoying message disappear eventually??
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
alex_686
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Re: New fee for Vanguard mutual accounts

Post by alex_686 »

jeffyscott wrote: Thu Aug 11, 2022 8:06 am Alex, I wanted to go back to this, as I did not understand some of your comments there. Can you explain what you meant, with regard to what is considered to be held via an advisor? Did you mean that any assets held in a brokerage account are considered to be held via an "advisor"?

...

Does the first part mean that most people that own ETFs utilize an advisor of some sort (including robo-advisors) or does it just mean that they are held in some sort of brokerage account?
I am reading somewhat between the lines. "Advisor", like many words, can mean different things in different contexts.

Anybody who handles other people money are a "advisor", at least in the lingo of the regulators - even if they offer no advice. Thus all mutual fund accounts (the client facing side) and all brokerage who is a "advisor" even if they offer no advice. On the flip side, I can make a solid argument that it this language is better than retail/institutional dichotomy when you want to view things in terms of functions rather than size. I have worked with some tiny funds where the assets are in the 10s of millions.

This language may be archaic dating back to a time when the purpose of brokers was to offer advice. But from a regulation viewpoint it is critical, separating retails accounts (who presumably need more oversight) from institutional accounts, or Asset Managers, who do not.

For example, clients that manage their own brokerage would not be "advisor" accounts. So we would not count and mutual funds they held ETFs or large retirement and pension funds.

Or, like I said, I may be misreading the quote. But this is my interpretation.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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beyou
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Re: New fee for Vanguard mutual accounts

Post by beyou »

SmileyFace wrote: Thu Aug 11, 2022 9:46 am
beyou wrote: Wed Aug 10, 2022 11:48 pm I have nothing against Fidelity, but note their history was high cost funds to which they added zero funds that cannot be held outside Fidelity (so gotcha).
To be clear - Fidelity had low cost index funds for many years before they added the zero funds. One can still choose their low cost index funds versus the zero funds (or if portability is important - go with ETFs from ishares or Vanguard).
Many years after Vanguard. And if one believes in active management (which is useful or essential for some types of investments such as munis, corp bonds, especially high yield) then Vanguard < Fidelity still today.

I use ETFs, but as an example, fees on ishares state muni funds are much higher than Vanguard equivalent admiral and even investor class funds, and Fidelity open end funds even higher. In my state, Vanguard charges 9 or 17 ER, ishares 25 and Fidelity 46. That is some real savings if you have enough for the Admiral funds. Yes there are some cases where ishares or Fidelity are cheaper, but I can buy those (other than zero funds) anywhere. Can’t buy the state muni admiral funds anywhere. For those that assert Vanguard wants to get rid of direct client servicing, hold their funds elsewhere, why restrict selling ANY Vanguard funds outside Vanguard ?
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Re: New fee for Vanguard mutual accounts

Post by beyou »

arcticpineapplecorp. wrote: Thu Aug 11, 2022 9:55 am migrated accounts, now showing brokerage...

but still getting the message (pop up) at opening telling me to transition my acct to brokerage :confused

assume this message will disappear in a day or so??

have others who migrated seen this annoying message disappear eventually??
Yes, I think it batch updates your status.
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beyou
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Re: New fee for Vanguard mutual accounts

Post by beyou »

SmileyFace wrote: Thu Aug 11, 2022 8:53 am
beyou wrote: Thu Aug 11, 2022 8:39 am I have not waited on hold in 20 years, and the website can handle most of my needs. There was exactly one time I had a function they had to perform for me and had to call, vs online service. This was recent, a one-time need (which is likely why not on the website), and was fast and accurate.
Good for you. Unfortunately that hasn't been my experience. I had to help my Father fix some Vanguard accounts and it couldn't be done online. I took a day to spend with him (had to be a weekday) and hold times were HOURS. We put in for a call back which didn't happen until very late in the day. Yes - the website can do most things. Until it can't - and there are several things that simply can't be done on the website.
beyou wrote: Thu Aug 11, 2022 8:39 am Why is it so upsetting that Vanguard introduced a service that other brokers have
It's not upsetting at all. It was merely a datapoint that I was using to point out how Vanguard has changed (since so many folks still seem to think they are somehow different or special). If you want a broker today - you have a lot of choices - Vanguard is no longer as different as it used to be.
beyou wrote: Thu Aug 11, 2022 8:39 am Fidelity also calls many customers for same sales pitch
My named Fidelity Rep called me once many years ago and simply asked me if I had any questions about my investments or if there was anything he could do to help. I explained that I was DIY and asked they never call again - and they never did. When I log in I can see the person's picture and choose when I need help - I can set up a phone appointment for a convenient time with them or simply call. If I set up a teleconference appointment I can explain what I am trying to do ahead of time (such as transfer my assets from Vanguard) and if they don't have the information or capability to do something they will have someone else on the call with them that does. Compare this to Vanguard where I spent an hour on the phone (after waiting hours for the callback) being transferred from person to person until finally someone was able to take an action (only to be transferred to someone else for the next action).
Selective facts, PAS is a much lower cost alternative to most brokers, so are they really the same ?

