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

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Mitchell777
Posts: 1278
Joined: Mon May 21, 2007 6:32 am

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

Post by Mitchell777 »

I'm sorry if I'm confused but I just got off the phone with Vanguard re this issue. I currently have both brokerage and non brokerage accounts with Vang. I was speaking to an off shore rep and she could not answer questions right off their "Moving your Vanguard funds to a Vanguard Brokerage Account" disclosure statement. That was before she dropped the call and had to call me back. I called several times total, sometimes I was asked for voice recognition, the next time not. Once the recording cut out. I rarely ever phone Vang but the past two times have been bad. But I digress.

1) Mutual funds set up as Avg Cost -You need to instruct Vang to switch cost basis to FIFO temporarily. Is this something that requires the transition be done by phone or can be done on line. Rep told me it's not necessary and whatever it is now will transition over.

2) If you have pension that direct deposits to a non brokerage MM fund, I assume I need to alert the pension that the account has changed.

3) The $25 fee (I have less than $5M). If I receive all documents on line, vs US mail, and move everything to brokerage, do I avoid the $25 PER FUND fee. Over 40 years I've accumulated more funds than I'd like but tax consequences keep me from selling.
DavidInMaryland
Posts: 27
Joined: Sat Mar 25, 2023 11:42 am

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

Post by DavidInMaryland »

To make matters more "fun," it looks like they are having trouble with some of the transitions. I have had a joint nonretirement "legacy" mutual fund account and a joint nonretirement brokerage account for years. With the new fee announcement, I finally tried to transition the legacy account, only to be told that I needed to call because of "Checkwriting."

I called, reported this, and the account rep was thoroughly confused and put me on hold. After 20+ minutes of hold music, when she said she'd be back in 3-4, I finally hung up.

I sent a secure message inquiring but otherwise am not sure what to do from here. If they intend to charge $25 for each of my 10+ mutual fund accounts, they need to provide some way to actually transfer them to a brokerage...
rkhusky
Posts: 17764
Joined: Thu Aug 18, 2011 8:09 pm

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

Post by rkhusky »

Mitchell777 wrote: Mon Jun 05, 2023 2:41 pm

1) Mutual funds set up as Avg Cost -You need to instruct Vang to switch cost basis to FIFO temporarily. Is this something that requires the transition be done by phone or can be done on line. Rep told me it's not necessary and whatever it is now will transition over.

2) If you have pension that direct deposits to a non brokerage MM fund, I assume I need to alert the pension that the account has changed.

3) The $25 fee (I have less than $5M). If I receive all documents on line, vs US mail, and move everything to brokerage, do I avoid the $25 PER FUND fee. Over 40 years I've accumulated more funds than I'd like but tax consequences keep me from selling.
1) FIFO is not a cost basis method - Average Cost and Actual Cost are the two cost basis methods. Everything else is a share selection method. Average Cost uses FIFO to determine which shares to sell. Perhaps Vanguard also provides FIFO with Actual Cost - I don’t know.

2) Moving to a brokerage account necessitates a new account number, which would need to be provided to whomever is providing the direct deposit.
rkhusky
Posts: 17764
Joined: Thu Aug 18, 2011 8:09 pm

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

Post by rkhusky »

HueyLD wrote: Mon Jun 05, 2023 12:12 pm
AQ wrote: Sun Jun 04, 2023 11:24 pm I haven't received such an email about new fee yet, and hope I never receive one :D

I have a MF only account with balance below 5mm. I don't mind paying anything below $100 to keep my account. But I own more than 20 Vanguard fund. Does Vanguard really charge me $500? (20*$25)?? Not sure wwhat I would do when the dreaded email finally come
You should check the message center after logging into your Vanguard account. They will not send it to your regular email accounts.

And yes your choices are:

(1) transition to brokerage accounts.

(2) increase your qualifying asset balance to at least $5M.

(3) pay the fees.

(4) move your money out of Vanguard.

If your account is a trust account, it may require you to mail in the form and their employees don’t seem to know how to assist you in converting a trust account. You need to allow yourself a lot of lead time.

Good luck as you definitely will need it.
Another option is to move to just one fund, such as TargetRetirement or LifeStrategy. But if it’s a taxable account, the taxes would likely be worse than the fees.
Selfdirected23
Posts: 4
Joined: Sun Jan 29, 2023 1:42 pm

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

Post by Selfdirected23 »

Have been a Vanguard customer for 30+ years now (though unfortunately not up to their $5 million threshold :wink: ). NEVER received any e-mails from VG regarding this change,and I am compulsive about searching/checking my spam folders regularly as I've had past issues with other important (non-VG) e-mails. Just got THREE letters yesterday (undated by VG, FWIW) which is AFTER the June 1, 2023 effective date for this fee. The THREE separate letters are for an IRA and 2 brokerage accounts (including the required separation of VG mutual funds and individual stock holding). All 3 letters stated a $25 fee PER VANGUARD ACCOUNT so this CANNOT be a simple charge to recoup mailing costs since we (DW & I) only get ONE consolidated household statement mailed from VG and already have e-delivery of fund/stock reports/proxies/etc.

