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

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Watty
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Re: New fee for Vanguard mutual accounts

Post by Watty »

jeffyscott wrote: Tue Aug 30, 2022 1:22 pm ^ There's no fee to sell at Fidelity, so they didn't waive anything and there was no need to call or sell the vanguard fund. But it sounds like you prefer the Fidelity fund anyway.

Mutual fund transaction fees at Fidelity and Schwab are charged for purchase only.
I just looked that up on the Fidelity web site and it says that there is a $49.95 purchase fee for non-Fidelity mutual funds and $0 redemption but there is a foot note that also says.
4. Certain funds will have a transaction fee of $75. To identify any applicable transaction fees associated with the purchase of a given fund, please refer to the "Fees and Distributions" tab on the individual fund page on Fidelity.com
Which is what I saw when I first looked it it. I would suspect that you are right for most non-Fidelity mutual funds but not for Vanguard funds.

I still need to move my wife's Vanguard account to Fidelity so I will move it to cash before the transfer.
Last edited by Watty on Tue Aug 30, 2022 2:03 pm, edited 1 time in total.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

eager to learn wrote: Tue Aug 30, 2022 1:59 pm From that link posted it appears there are 2 ways to avoid the $20 fee.

(1). sign up for electronic delivery for your monthly statements

-OR-

(2). have at least $1million in your MF account.
jeffyscott wrote: Tue Aug 30, 2022 1:28 pm
exodusNH wrote: Tue Aug 30, 2022 1:24 pm
eager to learn wrote: Tue Aug 30, 2022 12:54 pm <snip> ... because the fee can be avoided by accepting electronic delivery of correspondence...<snip>

Are you referring to the $20 fee for the old MF account? Can one simply contact Vanguard and say you opt out of monthly printed statements and then keep your old MF account without incurring the $20 fee?

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Re: New fee for Vanguard mutual accounts

Post by sycamore » Thu Aug 25, 2022 1:31 pm

Munir wrote: ↑Thu Aug 25, 2022 12:59 pm
It looks like a number of investors who are unhappy with Vanguard, including our Boglehead administrator, are congregating on this specific conversation. I'd like to also hear from contrarian views.

The fee situation does not impact my happiness with Vanguard one way or another.

Why? Because I didn't need to be nudged/shoved from the old mutual fund platform to the brokerage platform -- I did that years ago.

Also because the fee can be avoided by accepting electronic delivery of correspondence. Not only am I okay with that, it's actually my preference -- less paper in the mail for me to shred or throw away, less tree killing in the first place, etc.
Avoiding the $20 fee per mutual fund held cannot be avoided unless you have $1M in Vanguard assets. They want you off this platform so that it can live its life out at a data center on the farm.

The $20 fee per brokerage account (which can hold many mutual funds, stocks, Treasuries, ETFs) can be avoided by accepting electronic delivery or having enough assets.
Yes and, in fact, it appears that paperless does absolutely nothing wrt fees for MF only accounts.

https://investor.vanguard.com/client-be ... count-fees
I think #1 applies to brokerage accounts, not MF
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

Watty wrote: Tue Aug 30, 2022 2:02 pm
jeffyscott wrote: Tue Aug 30, 2022 1:22 pm ^ There's no fee to sell at Fidelity, so they didn't waive anything and there was no need to call or sell the vanguard fund. But it sounds like you prefer the Fidelity fund anyway.

Mutual fund transaction fees at Fidelity and Schwab are charged for purchase only.
I just looked that up on the Fidelity web site and it says that there is a $49.95 purchase fee for non-Fidelity mutual funds and $0 redemption but there is a foot note that also says.
4. Certain funds will have a transaction fee of $75. To identify any applicable transaction fees associated with the purchase of a given fund, please refer to the "Fees and Distributions" tab on the individual fund page on Fidelity.com
Which is what I saw when I first looked it it. I would suspect that you are right for most non-Fidelity mutual funds but not for Vanguard funds.

I still need to move my wife's Vanguard account to Fidelity so I will move it to cash before the transfer.
There should not be a fee to sell. They're $75 to buy. Dividend reinvestment might be $5.
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

Watty wrote: Tue Aug 30, 2022 2:02 pm
jeffyscott wrote: Tue Aug 30, 2022 1:22 pm ^ There's no fee to sell at Fidelity, so they didn't waive anything and there was no need to call or sell the vanguard fund. But it sounds like you prefer the Fidelity fund anyway.

Mutual fund transaction fees at Fidelity and Schwab are charged for purchase only.
I just looked that up on the Fidelity web site and it says that there is a $49.95 purchase fee for non-Fidelity mutual funds and $0 redemption but there is a foot note that also says.
4. Certain funds will have a transaction fee of $75. To identify any applicable transaction fees associated with the purchase of a given fund, please refer to the "Fees and Distributions" tab on the individual fund page on Fidelity.com
Which is what I saw when I first looked it it. I would suspect that you are right for most non-Fidelity mutual funds but not for Vanguard funds.

I still need to move my wife's Vanguard account to Fidelity so I will move it to cash before the transfer.
It's a $75 purchase fee for vanguard, just as it it states in what you copied:

Certain funds will have a transaction fee of $75. To identify any applicable transaction fees associated with the purchase of a given fund...

You can also see that even more clearly stated in the footnote on the fund page for any Vanguard fund:
You will only be charged a transaction fee when you buy a FundsNetwork TF fund, not when you sell one.
https://fundresearch.fidelity.com/mutua ... /922908728
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

jebmke wrote: Tue Aug 30, 2022 2:03 pm
eager to learn wrote: Tue Aug 30, 2022 1:59 pm From that link posted it appears there are 2 ways to avoid the $20 fee.

