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$$ Vanguard Raising Fees $$

racecar
  |     |   628 posts since 2014

I recently received an email (below) explaining all the new and increased fees at ("low-cost") Vanguard. The most disappointing one is $100 to close account or transfer any funds to another institution -- whether it be IRA or not.

Just curious: does Fidelity charge a transfer or closure fee?

If you want to avoid these fees, you have a month or two until they go into effect.

=======================

Effective July 1, 2024, the following commission schedule changes will take effect:

Broker-assisted commission: A $25 broker-assisted commission will be charged for each Vanguard mutual fund1 and Vanguard ETF® (exchange-traded fund) trade placed over the phone and for closing transactions placed by Vanguard Brokerage Services® to cover a margin call or satisfy an outstanding debt owed in your brokerage account.* This broker-assisted commission is consistent with our existing policy on trading stocks and other products.

Certificate deposit fee: A $100 processing fee (per CUSIP) will be charged for the deposit of physical share certificates into your brokerage account.

Class action service fee: With the introduction of this new service in which Vanguard Brokerage will facilitate filing claims on behalf of clients in an attempt to recover class action settlement funds, a fee of 20% will be deducted from these recovered funds prior to their deposit into your brokerage account. See the Notice of Amendment to the Vanguard Brokerage Account Agreement ("Account Agreement Amendment") for details on the service.

Foreign securities and American Depositary Receipts (ADRs) dividends fee: A fee of 1% on the gross dividend amount will be charged when a dividend is paid on a foreign or ADR asset held in U.S. dollars.

Restricted security legend removal fee: A $250 processing fee may be charged for research and removal of a restriction on a security held in your brokerage account.

Account closure and transfer fee: A $100 processing fee may be charged for account closure or transfer of account assets to another firm.**

Effective June 1, 2024, the following commission schedule change will take effect:

The tax filing fee for master limited partnerships (MLPs) held in an IRA will change from $300 to $500 per account.

You can obtain an updated copy of the Vanguard Brokerage Services commission and fee schedules here and read more about these important account agreement updates in the Account Agreement Amendment.

Please note that the updates discussed in this communication apply to all your accounts maintained with Vanguard Brokerage Services.

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Rickny
  |     |   1,297 posts since 2017
$100 processing fee may be charged for account closure or transfer of account assets to another firm.**ì

"May be charged".  Wonder what this means and the details of the **?  I have a good sum with Vanguard  but haven't gotten this email.  Most of the items wouldn't pertain to me.  I have no paper certificates, do trades online,
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Rickny
  |     |   1,297 posts since 2017
Just got it. The ** fir closure The fee will not be assessed for clients who hold at least $5 million in qualifying Vanguard assets
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111
  |     |   672 posts since 2019
Received the infamous email earlier today. A lot of chatter about this at Bogleheads forum as you might expect -New Vanguard Fees? - Bogleheads.org
Many of them talk about moving to Fidelity.  So much for the original low-fee, cost-conscious investment company!
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txFish1
  |     |   479 posts since 2023
racecar One of my neighbors who are a couple in their mid 80s had a joint brokerage acct and also 2 IRA accts with Fidelity moved their assets out of Fidelity into a bank that offers the CDARS program as he was losing some mental awareness and thought it was best for his situation and he told me he was not charged any fees to close all of his accounts. This was last December but I do not think it has changed since then.
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racecar
  |     |   628 posts since 2014
I called Vanguard to ask for clarification since there seems to be some discrepancy in the online forums about the $100 transfer out fee. On a recorded line I was told it's only if you close the account out completely at the transfer. Not, say, if you want to transfer $5k out here and $6k out there and still have some left.

So if one really wanted to move the entire amount out, I suppose they could leave $5 in to avoid the $100 fee (although, would there then be a Vanguard "low balance" fee? I don't know).