Not happy at all.
Makes me openly wonder about what other fees VG has waiting in the wings.......

With all the competition in the discount brokerage & no load fund market, how can VG not see they are likely to lose customers over this? To many folks (including me) it will be the principle of the matter- and what is shows about their lack of customer respect these days. Even my national bank (only 5-figure total assets with them) still offers mailed paper statements for free.
exodusNH
Posts: 10347
Joined: Wed Jan 06, 2021 7:21 pm

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

Post by exodusNH »

Selfdirected23 wrote: Mon Jun 05, 2023 5:53 pm Have been a Vanguard customer for 30+ years now (though unfortunately not up to their $5 million threshold :wink: ). NEVER received any e-mails from VG regarding this change,and I am compulsive about searching/checking my spam folders regularly as I've had past issues with other important (non-VG) e-mails. Just got THREE letters yesterday (undated by VG, FWIW) which is AFTER the June 1, 2023 effective date for this fee. The THREE separate letters are for an IRA and 2 brokerage accounts (including the required separation of VG mutual funds and individual stock holding). All 3 letters stated a $25 fee PER VANGUARD ACCOUNT so this CANNOT be a simple charge to recoup mailing costs since we (DW & I) only get ONE consolidated household statement mailed from VG and already have e-delivery of fund/stock reports/proxies/etc.

Not happy at all.
Makes me openly wonder about what other fees VG has waiting in the wings.......

With all the competition in the discount brokerage & no load fund market, how can VG not see they are likely to lose customers over this? To many folks (including me) it will be the principle of the matter- and what is shows about their lack of customer respect these days. Even my national bank (only 5-figure total assets with them) still offers mailed paper statements for free.
You can avoid the per mutual fund fee by transitioning to a brokerage account. You can avoid the $25 yearly fee there by getting electronic statements.

They haven't offered the type of account you have for at least 10 years. The platform is old and costing them money to maintain in parallel with the brokerage platform. They want you to either leave or go to the brokerage platform, which, for the vast majority of people has enough similarities to be a non-issue.

You can hold the mutual funds in the brokerage account.
capran
Posts: 1091
Joined: Thu Feb 18, 2016 9:45 am

"new" Vanguard account service fee

Post by capran »

[This post has been merged with this on-going discussion. Moderator Pops1860]

In case there are any "old school" folks out there that like getting a monthly written statement... Today received in the mail a new account service fee notification (Vanguard) that would suggest it was effective June 1. At $25 per account unless you have 5 million, that would be an unnecessary expense, so reluctantly called to switch over to e delivery to avoid the fees. Even though the paperwork they sent says June 1, the representative said the fee starts September 1st, which would have been nice to know. Guess our "Flagship" combined 2 million isn't enough to get you a free statement.
User avatar
Cheez-It Guy
Posts: 4007
Joined: Sun Mar 03, 2019 3:20 pm

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

Post by Cheez-It Guy »

Not a paper one.
hotajax
Posts: 249
Joined: Sun Oct 28, 2018 5:36 pm
Location: Too Close to Philadelphia.

Annual [Vanguard brokerage] Account Services Fee

Post by hotajax »

[Thread merged into here --admin LadyGeek]

Rec'd my notification today that I will now be paying $25 annually per Vanguard Brokerage Account. Certain exceptions apply. Like if you have $5 million, or you have e-delivery, enrolled in Personal Advisory Service, or some other arrangement regarding trust ( that I don't understand ).

So What is an "account"? If you have a brokerage account with 4 funds, is that a $25 fee, or a $100.00 fee?

Also, what if you have old accounts with zero balances that Vanguard never closed out? Will they be subjected to the fee?

Thanks.
Last edited by hotajax on Mon Jun 05, 2023 8:03 pm, edited 1 time in total.
sport
Posts: 12094
Joined: Tue Feb 27, 2007 2:26 pm
Location: Cleveland, OH

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

Post by sport »

Cheez-It Guy wrote: Mon Jun 05, 2023 7:12 pm Not a paper one.
Is it possible to get a paper year-end statement even if all the other documents are sent electronically?
User avatar
FiveK
Posts: 15742
Joined: Sun Mar 16, 2014 2:43 pm

Re: Annual Accont Services Fee

Post by FiveK »

Having e-delivery is probably the simplest way to avoid being affected by this issue. Is that an option for you?
hotajax
Posts: 249
Joined: Sun Oct 28, 2018 5:36 pm
Location: Too Close to Philadelphia.