(1). sign up for electronic delivery for your monthly statements

-OR-

(2). have at least $1million in your MF account.

I think #1 applies to brokerage accounts, not MF
Yep:
you can eliminate the fee on brokerage accounts by signing up for e-delivery
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Watty
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Re: New fee for Vanguard mutual accounts

Post by Watty »

jeffyscott wrote: Tue Aug 30, 2022 2:26 pm
Watty wrote: Tue Aug 30, 2022 2:02 pm
jeffyscott wrote: Tue Aug 30, 2022 1:22 pm ^ There's no fee to sell at Fidelity, so they didn't waive anything and there was no need to call or sell the vanguard fund. But it sounds like you prefer the Fidelity fund anyway.

Mutual fund transaction fees at Fidelity and Schwab are charged for purchase only.
I just looked that up on the Fidelity web site and it says that there is a $49.95 purchase fee for non-Fidelity mutual funds and $0 redemption but there is a foot note that also says.
4. Certain funds will have a transaction fee of $75. To identify any applicable transaction fees associated with the purchase of a given fund, please refer to the "Fees and Distributions" tab on the individual fund page on Fidelity.com
Which is what I saw when I first looked it it. I would suspect that you are right for most non-Fidelity mutual funds but not for Vanguard funds.

I still need to move my wife's Vanguard account to Fidelity so I will move it to cash before the transfer.
It's a $75 purchase fee for vanguard, just as it it states in what you copied:

Certain funds will have a transaction fee of $75. To identify any applicable transaction fees associated with the purchase of a given fund...

You can also see that even more clearly stated in the footnote on the fund page for any Vanguard fund:
You will only be charged a transaction fee when you buy a FundsNetwork TF fund, not when you sell one.
https://fundresearch.fidelity.com/mutua ... /922908728
Thanks for figuring that out. :beer
3funder
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Re: New fee for Vanguard mutual accounts

Post by 3funder »

I believe you can avoid the fee in a taxable account if you receive electronic delivery of statements, etc.
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criticalmass
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Re: New fee for Vanguard mutual accounts

Post by criticalmass »

3funder wrote: Tue Aug 30, 2022 2:58 pm I believe you can avoid the fee in a taxable account if you receive electronic delivery of statements, etc.
Are you sure about that? The communications to some indicate the fee will apply for all mutual accounts (i.e. non brokerage accounts) regardless of statement mail preferences.
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Re: New fee for Vanguard mutual accounts

Post by LadyGeek »

The fee applies to all accounts, regardless of type. My Mom's taxable account (the fund inside the account) was identified for the fee hit.
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3funder
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Re: New fee for Vanguard mutual accounts

Post by 3funder »

LadyGeek wrote: Tue Aug 30, 2022 3:21 pm The fee applies to all accounts, regardless of type. My Mom's taxable account (the fund inside the account) was identified for the fee hit.
I see now. It doesn't matter if you invest in a mutual fund or an ETF; what matters is if the account is a mutual fund or brokerage account.
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exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

3funder wrote: Tue Aug 30, 2022 3:33 pm
LadyGeek wrote: Tue Aug 30, 2022 3:21 pm The fee applies to all accounts, regardless of type. My Mom's taxable account (the fund inside the account) was identified for the fee hit.
I see now. It doesn't matter if you invest in a mutual fund or an ETF; what matters is if the account is a mutual fund or brokerage account.
Correct.

For "reasons", on the legacy mutual fund platform, every mutual fund you hold is an "account". If you have a taxable "account" with VTSAX and VTIAX, and an IRA "account" with VTSAX and VTIAX, you have four accounts and will have $80 in fees. Those fees would only be waived if you had $1M in Vanguard assets.

On the brokerage platform, with the same "account" holdings, you would either have $0 in fees (electronic statements) or $40 (monthly printed statements.)
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

3funder wrote: Tue Aug 30, 2022 3:33 pm
LadyGeek wrote: Tue Aug 30, 2022 3:21 pm The fee applies to all accounts, regardless of type. My Mom's taxable account (the fund inside the account) was identified for the fee hit.
I see now. It doesn't matter if you invest in a mutual fund or an ETF; what matters is if the account is a mutual fund or brokerage account.
There are fees for getting paper documents. There are now apparently fees for being on the mutual-fund-only platform. (Note that you can't buy ETF's on the mutual fund platform).
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Re: New fee for Vanguard mutual accounts

Post by eager to learn »

Poorly drafted letter from Vanguard. It says you will be charged a $20 fee if you remain on the MF-only platform.

Next paragraph states ..."if you transition your account to the VBA platform you can (emphasis added) avoid paying this account service fee.

It doesn't tell you how to avoid this fee (electing e-statements on VBA accounts only) just how to migrate your account to the VBA.

On the web site, it states ... "If you’re the primary account owner, you can eliminate the fee on brokerage accounts (emphasis added) by signing up for e-delivery of statements and the annual privacy policy notice; ... <snip>
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Re: New fee for Vanguard mutual accounts

Post by dharrythomas »

Once they get us all on one platform, then the push for ETFs begins in earnest. The more in ETFs vs Funds, the bigger the cost differential. The bigger the cost differential, the more people will move. A virtuous cycle or a death spiral for the mutual funds, take your pick. Apparently, the two are not going to coexist peacefully, so Vanguard decided to disrupt itself.

