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

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ee_guy
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Re: New fee for Vanguard mutual accounts

Post by ee_guy »

Northern Flicker wrote: Sun Aug 14, 2022 7:30 pm They are retiring the old platform, and you can convert now or pay to delay the inevitable.
Is it really inevitable? A possible explanation is that the old legacy platform has been ported and moderized - given that accounts with $1M are exempted and no EOL (end of life) date has been stated. Perhaps there are significant assets on MF only accounts?

Given that Vanguard has engaged McKinsey, other motives may be in play.
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rob
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Re: New fee for Vanguard mutual accounts

Post by rob »

jebmke wrote: Mon Aug 15, 2022 6:05 am Lol, you haven’t told us what this is in absolute dollars.
I don't see why the percentage is not enough but... $820 extra fees per year from the "low cost leader".... Since this is account * fund, it escalates. Again, this may be trivial to a lot here but it's not to me. Yes yes yes... I should live in Mayberry and buy 1 fund in 1 account and not have a Roth, Trad, Rollover, Taxable with TLH pairs or a spouse or kids or more than a single objective etc. etc. or I should just accept that I'm been shafted and happily move to the "new" platform and take one for the team. This place used to care - a lot - about cost drag; what does an extra $820 annual drag compounding over the long-term cost (yeah I could do the calc but I don't want to know).
jebmke wrote: Mon Aug 15, 2022 6:05 am I believe Rob is restricted by employer. I’ve lost track. Nonetheless, whining to random internet people isn’t going to change his options.
That is the defn of this entire forum. Funny how it's "whining" when it's not effecting the specific individual in the mirror. As I said, waving this off as trivial like most posts is disingenuous.
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retiringwhen
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Re: New fee for Vanguard mutual accounts

Post by retiringwhen »

ee_guy wrote: Mon Aug 15, 2022 10:03 am
Northern Flicker wrote: Sun Aug 14, 2022 7:30 pm They are retiring the old platform, and you can convert now or pay to delay the inevitable.
Is it really inevitable? A possible explanation is that the old legacy platform has been ported and moderized - given that accounts with $1M are exempted and no EOL (end of life) date has been stated. Perhaps there are significant assets on MF only accounts?

Given that Vanguard has engaged McKinsey, other motives may be in play.
Given that Brokerage systems are largely COTS, and mutual fund platforms are custom software, it seems very unlikely that Vanguard has any interest in keeping around the custom system. They have publicly committed to the Infosys COTS Brokerage platform

There is little doubt in my mind that this is cost saving measure.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

rob wrote: Mon Aug 15, 2022 10:36 am
jebmke wrote: Mon Aug 15, 2022 6:05 am Lol, you haven’t told us what this is in absolute dollars.
I don't see why the percentage is not enough but... $820 extra fees per year from the "low cost leader".... Since this is account * fund, it escalates. Again, this may be trivial to a lot here but it's not to me. Yes yes yes... I should live in Mayberry and buy 1 fund in 1 account and not have a Roth, Trad, Rollover, Taxable with TLH pairs or a spouse or kids or more than a single objective etc. etc. or I should just accept that I'm been shafted and happily move to the "new" platform and take one for the team. This place used to care - a lot - about cost drag; what does an extra $820 annual drag compounding over the long-term cost (yeah I could do the calc but I don't want to know).
jebmke wrote: Mon Aug 15, 2022 6:05 am I believe Rob is restricted by employer. I’ve lost track. Nonetheless, whining to random internet people isn’t going to change his options.
That is the defn of this entire forum. Funny how it's "whining" when it's not effecting the specific individual in the mirror. As I said, waving this off as trivial like most posts is disingenuous.
Well, whining in my book is almost any time some one complains to people who cannot affect the outcome. It seems your choices are fairly clear. The only one I'd add to the ones previously brought up is to seek to reduce the complexity of your holdings with VG by moving all the non-taxable accounts (you can sell VG assets without tax impact). 41 funds seems like a lot to me for an account that is sub $1 million but I'm not you.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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ResearchMed
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Notification of fee changes for Vanguard brokerage account

Post by ResearchMed »

I hadn't heard anything official from Vanguard about this - yet.

Since our 403b plan accounts were moved back to TIAA, the only accounts we have with Vanguard are quite small TIRAs and Roths.

The following just showed up in my email, from Vanguard, with a subject header of:


"The fee policy is changing for brokerage accounts"


The message is:


"Changes coming to the annual account service fee

We're writing to let you know we're making changes to the Vanguard Brokerage Services® annual account service fee. Since you've opted in to our e-delivery service for statements, account notifications, and other Vanguard communications, you won't be charged.

View the full commission and fee schedules online [it appears a link is included].

Thank you for belonging to the Vanguard community of investors..."


Good to know for sure (!?) that we won't have any of these fees.

RM
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Re: New fee for Vanguard mutual accounts

Post by BigJohn »

rob wrote: Mon Aug 15, 2022 10:36 am
jebmke wrote: Mon Aug 15, 2022 6:05 am Lol, you haven’t told us what this is in absolute dollars.
I don't see why the percentage is not enough but... $820 extra fees per year from the "low cost leader".... Since this is account * fund, it escalates. Again, this may be trivial to a lot here but it's not to me. Yes yes yes... I should live in Mayberry and buy 1 fund in 1 account and not have a Roth, Trad, Rollover, Taxable with TLH pairs or a spouse or kids or more than a single objective etc. etc. or I should just accept that I'm been shafted and happily move to the "new" platform and take one for the team. This place used to care - a lot - about cost drag; what does an extra $820 annual drag compounding over the long-term cost (yeah I could do the calc but I don't want to know).
jebmke wrote: Mon Aug 15, 2022 6:05 am I believe Rob is restricted by employer. I’ve lost track. Nonetheless, whining to random internet people isn’t going to change his options.
That is the defn of this entire forum. Funny how it's "whining" when it's not effecting the specific individual in the mirror. As I said, waving this off as trivial like most posts is disingenuous.
You keep saying “low cost leader” as if that must mean lowest cost for everyone. As I said above, this is a very rational business decision by VG. Trivial or not, I agree that retiring a legacy platform will increase costs for a small number of people. You’re in that group and have some difficult choices to make. However, the vast majority of their customers are well served by this change. So VG is simply choosing to be the “low cost leader” for the bulk of their customers.
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Re: New fee for Vanguard mutual accounts

