One of Clark's favorites goes bad? Vanguard

Vanguard Brokerage just sent out an update with tons of new fees for Brokerage services, but notably, they will now charge to $100 to close or transfer an account if your account has <$5 million in qualifying Vanguard assets.
Other highlights include

  • $25 fee for broker assisted buys of Mutual funds or ETF
  • $100 fee for deposit of physical cert
  • 20% fee for class action recovery
  • 1% fee on dividends for foreign or ADR funds held in US dollar
  • $250 Restricted security legend removal fee
  • $100 fee to close
  • $100 fee to transfer out
  • MLP tax filing fee $300-$500

I am trying to put my arms around all this but it doesn’t sound good.

I also recently got a Vanguard email saying my SEP and Simple Accounts were being transferred to “Ascensus”, who I’ve never heard of.

It had always been some comfortable dealing with Vanguard - I do not think I will be comfortable with what is coming.

It does appear a bit anti-consumer…especially those with smaller accounts. The MLP tax filing fee seems ridiculous and account transfer and closing fees are very high. I have seen HSA providers try and create a walled garden by adding account termination fees…but not brokerage accounts.

Did they offer a period where you could get out before the fees take place?

I have to say that I don’t understand what any of these fees are for!
I’m just a regular person with mutual funds, though a few years back VG forced me to change to a brokerage account which I don’t use because I don’t understand ETFs!!

For the regular, not-fancy investor, do these fees mean anything?

I think the fees apply to accounts with less than $1M. The required amount for Flagship Services is $1M to $5M.

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Vanguard email:

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

“**The fee will not be assessed for clients who hold at least $5 million in qualifying
Vanguard assets.”

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Sounds like a good time for Schwab or Fidelity to introduce a new marketing campaign.

This applies to all existing accounts and goes into effect June 1 so a little over a month to make a decision on if you want to close your brokerage account without fees.

A lot of these fees are fairly typical for brokerages that are not one of Clark’s favorites. However, the closure fee/transfer fee is pretty unusual especially for any account under $5 million

Vanguard Flagship accounts are not getting the email.

Yeah they are, yesterday (May 1, 2024).

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If you are interested in more detailed info and ways to avoid the new fees, here are two sources I found useful.

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Yes they are
I don’t really see much advantage to being “Flagship” anymore.

Broker assist buys are no charge. The other charges are for things that don’t happen very often.

All this has got me to thinking… I’m a Flagship member and get e-statements etc., so I don’t pay any fees. But now we’re retired and spending the money, so eventually I’ll drop below $1M. Am I then going to get hit with fees? There used to be low-balance fees, does that even exist any more? Would be kinda rude to have been a Vanguard investor since 1985, built up my portfolio to 7 figures, then get charged stupid fees in my old age. I guess I could look online to see all their fees. Maybe I will tomorrow when I’m less tired and seeing straight.

from what I read, the $100 fee is if you move your account from Vanguard.
The other fees are for various services – help w/ brokerage transactions, certain types of CDs, etc. I didn’t see anything about fees for just having a VG account.

UPCOMING PODCAST: Clark does not like these fees or the way Vanguard announced them. However, he is sticking with Vanguard. He will explain more during the May 22 podcast.

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That doesn’t really give us much time to get out of Vanguard before the fees kick in, if we decide that’s the right answer for us. Maybe move it up a week. Or better yet, do it tomorrow.

And go where? Recommendations?