Vanguard recently announced some new and/or increased fees for their brokerage accounts. Here is their updated full commission & fee schedule. The following are effective July 1, 2024:
- Account closure and ACAT outgoing transfer fee: A $100 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.
- Broker-assisted trade commission: A $25 broker-assisted commission will be charged for each Vanguard mutual fund and Vanguard ETF 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. Broker-assisted commissions will not be charged for brokerage accounts enrolled in a Vanguard-affiliated advisory service or for clients with $1 million or more in qualifying Vanguard assets. This previously applied to individual stocks, but not Vanguard ETFs and mutual funds.
- Stock 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.
- 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.
The following are effective July 1, 2024:
- Tax filing fee for master limited partnerships (MLPs) held in an IRA will change from $300 to $500 per account.
These moves could be seen as Vanguard expanding its “at cost” philosophy. Vanguard decided that paper statements cost too much money, so they made everyone pay for them if they wanted them. Vanguard is probably seeing a lot of accounts being closed and/or transferred out, and now they want you to cover the cost to administer that as well.
An alternative view is that most of these fees are justifiable in that most of Vanguard’s competitors also charge them. Vanguard is simply becoming more like every other broker. It’s up to you to decide if that is a good thing.
While a lot of other brokers indeed have outgoing transfer fees, Fidelity still charges nothing for both full and outgoing ACAT transfers. Schwab and Merrill Edge charge $50 for a full outgoing transfer, but $0 for a partial transfer.
I would say the most surprising fee is the account closure fee. I can understand the outgoing transfer fee, but I think there is a reason why I could not find an account closure fee at Fidelity, Schwab, or Merrill Edge. If you have $5,000 invested and need to sell everything to pay for an unexpected bill, Vanguard will now ding you for another $100 on the way out. Even if justified in terms of administrative work required, it just doesn’t look so good on the public relations front.
I suppose the actionable advice is that if you were thinking about transferring multiple accounts out of Vanguard, you might want to do so before the new fee is implemented. A brokerage, Traditional IRA, and Roth IRA would add up to $300 now. Although, if I did move out, it would be for ACAT transfer bonuses which usually include outgoing ACAT fee rebates, so I don’t plan to rush into anything. If I had a smaller account, I would consider it more strongly as the ACAT fee rebates usually require a minimum asset level of $5,000 to $10,000.
During a discussion about an outgoing transfer last year, a Fidelity rep told me: “No, we won’t charge you a fee when you transfer out, and we won’t charge you a fee when you come back.” In other words, they are confident that their product is good enough that while you might leave to try out a competitor, chances are good that you’ll eventually come back.
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Little.by little fees are being added
I think the govt doesnt want to many working class people.to.become too rich so they dont have to work.
Also, i think these CEOs realize they can start charging fees and make more money
You have this
M1 finance charging 10 dollars per month if you have less than 10k
Fidelty charging 100 dollars to buy certain ETFs
Thanks for this. I had an old remnant account from when I added my wife’s name. In that situation, they need to add a new account, transfer the shares and funds, and it leaves behind the remnant account.
I called up to have that remnant account closed. I could see them charging me $100 in the future. That would have been silly because they can’t support that kind of account change.
Seems short sighted on vanguard’s part. Fortunately my account is at a level where I don’t get effected by any fees and have an assigned rep, so the recent long phone wait times have not been an issue for me. But I started from a very small amount almost 20 years ago. Back then such fees would have pushed me to another company who I would likely still be with today. I wouldn’t be surprised if this is a common situation with many of vanguard’s current “high net worth” clients, who may not be with vanguard today if they had these fees 20 years ago. I can only wonder if vanguard’s is moving to a model where they predominantly just setup mutual finds and etf’s which are then sold through other brokerage houses such as fidelity and Charles schwab
How do they enforce that if you run down the balance to $1 and let it sit?