Post by billaster »

rob wrote: Mon Aug 15, 2022 10:36 am I don't see why the percentage is not enough but... $820 extra fees per year from the "low cost leader".... Since this is account * fund, it escalates. Again, this may be trivial to a lot here but it's not to me. Yes yes yes... I should live in Mayberry and buy 1 fund in 1 account and not have a Roth, Trad, Rollover, Taxable with TLH pairs or a spouse or kids or more than a single objective etc. etc. or I should just accept that I'm been shafted and happily move to the "new" platform and take one for the team. This place used to care - a lot - about cost drag; what does an extra $820 annual drag compounding over the long-term cost (yeah I could do the calc but I don't want to know).
Well, part of your problem is that you have 41 mutual funds. You've chosen to make your life complicated and expensive. This fee might be a great incentive to simplify your portfolio and could increase your returns in the long run.

If $820 increases your fees by 30%, it works out that your portfolio value is around $4 million and the increase in fees is effectively 1.5 or 2 basis points. Why so paranoid about brokerage statements going to your company? That's not a particularly outlandish portfolio value for someone in your business at your compensation level, so what's the concern about brokerage statements going to your company?

They are obviously paying you a big pile of money each year. Is $820 such a big burden? You could consider it the price of playing with the big boys in order to meet company compliance standards. Or just move to a brokerage if the cost bothers you. You have choices.
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Re: New fee for Vanguard mutual accounts

Post by rob »

jebmke wrote: Mon Aug 15, 2022 10:43 am The only one I'd add to the ones previously brought up is to seek to reduce the complexity of your holdings with VG by moving all the non-taxable accounts (you can sell VG assets without tax impact). 41 funds seems like a lot to me for an account that is sub $1 million but I'm not you.
I talked about that above as moving all tax-deferred to a Fido MF only account but I have to cash that out for the transfer obviously as cannot be in-kind (no tax just time out of the market).

It's not "an account" with 41 funds..... My spouse and I cannot combine Roth's... I cannot combine a roth with a trad or taxable... I cannot combine the kids UTMA's etc. Apart from the taxable which has a handful of funds due to the TLH pairing and money market stuff, there are 1 or 2 funds in each account. If fact, a lot of the accounts hold the same fund. Structurally, I (or anyone) cannot do what your suggesting.

The other line I'm investigating is whether I can convert the kids UTMA's to a brokerage without getting hit with reporting on those - I suspect not but TBD. If I can do that I will pick a different vendor and depending on cap gains non V funds.
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rob
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Re: New fee for Vanguard mutual accounts

Post by rob »

billaster wrote: Mon Aug 15, 2022 11:29 am
rob wrote: Mon Aug 15, 2022 10:36 am I don't see why the percentage is not enough but... $820 extra fees per year from the "low cost leader".... Since this is account * fund, it escalates. Again, this may be trivial to a lot here but it's not to me. Yes yes yes... I should live in Mayberry and buy 1 fund in 1 account and not have a Roth, Trad, Rollover, Taxable with TLH pairs or a spouse or kids or more than a single objective etc. etc. or I should just accept that I'm been shafted and happily move to the "new" platform and take one for the team. This place used to care - a lot - about cost drag; what does an extra $820 annual drag compounding over the long-term cost (yeah I could do the calc but I don't want to know).
Well, part of your problem is that you have 41 mutual funds. You've chosen to make your life complicated and expensive. This fee might be a great incentive to simplify your portfolio and could increase your returns in the long run.

If $820 increases your fees by 30%, it works out that your portfolio value is around $4 million and the increase in fees is effectively 1.5 or 2 basis points. Why so paranoid about brokerage statements going to your company? That's not a particularly outlandish portfolio value for someone in your business at your compensation level, so what's the concern about brokerage statements going to your company?

They are obviously paying you a big pile of money each year. Is $820 such a big burden? You could consider it the price of playing with the big boys in order to meet company compliance standards. Or just move to a brokerage if the cost bothers you. You have choices.
Your assumptions are incorrect.
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

rob wrote: Mon Aug 15, 2022 10:36 am I don't see why the percentage is not enough but... $820 extra fees per year from the "low cost leader".... Since this is account * fund, it escalates. Again, this may be trivial to a lot here but it's not to me. Yes yes yes... I should live in Mayberry and buy 1 fund in 1 account and not have a Roth, Trad, Rollover, Taxable with TLH pairs or a spouse or kids or more than a single objective etc. etc. or I should just accept that I'm been shafted and happily move to the "new" platform and take one for the team. This place used to care - a lot - about cost drag; what does an extra $820 annual drag compounding over the long-term cost (yeah I could do the calc but I don't want to know).
That is ridiculous, $820 per year in fees! We're leaving over $80, but we have no issues with going to a brokerage account just don't want Vanguard's.

Perhaps, you could combine some of the accounts. A rollover IRA doesn't have to be kept separate. You mention "or more than a single objective", maybe some of those single objective accounts could be combined and then track the amounts dedicated to each objective on a spreadsheet? I do wonder about the number of accounts, since you say each has just 1 or 2 funds, so that means 20+ accounts, that and the single objective comment makes it sound like you are doing some sort of virtual version of an envelope system for budgeting.