Re: Annual Accont Services Fee

Post by hotajax »

Nope. I want something to read and pour over during the morning coffee
Last edited by hotajax on Mon Jun 05, 2023 8:05 pm, edited 1 time in total.
gotoparks
Posts: 1149
Joined: Sat Jan 28, 2023 9:19 am

Re: Annual Accont Services Fee

Post by gotoparks »

You might want to call Vanguard and get the old account closed. Also, you can find out what their definition of an account is.
tomd37
Posts: 4098
Joined: Thu Mar 01, 2007 9:39 pm
Location: Middle Tennessee

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

Post by tomd37 »

I am assuming this $25 charge is a single annual charge to be imposed at the end of some designated quarter, that it is per account (e,g., Traditional IRA, Roth IRA, taxable investment acct and per person) in which I/we have active investments. So five different accounts between us means $125 in fees per year. At ages 88 and 86 that fee is not going to break the bank over our remaining years.
:sharebeer

PS: Wasn't the exclusion amount $1M in Vanguard investments up until recently and now it has gone to $5M?
Tom D.
exodusNH
Posts: 10347
Joined: Wed Jan 06, 2021 7:21 pm

Re: Annual Accont Services Fee

Post by exodusNH »

hotajax wrote: Mon Jun 05, 2023 8:01 pm Nope. I want something to read and pour over during the morning coffee
You could print the statement.

It's $25 per brokerage account (unique account #). Not sure if $0 accounts count.
hotajax
Posts: 249
Joined: Sun Oct 28, 2018 5:36 pm
Location: Too Close to Philadelphia.

Re: Annual [Vanguard brokerage] Account Services Fee

Post by hotajax »

Yes, but I want to know if each mutual fund or ETF in the account is treated separately and subjected to the annual fee.
exodusNH
Posts: 10347
Joined: Wed Jan 06, 2021 7:21 pm

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

Post by exodusNH »

tomd37 wrote: Mon Jun 05, 2023 8:24 pm I am assuming this $25 charge is a single annual charge to be imposed at the end of some designated quarter, that it is per account (e,g., Traditional IRA, Roth IRA, taxable investment acct and per person) in which I/we have active investments. So five different accounts between us means $125 in fees per year. At ages 88 and 86 that fee is not going to break the bank over our remaining years.
:sharebeer

PS: Wasn't the exclusion amount $1M in Vanguard investments up until recently and now it has gone to $5M?
When I first opened my account in 2019, it was $50,000. Then $1M last year.
DavidInMaryland
Posts: 27
Joined: Sat Mar 25, 2023 11:42 am

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

Post by DavidInMaryland »

exodusNH wrote: Mon Jun 05, 2023 8:31 pm
tomd37 wrote: Mon Jun 05, 2023 8:24 pm

PS: Wasn't the exclusion amount $1M in Vanguard investments up until recently and now it has gone to $5M?
Yup. And they also seem to have quietly dropped the "Flagship" terminology for high-dollar accounts. $M isn't what it used to be.
water2357
Posts: 654
Joined: Sat Sep 12, 2020 9:24 am

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

Post by water2357 »

Vanguard Mutual Fund accounts were still being opened as late as 2018. I know of an account that was opened in 2018. So, it is false to state that Vanguard has not opened these accounts in more than 10 years.

I don't recall Vanguard coming out and actually stating the last date they opened a mutual fund account for a customer. They have, however, been trying to convince customers to only open brokerage accounts, most likely for more than 10 years.
Geologist
Posts: 3057
Joined: Fri Jan 02, 2009 6:35 pm

Re: Annual [Vanguard brokerage] Account Services Fee

Post by Geologist »

hotajax wrote: Mon Jun 05, 2023 8:28 pm Yes, but I want to know if each mutual fund or ETF in the account is treated separately and subjected to the annual fee.
I think you answered your own question in your OP. You have a brokerage account, which has an account number. Investments you hold in that account (whether they are mutual funds, ETF’s, Treasury bills or whatever) don’t have a separate account number; they are part of the brokerage account. So that would be one fee.

The question about $0 accounts is interesting, but I don’t have $5 million at Vanguard and I have leftover long dormant estate accounts at $0 from my parents and haven’t received any email yet.

However, if you are unsure, it seems to me you would be better off calling Vanguard.
User avatar
LadyGeek
Site Admin
Posts: 95696
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

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

Post by LadyGeek »

I merged hotajax's thread into the ongoing discussion.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
capran
Posts: 1091
Joined: Thu Feb 18, 2016 9:45 am

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

Post by capran »

HueyLD wrote: Mon Jun 05, 2023 12:12 pm
AQ wrote: Sun Jun 04, 2023 11:24 pm I haven't received such an email about new fee yet, and hope I never receive one :D

I have a MF only account with balance below 5mm. I don't mind paying anything below $100 to keep my account. But I own more than 20 Vanguard fund. Does Vanguard really charge me $500? (20*$25)?? Not sure wwhat I would do when the dreaded email finally come
You should check the message center after logging into your Vanguard account. They will not send it to your regular email accounts.