At least since they are share classes of the same fund, it will not create a taxable event.
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

dharrythomas wrote: Tue Aug 30, 2022 5:49 pm Once they get us all on one platform, then the push for ETFs begins in earnest. The more in ETFs vs Funds, the bigger the cost differential. The bigger the cost differential, the more people will move. A virtuous cycle or a death spiral for the mutual funds, take your pick. Apparently, the two are not going to coexist peacefully, so Vanguard decided to disrupt itself.

At least since they are share classes of the same fund, it will not create a taxable event.
Given the volume of holdings in mutual funds they have via 401k plans, your fears will likely never be recognized in your lifetime.
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Re: New fee for Vanguard mutual accounts

Post by dharrythomas »

exodusNH wrote: Tue Aug 30, 2022 5:51 pm
dharrythomas wrote: Tue Aug 30, 2022 5:49 pm Once they get us all on one platform, then the push for ETFs begins in earnest. The more in ETFs vs Funds, the bigger the cost differential. The bigger the cost differential, the more people will move. A virtuous cycle or a death spiral for the mutual funds, take your pick. Apparently, the two are not going to coexist peacefully, so Vanguard decided to disrupt itself.

At least since they are share classes of the same fund, it will not create a taxable event.
Given the volume of holdings in mutual funds they have via 401k plans, your fears will likely never be recognized in your lifetime.
Maybe not, but I was an adult when K-Mart passed Sears to become the largest retailer in the US. We saw WalMart coming, but not Amazon. Talk about disruption. With me it is not a fear, I believe the only constant is ever accelerating change and that survival requires adaptation.

The day after I transferred to the brokerage, I started getting emails pumping ETFs.

The form that Vanguard is forced to adopt for the captive audience within a plan may not be offered to to a retail investor. And they may just not change their balanced funds. This is just a thought experiment.
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Re: New fee for Vanguard mutual accounts

Post by elpollo »

per letter today, no more RMD service for 2023 if one has 'vanguard classic' IRA account, one must convert to VBS by Sept 9th or something

so that just leaves taxable for myself, to drag my feet on, I prefer VGC cause I can comprehend the statements clearer,

"cash in" "cash out" to me, is something designed by brokers, not people

edit: actually it seems to say sept 9 is deadline for a final RMD service possible, which ends in Oct 2022, and seems there will be *no such service to calculate and distribute for IRAs converted to the Brokerage side, is how I read it.

so, guess now I'm wondering if Schwab or Fidelity does *do "calculate and distribute" services for RMDs ?
Last edited by elpollo on Wed Aug 31, 2022 6:37 pm, edited 2 times in total.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Why foot-drag though? You can obviously operate on the brokerage platform.
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Re: New fee for Vanguard mutual accounts

Post by rossington »

elpollo wrote: Wed Aug 31, 2022 3:31 pm per letter today, no more RMD service for 2023 if one has 'vanguard classic' IRA account, one must convert to VBS by Sept 9th or something

so that just leaves taxable for myself, to drag my feet on, I prefer VGC cause I can comprehend the statements clearer,

"cash in" "cash out" to me, is something designed by brokers, not people

edit: actually it seems to say sept 9 is deadline for a final RMD service possible, which ends in Oct 2022, and seems there will be *no such service to calculate and distribute for IRAs converted to the Brokerage side, is how I read it.

so, guess now I'm wondering if Schwab or Fidelity does *do "calculate and distribute" services for RMDs ?
The transition process is really easy and recently took less than 24hrs to complete.
The Brokerage platform is easy to understand and use too.
If if you are considering moving I would make the transition now while there is still plenty of time.
*FYI I called Vanguard this evening and they picked up on the FIRST RING.*
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Re: New fee for Vanguard mutual accounts

Post by Gigihsu »

I checked my account balance this morning (9/1) and did not see any distributions from my muni fund for August in the brokerage account. I was puzzled because as far as I remembered, the muni fund always paid out the dividends at the end of the month.

I then realized there is money showing up in the brokerage Settlement fund under "Total credits and debits," and "Funds available to trade." If my math is right, it is my muni fund distribution for the reminder of August, but it is not in my muni fund's activity.

When I tried to exchange the settlement fund to another fund, the transaction page (the same interface as the old mutual fund account era) showed 0 balance for the settlement fund. I couldn't proceed even if there was money in "Funds available to trade."

Wonder if we elect the option, "Dividends:Transfer to settlement fund," there will always be an odd "waiting period" to reflect on the fund activities and access the cash in the new brokerage account.
BigJohn wrote: Tue Aug 16, 2022 4:58 pm
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 jeffyscott »

^You don't enter that as exchange. Just enter a buy order for whatever you want to buy.
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elpollo
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Re: New fee for Vanguard mutual accounts

Post by elpollo »

Gigihsu wrote: Thu Sep 01, 2022 1:04 pm I checked my account balance this morning (9/1) and did not see any distributions from my muni fund for August in the brokerage account. I was puzzled because as far as I remembered, the muni fund always paid out the dividends at the end of the month.

I then realized there is money showing up in the brokerage Settlement fund under "Total credits and debits," and "Funds available to trade." If my math is right, it is my muni fund distribution for the reminder of August, but it is not in my muni fund's activity.

When I tried to exchange the settlement fund to another fund, the transaction page (the same interface as the old mutual fund account era) showed 0 balance for the settlement fund. I couldn't proceed even if there was money in "Funds available to trade."