Can your spouse's IRA accounts go to the brokerage, without an employer reporting requirement?

You mention TLH pairs, that makes me wonder what Vanguard will do if you have a fund for just part of the year?
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Re: New fee for Vanguard mutual accounts

Post by LadyGeek »

jeffyscott wrote: Mon Aug 15, 2022 1:06 pm A rollover IRA doesn't have to be kept separate.
I've had separate rollover IRAs at Vanguard. Each was a 401(k) rollover from a different employer. Once the funds settled, I transferred everything into a single Traditional IRA. The rollover IRA balances are 0.00 and they don't appear in my statements.

My Vanguard funds are held at Fidelity.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

rob wrote: Mon Aug 15, 2022 11:44 am
jebmke wrote: Mon Aug 15, 2022 10:43 am The only one I'd add to the ones previously brought up is to seek to reduce the complexity of your holdings with VG by moving all the non-taxable accounts (you can sell VG assets without tax impact). 41 funds seems like a lot to me for an account that is sub $1 million but I'm not you.
I talked about that above as moving all tax-deferred to a Fido MF only account but I have to cash that out for the transfer obviously as cannot be in-kind (no tax just time out of the market).

It's not "an account" with 41 funds..... My spouse and I cannot combine Roth's... I cannot combine a roth with a trad or taxable... I cannot combine the kids UTMA's etc. Apart from the taxable which has a handful of funds due to the TLH pairing and money market stuff, there are 1 or 2 funds in each account. If fact, a lot of the accounts hold the same fund. Structurally, I (or anyone) cannot do what your suggesting.

The other line I'm investigating is whether I can convert the kids UTMA's to a brokerage without getting hit with reporting on those - I suspect not but TBD. If I can do that I will pick a different vendor and depending on cap gains non V funds.
I did the reverse with a 401(k) at Fidelity. It was in funds that would not transfer. I had them cash out the funds that could be transferred in-kind in a rollover IRA and then made the transfer of the rollover to VG. Sometimes you just have to get creative.
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

Post by bengal22 »

Cheez-It Guy wrote: Sun Aug 14, 2022 1:21 pm
or4cle wrote: Sun Aug 14, 2022 1:11 pm In effort to reduce tax reporting paperwork and only get one set of documents from one platform, I thought I read (in another thread) it was preferable to transition at the beginning of the year (i.e. Jan 1st).

Does anyone have any recommendations / knowledge around this?
That was a good idea before the announcement of fees to take effect in the current tax year. The window for using that strategy free of charge is now closed. So if you want to pay a fee just to have a single set of 1099s in January, have at it. Or convert before the deadline, avoid the fee, and just handle two 1099s for one year. It's not a big deal. If you have any taxable investments outside of Vanguard or even enough bank interest on cash, you're already dealing with multiple 1099s. I changed in the middle of the year -- about 7 years ago. I survived and in fact thrived!
"Announcement of fees." I never received any announcement. No email. Nothing on web site. And I am an owner. I only found out through this forum. This will hasten my transition to Fidelity.
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

jebmke wrote: Mon Aug 15, 2022 1:26 pm
rob wrote: Mon Aug 15, 2022 11:44 am I talked about that above as moving all tax-deferred to a Fido MF only account but I have to cash that out for the transfer obviously as cannot be in-kind (no tax just time out of the market).
I did the reverse with a 401(k) at Fidelity. It was in funds that would not transfer. I had them cash out the funds that could be transferred in-kind in a rollover IRA and then made the transfer of the rollover to VG. Sometimes you just have to get creative.
I think the issue is these are Vanguard mutual fund accounts, so the current accounts can only hold Vanguard mutual funds and going to a fidelity mutual fund account (not Fidelity brokerage), which (I assume) can only hold Fidelity mutual funds?
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

retiredjg wrote: Sat Aug 13, 2022 2:19 pm My downgrade is complete. Pushed the button yesterday afternoon and had new brokerage accounts this morning.

Now everything I want to do will take two steps and two days instead of one step overnight. Joy. Joy. :annoyed

At least the transition went smoothly....as far as I know.
Update. When I mentioned above that things will take two steps instead of only 1 step, several of you said that was not correct. Here is my experience so far.

I set up a taxable account today and it went fine. Took about 10 minutes. All is well there.

1. Withdrawal from IRA - sent to taxable account. I was not allowed to exchange fund to fund because I wanted to withhold taxes. The only way to do that (withhold taxes) is by going through the settlement fund. So I will have to wait until the money shows up and then buy the fund I want. So this will take two steps and at least two logins and at least two days.

2. Withdrawal from IRA - sent to checking account at my credit union.. Again, I wanted to withhold taxes but this transaction did not take two steps. :happy It said the money will show up in 2 to 3 days which is exactly how it worked on the old platform.

I will want to do a Roth conversion later on in the year - this will obviously take two steps if I want to withhold taxes and it only took 1 step on the old platform.

Not happy that I will have to log back in tomorrow to buy a fund in taxable, but everything else has gone very smoothly. So, bottom line....it is a mixed bag so far.
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Re: New fee for Vanguard mutual accounts

Post by Doom&Gloom »

Vanguard must be getting some feedback on these recent notifications about fees. I would not be surprised if all account holders receive an email about fees in the near future.

Today I received an email informing me that since I have opted in to edelivery for statements, notifications, etc for my brokerage account I will not be charged an annual account service fee. Not sure which account this email is referring to as I have a Rollover IRA and a taxable account--both on the brokerage platform. So they took the trouble to tell me that there are no changes for me. Now.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

I never get emails from Vanguard since I asked them to stop sending me emails.
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

Post by BigJohn »

retiredjg wrote: Mon Aug 15, 2022 1:42 pm
retiredjg wrote: Sat Aug 13, 2022 2:19 pm My downgrade is complete. Pushed the button yesterday afternoon and had new brokerage accounts this morning.