And yes your choices are:

(1) transition to brokerage accounts.

(2) increase your qualifying asset balance to at least $5M.

(3) pay the fees.

(4) move your money out of Vanguard.

If your account is a trust account, it may require you to mail in the form and their employees don’t seem to know how to assist you in converting a trust account. You need to allow yourself a lot of lead time.

Good luck as you definitely will need it.
We called today and were told in broken English that the fee would begin on September 1, and that the only way to avoid the fee is to have 5 million or set up e statements. We have three Brokerage accounts- IRA and Roth (hers) , My Roth (converted from my IRA over the past 10 years) and a joint taxable account. All were converted to Brokerage within last 2 years, and since the only thing we have are Brokerage accounts, I wonder if the phone person was giving me wrong information. She certainly did NOT say having brokerage accounts is a way to avoid the fee. So much for their "Flagship" service. I guess it's like "5 mil is the old 2 mil".
clip651
Posts: 1584
Joined: Thu Oct 02, 2014 11:02 am

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

Post by clip651 »

water2357 wrote: Mon Jun 05, 2023 8:42 pm Vanguard Mutual Fund accounts were still being opened as late as 2018. I know of an account that was opened in 2018. So, it is false to state that Vanguard has not opened these accounts in more than 10 years.

I don't recall Vanguard coming out and actually stating the last date they opened a mutual fund account for a customer. They have, however, been trying to convince customers to only open brokerage accounts, most likely for more than 10 years.
+1

I opened a mutual fund only account at VG in 2014. My parents opened mutual fund only accounts at VG in 2015. And when opening them, they did try to encourage us to open brokerage accounts, but they didn't push too hard back then when we said that wasn't what we wanted. We were all just getting started on DIY investing and thought the mutual fund only version would be simpler to learn at the time. (We've all since opened brokerage accounts, but we haven't transitioned the original mutual fund accounts because of concerns with reports about agent authority not transferring over properly.)

So I can attest they were trying to convince customers to go with the brokerage option in 2014 and 2015, but the mutual fund accounts were still an option for new accounts then.
User avatar
Watty
Posts: 28860
Joined: Wed Oct 10, 2007 3:55 pm

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

Post by Watty »

Clarky wrote: Sat Jun 03, 2023 3:09 am Thanks for sharing. I have a feeling posters who actually do leave for other firms would not come back here to report on all the experiences they have in those greener pastures.
I left for Fidelity last September when this first came out and Fidelity has been working just fine for me

I have not been following this thread but I saw the "June 2023 update" so I was curious about just what had changed.

I did not leave just because of the fee but the final straw was when I tried calling Vanguard to ask them a question about it. I could never get through to anyone even though I called several times and I vaguely recall it would have been around a 45 minute expected wait time.

I never did get an answer to may question which was;

"There is a $20 fee per account for paper statements. (back then). I have a Roth, traditional IRA, joint taxable account and my wife has a traditional IRA at Vanguard. How many accounts is that? It could be up to 4 accounts which would be cost $80 a year, or as few as one which would have cost $20 back then."

Not being able to get ahold of a live person to ask that question made me lose any confidence that I still had in Vanguard.

Out of curiosity, does anyone know how many accounts that would be?

FYI: We really want to keep getting the paper statement so that if something happens to me my wife who is less technical could handle it better and I would have been willing to pay the $20 a year but not $80. We get the paper statements just fine from Fidelity.
Last edited by Watty on Mon Jun 05, 2023 11:29 pm, edited 1 time in total.
billaster
Posts: 2930
Joined: Wed Apr 27, 2022 2:21 pm

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

Post by billaster »

People keep bringing up the size of their accounts, but one meeeleeon dollars, while a big deal for you, is just 400 bucks a year to Vanguard -- less than many people spend at Starbucks. I'm not sure how much of a white glove experience you expect beyond a professionally managed fund.

Image
User avatar
HueyLD
Posts: 9789
Joined: Mon Jan 14, 2008 9:30 am

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

Post by HueyLD »

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

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

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

“ Brokerage accounts:

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

How you can avoid the fee:

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

“ Mutual fund-only accounts:

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

I think unhappy VG customers should complain to VG management about their anti-customer pricing and poor customer service. Any if complaints fall on deaf ears, they should be willing to walk with their feet. It is so sad that the company founded by Saint Bogle is now greedier than the Wall Street.
User avatar
Cheez-It Guy
Posts: 4007
Joined: Sun Mar 03, 2019 3:20 pm

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

Post by Cheez-It Guy »

sport wrote: Mon Jun 05, 2023 7:55 pm
Cheez-It Guy wrote: Mon Jun 05, 2023 7:12 pm Not a paper one.
Is it possible to get a paper year-end statement even if all the other documents are sent electronically?
That's a question for Vanguard if you are brave enough. They seem to be moving in an all-or-nothing direction with the possible exception of tax forms, so I kind of doubt it.
jebmke
Posts: 25476
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