Wonder if we elect the option, "Dividends:Transfer to settlement fund," there will always be an odd "waiting period" to reflect on the fund activities and access the cash in the new brokerage account.
BigJohn wrote: Tue Aug 16, 2022 4:58 pm
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.
kind of my point, I'm much more likely to make a mistake, if I'm expected to adapt to brokerage speak,

and can't clearly track my account because of the same on the statements, if its evitable for everyone, I'll just wait till it is and/or consider the other companies for the basic services which VG insists on removing/shrinkin , though maybe the statements might appear similar ?

; I have a letter that this was all going to be required for 2021, so
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

It's really not very hard to make this adaptation. Deciding to go down with the ship seems almost certain to be fraught with ongoing and increasing frustration.
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Re: New fee for Vanguard mutual accounts

Post by patrick »

Cheez-It Guy wrote: Thu Sep 01, 2022 2:07 pm It's really not very hard to make this adaptation. Deciding to go down with the ship seems almost certain to be fraught with ongoing and increasing frustration.
Vanguard has not allowed opening new mutual fund accounts for many years. They have also touted the purported benefits of the change for quite a while. It probably would not be very hard for most people to make the change, but such people are probably mostly on the brokerage already. As others have already pointed out, it is a big problem for some people, who are likely to be the main ones sticking with the non brokerage accounts.

As for myself, I used to work in the financial sector for an employer who would not allow brokerage accounts anywhere but the one brokerage they chose. For that reason I had to use a Vanguard mutual fund only account. I have since left that job but stuck with the mutual fund account in case I return to working in finance later. However, it does not seem worth paying extra just in case I go back.

Fidelity and Schwab both have mutual funds with slightly lower expenses than Vanguard funds, and using ETFs opens even more options. From my perspective, the ability to have a mutual fund only account was the only advantage of Vanguard. I will indeed switch to a brokerage account but it may not be a Vanguard one.
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Re: New fee for Vanguard mutual accounts

Post by LadyGeek »

elpollo wrote: Wed Aug 31, 2022 3:31 pm per letter today, no more RMD service for 2023 if one has 'vanguard classic' IRA account, one must convert to VBS by Sept 9th or something

so that just leaves taxable for myself, to drag my feet on, I prefer VGC cause I can comprehend the statements clearer,

"cash in" "cash out" to me, is something designed by brokers, not people

edit: actually it seems to say sept 9 is deadline for a final RMD service possible, which ends in Oct 2022, and seems there will be *no such service to calculate and distribute for IRAs converted to the Brokerage side, is how I read it.

so, guess now I'm wondering if Schwab or Fidelity does *do "calculate and distribute" services for RMDs ?
Termination of RMD services was not in the letter I received for my Mom, who does receive RMDs. Is this information available online so I can confirm this is indeed the case?

This is not good at all, as I suspect that many who don't do the conversion will miss their expected automated distribution and get in hot water with the IRS.
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

patrick wrote: Thu Sep 01, 2022 2:52 pm Fidelity and Schwab both have mutual funds with slightly lower expenses than Vanguard funds, and using ETFs opens even more options. From my perspective, the ability to have a mutual fund only account was the only advantage of Vanguard. I will indeed switch to a brokerage account but it may not be a Vanguard one.
From other posts here, I think you can still get a mutual fund account with Fidelity. You have to call, though.
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elpollo
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Re: New fee for Vanguard mutual accounts

Post by elpollo »

LadyGeek wrote: Thu Sep 01, 2022 2:54 pm
elpollo wrote: Wed Aug 31, 2022 3:31 pm per letter today, no more RMD service for 2023 if one has 'vanguard classic' IRA account, one must convert to VBS by Sept 9th or something

so that just leaves taxable for myself, to drag my feet on, I prefer VGC cause I can comprehend the statements clearer,

"cash in" "cash out" to me, is something designed by brokers, not people

edit: actually it seems to say sept 9 is deadline for a final RMD service possible, which ends in Oct 2022, and seems there will be *no such service to calculate and distribute for IRAs converted to the Brokerage side, is how I read it.

so, guess now I'm wondering if Schwab or Fidelity does *do "calculate and distribute" services for RMDs ?
Termination of RMD services was not in the letter I received for my Mom, who does receive RMDs. Is this information available online so I can confirm this is indeed the case?

This is not good at all, as I suspect that many who don't do the conversion will miss their expected automated distribution and get in hot water with the IRS.
edit
VG said, VBA will have the service for 2023 ; apparently not needing to setup yearly each time.
"legacy" side will have to mail a check or do a direct bank dep, no VG settlement

sorry for the edits
Last edited by elpollo on Thu Sep 01, 2022 4:52 pm, edited 2 times in total.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

patrick wrote: Thu Sep 01, 2022 2:52 pm
Cheez-It Guy wrote: Thu Sep 01, 2022 2:07 pm It's really not very hard to make this adaptation. Deciding to go down with the ship seems almost certain to be fraught with ongoing and increasing frustration.
Vanguard has not allowed opening new mutual fund accounts for many years. They have also touted the purported benefits of the change for quite a while. It probably would not be very hard for most people to make the change, but such people are probably mostly on the brokerage already. As others have already pointed out, it is a big problem for some people, who are likely to be the main ones sticking with the non brokerage accounts.

As for myself, I used to work in the financial sector for an employer who would not allow brokerage accounts anywhere but the one brokerage they chose. For that reason I had to use a Vanguard mutual fund only account. I have since left that job but stuck with the mutual fund account in case I return to working in finance later. However, it does not seem worth paying extra just in case I go back.