Now everything I want to do will take two steps and two days instead of one step overnight. Joy. Joy. :annoyed

At least the transition went smoothly....as far as I know.
Update. When I mentioned above that things will take two steps instead of only 1 step, several of you said that was not correct. Here is my experience so far.

I set up a taxable account today and it went fine. Took about 10 minutes. All is well there.

1. Withdrawal from IRA - sent to taxable account. I was not allowed to exchange fund to fund because I wanted to withhold taxes. The only way to do that (withhold taxes) is by going through the settlement fund. So I will have to wait until the money shows up and then buy the fund I want. So this will take two steps and at least two logins and at least two days.

2. Withdrawal from IRA - sent to checking account at my credit union.. Again, I wanted to withhold taxes but this transaction did not take two steps. :happy It said the money will show up in 2 to 3 days which is exactly how it worked on the old platform.

I will want to do a Roth conversion later on in the year - this will obviously take two steps if I want to withhold taxes and it only took 1 step on the old platform.

Not happy that I will have to log back in tomorrow to buy a fund in taxable, but everything else has gone very smoothly. So, bottom line....it is a mixed bag so far.
I was one of the ones that said "not correct" but I pay quarterly estimated taxes rather than worry about withholding on transactions so didn't even consider this case. Good to document the differences for others that maybe in the same position.

As far as Roth conversions, if I recall correctly, they ask about withholding and tell you that if you want to withhold you need to call (ie cannot be done online). But I have a question that's a bit of a tangent... Roth conversions are most beneficial when the taxes are paid from outside the conversion. Can be a very marginal to negative benefit if it lowers the amount moved into your Roth. So, if you haven't already, you might want to consider not withholding on the conversion itself and making up the necessary withholding elsewhere.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

Right. Unless there is no other option it is much more beneficial to pay tax on Roth conversion from taxable money.
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Re: New fee for Vanguard mutual accounts

Post by FrugalInvestor »

jebmke wrote: Mon Aug 15, 2022 2:24 pm I never get emails from Vanguard since I asked them to stop sending me emails.
Same here, but I do get messages through my account message center and I've received nothing about new fees.
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

One can only pay taxes out of a taxable account if there is one. :D

I've just now created it and I believe it will be near empty within a few months. Just as well because I'm not very interested in estimated taxes. Withholding has worked well for me for a number of years.

I know that paying tax out of savings is a little bit better. No way for it to be "much" better in my situation. Even if it were a choice.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

bengal22 wrote: Mon Aug 15, 2022 1:32 pm
Cheez-It Guy wrote: Sun Aug 14, 2022 1:21 pm
or4cle wrote: Sun Aug 14, 2022 1:11 pm In effort to reduce tax reporting paperwork and only get one set of documents from one platform, I thought I read (in another thread) it was preferable to transition at the beginning of the year (i.e. Jan 1st).

Does anyone have any recommendations / knowledge around this?
That was a good idea before the announcement of fees to take effect in the current tax year. The window for using that strategy free of charge is now closed. So if you want to pay a fee just to have a single set of 1099s in January, have at it. Or convert before the deadline, avoid the fee, and just handle two 1099s for one year. It's not a big deal. If you have any taxable investments outside of Vanguard or even enough bank interest on cash, you're already dealing with multiple 1099s. I changed in the middle of the year -- about 7 years ago. I survived and in fact thrived!
"Announcement of fees." I never received any announcement. No email. Nothing on web site. And I am an owner. I only found out through this forum. This will hasten my transition to Fidelity.
Did you consider the possibility that your unique situation may not be subject to new fees for whatever reason?
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

retiringwhen wrote: Mon Aug 15, 2022 10:40 am
ee_guy wrote: Mon Aug 15, 2022 10:03 am
Northern Flicker wrote: Sun Aug 14, 2022 7:30 pm They are retiring the old platform, and you can convert now or pay to delay the inevitable.
Is it really inevitable? A possible explanation is that the old legacy platform has been ported and moderized - given that accounts with $1M are exempted and no EOL (end of life) date has been stated. Perhaps there are significant assets on MF only accounts?

Given that Vanguard has engaged McKinsey, other motives may be in play.
Given that Brokerage systems are largely COTS, and mutual fund platforms are custom software, it seems very unlikely that Vanguard has any interest in keeping around the custom system. They have publicly committed to the Infosys COTS Brokerage platform

There is little doubt in my mind that this is cost saving measure.
Not just cost savings, but by using a COTS (commercial off-the-shelf) system, the COTS software supplier can focus on what it does well (software development) while Vanguard can focus on what it does well (investment fund management).
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Re: New fee for Vanguard mutual accounts

Post by bengal22 »

Cheez-It Guy wrote: Mon Aug 15, 2022 4:49 pm
bengal22 wrote: Mon Aug 15, 2022 1:32 pm
Cheez-It Guy wrote: Sun Aug 14, 2022 1:21 pm
or4cle wrote: Sun Aug 14, 2022 1:11 pm In effort to reduce tax reporting paperwork and only get one set of documents from one platform, I thought I read (in another thread) it was preferable to transition at the beginning of the year (i.e. Jan 1st).