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

Post by jebmke »

Cheez-It Guy wrote: Tue Jun 06, 2023 6:08 am
sport wrote: Mon Jun 05, 2023 7:55 pm
Cheez-It Guy wrote: Mon Jun 05, 2023 7:12 pm Not a paper one.
Is it possible to get a paper year-end statement even if all the other documents are sent electronically?
That's a question for Vanguard if you are brave enough. They seem to be moving in an all-or-nothing direction with the possible exception of tax forms, so I kind of doubt it.
Until 2022 I would have said yes. I was getting a December Household Statement in the mail but all other docs were electronic. I did not get a year-end statement for 2022.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
prd1982
Posts: 1786
Joined: Sun Jan 08, 2017 3:43 pm

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

Post by prd1982 »

HueyLD wrote: Tue Jun 06, 2023 5:28 am
capran wrote: Mon Jun 05, 2023 10:31 pmWe called today and were told in broken English that the fee would begin on September 1, and that the only way to avoid the fee is to have 5 million or set up e statements. We have three Brokerage accounts- IRA and Roth (hers) , My Roth (converted from my IRA over the past 10 years) and a joint taxable account. All were converted to Brokerage within last 2 years, and since the only thing we have are Brokerage accounts, I wonder if the phone person was giving me wrong information. She certainly did NOT say having brokerage accounts is a way to avoid the fee. So much for their "Flagship" service. I guess it's like "5 mil is the old 2 mil".
It is unfortunate that you were given misleading information by a poorly trained third party servicer …
I’m confused. What misleading information was the OP given?
User avatar
Cheez-It Guy
Posts: 4007
Joined: Sun Mar 03, 2019 3:20 pm

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

Post by Cheez-It Guy »

HueyLD wrote: Tue Jun 06, 2023 5:28 am I think unhappy VG customers should complain to VG management about their anti-customer pricing and poor customer service. Any if complaints fall on deaf ears, they should be willing to walk with their feet. It is so sad that the company founded by Saint Bogle is now greedier than the Wall Street.
Why do you ascribe it to greed? Who is benefitting? Vanguard's corporate history (and embedded culture) is one of ruthless cost-cutting. It's their business model. All Vanguard investors have been the financial beneficiaries of this. They've gotten much of the low-hanging fruit already, but now some of their actions start to affect retail investors more personally or create minor pain points to drive a desired outcome. They provide a very easy way to avoid the fee. Again, where is the greed?
exodusNH
Posts: 10347
Joined: Wed Jan 06, 2021 7:21 pm

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

Post by exodusNH »

HueyLD wrote: Tue Jun 06, 2023 5:28 am I think unhappy VG customers should complain to VG management about their anti-customer pricing and poor customer service. Any if complaints fall on deaf ears, they should be willing to walk with their feet. It is so sad that the company founded by Saint Bogle is now greedier than the Wall Street.
It's hardly greed.

They want people off the mutual fund platform. They've asked. They've cajoled. Now they're using a stick. They can't force people to move, so they will continue to make it more and more uncomfortable to be on that platform.

As for the brokerage account, I guarantee you it costs more than $25 per year to mail out statements. Have you seen the cost of postage? That alone is probably half that fee. Then you've got the paper, printing, envelopes, and people to oversee the process.

Vanguard's messaging on this is terrible. They seem to go out of their way to make this as miserable of a process as possible to everyone involved. In particular, there are a number of conditions that make automatic conversion impossible.
hotajax
Posts: 249
Joined: Sun Oct 28, 2018 5:36 pm
Location: Too Close to Philadelphia.

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

Post by hotajax »

Hello, Fidelity. I'm interested in transferring my family's business.

Curious: Are there any Flagship benefits left from the past practices of $1 Million to become "flagship"? I can't think of single one. V is just not ethical enough to tell you how your privileges have disappeared.
Last edited by hotajax on Tue Jun 06, 2023 8:28 am, edited 1 time in total.
hotajax
Posts: 249
Joined: Sun Oct 28, 2018 5:36 pm
Location: Too Close to Philadelphia.

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

Post by hotajax »

"Final Answer": I called V. I asked specifically about accounts vs funds. If your dashboard has something that says "account", then that is what you will pay the $25 annual fee for. It doesn't matter how many mutual funds or ETF's are in that account. $25 bucks. It's a steal for postage, paper, ink, and maintenance of a printer at home.

Accounts under the "old" sytem, the ones you had before V beat you in the head with a stick to make you switch to a brokerage account, are not subject to the annual fee.

I was told this by an individual who clearly has English as a first language, and is stationed in Malvern, PA. I don't believe there was any language barrier.
exodusNH
Posts: 10347
Joined: Wed Jan 06, 2021 7:21 pm

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

Post by exodusNH »

hotajax wrote: Tue Jun 06, 2023 8:24 am Accounts under the "old" sytem, the ones you had before V beat you in the head with a stick to make you switch to a brokerage account, are not subject to the annual fee.