Fidelity and Schwab both have mutual funds with slightly lower expenses than Vanguard funds, and using ETFs opens even more options. From my perspective, the ability to have a mutual fund only account was the only advantage of Vanguard. I will indeed switch to a brokerage account but it may not be a Vanguard one.
Some valid points here, but I'm just judging based on the majority of explanations I see. MANY do not seem to have a good reason or in some cases seem wholly unaware of the prods spanning the last decade. It's continually surprising. Like they just want to see how long they can ride it or want to see how long they can jam up the works because they don't like being told what to do. Does that make them contrarians, or. . . ?
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Re: New fee for Vanguard mutual accounts

Post by cas »

LadyGeek wrote: Thu Sep 01, 2022 2:54 pm
elpollo wrote: Wed Aug 31, 2022 3:31 pm per letter today, no more RMD service for 2023 if one has 'vanguard classic' IRA account, one must convert to VBS by Sept 9th or something

[. . .]
Termination of RMD services was not in the letter I received for my Mom, who does receive RMDs. Is this information available online so I can confirm this is indeed the case?

This is not good at all, as I suspect that many who don't do the conversion will miss their expected automated distribution and get in hot water with the IRS.
Before people get too enthused about discussing this topic here, there is another entire thread dedicated to what seems to be the same letter: RMD distributions no longer transferred to non-retirement accounts

(Except people over there don't seem to have concerns that are as extensive as those elpollo has, so I can't guarantee it is the same letter. But I think it probably is.)
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

patrick wrote: Thu Sep 01, 2022 2:52 pm
Vanguard has not allowed opening new mutual fund accounts for many years.
For whatever reason I was obsessed with this conversion topic a couple of years ago and read nearly every post on it (I blame Cheeze-It :happy whose points of view I was trying to balance with my own.) Someone did report back in late 2020 they were still able to call and open a Mutual Fund account - they just had to provide the reason they wanted to (regulatory requirement). I am not sure if this is still the case but not so long ago (Approx 18 months) they were still opening new accounts which was one of the facts that made me believe the platform was a long way from retirement (and perhaps it still is - although with fees rolling in - I do agree it's time to move on now if you can).
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Re: New fee for Vanguard mutual accounts

Post by Gigihsu »

jeffyscott wrote: Thu Sep 01, 2022 1:35 pm ^You don't enter that as exchange. Just enter a buy order for whatever you want to buy.
Thanks for pointing out that I should use the "buy" function instead of exchange for the settlement fund. I probably will never figure it out myself.
There is no excuse why this distribution is not reflected in my muni fund activity though.
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Re: New fee for Vanguard mutual accounts

Post by elpollo »

cas wrote: Thu Sep 01, 2022 4:09 pm
LadyGeek wrote: Thu Sep 01, 2022 2:54 pm
elpollo wrote: Wed Aug 31, 2022 3:31 pm per letter today, no more RMD service for 2023 if one has 'vanguard classic' IRA account, one must convert to VBS by Sept 9th or something

[. . .]
Termination of RMD services was not in the letter I received for my Mom, who does receive RMDs. Is this information available online so I can confirm this is indeed the case?

This is not good at all, as I suspect that many who don't do the conversion will miss their expected automated distribution and get in hot water with the IRS.
Before people get too enthused about discussing this topic here, there is another entire thread dedicated to what seems to be the same letter: RMD distributions no longer transferred to non-retirement accounts

(Except people over there don't seem to have concerns that are as extensive as those elpollo has, so I can't guarantee it is the same letter. But I think it probably is.)
same letter, same concerns from what I read ; now resolved; VBA will calculate, but can't set up distribute till next year, thanks for the notice of the other thread
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

Gigihsu wrote: Thu Sep 01, 2022 4:40 pm
jeffyscott wrote: Thu Sep 01, 2022 1:35 pm ^You don't enter that as exchange. Just enter a buy order for whatever you want to buy.
Thanks for pointing out that I should use the "buy" function instead of exchange for the settlement fund. I probably will never figure it out myself.
There is no excuse why this distribution is not reflected in my muni fund activity though.
Bond fund dividends in a brokerage account are posted to the account on the first business day after the end of the month.

For example, when I look at my January, 2021 Statement, the December, 2020 dividends for my bond funds in the brokerage account were posted on January 4, 2021. I suspect if I had looked at the web site on January 4, it would have shown as a credit due but not actually in the settlement fund. Had I looked on January 5, it would have been deposited in the Settlement fund.

Note that while the dividend is posted in January, 2021 it will be included as 2020 dividends on a 1099-DIV. Thus there are two reconciling entries (among others) to reconcile the statement to your tax docs.

Could this be what you are seeing?
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Re: New fee for Vanguard mutual accounts

Post by TropikThunder »

Cheez-It Guy wrote: Thu Sep 01, 2022 3:27 pm because they don't like being told what to do.
I remember a car thread here a couple years ago where one commenter was adamant that they would never buy a car with automatic headlights because they didn’t want to cede control over when the lights were on.
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Re: New fee for Vanguard mutual accounts

Post by patrick »

Cheez-It Guy wrote: Thu Sep 01, 2022 3:27 pmSome valid points here, but I'm just judging based on the majority of explanations I see. MANY do not seem to have a good reason or in some cases seem wholly unaware of the prods spanning the last decade. It's continually surprising. Like they just want to see how long they can ride it or want to see how long they can jam up the works because they don't like being told what to do. Does that make them contrarians, or. . . ?
Plenty of people dislike being told they must change. Nonetheless, while I admit not reading every single post, it seemed to me that the critical posts generally did point to specific disadvantages.