Does anyone have any recommendations / knowledge around this?
That was a good idea before the announcement of fees to take effect in the current tax year. The window for using that strategy free of charge is now closed. So if you want to pay a fee just to have a single set of 1099s in January, have at it. Or convert before the deadline, avoid the fee, and just handle two 1099s for one year. It's not a big deal. If you have any taxable investments outside of Vanguard or even enough bank interest on cash, you're already dealing with multiple 1099s. I changed in the middle of the year -- about 7 years ago. I survived and in fact thrived!
"Announcement of fees." I never received any announcement. No email. Nothing on web site. And I am an owner. I only found out through this forum. This will hasten my transition to Fidelity.
Did you consider the possibility that your unique situation may not be subject to new fees for whatever reason?
No. Seems clear in their explanation of fees. I hated to wait until I got hit. Maybe because I'm an owner I am exempt.
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Re: New fee for Vanguard mutual accounts

Post by tomd37 »

Three letters were received by mail today, one addressed to me, one to spouse, and one to both of us. They each stated the following:

"We're writing to let you know we're making changes to the Vanguard Brokerage Services annual account services fee. However, based on your account status or level of Vanguard qualifying assets, you won't be charged."

She and I each have a TIRA, I have a Roth IRA, and we have a joint taxable investment account. My understanding is that they still continue to be under the old mutual fund system since 2003. I have no idea if they are under Brokerage Services or not, as I do not understand all this "stuff". I guess a telephone call to them is in order for a better understanding on my part
Tom D.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

tomd37 wrote: Mon Aug 15, 2022 7:56 pm Three letters were received by mail today, one addressed to me, one to spouse, and one to both of us. They each stated the following:

"We're writing to let you know we're making changes to the Vanguard Brokerage Services annual account services fee. However, based on your account status or level of Vanguard qualifying assets, you won't be charged."

She and I each have a TIRA, I have a Roth IRA, and we have a joint taxable investment account. My understanding is that they still continue to be under the old mutual fund system since 2003. I have no idea if they are under Brokerage Services or not, as I do not understand all this "stuff". I guess a telephone call to them is in order for a better understanding on my part
If you go online and look at the name of the account, if it says "Brokerage Account" it is a brokerage account. If it doesn't say that, it is on the old Mutual Fund platform. Mutual funds can be held in either type of account. ETFs can only be held in a brokerage account.
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

Post by Nate79 »

bengal22 wrote: Mon Aug 15, 2022 7:49 pm
Cheez-It Guy wrote: Mon Aug 15, 2022 4:49 pm
bengal22 wrote: Mon Aug 15, 2022 1:32 pm
Cheez-It Guy wrote: Sun Aug 14, 2022 1:21 pm
or4cle wrote: Sun Aug 14, 2022 1:11 pm In effort to reduce tax reporting paperwork and only get one set of documents from one platform, I thought I read (in another thread) it was preferable to transition at the beginning of the year (i.e. Jan 1st).

Does anyone have any recommendations / knowledge around this?
That was a good idea before the announcement of fees to take effect in the current tax year. The window for using that strategy free of charge is now closed. So if you want to pay a fee just to have a single set of 1099s in January, have at it. Or convert before the deadline, avoid the fee, and just handle two 1099s for one year. It's not a big deal. If you have any taxable investments outside of Vanguard or even enough bank interest on cash, you're already dealing with multiple 1099s. I changed in the middle of the year -- about 7 years ago. I survived and in fact thrived!
"Announcement of fees." I never received any announcement. No email. Nothing on web site. And I am an owner. I only found out through this forum. This will hasten my transition to Fidelity.
Did you consider the possibility that your unique situation may not be subject to new fees for whatever reason?
No. Seems clear in their explanation of fees. I hated to wait until I got hit. Maybe because I'm an owner I am exempt.
You are an owner of what?
mbres60
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Re: New fee for Vanguard mutual accounts

Post by mbres60 »

tomd37 wrote: Mon Aug 15, 2022 7:56 pm Three letters were received by mail today, one addressed to me, one to spouse, and one to both of us. They each stated the following:

"We're writing to let you know we're making changes to the Vanguard Brokerage Services annual account services fee. However, based on your account status or level of Vanguard qualifying assets, you won't be charged."

She and I each have a TIRA, I have a Roth IRA, and we have a joint taxable investment account. My understanding is that they still continue to be under the old mutual fund system since 2003. I have no idea if they are under Brokerage Services or not, as I do not understand all this "stuff". I guess a telephone call to them is in order for a better understanding on my part
We received the same letter today. We have a Brokerage account with one stock in it along with the settlement fund. Otherwise everything else is on the mutual fund platform although strangely not all of my accounts have the link that says transition account. Not sure why.

Anyways, how much are the qualifying assets? Do you need to have the qualifying amount in each account or totaled altogether?
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Re: New fee for Vanguard mutual accounts

Post by mkc »

mbres60 wrote: Mon Aug 15, 2022 8:40 pm
tomd37 wrote: Mon Aug 15, 2022 7:56 pm Three letters were received by mail today, one addressed to me, one to spouse, and one to both of us. They each stated the following:

"We're writing to let you know we're making changes to the Vanguard Brokerage Services annual account services fee. However, based on your account status or level of Vanguard qualifying assets, you won't be charged."

She and I each have a TIRA, I have a Roth IRA, and we have a joint taxable investment account. My understanding is that they still continue to be under the old mutual fund system since 2003. I have no idea if they are under Brokerage Services or not, as I do not understand all this "stuff". I guess a telephone call to them is in order for a better understanding on my part
We received the same letter today. We have a Brokerage account with one stock in it along with the settlement fund. Otherwise everything else is on the mutual fund platform although strangely not all of my accounts have the link that says transition account. Not sure why.

Anyways, how much are the qualifying assets? Do you need to have the qualifying amount in each account or totaled altogether?
This topic might cover it viewtopic.php?t=383788
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Re: New fee for Vanguard mutual accounts

Post by ResearchMed »

mkc wrote: Mon Aug 15, 2022 8:52 pm
mbres60 wrote: Mon Aug 15, 2022 8:40 pm
tomd37 wrote: Mon Aug 15, 2022 7:56 pm Three letters were received by mail today, one addressed to me, one to spouse, and one to both of us. They each stated the following:

"We're writing to let you know we're making changes to the Vanguard Brokerage Services annual account services fee. However, based on your account status or level of Vanguard qualifying assets, you won't be charged."

