LadyGeek wrote: ↑Thu Aug 25, 2022 6:22 am
Cool.
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.