As to customer service, it is common in the industry to have experts help with unusual issues that are not automated (often due to infrequency and complexity). The front line support needs training to get you to the right person, and the experts needs to be there when you need them. The growth of Vanguard makes it tough to onboard and train fast enough. So going elsewhere is is good for those of us who remain, we’ll get quicker access to staff as needed. In the end, you do usually get what you pay for and Vanguard generally does cost less for most of their products. Just look at PAS fees and my above comparison of muni fund ER.
rkhusky
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

arcticpineapplecorp. wrote: Thu Aug 11, 2022 9:55 am migrated accounts, now showing brokerage...

but still getting the message (pop up) at opening telling me to transition my acct to brokerage :confused

assume this message will disappear in a day or so??

have others who migrated seen this annoying message disappear eventually??
I still have a message about my 401k rollover months after the money showed up in my account.
lws
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Re: New fee for Vanguard mutual accounts

Post by lws »

Not surprised.
This was a forthcoming event.
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

beyou wrote: Thu Aug 11, 2022 10:25 am
SmileyFace wrote: Thu Aug 11, 2022 9:46 am
beyou wrote: Wed Aug 10, 2022 11:48 pm I have nothing against Fidelity, but note their history was high cost funds to which they added zero funds that cannot be held outside Fidelity (so gotcha).
To be clear - Fidelity had low cost index funds for many years before they added the zero funds. One can still choose their low cost index funds versus the zero funds (or if portability is important - go with ETFs from ishares or Vanguard).
Many years after Vanguard.
Still - it was 1988 - quite a long time ago and decades before the zero funds. It's not like they jumped from high-priced managed funds to the Zero funds which is what you seemed to imply. They had index funds for 40 years prior.
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Re: New fee for Vanguard mutual accounts

Post by beyou »

SmileyFace wrote: Thu Aug 11, 2022 11:43 am
beyou wrote: Thu Aug 11, 2022 10:25 am
SmileyFace wrote: Thu Aug 11, 2022 9:46 am
beyou wrote: Wed Aug 10, 2022 11:48 pm I have nothing against Fidelity, but note their history was high cost funds to which they added zero funds that cannot be held outside Fidelity (so gotcha).
To be clear - Fidelity had low cost index funds for many years before they added the zero funds. One can still choose their low cost index funds versus the zero funds (or if portability is important - go with ETFs from ishares or Vanguard).
Many years after Vanguard.
Still - it was 1988 - quite a long time ago and decades before the zero funds. It's not like they jumped from high-priced managed funds to the Zero funds which is what you seemed to imply. They had index funds for 40 years prior.
Vanguard was not the inventor of index funds, but first to widely adopt for retail investors. There is no doubt, Fidelity was always a follower not a leader in the low cost space. Without a firm like Vanguard (willing to cannibalize their own active funds with index funds), Fidelity might not have ever sold index funds.

Yet still today their active funds cost more than Vanguard active funds, and their managed accts (Hybrid Robo Advisor similar to PAS) cost more than Vanguard (.50 vs .30% annual fee).

Fidelity always has been and continues to be more expensive in many ways, same in some products, best only in captive index funds. You get what you pay for. I am under no illusion that I could pay more and get somewhat better service elsewhere, but the service I get meets my needs now, at what is the broadest array of low cost product options.
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

beyou wrote: Thu Aug 11, 2022 12:18 pm
Fidelity always has been and continues to be more expensive in many ways, same in some products, best only in captive index funds. You get what you pay for. I am under no illusion that I could pay more and get somewhat better service elsewhere, but the service I get meets my needs now, at what is the broadest array of low cost product options.
These statements are somewhat misleading. I know you mentioned there are some specific muni-funds you invest in but for the basic 3-fund boglehead Fidelity, Schwab, Etrade, etc are no more expensive than Vanguard. I (and many others) pay no more and yet get far better service elsewhere. For many (or likely most) Bogleheads it is simply not true that "Fidelity is more expensive in many ways".
Most Bogleheads can get more without having to pay more.
4ransom
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Brokerage conversion costs?