She and I each have a TIRA, I have a Roth IRA, and we have a joint taxable investment account. My understanding is that they still continue to be under the old mutual fund system since 2003. I have no idea if they are under Brokerage Services or not, as I do not understand all this "stuff". I guess a telephone call to them is in order for a better understanding on my part
We received the same letter today. We have a Brokerage account with one stock in it along with the settlement fund. Otherwise everything else is on the mutual fund platform although strangely not all of my accounts have the link that says transition account. Not sure why.

Anyways, how much are the qualifying assets? Do you need to have the qualifying amount in each account or totaled altogether?
This topic might cover it viewtopic.php?t=383788

Or this:

viewtopic.php?p=6825321#p6825321


For Brokerage Accounts, it seems to be sufficient to get electronic delivery.

"...We're writing to let you know we're making changes to the Vanguard Brokerage Services® annual account service fee. Since you've opted in to our e-delivery service for statements, account notifications, and other Vanguard communications, you won't be charged..."

DH and I each received an email like this.
And after our 403b plan was moved back to TIAA in 2020, all of our TIRA and Roth IRA Brokerage accounts have *very* small total amounts. If one has electronic delivery for Brokerage accounts, given the message that Vanguard sent each of us and the small amounts involved, I can't imagine that there is a "minimum balance" needed if there is electronic delivery. :wink:

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Re: New fee for Vanguard mutual accounts

Post by bengal22 »

Nate79 wrote: Mon Aug 15, 2022 8:10 pm
bengal22 wrote: Mon Aug 15, 2022 7:49 pm
Cheez-It Guy wrote: Mon Aug 15, 2022 4:49 pm
bengal22 wrote: Mon Aug 15, 2022 1:32 pm
Cheez-It Guy wrote: Sun Aug 14, 2022 1:21 pm

That was a good idea before the announcement of fees to take effect in the current tax year. The window for using that strategy free of charge is now closed. So if you want to pay a fee just to have a single set of 1099s in January, have at it. Or convert before the deadline, avoid the fee, and just handle two 1099s for one year. It's not a big deal. If you have any taxable investments outside of Vanguard or even enough bank interest on cash, you're already dealing with multiple 1099s. I changed in the middle of the year -- about 7 years ago. I survived and in fact thrived!
"Announcement of fees." I never received any announcement. No email. Nothing on web site. And I am an owner. I only found out through this forum. This will hasten my transition to Fidelity.
Did you consider the possibility that your unique situation may not be subject to new fees for whatever reason?
No. Seems clear in their explanation of fees. I hated to wait until I got hit. Maybe because I'm an owner I am exempt.
You are an owner of what?
One of the owners of Vanguard.
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Re: New fee for Vanguard mutual accounts

Post by criticalmass »

bengal22 wrote: Mon Aug 15, 2022 9:08 pm
Nate79 wrote: Mon Aug 15, 2022 8:10 pm
bengal22 wrote: Mon Aug 15, 2022 7:49 pm
Cheez-It Guy wrote: Mon Aug 15, 2022 4:49 pm
bengal22 wrote: Mon Aug 15, 2022 1:32 pm

"Announcement of fees." I never received any announcement. No email. Nothing on web site. And I am an owner. I only found out through this forum. This will hasten my transition to Fidelity.
Did you consider the possibility that your unique situation may not be subject to new fees for whatever reason?
No. Seems clear in their explanation of fees. I hated to wait until I got hit. Maybe because I'm an owner I am exempt.
You are an owner of what?
One of the owners of Vanguard.
Absolutely! Just bring it up as a motion under New Business at the next Owner's Meeting. No doubt you will get a second and your motion will pass with overwhelming owner's representation. Remember, "At Vanguard, you're not just a client, you're an owner," so enjoy those ownership benefits and perks!
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Re: New fee for Vanguard mutual accounts

Post by Gnirk »

i received two letters today; one for my IRA, and one for my taxable account:
Both letters said "based on your account status or level of Vanguard qualifying assets, you won't be charged".

i still hate the new website; viewing our accounts now requires 12 pages, instead of 5 pages because of the format ( huge font), and also displays less information for each fund we hold. Which means a lot more searching and "clicks" to find that info. That, to me, is neither progress nor an improvement.
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Re: New fee for Vanguard mutual accounts

Post by FrugalInvestor »

Nate79 wrote: Mon Aug 15, 2022 9:39 pm
bengal22 wrote: Mon Aug 15, 2022 9:08 pm
Nate79 wrote: Mon Aug 15, 2022 8:10 pm
bengal22 wrote: Mon Aug 15, 2022 7:49 pm
Cheez-It Guy wrote: Mon Aug 15, 2022 4:49 pm

Did you consider the possibility that your unique situation may not be subject to new fees for whatever reason?
No. Seems clear in their explanation of fees. I hated to wait until I got hit. Maybe because I'm an owner I am exempt.
You are an owner of what?
One of the owners of Vanguard.
I can't tell if this is sarcasm or not. Because you are not an owner of Vanguard.
This says that investors in Vanguard funds are the "owners" of Vanguard.

https://corporate.vanguard.com/content/ ... 0Ownership.
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Re: New fee for Vanguard mutual accounts

Post by Nate79 »

FrugalInvestor wrote: Mon Aug 15, 2022 9:48 pm
Nate79 wrote: Mon Aug 15, 2022 9:39 pm
bengal22 wrote: Mon Aug 15, 2022 9:08 pm
Nate79 wrote: Mon Aug 15, 2022 8:10 pm
bengal22 wrote: Mon Aug 15, 2022 7:49 pm