Switching financial institutions due to a negative changes is not a big deal in itself. For instance, most of my cash had been in HMBradley, but I moved it all out earlier this year because they lowered their rates while bond interest rates increased. I'll do the same thing again if comparable problems happen with my remaining accounts.

However, some of us may have felt that Vanguard was special and very different from all the other financial institutions. This may be part of the reason that some favored Vanguard over alternatives with slightly lower expense ratios. It could also have led to an expectation they would favor long-term investing over using brokerage accounts that facilitate frequent trading, with the push to switch to brokerage seen as betraying that legacy.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

TropikThunder wrote: Thu Sep 01, 2022 5:17 pm
Cheez-It Guy wrote: Thu Sep 01, 2022 3:27 pm because they don't like being told what to do.
I remember a car thread here a couple years ago where one commenter was adamant that they would never buy a car with automatic headlights because they didn’t want to cede control over when the lights were on.
Haha! My car has automatic lights, but also manual settings. I choose to use the manual options, but I wouldn't refuse to purchase a vehicle if it only had automatic.
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Re: New fee for Vanguard mutual accounts

Post by BigJohn »

elpollo wrote: Thu Sep 01, 2022 1:53 pm
Gigihsu wrote: Thu Sep 01, 2022 1:04 pm I checked my account balance this morning (9/1) and did not see any distributions from my muni fund for August in the brokerage account. I was puzzled because as far as I remembered, the muni fund always paid out the dividends at the end of the month.

I then realized there is money showing up in the brokerage Settlement fund under "Total credits and debits," and "Funds available to trade." If my math is right, it is my muni fund distribution for the reminder of August, but it is not in my muni fund's activity.

When I tried to exchange the settlement fund to another fund, the transaction page (the same interface as the old mutual fund account era) showed 0 balance for the settlement fund. I couldn't proceed even if there was money in "Funds available to trade."

Wonder if we elect the option, "Dividends:Transfer to settlement fund," there will always be an odd "waiting period" to reflect on the fund activities and access the cash in the new brokerage account.
BigJohn wrote: Tue Aug 16, 2022 4:58 pm
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.
kind of my point, I'm much more likely to make a mistake, if I'm expected to adapt to brokerage speak,

and can't clearly track my account because of the same on the statements, if its evitable for everyone, I'll just wait till it is and/or consider the other companies for the basic services which VG insists on removing/shrinkin , though maybe the statements might appear similar ?

; I have a letter that this was all going to be required for 2021, so
I’ll agree that all the double entry in/out can make the transaction page a bit busy but you get used to it pretty quickly and ignore those in/out transactions. From what I’ve read, brokerage accounts elsewhere are organized the same so tough to avoid eventually. To your worry though, exactly what mistake do you think this might cause you to make? What about the potential for a mistake as VG reduces functionality in the old MF accounts.

Honestly, the hand writing is on the wall that VG is going to make staying on the old platform increasingly difficult. Few people like change but wouldn’t it be better to do it on your own terms now than stay frustrated but end up in the same place (at VG or elsewhere) in a year or two?
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

patrick wrote: Thu Sep 01, 2022 5:34 pm
Cheez-It Guy wrote: Thu Sep 01, 2022 3:27 pmSome valid points here, but I'm just judging based on the majority of explanations I see. MANY do not seem to have a good reason or in some cases seem wholly unaware of the prods spanning the last decade. It's continually surprising. Like they just want to see how long they can ride it or want to see how long they can jam up the works because they don't like being told what to do. Does that make them contrarians, or. . . ?
Plenty of people dislike being told they must change. Nonetheless, while I admit not reading every single post, it seemed to me that the critical posts generally did point to specific disadvantages.
I think these posts are looking at things backwards. I don't need to point to any disadvantages, just to the lack of any advantages. The default is to leave things as they are, and for the mutual account fund that we had until recently, there were no advantages to changing it to a brokerage account. There was no interest in investing in anything but Vanguard mutual funds in that account.

Then over time, it became the case that if we did want to make it a brokerage account, it would not be at Vanguard. And that if we decided to consolidate accounts at one broker, it would not be Vanguard. The new fees meant it was time to make that change and consolidate accounts elsewhere. (I do think it was very poor customer service to provide only 6 weeks notice of the new fees, though.)

Of course, things have changed over the years. At one time there were more advantages to having an account (of some variety) at Vanguard, but with the exception of the ability to buy Admiral shares of managed funds, I can't think of any that remain for us.
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

patrick wrote: Thu Sep 01, 2022 5:34 pm Plenty of people dislike being told they must change. Nonetheless, while I admit not reading every single post, it seemed to me that the critical posts generally did point to specific disadvantages.
There were a couple of convenience features that aren't possible on the brokerage account: redirecting dividends from fund A to fund B and having your RMD automatically pushed into another mutual fund in a taxable mutual fund account.

The end of year statement had a summary of the transactions that occurred over the year.

The real pain is for people that work in a financial services role where they cannot have a brokerage account that's not monitored by their employer. People understandably object to their employer having such a detailed view into this finances. Even more annoying is that you might have to hold the brokerage account at a designated brokerage, even if they charge high fees.
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Re: New fee for Vanguard mutual accounts

Post by ruud »

Gigihsu wrote: Thu Sep 01, 2022 1:04 pm I checked my account balance this morning (9/1) and did not see any distributions from my muni fund for August in the brokerage account. I was puzzled because as far as I remembered, the muni fund always paid out the dividends at the end of the month.