Post by 4ransom »

[Thread merged into here --admin LadyGeek]

If I have 2 funds in each of the following accounts what will the costs be? 1-joint account 2-spouse IRA 3-spouse roth IRA 4-spouse rollover IRA 5-other spouse, husband, first one was wife, IRA 6-roth IRA. If the total adds up to about 2 million, would conversion costs be for 2 funds or 12?
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Re: Brokerage conversion costs?

Post by ruud »

What do you mean by "conversion costs"?
.
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Re: Brokerage conversion costs?

Post by nalor511 »

4ransom wrote: Thu Aug 11, 2022 1:08 pm If I have 2 funds in each of the following accounts what will the costs be? 1-joint account 2-spouse IRA 3-spouse roth IRA 4-spouse rollover IRA 5-other spouse, husband, first one was wife, IRA 6-roth IRA. If the total adds up to about 2 million, would conversion costs be for 2 funds or 12?
You'll have to provide more information about what kind of conversion you're talking about. If you're talking about converting VG MF shares to ETF, there is no cost. If you're talking about converting VG MF-only account to brokerage account, there is no cost. If your'e talking about Roth Conversion, there's no cost at the brokerage, but you will pay taxes on the conversion.
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

SmileyFace wrote: Thu Aug 11, 2022 5:00 am
Northern Flicker wrote: Thu Aug 11, 2022 12:04 am and less secure than more recent systems
I am not reading more into your statements than claimed - this is your claim once again.
You did it in that response by extracting part of my quote, eliminating qualifiers and nuance. The full two statements were:

Legacy systems tend to be more costly to maintain, more prone to bugs, and less secure than more recent systems. Whether a particular one is any of those things can only be evaluated on a case-by-case basis.

There are tools to identify insecure code issues. Suppose you use them, and identify a vulnerability to cross site scripting. How easy will it be to fix in an older, more brittle system? Maybe not hard, or maybe it will persist longer than desirable because changes to the code are somewhat risky.

Less reliable systems also are less secure than more reliable ones, all else equal.

But any time you have two separate systems for 1 business process, eliminating one reduces the attack surface and frees up maintenance resources to bring to bear on the remaining environment, whether to enhance functionality, reliability, or security.
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Re: Brokerage conversion costs?

Post by 4ransom »

These ae all Vanguard funds. I was under the impression that at some point a $20 would be charged if the accounts were not moved to brokerage account.
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Re: New fee for Vanguard mutual accounts

Post by beyou »

SmileyFace wrote: Thu Aug 11, 2022 12:28 pm
beyou wrote: Thu Aug 11, 2022 12:18 pm
Fidelity always has been and continues to be more expensive in many ways, same in some products, best only in captive index funds. You get what you pay for. I am under no illusion that I could pay more and get somewhat better service elsewhere, but the service I get meets my needs now, at what is the broadest array of low cost product options.
These statements are somewhat misleading. I know you mentioned there are some specific muni-funds you invest in but for the basic 3-fund boglehead Fidelity, Schwab, Etrade, etc are no more expensive than Vanguard. I (and many others) pay no more and yet get far better service elsewhere. For many (or likely most) Bogleheads it is simply not true that "Fidelity is more expensive in many ways".
Most Bogleheads can get more without having to pay more.
Many Bogleheads are in a high enough tax bracket to use munis over total bond in a taxable portfolio.

Your brokerage cash balance has a lower yield at Fidelity than Vanguars due to higher fee mmkt funds.

The whole world does not subscribe to 3 fund portfolios.
But as I said, if your needs are simple, any broker will do.
But if your needs are that simple, you shouldn’t need anyone to help you.

In fact I'd say many don't want the complexity of a 3 fund, hence the use of Target Date funds.
Win for Vanguard, 8 bps ER, vs 75 for retail Fidelity Target funds (23 bps in my son's Fido 401k).
Some may not want the simplicity of Target nor 3 fund, and have more complex needs (such as munis, such as asset location needs, or desire to tilt etc).
For those, many funds are more expensive at Fidelity.
Finally for those who want no involvement at all, the PAS vs Hybrid robo advisor Vanguard wins on fees.
There are MANY people, with more and less complex needs than 3 fund who win with fees at Vanguard.
Last edited by beyou on Thu Aug 11, 2022 2:59 pm, edited 1 time in total.
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

Northern Flicker wrote: Thu Aug 11, 2022 1:56 pm
SmileyFace wrote: Thu Aug 11, 2022 5:00 am
Northern Flicker wrote: Thu Aug 11, 2022 12:04 am and less secure than more recent systems
I am not reading more into your statements than claimed - this is your claim once again.
You did it in that response by extracting part of my quote, eliminating qualifiers and nuance. The full two statements were:

Legacy systems tend to be more costly to maintain, more prone to bugs, and less secure than more recent systems. Whether a particular one is any of those things can only be evaluated on a case-by-case basis.