No. Seems clear in their explanation of fees. I hated to wait until I got hit. Maybe because I'm an owner I am exempt.
You are an owner of what?
One of the owners of Vanguard.
I can't tell if this is sarcasm or not. Because you are not an owner of Vanguard.
This says that investors in Vanguard funds are the "owners" of Vanguard.

https://corporate.vanguard.com/content/ ... 0Ownership.
Read the fine print. That's marketing speak to grab the attention of the ignorant masses. There are many threads on this topic but it's an exaggeration at best and a lie at worst.
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Re: New fee for Vanguard mutual accounts

Post by tj »

Interesting- apparently over half of Vanguard's AUM is through financial advisor services - https://corporate.vanguard.com/content/ ... story.html
MadHungarian
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Re: New fee for Vanguard mutual accounts

Post by MadHungarian »

Gnirk wrote: Mon Aug 15, 2022 9:28 pm i received two letters today; one for my IRA, and one for my taxable account:
Both letters said "based on your account status or level of Vanguard qualifying assets, you won't be charged".

i still hate the new website; viewing our accounts now requires 12 pages, instead of 5 pages because of the format ( huge font), and also displays less information for each fund we hold. Which means a lot more searching and "clicks" to find that info. That, to me, is neither progress nor an improvement.
I did find a reasonable facsimile of the old format.
It's just harder to get to now than it used to be, bleah.
https://personal.vanguard.com/us/XHTML/ ... ncesbydate

(Oh wow, i actually managed to spell "facsimile" correctly on the first try!)
criticalmass
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Re: New fee for Vanguard mutual accounts

Post by criticalmass »

Some Vanguard owners have received notices of a new fee. Some Vanguard owners have not.

Regulations require Vanguard and other financial institutions to notify owners customers in writing of any fee changes.

So if you haven't received any letters or emails from Vanguard about the new fee, you are off the hook---for now.

But keep checking for future notices.
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Re: New fee for Vanguard mutual accounts

Post by Gnirk »

MadHungarian wrote: Mon Aug 15, 2022 11:15 pm
Gnirk wrote: Mon Aug 15, 2022 9:28 pm i received two letters today; one for my IRA, and one for my taxable account:
Both letters said "based on your account status or level of Vanguard qualifying assets, you won't be charged".

i still hate the new website; viewing our accounts now requires 12 pages, instead of 5 pages because of the format ( huge font), and also displays less information for each fund we hold. Which means a lot more searching and "clicks" to find that info. That, to me, is neither progress nor an improvement.
I did find a reasonable facsimile of the old format.
It's just harder to get to now than it used to be, bleah.
https://personal.vanguard.com/us/XHTML/ ... ncesbydate

(Oh wow, i actually managed to spell "facsimile" correctly on the first try!)
Thank You!!!
MadHungarian
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Re: New fee for Vanguard mutual accounts

Post by MadHungarian »

Gnirk wrote: Mon Aug 15, 2022 11:42 pm
MadHungarian wrote: Mon Aug 15, 2022 11:15 pm
Gnirk wrote: Mon Aug 15, 2022 9:28 pm i received two letters today; one for my IRA, and one for my taxable account:
Both letters said "based on your account status or level of Vanguard qualifying assets, you won't be charged".

i still hate the new website; viewing our accounts now requires 12 pages, instead of 5 pages because of the format ( huge font), and also displays less information for each fund we hold. Which means a lot more searching and "clicks" to find that info. That, to me, is neither progress nor an improvement.
I did find a reasonable facsimile of the old format.
It's just harder to get to now than it used to be, bleah.
https://personal.vanguard.com/us/XHTML/ ... ncesbydate

(Oh wow, i actually managed to spell "facsimile" correctly on the first try!)
Thank You!!!
Mind you, i don't know how long it will remain! It might be they just forgot to re-format this page and will get around to it presently.
I hate the new cartoonish format too. I think it's designed for folks with small smartphones and smaller attention spans.
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Re: New fee for Vanguard mutual accounts

Post by sport »

MadHungarian wrote: Mon Aug 15, 2022 11:15 pm
Gnirk wrote: Mon Aug 15, 2022 9:28 pm i received two letters today; one for my IRA, and one for my taxable account:
Both letters said "based on your account status or level of Vanguard qualifying assets, you won't be charged".

i still hate the new website; viewing our accounts now requires 12 pages, instead of 5 pages because of the format ( huge font), and also displays less information for each fund we hold. Which means a lot more searching and "clicks" to find that info. That, to me, is neither progress nor an improvement.
I did find a reasonable facsimile of the old format.
It's just harder to get to now than it used to be, bleah.
https://personal.vanguard.com/us/XHTML/ ... ncesbydate

(Oh wow, i actually managed to spell "facsimile" correctly on the first try!)
I believe you can get this same format by using your regular log in, click on the "accounts" drop down menu, and selecting "balances and holdings".
astrohip
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Re: New fee for Vanguard mutual accounts

Post by astrohip »

Received a letter today about fees. On a VG account for my parents, that I closed when my dad passed away in Feb 2020.

Just to be clear, no one has a VG account any more. Not my deceased dad, my still living mom (Fid), or me (fid).

But hey, I got the letter! :oops:
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Gigihsu
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Re: New fee for Vanguard mutual accounts

Post by Gigihsu »

I am one of those who always put off the brokerage transition and only rushed to make the request after receiving the threatening email, "Transition your account for an enhanced experience and to avoid fees."

The transition was fairly smooth, but one surprise: There was an unexpected muni fund dividend distribution during the transition, My muni fund distribution was always set to transfer the payout to the money market fund. However, on the date of the brokerage transition, which was mid-month, not the usual end-of-month, it triggered a dividend distribution, and it was reinvented to buy more shares.