I was told this by an individual who clearly has English as a first language, and is stationed in Malvern, PA. I don't believe there was any language barrier.
I don't think this is true.

On the old platform, each mutual fund you owned was a separate "account." If you had a taxable account, an IRA, and a rIRA, and had the same three mutual funds in each account, you were subject to $180 in annual fees unless you had $1M in Vanguard assets.

They've now raised the fee to $25 each and the waiver amount to $5M.

They really want people off that platform.

If you look here: https://investor.vanguard.com/client-be ... count-fees, it's pretty clearly spelled out.

One are of ambiguity, though, is that it says you can avoid the fee on the brokerage account by opting for electronic statements. Since it specifically says "brokerage", that would imply that the only way to avoid the old platform fee would be to have $5M.
capran
Posts: 1091
Joined: Thu Feb 18, 2016 9:45 am

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

Post by capran »

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

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

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

“ Brokerage accounts:

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

How you can avoid the fee:

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

“ Mutual fund-only accounts:

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

I think unhappy VG customers should complain to VG management about their anti-customer pricing and poor customer service. Any if complaints fall on deaf ears, they should be willing to walk with their feet. It is so sad that the company founded by Saint Bogle is now greedier than the Wall Street.
Interesting. The letter that we got from Vanguard is quite different. It says There are only 4 ways to avoid the fee: 1) sign up for e delivery,2) enrolled in an advisory service with Vanguard 3)5 mil, 4) clients who have an organization or trust registered under an employee identification number. Hopefully later this year we'll be re-doing trust to a simple which will make it easier to do changes.
User avatar
FrugalInvestor
Posts: 6214
Joined: Thu Nov 06, 2008 11:20 pm

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

Post by FrugalInvestor »

I've had accounts (mutual funds) with Vanguard since the 1980s. When my wife and I relocated in 2014 and had our estate documents updated the attorney we worked with instructed us to title our taxable account in the name of our revocable trust. When I called Vanguard to ask about this they said it could not be done without the account being converted to brokerage. I wasn't happy and held off for awhile but realized that a 'win' for me (not transitioning) would likely just create more problems for my wife or our heirs down the road so I went ahead with the change. The transition went fairly smoothly although the information I was given up front was not completely accurate which caused some inconvenience - but that was fairly easily overcome. Vanguard did not push me to transition our IRAs so I held off on that.

Since the initial conversion I've been thinking about the possible hassles (primarily for others) down the road if the IRAs were not converted so I went ahead and did that online Friday afternoon. I did call in to ask a couple of questions and spoke with a representative who seemed to be well trained. The voice prompts indicated that she was part of the "transition team." She offered to lead me through the steps and I allowed her to do that for both my wife's and my IRAs.

When the online process was complete the representative said that the conversion process should be complete within 1-2 business days and at that time I should call in and ask that our authorized agent designations be re-established on one another's accounts. She checked to make sure that Vanguard had a record of us filling out the necessary forms and said that they were on file so it would just be a matter of calling in.

The conversions were not complete on Monday or Tuesday but appear to be done this morning (Wednesday). So far everything looks good. I'll call today or tomorrow to re-establish the agent authorizations.

Although I liked the old system and much preferred the old reporting I can certainly live with the current system. Since all we own and plan to own are mutual funds, I can see no benefit to me of having brokerage accounts, but I understand that is where the investment world has gone. As we age I can imagine the day that we would like to have annual statements and tax forms 'pushed' to us through the mail as I see many people struggle with technology as they age. If/when that day comes for us I suspect it will be a small problem in the grand scheme of things and we'll just bite the bullet and pay for the service.
Have a plan, stay the course and simplify. Then ignore the noise!
Booper
Posts: 330
Joined: Mon Apr 16, 2012 6:26 pm

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

Post by Booper »

It's pretty crazy that this might wind up being what leads me to move my life savings to another company.

I had serious customer service problems with Vanguard ~2 years ago. There was an important issue that I had to wait on the phone for an hour on hold for. That happened more than once. And last year the upgrade to the brokerage accounts was not as smooth for me as they advertised it would be. These were annoying things for me, but Vanguard had built up so much goodwill with me that I didn't leave. My previous brokerage was Charles Schwab, and I lost money with them because they aggressively pitched their "Yield Plus" product to me which wound up imploding.

But I really find value in getting paper statements. I make it a point to try and read everything they send to me. My system is to take the envelopes and put them on my desk and read them when I get around to it. I get so much email that I think if I relied on that then things would slip through the cracks. And I work (and play) in front of a screen for so much of my life that I like having the paper when it comes to this.

Of course, someone will say "Well, you could just make it a point to print things out as soon as you get them." Of course that's true. But I don't want to. I like my current system. And the thought of paying $25 / account / year to keep it seems weird to me. I mean, will Fidelity charge that fee? I think someone earlier said they don't.