There are tools to identify insecure code issues. Suppose you use them, and identify a vulnerability to cross site scripting. How easy will it be to fix in an older, more brittle system? Maybe not hard, or maybe it will persist longer than desirable because changes to the code are somewhat risky.

Less reliable systems also are less secure than more reliable ones, all else equal.

But any time you have two separate systems for 1 business process, eliminating one reduces the attack surface and frees up maintenance resources to bring to bear on the remaining environment, whether to enhance functionality, reliability, or security.
Two systems are definitely more problematic than one - but that is not at all what we are debating (since neither system is going away). What I was debating was your original statement about where I would rather my ACH credentials - I would go with the older one (yes - it might be more prone to well known and documented sql-injection and other attacks - but these were shored up years ago. The new system may have various new APIs and GraphQL and other technologies that vendors are still catching up on shoring up). Again - as evidence simply look at all the hacks of the past few years and ask yourself if it was a newer system or a legacy platform.
Last edited by SmileyFace on Thu Aug 11, 2022 3:09 pm, edited 2 times in total.
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

beyou wrote: Thu Aug 11, 2022 2:15 pm
SmileyFace wrote: Thu Aug 11, 2022 12:28 pm
beyou wrote: Thu Aug 11, 2022 12:18 pm
Fidelity always has been and continues to be more expensive in many ways, same in some products, best only in captive index funds. You get what you pay for. I am under no illusion that I could pay more and get somewhat better service elsewhere, but the service I get meets my needs now, at what is the broadest array of low cost product options.
These statements are somewhat misleading. I know you mentioned there are some specific muni-funds you invest in but for the basic 3-fund boglehead Fidelity, Schwab, Etrade, etc are no more expensive than Vanguard. I (and many others) pay no more and yet get far better service elsewhere. For many (or likely most) Bogleheads it is simply not true that "Fidelity is more expensive in many ways".
Most Bogleheads can get more without having to pay more.
Many Bogleheads are in a high enough tax bracket to use munis over total bond in a taxable portfolio.

Your brokerage cash balance has a lower yield at Fidelity than Vanguars due to higher fee mmkt funds.

The whole world does not subscribe to 3 fund portfolios.
But as I said, if your needs are simple, any broker will do.
But if your needs are that simple, you shouldn’t need anyone to help you.
I don't hold bonds in taxable nor keep any cash with a brokerage. The Boglehead tenant is to keep things simple and negate the need to seek help - so yes - thanks for the acknowledgement that any broker will do. And if any broker will do - why not fall back to one with better support (bringing us full circle to orginal statements I made) which rules out Vanguard.
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Re: Brokerage conversion costs?

Post by ruud »

4ransom wrote: Thu Aug 11, 2022 2:07 pm These ae all Vanguard funds. I was under the impression that at some point a $20 would be charged if the accounts were not moved to brokerage account.
Yes, but that’s a “non-conversion” cost rather than a conversion cost :)

(Double check whether you might already have these in brokerage accounts)
.
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Re: New fee for Vanguard mutual accounts

Post by LadyGeek »

I merged 4ransom's thread into the ongoing discussion.

(Thanks to the member who reported the post and provided a link to this thread.)
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gonggong
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Re: New fee for Vanguard mutual accounts

Post by gonggong »

Just seeing if anyone else also ran into this while trying to transition. When transitioning my wife's account, it still lists her as a resident alien, but she's a US citizen as of 3 years ago. When trying to edit that, it says to do so under the account maintenance page. Unless we missed it, we don't see an option for that anywhere. I know the message center was mostly retired, but I tried sending a message through that, and I haven't heard back in 4+ days. I'm guessing we're going to need to call in for this?
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

gonggong wrote: Fri Aug 12, 2022 8:11 am Just seeing if anyone else also ran into this while trying to transition. When transitioning my wife's account, it still lists her as a resident alien, but she's a US citizen as of 3 years ago. When trying to edit that, it says to do so under the account maintenance page. Unless we missed it, we don't see an option for that anywhere. I know the message center was mostly retired, but I tried sending a message through that, and I haven't heard back in 4+ days. I'm guessing we're going to need to call in for this?
Call them, first thing in the morning. They can take weeks to respond to messages.
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

gonggong wrote: Fri Aug 12, 2022 8:11 am I know the message center was mostly retired, but I tried sending a message through that, and I haven't heard back in 4+ days. I'm guessing we're going to need to call in for this?
Not really. We lost the big "compose" button, but I sent two messages about the new fees by clicking on "submit document", which let's you send a message.