I double checked all the settings, and the new brokerage account setting was correct, "Dividends:Transfer to settlement fund." It was not a lot of money so I let the issue drop.
TSintheATL
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Re: New fee for Vanguard mutual accounts

Post by TSintheATL »

Apparently able to make the transition online, and I'm not at all computer savvy.

Thanks to everyone for the heads-up! I get so many e-mails from Vanguard, I tend to ignore them. I probably would have overlooked this one if it weren't for this thread.

One question: Any problem having a settlement fund (Federal Money Market Fund) with a balance of $0 over a period of time?
Lionel Hutz
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Re: New fee for Vanguard mutual accounts

Post by Lionel Hutz »

TSintheATL wrote: Tue Aug 16, 2022 2:32 pm One question: Any problem having a settlement fund (Federal Money Market Fund) with a balance of $0 over a period of time?
If the account has a balance in other funds, zero issue.

If the entire account including the settlement fund is $0, I think there's a danger of them closing the account after a while. I don't know how long but I don't think it's any sooner than 6-12 months, maybe more.
BigJohn
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Re: New fee for Vanguard mutual accounts

Post by BigJohn »

Gigihsu wrote: Tue Aug 16, 2022 12:10 pm I am one of those who always put off the brokerage transition and only rushed to make the request after receiving the threatening email, "Transition your account for an enhanced experience and to avoid fees."

The transition was fairly smooth, but one surprise: There was an unexpected muni fund dividend distribution during the transition, My muni fund distribution was always set to transfer the payout to the money market fund. However, on the date of the brokerage transition, which was mid-month, not the usual end-of-month, it triggered a dividend distribution, and it was reinvented to buy more shares.

I double checked all the settings, and the new brokerage account setting was correct, "Dividends:Transfer to settlement fund." It was not a lot of money so I let the issue drop.
This was the muni fund leaving the old account paying the accrued dividend before being closed and sent the the new account. So you dividend in the new account will be lower this month as fewer days. Not sure why it was reinvested rather than sent to settlement account though but sounds like not a big deal.
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Re: New fee for Vanguard mutual accounts

Post by beyou »

SmileyFace wrote: Thu Aug 11, 2022 3:01 pm
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.

Nobody can say a 3 fund portfolio is the Boglehead tenant, it is one of many ideas discussed here, not as widely followed as discussed, and not even what Mr Bogle recommended (no international).

And by not needing help and any broker will do, how do you even compare or evaluate the service ? What are you calling them about if you have a 3 fund portfolio ? My point is, you can do fine at Fidelity or Vanguard with a 3 fund portfolio, same fees, same lack of need to call for help (not needed). But for the MANY that stray from 3 fund portfolio, you absolutely pay more at Fidelity. And people are frantic here over minimal Vanguard fees.

Why is this board even needed if everyone just used 3 fund portfolio, what is there to discuss ?

Why is there a long running thread about one stop shopping at Fidelity if people only had a 3 fund port there, no cash etc ?
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

Will answer you questions:
beyou wrote: Tue Aug 16, 2022 6:40 pm And by not needing help and any broker will do, how do you even compare or evaluate the service ?
Some of my evaluation criteria were things like 24/7 customer service. ETF purchases by dollar amount. Great retirement planning tools. Best web site experience. Fidelity wins on all these.
beyou wrote: Tue Aug 16, 2022 6:40 pm What are you calling them about if you have a 3 fund portfolio ?
My recent example: My Father had a simple portfolio and my Mother passed away and there was no way to remove her name off some accounts without calling. Wish I could have worked it on a Saturday but at Vangaurd I had to spend a weekday with my Father to take care of this - it took 6 hours and 3 Vanguard people to do this one task. Another example you need to call is when they convince you to transition your account to a different type and screw things up. There are multiple long customer service complaint threads with plenty of additional examples beyond these.
beyou wrote: Tue Aug 16, 2022 6:40 pm Why is this board even needed if everyone just used 3 fund portfolio, what is there to discuss ?
One good topic appears to be the best brokerage to hold you 3 fund portfolio. Some folks seem to still think Vanguard is the only option and get enlightened here to better options. Other great topics are consumer issues, insurance options, house payoff versus investing, college choices, 529 plan options, home maintenance issues, watch choices, etc.
beyou wrote: Tue Aug 16, 2022 6:40 pm Why is there a long running thread about one stop shopping at Fidelity if people only had a 3 fund port there, no cash etc ?
Other benefits beyond investing are a good reason. You need to buy things for example and Fidelity has a 2% cashback credit card. There are also many choices for 3 fund portfolios these days - fidelity has multiple fund choices and ETF options which are discussed for each of the three funds.

Hope this helps.
Last edited by SmileyFace on Wed Aug 17, 2022 10:38 am, edited 1 time in total.
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

beyou wrote: Tue Aug 16, 2022 6:40 pm And people are frantic here over minimal Vanguard fees.
Ironic you made this statement in a thread about a new fee being levied by Vanguard (for an account type that Fidelity doesn't charge a fee for).
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Re: New fee for Vanguard mutual accounts

Post by water2357 »

What is the effective date of the million dollar requirement to avoid the brokerage account $20 charge for mailed statements?

Vanguard did not list this fee change in the letter I received yesterday. They only mentioned the $20 charge for each mutual fund in a mutual fund account effective after 9/30/22.

So what is the effective date for having to change to e-delivery to avoid the fee on brokerage accounts?

Vanguard's fee notifications are anything but transparent if you literally have to check on line every day to find out what their fees are now. Very disappointing to say the least. And if they are going to set a million dollar limit then it should include all assets not just limited Vanguard assets. It's a brokerage account, not a mutual fund account. A brokerage account holds more than Vanguard mutual funds and ETFs or it's not much of a brokerage service. Do they really not want to be a brokerage? I don't get it.
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