I just called Vanguard to ask them if they would waive the fee for me. I have a substantial nest egg but less than the $5M they quote as needed to waive the fee. The said no. I said "I am seriously considering moving to Fidelity over this. Are you sure you won't waive the fee even knowing that?" They said no.

What's particularly grating about this for me is that no other company has put me in this position. Some have offered a discount if I switched to digital statements. It's pretty uncomfortable that the company which I literally entrust with my life savings (and which I pay a % of the assets to do so) is the first to do this.

I guess I have until September to decide if I really care enough about this to execute on it.
prd1982
Posts: 1786
Joined: Sun Jan 08, 2017 3:43 pm

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

Post by prd1982 »

Booper wrote: Tue Jun 06, 2023 10:20 am
What's particularly grating about this for me is that no other company has put me in this position. Some have offered a discount if I switched to digital statements. It's pretty uncomfortable that the company which I literally entrust with my life savings (and which I pay a % of the assets to do so) is the first to do this.

Would it feel better if VG said they where charging everyone $25, but would waive the charge if you converted to paperless?
Booper
Posts: 330
Joined: Mon Apr 16, 2012 6:26 pm

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

Post by Booper »

prd1982 wrote: Tue Jun 06, 2023 10:46 am
Booper wrote: Tue Jun 06, 2023 10:20 am
What's particularly grating about this for me is that no other company has put me in this position. Some have offered a discount if I switched to digital statements. It's pretty uncomfortable that the company which I literally entrust with my life savings (and which I pay a % of the assets to do so) is the first to do this.

Would it feel better if VG said they where charging everyone $25, but would waive the charge if you converted to paperless?
Well, their primary way of charging me money is via an Expense Ratio for the funds I purchase. So if they offered a discount in the ER for doing that it might feel more congruous. Something about an explicit cash charge for paper statements when they've never charged me in that way, or for that thing, seems weird.
Broken Man 1999
Posts: 8626
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, near Champa Bay !

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

Post by Broken Man 1999 »

Booper wrote: Tue Jun 06, 2023 10:20 am It's pretty crazy that this might wind up being what leads me to move my life savings to another company.

I had serious customer service problems with Vanguard ~2 years ago. There was an important issue that I had to wait on the phone for an hour on hold for. That happened more than once. And last year the upgrade to the brokerage accounts was not as smooth for me as they advertised it would be. These were annoying things for me, but Vanguard had built up so much goodwill with me that I didn't leave. My previous brokerage was Charles Schwab, and I lost money with them because they aggressively pitched their "Yield Plus" product to me which wound up imploding.

But I really find value in getting paper statements. I make it a point to try and read everything they send to me. My system is to take the envelopes and put them on my desk and read them when I get around to it. I get so much email that I think if I relied on that then things would slip through the cracks. And I work (and play) in front of a screen for so much of my life that I like having the paper when it comes to this.

Of course, someone will say "Well, you could just make it a point to print things out as soon as you get them." Of course that's true. But I don't want to. I like my current system. And the thought of paying $25 / account / year to keep it seems weird to me. I mean, will Fidelity charge that fee? I think someone earlier said they don't.

I just called Vanguard to ask them if they would waive the fee for me. I have a substantial nest egg but less than the $5M they quote as needed to waive the fee. The said no. I said "I am seriously considering moving to Fidelity over this. Are you sure you won't waive the fee even knowing that?" They said no.

What's particularly grating about this for me is that no other company has put me in this position. Some have offered a discount if I switched to digital statements. It's pretty uncomfortable that the company which I literally entrust with my life savings (and which I pay a % of the assets to do so) is the first to do this.

I guess I have until September to decide if I really care enough about this to execute on it.
I'm very surprised you haven't ran into this issue somewhere, already. I first ran into having to pay for statements years ago at my credit union. Currently paper statements cost $6.00/month. In fairness to the credit union, they aren't spreading expenses over 30 million customers like Vanguard.

Vanguard will continue to squeeze expenses out where they can, and add more services that potentially could bring in more dollars.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
hotajax
Posts: 249
Joined: Sun Oct 28, 2018 5:36 pm
Location: Too Close to Philadelphia.

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

Post by hotajax »

If you don't have $5 milliion, you're simply a burr under their saddle. You have to accept the fact that at one time, you helped them grow, but now you're the ugly girl at the party, and it's time to walk. No use complaining, ever since Bill McNabb left, the company has a new corporate mission to degrade service. They had to know what will happen.
Last edited by hotajax on Tue Jun 06, 2023 12:00 pm, edited 2 times in total.
chinchin
Posts: 830
Joined: Tue Nov 14, 2017 7:02 pm

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

Post by chinchin »

As a Vanguard Owner (TM) at Fidelity, I approve of Vanguard Brokerage Services charging their clients for paper statements, so I don't have to pay for it.
Last edited by chinchin on Tue Jun 06, 2023 12:00 pm, edited 2 times in total.
not financial advice
hotajax
Posts: 249
Joined: Sun Oct 28, 2018 5:36 pm
Location: Too Close to Philadelphia.