I then realized there is money showing up in the brokerage Settlement fund under "Total credits and debits," and "Funds available to trade." If my math is right, it is my muni fund distribution for the reminder of August, but it is not in my muni fund's activity.

When I tried to exchange the settlement fund to another fund, the transaction page (the same interface as the old mutual fund account era) showed 0 balance for the settlement fund. I couldn't proceed even if there was money in "Funds available to trade."

Wonder if we elect the option, "Dividends:Transfer to settlement fund," there will always be an odd "waiting period" to reflect on the fund activities and access the cash in the new brokerage account.
On the day of the dividend distribution (first of the month for bond mutual funds, could be a different day for ETFs or stock funds), the distribution shows up in “funds available to trade”. The next morning the transaction is reflected in transaction history and settlement fund balance.

The distribution was made, and if you didn’t buy anything with it, at the end of the day it was “swept” into the settlement fund.

The same happens if you sell an ETF: the proceeds are available for another trade right away, and will be reflected in the settlement fund balance 2 days later (due to the T+2 settlement for stocks/ETFs). Until then they’re listed as a credit and included in the “funds available to trade”.

This is simply how brokerage accounts work.
.
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Re: New fee for Vanguard mutual accounts

Post by BigJohn »

patrick wrote: Thu Sep 01, 2022 5:34 pm
Cheez-It Guy wrote: Thu Sep 01, 2022 3:27 pmSome valid points here, but I'm just judging based on the majority of explanations I see. MANY do not seem to have a good reason or in some cases seem wholly unaware of the prods spanning the last decade. It's continually surprising. Like they just want to see how long they can ride it or want to see how long they can jam up the works because they don't like being told what to do. Does that make them contrarians, or. . . ?
Plenty of people dislike being told they must change. Nonetheless, while I admit not reading every single post, it seemed to me that the critical posts generally did point to specific disadvantages.

Switching financial institutions due to a negative changes is not a big deal in itself. For instance, most of my cash had been in HMBradley, but I moved it all out earlier this year because they lowered their rates while bond interest rates increased. I'll do the same thing again if comparable problems happen with my remaining accounts.

However, some of us may have felt that Vanguard was special and very different from all the other financial institutions. This may be part of the reason that some favored Vanguard over alternatives with slightly lower expense ratios. It could also have led to an expectation they would favor long-term investing over using brokerage accounts that facilitate frequent trading, with the push to switch to brokerage seen as betraying that legacy.
I like VG. Been there for many years when all other alternatives were much more expensive. I haven’t had any significant problems with their customer service or or other issues. I have no plans to move. But…..

I have no delusions that they are any more paternalistic or caring than any other mega-corp. They are a huge company that is making a sound business decisions just like I would expect. For those still struggling with these changes, the first step is to recognize this and act accordingly. You can; 1) convert now at VG, 2) move your $$$ elsewhere, 3) wait as the MF platform becomes more and more painful to use and then do 1 or 2 later after months/years more frustration. It’s really that simple so pick whichever of these is the least painful option for you but stop waiting for VG to act like anything other than a mega-corp.
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Re: New fee for Vanguard mutual accounts

Post by LadyGeek »

LadyGeek wrote: Thu Aug 25, 2022 7:42 am
cas wrote: Thu Aug 25, 2022 7:15 am
LadyGeek wrote: Thu Aug 25, 2022 6:22 am If I can swing the paperwork for my POA, I'm going to redesign my brokerage and switch to Fidelity.
LadyGeek - Here's another post from the last couple of months with a detailed first hand account of someone dealing with both new accounts at Vanguard under an existing full agent authorization and with durable POA for new accounts at Fidelity. It is long, due to the detailed description, so I'll just link it rather than quote it.
Thanks! I'll report back happens with my situation.
The move to Fidelity has started. I have an update here: Re: Finding out your Power of Attorney is useless
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Re: New fee for Vanguard mutual accounts

Post by mkc »

gonggong wrote: Thu Aug 18, 2022 2:58 pm Alright, so my latest issue with this transition. My wife transitioned her account, and I'm positive the webpage even mentioned it would retain any existing agent authorizations. So despite other people in this thread saying to call in to transition, I figured VG knew what they were doing since it specifically mentioned it, and I could transition via the website. I was happy to see I received a message in my Message Center saying to confirm my full agent authorization. Link even takes me to a page showing her new Roth IRA brokerage account #, and I have to answer 3 questions. Easy, right? Except after I submit, I get this error message:
This link is no longer active.
This agent link has either expired, or already been used. You can view the accounts that you have access to here.
Now I've been on a call (mostly on hold) with VG for an hour. First representative I spoke to said I would not be able to view her accounts from mine (despite seeing her Trad IRA and my parents' accounts), so he thankfully transferred me to someone else who actually knows what agent authorization is. Still on hold while Rep #2's checking stuff out. Not exactly making me feel confident. If they're gonna make me go through notarization again, I may have to transfer to Fido.

Ok, just finished up the call. He said that since they found our old full agent authorization form from over a decade ago, they can go ahead and enable it on her newly transitioned Roth IRA account. I'll wait the 3-5 days he thinks it'll take, but if it doesn't work, this may be my last straw.

