Vanguard restructuring account fees

Vanguard is restructuring its account fees. Instead of the mix of: $10 custodial fee on IRAs with balance of less than $5000 $10 maint. fee on index funds with balance of less than $10000 $10 cust fee on ESAs with balance of less than $5000 $10 low-balance fee on all non-ret accounts with balance of less than $2500

Vanguard will instead have a $20 per fund fee on all funds with balances of less than $10000. The fee can be waived by registering for acct access on vanguard.com and requesting electronic delivery of statements, confirmations, reports, and prospecti.

Reply to
Rich Carreiro
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As a Vanguard investor I dislike this change. I could do without paper prospectuses, but I value paper account statements. The marginal cost of their sending quarterly account statements must be a lot less than $20 (I'd guess less than $10), so I think they are trying to bully me in to doing what they think is right. My wife has a traditional IRA that we are no longer eligible to contribute to on a deductible basis, and the IRA value is below $10K. I think I'll move it to Fidelity, a company which has slightly higher overall fees overall but which has a better attitude towards its investors IMO.

Vanguard ought to "grandfather" current accounts so that their fees do not rise.

Reply to
Beliavsky

Electronic statements won't hinder your ability to have paper account statements. You can download a statement via Adobe and print it out. Also, old statements are available online should you lose one. I think it's a great convenience.

Elizabeth Richardson

Reply to
Elizabeth Richardson

I'd probably not make that guess.

$10,000 * 0.001 (10 basis points of higher management fees) == $10.

Unless the management cost differential (depends on your choice of funds, etc) is pretty small, Vanguard may still be saving you money even if you pay it out of pocket. It depends on what investments you have there.

NTF funds all kick back to Fidelity (or whatever brokerage "supermarket" you are using) to compensate them for the NTF status and for dealing with all the account statements and such - and those kick-backs are way higher than 10bps - more like 35 bps.

You may or may not come out ahead by moving, but there is no free lunch.

Reply to
BreadWithSpam

On May 24, 10:45 am, Rich Carreiro

Interestingly, while I didn't see (or missed) it mentioned in the (physical) mailing I got about the change, on a FAQ about the changes on vanguard.com, it says that the fee will also be waived if your total mutual fund balance at Vanguard is $100K or more.

Reply to
Rich Carreiro

Elizabeth Richardson wrote on [Thu, 24 May 2007 15:29:12 -0500]:

I believe signing up for electronic with an annual paper statement qualifies

Reply to
Justin

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