One response came the next day and the other came the same day. But maybe that's because both were probably standard canned responses, more or less.
SurlyDuff
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Re: New fee for Vanguard mutual accounts

Post by SurlyDuff »

Got it today. $40 for two accounts, I guess my empty Trad IRA counts.

Never saw a reason to convert it until now. All I do at this point is shovel my annual IRA contribution into the hole and close the website until next time basically. The mutual fund platform did that just fine.
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

SurlyDuff wrote: Fri Aug 12, 2022 2:14 pm Got it today. $40 for two accounts, I guess my empty Trad IRA counts.

Never saw a reason to convert it until now. All I do at this point is shovel my annual IRA contribution into the hole and close the website until next time basically. The mutual fund platform did that just fine.
In the old platform parlance, each mutual fund is an account. E.g., if you have VTSAX and VBTLX, that's two accounts.
peppers
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Re: New fee for Vanguard mutual accounts

Post by peppers »

Received the email this morning from Vanguard. It will cost me $100.00 if I do nothing. I could go to the brokerage side and hope everything I have set up carries over.
Or I could contact the folks at Fidelity and say I need you to move something for me. That would probably lead to more calls, text messages and emails from the Fidelity reps.

An interesting thing to me was that on the Vanguard home page they claim to have 30 million investors. In the email I received it stated "join the 4.5 million investors who use Vanguard Brokerage Accounts. (VBA)".

Hmmm.......
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criticalmass
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Re: New fee for Vanguard mutual accounts

Post by criticalmass »

For those who received the fee email, do you see any alerts or messages about the new fee after login?

For those who did not receive the fee email, do you see anything about fees once logged in?

No emails or notices here, but I have direct deposit setup for the mutual fund accounts so there is no option to convert to the brokerage.
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

criticalmass wrote: Fri Aug 12, 2022 3:29 pm For those who received the fee email, do you see any alerts or messages about the new fee after login?

For those who did not receive the fee email, do you see anything about fees once logged in?

No emails or notices here, but I have direct deposit setup for the mutual fund accounts so there is no option to convert to the brokerage.
I got the email a couple of days ago. My account, however, just had the "please transition now" box. I didn't check messages.
retiringwhen
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Re: New fee for Vanguard mutual accounts

Post by retiringwhen »

peppers wrote: Fri Aug 12, 2022 3:25 pm Received the email this morning from Vanguard. It will cost me $100.00 if I do nothing. I could go to the brokerage side and hope everything I have set up carries over.
Or I could contact the folks at Fidelity and say I need you to move something for me. That would probably lead to more calls, text messages and emails from the Fidelity reps.

An interesting thing to me was that on the Vanguard home page they claim to have 30 million investors. In the email I received it stated "join the 4.5 million investors who use Vanguard Brokerage Accounts. (VBA)".

Hmmm.......
The other 25 million hold in 401k plans or all the other brokerages.

For most vanguard index funds, Fidelity is the largest name holding assets. A few are SChwab.
tj
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Re: New fee for Vanguard mutual accounts

Post by tj »

peppers wrote: Fri Aug 12, 2022 3:25 pm Received the email this morning from Vanguard. It will cost me $100.00 if I do nothing. I could go to the brokerage side and hope everything I have set up carries over.
Or I could contact the folks at Fidelity and say I need you to move something for me. That would probably lead to more calls, text messages and emails from the Fidelity reps.

An interesting thing to me was that on the Vanguard home page they claim to have 30 million investors. In the email I received it stated "join the 4.5 million investors who use Vanguard Brokerage Accounts. (VBA)".

Hmmm.......
A lot of employer plans. They don't use VBA.
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

peppers wrote: Fri Aug 12, 2022 3:25 pm Received the email this morning from Vanguard. It will cost me $100.00 if I do nothing. I could go to the brokerage side and hope everything I have set up carries over.
Or I could contact the folks at Fidelity and say I need you to move something for me. That would probably lead to more calls, text messages and emails from the Fidelity reps.

An interesting thing to me was that on the Vanguard home page they claim to have 30 million investors. In the email I received it stated "join the 4.5 million investors who use Vanguard Brokerage Accounts. (VBA)".

Hmmm.......
30 million counts all the people with investments in 401ks and similar, as well as those who hold Vanguard funds elsewhere.

Vanguard is a pretty small brokerage overall. They're not really in that market.

Blackrock has 0 brokerage customers; they're the biggest fund family in the world.
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