Just thought I'd pass along my experience. Looks like the same problem TrumanTown experienced in this thread: viewtopic.php?p=6662875#p6662875
TrumanTown hasn't been online in several months and hasn't posted an update.... Did you confirm this was fixed in your case as the rep on the call assured you would happen?
Last edited by mkc on Sat Sep 03, 2022 3:58 pm, edited 1 time in total.
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Re: New fee for Vanguard mutual accounts

Post by LadyGeek »

I wanted to provide an update to my earlier post:
LadyGeek wrote: Tue Aug 23, 2022 8:18 am I have POA for my Mom's account and recently changed her mailing address to mine. (She's in a CCRC and can no longer receive mail.) Yesterday, I received her letter. This morning, I received an email.

As POA, I don't have direct access to her account and couldn't make the change online. I called Vanguard. After waiting 37 minutes on hold, the rep wasn't able to make the change online, either. So, he's mailing me a form to do this by mail. I'll get one form for each account (tax-deferred, taxable).
(To summarize subsequent posts, I've started the process to transfer my Mom's funds to Fidelity under POA.)

Today, I received the brokerage service forms to convert my Mom's accounts from mutual-fund only to the Vanguard Brokerage Service in the mail. What did I receive? Two totally blank paper applications for new brokerage accounts. One for retirement accounts, one for non-retirement accounts.

The forms allow for someone to sign as custodian / guardian for an incapacitated individual. As stated on Page 2 of Moving your Vanguard funds to a Vanguard Brokerage Account, I am very confident that my current POA will not be recognized.

Additionally, I don't see any forms which will transfer funds internally within Vanguard. I'm not going to fund a new brokerage services IRA account from an existing mutual-fund IRA account. To me, that's a distribution which is a hard-stop No. (I may be wrong, but I'm not willing to go to this level of effort to find out if it can be done as a transfer-in-kind.)

I've run out of options to stay with Vanguard. I tried. I'm done.
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Re: New fee for Vanguard mutual accounts

Post by LadyGeek »

I moved a discussion regarding the creation of custom transaction reports to a new thread. See: Moving to Vanguard brokerage platform - How do I create custom transaction reports?
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Re: New fee for Vanguard mutual accounts

Post by Kenkat »

Kenkat wrote: Tue Aug 09, 2022 8:54 am I got the email this morning so I went online to complete the transfer. I was able to successfully get my rollover IRA account transferred but got an error on the joint taxable account transfer with a message to call. The message was related to a direct deposit setup I had with the US Treasury for tax refunds.

I went through the automated system to get routed - the magic words to get to the right spot were “Account Transition”. When I previously had said “Brokerage Account Transition” it thought I wanted to do a transfer. Anyway, once I got through this process, about 30 seconds, someone answered immediately. He walked me through deactivating the direct deposit but he was still unable to complete the transition so he opened a ticket for me for further investigation.

My guess is that there are a large number of transactions being processed and System A has not yet told System B that everything is now good. I will give it a couple of days and try again at some point.
Just an update from page 2 - I still have not been able to transition my taxable mutual fund account. I tried every couple of days or so to convert (as instructed by the rep) but it always errored out. Now I no longer get the transition option at all so I suppose I will have to call back.

Anyone else who has tried to transition online but are still receiving an error?
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Re: New fee for Vanguard mutual accounts

Post by bltn »

LadyGeek wrote: Thu Aug 25, 2022 6:22 am
retire2022 wrote: Wed Aug 24, 2022 10:51 pm BH got a mention in the Barrons' article (paywall)

https://www.barrons.com/advisor/article ... 1661283029
Cool. 8-) The article makes an excellent point. Portfolio expenses include not just those you pay for an advisor, e.g. AUM fees, but for all expenses. That includes administrative and trading fees.

Paraphrasing the article's examples, you are paying 0.10% in administrative fees for a $20,000 account. That's far more than the 0.03% expense ratio of Vanguard's S&P 500 ETF (VOO) and a lot of other funds.

I also like the Vanguard spokesperson's statement "we are redesigning an already-existing account service fee".

If I can swing the paperwork for my POA, I'm going to redesign my brokerage and switch to Fidelity.
I m not sure I understand what would be the drawback to switching a traditional mutual fund account to a brokerage account, and avoiding the administrative fees.

Just prior to retiring, I consolidated all of my investments into my Vanguard account and my Fidelity account, the majority being with Vanguard.

My Fidelity account increase drew some attention from the local office. During a meeting with an advisor, the suggestion was made that I use one if the active management programs or that I buy a delayed annuity. Although I ve maintained the majority of my investment with Fidelity in a stock index fund, for the first few years I was still advised about other active management opportunities. Now Fidelity seems to realize that I m an incurable passive investor and the sales pitches have stopped.

Other than a complimentary evaluation of my investments with Vanguard with the offer for PAS services, shortly after some funds were transferred there, no further sales pitches have occurred. Maybe Vanguard is changing, but I always thought that approach reflected their investor ownership model with no financial incentives for active management. And I realize that without Vanguard making the investing public aware of the benefits of no load passive investment funds with low ER s, we might still be paying 8.5% front end loads, and high trade costs.

I maintain funds at both brokerages, in case a future problem at one place, that I can t foresee now, would tie up my money at that brokerage. However, I have recommended to my wife and children, that if something happens to prevent my management of our family finances, that all funds be transferred to Vanguard to simplify matters.

Future changes may make Vanguard less desirable as the holder of our investments, but I don t think that has happened yet.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Or maybe future changes will make Vanguard MORE desirable.
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Re: New fee for Vanguard mutual accounts

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Re: New fee for Vanguard mutual accounts

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