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

Post by hotajax »

Not sure i it has as much to do with charging you for individual accounts as much as it is a corporate-wide de-emphasis of customer service. Seriously, how long until they hit you with account fees, even if you go e-statements? How many Flagship bennies do you have left? I don't have $5 million, and I cannot think of a single Flagship bennie I still enjoy for investing $1 million.
Booper
Posts: 330
Joined: Mon Apr 16, 2012 6:26 pm

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

Post by Booper »

chinchin wrote: Tue Jun 06, 2023 11:55 am As a Vanguard Owner (TM) at Fidelity, I approve of Vanguard Brokerage Services charging their clients for paper statements, so I don't have to pay for it.
Does Fidelity charge you to buy and sell Vanguard funds?
User avatar
jeffyscott
Posts: 13486
Joined: Tue Feb 27, 2007 8:12 am

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

Post by jeffyscott »

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

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

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

“ Brokerage accounts:

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

How you can avoid the fee:

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

“ Mutual fund-only accounts:

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

I think unhappy VG customers should complain to VG management about their anti-customer pricing and poor customer service. Any if complaints fall on deaf ears, they should be willing to walk with their feet. It is so sad that the company founded by Saint Bogle is now greedier than the Wall Street.
Interesting. The letter that we got from Vanguard is quite different. It says There are only 4 ways to avoid the fee: 1) sign up for e delivery,2) enrolled in an advisory service with Vanguard 3)5 mil, 4) clients who have an organization or trust registered under an employee identification number. Hopefully later this year we'll be re-doing trust to a simple which will make it easier to do changes.
There's no difference at all, that's exactly what it says at the link for brokerage accounts.
Booper
Posts: 330
Joined: Mon Apr 16, 2012 6:26 pm

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

Post by Booper »

hotajax wrote: Tue Jun 06, 2023 11:46 am If you don't have $5 milliion, you're simply a burr under their saddle. You have to accept the fact that at one time, you helped them grow, but now you're the ugly girl at the party, and it's time to walk. No use complaining, ever since Bill McNabb left, the company has a new corporate mission to degrade service. They had to know what will happen.
I don't know who Bill McNabb is (was?). Can you fill me in, and how your experience with company changed once he left?
User avatar
Harry Livermore
Posts: 1937
Joined: Thu Apr 04, 2019 5:32 am

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

Post by Harry Livermore »

Booper wrote: Tue Jun 06, 2023 12:33 pm
hotajax wrote: Tue Jun 06, 2023 11:46 am If you don't have $5 milliion, you're simply a burr under their saddle. You have to accept the fact that at one time, you helped them grow, but now you're the ugly girl at the party, and it's time to walk. No use complaining, ever since Bill McNabb left, the company has a new corporate mission to degrade service. They had to know what will happen.
I don't know who Bill McNabb is (was?). Can you fill me in, and how your experience with company changed once he left?
He was the CEO right after Bogle, and before the current CEO, Tim Buckley.
Cheers
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

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

Post by anon_investor »

Booper wrote: Tue Jun 06, 2023 12:13 pm
chinchin wrote: Tue Jun 06, 2023 11:55 am As a Vanguard Owner (TM) at Fidelity, I approve of Vanguard Brokerage Services charging their clients for paper statements, so I don't have to pay for it.
Does Fidelity charge you to buy and sell Vanguard funds?
Fidelity charge a fee to buy (automatic dividend reinvestment is free) but not to sell. For index funds I have transferred out of Vanguard, I just did a tax free conversion to ETF before transferring. ETFs are free to trade at most brokerages, including Fidelity.
User avatar
jeffyscott
Posts: 13486
Joined: Tue Feb 27, 2007 8:12 am

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

Post by jeffyscott »

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

And long ago, you could choose paperless for all but that year end consolidated statement and tax forms and qualify for fee waivers (I think at that time $50K or $10K per fund was all you needed to avoid fees, even with paper everything).
Last edited by jeffyscott on Tue Jun 06, 2023 12:52 pm, edited 1 time in total.
User avatar
tuningfork
Posts: 885
Joined: Wed Oct 30, 2013 8:30 pm

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

Post by tuningfork »

If you're concerned about this fee at Vanguard, you may be able to transfer your accounts to Fidelity, get a bonus for transferring if your balance is large enough, and still get paper statements if you wish.

I just transferred all my Vanguard accounts to Fidelity (not because of this fee, but consolidating all my accounts to Fidelity is something I had been considering for some time and finally did last week). My Fidelity rep gave me a $3000 incentive for transferring $2 million. I get paperless statements at Fidelity so I have no idea if they charge for paper.
Post Reply