I was ready to move everything to Fidelity if the $100 transfer fee was for each time (rather than just when you completely close it out), but a lot of my holdings are VG funds so for right now I'll stay at VG -- though that can change at any time, and I don't blame anyone for moving to Fidelity at this point, as their CSR is leaps and bounds above VG -- and as far as fees, it's as if Fidelity and VG of 20 years ago completely switched places.
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me1004
  |     |   1,381 posts since 2010
I don’t like this. However, most of the fees can be avoided, several simply by doing it yourself in your online account online rather than having a broker do it. You can avoid the $25 annual maintenance fee simply by taking e-statements and documents (of having $5 million with them!) .

But that new $100 closure fee! I find that outrageous! And as Rickny says, “May be charged?” Why is that not explained anywhere? And the “**,” which is not listed below or anywhere, what that might be about.

I will say, I was pushed by fees last summer to change my Vanguard account to a brokerage account, and I have found it horrible ever since. All the materials are so poorly presented, poorly written and poorly formatted, it’s difficult to follow them — and that goes for these latest changes. And they try to clip you left and right for fees.

The document explaining them is 16 pages long — but that’s because they put the version of the new documents first and then put the entire things all over again as it was as of last June 1, 2023. That seems to have confused the OP, who said you have “a month or two” until they go into effect. No, actually you have two months, until July 1, 2024. The June date below — look at it again, it is 2023. Yes, I know, that entire 8-page section should not be there! Again poor presentation, I see no need for the entire document to be put in there again as it was before these changes. A good presentation would have said something like “New closure fee added,” or “Charge for this brokerage transaction changed form 0 to $25.” That would be far more clear, and would avoid us having to read the entire thing all over again to find out what is changed and what is not.

I THINK the only thing that will affect me is the new $100 closure fee – of course, depending on what “may be charged” means.

Yes, Vanguard is no longer the house built by Bogle. It now tries to clip you for fees left and right. What is so irritating is that Bogle brought in no load, fee-free mutual funds, but now a no load fund gets hit with a $100 load at closure – that is just a load by another name. One of the serious reasons I chose Vanguard was its no load approach. Not I’m stuck with that anyway. They took my money on the basis of no load, and now they sneak one in by another name! That just hits me as being very similar to breach of contract. I can't really get out, it would cost me a fortune now to do so, as the majority I have with them after several decades is capital gains, it would be a huge tax hit to take out all at once.

I can’t recommend Vanguard to anyone any more.

Racecar, good thought about avoiding the $100 closer fee by instead leaving $5 in the fund. However, you forgot that they have minimum amounts that must be in the funds, and those are more than $5 or $100. I look forward to your next idea – where there’s a will, there’s a way.

Well, wait a minute. Are they applying that fee to closure of individual mutual funds or to your overall brokerage account? It says for “account” closure, not “fund” closure. If the overall account, then your $5 approach might work. I don’t think there is any minimum for the money market fund, so leave that open, which would leave the brokerage account open. :) Cash out the funds to the money market, and write a check for all but $5. Or $1. And then never look back.
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fliegeroh
  |     |   116 posts since 2022
I got it too. All the "financial services" are deteriorating in service and raising their fees.
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w00d00w
  |     |   360 posts since 2012
my takeaway from this announcement is no matter which brokerage is used, it's best to keep track of the fee structure and how it affects future investment plans. unfortunately, there are also "hidden" fees to keep track of such as Schwab designating a very low interest bearing account as its brokerage sweep account. something else to consider for those moving accounts from Vanguard to another brokerage is how the new broker will handle any Vanguard mutual fund shares that are transferred. Transferred Vanguard ETFs should pose no problem, but there might be fees at the new broker to sell in the future any Vanguard mutual fund shares that are transferred now. If fees will apply at the new broker, perhaps best to convert those Vanguard mutual fund shares to ETF shares (which Vanguard allows for some of its fund offerings) or liquidate the holding prior to transfer.  Could be tricky as liquidating a mutual fund in a taxable account prior to transfer would have tax consequences.
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