In the near future, Vanguard may change the rule again to charge your account a monthly fee if it is less than 1.01
“Fidelity still charges nothing for both full and outgoing ACAT transfers”
When I first opened up my Roth IRA in 2005, it was the opposite. Fidelity had transfer-out fees but Vanguard did not. I know because I was hit by Fidelity’s transfer-out fee.
It seems like the pendulum has swung in favor of Fidelity at this time, but they haven’t always been this generous with fees….
Thanks for this information. I am intending to transfer part of my IRA (not held at Vanguard) to a new firm. I had narrowed the choices to Fidelity and Vanguard. I decided on Fidelity after learning of this information.
Fidelity is starting to charge 100 fee to buy certain etfs. Fidelity does not charge closing an account or anything like that but they are charging 100 dollars to buy certain ETFs
So that is different fee from a different broker
Ironically, I opened my IRA years ago with Vanguard because it was a tossup between them and Fidelity, and Vanguard didn’t charge a fee to close the account if I decided I hated them. Between now and then, I’ve changed jobs and my 401K and HSA is at Fidelity.
After a lot of difficulties with my mother’s new Vanguard account and Vanguard giving me flat out wrong information, I was on the fence about just consolidating my portfolio at Fidelity. It seemed to me that Vanguard was heading towards being a company that primarily sold mutual funds and ETFs, and being a broker only for those with a lot of money or those using their paid advisory services.
I kept putting off the decision, because there was no penalty to kicking it down the road. The new closure fee was the push I needed to close my Vanguard accounts.
I encouraged my daughter to open a Vanguard account. She has about $10,000 in it and may need to use that money to pay for some unforeseen expenses. I can’t believe she would be charged $100 to close the account. Yes, good idea idea to leave a few bucks in the account.
If they don’t charge fees for low balance, etc. I don’t know that yet.
I was shocked when I saw the $100 account closure fee because we have 10 accounts with Vanguard in our household. I’ve been with them for 26 years! I’ve been upset that Vanguard decided to use my shares in a proxy vote for ESG board members at Exxon instead of maximizing shareholder profit. I was upset last month when they said they were transferring Solo 401k’s over to Ascensus where there will now be a multitude of fees. I’ve initiated transfers to transfer every cent out of Vanguard. Once my funds are transferred I’ll be selling out of my Vanguard ETF’s and purchasing Fidelity Zero expense ETF’s. Vanguard is a mutually owned company and this is how they treat their shareholders–They have lost their way.
Held Vanguard funds fir over 30 years. When they started all this brokerage account stuff 3 or 4 years ago, I was quite upset. I moved my individual account but left my joint accounts. When I saw all of this with the exit fee, I agree, they have lost their way. I am on their steering committee and this was never mentioned in any of our surveys. Sorry Vanguard, moving everything to Schwab now. $100 down every day for a week does not bother me. $100 just to line your pocket is ridiculous. Besides, Schwab S&P 500 is only 0.2% where Vanguard is 0.4%.
I was just charged $300 by Vanguard for moving 3 small custodial accounts to Etrade! Ridiculous! These were small accounts (all less than $10,000). My grandchildren are 2, 5 and 8 years old and I feel like Vanguard has stolen this money. I was with them for over 8 years. I talked with 3 different people at Vanguard and all of them went with the company line of “this fee being non-negotiable”. I am done with Vanguard for life! And so is the rest of my family!
I have a tiny bit of IRA rollover money at Vanguard all these years; I’m going to decamp to Fidelity, it seems, before the deadline. It looks like they have my Vanguard fund in stock, so I can transfer and leave it. There’s a big fee to add to it, but I don’t intend to ever touch it again, so I don’t really care. Other option is an ETF conversion first, then transferring, which I might pursue.
Effective June 1, 2024, the following commission schedule change will take effect. Might want to this.
I wonder if there is a fee for a low $1 balance just to keep the account open? Looks like I am transferring my accounts back to fidelity soon.
I’m leaving Vanguard completely, between this and their political meddlings.
Moved everything out of VG after being with them for over a decade.
This is a slap in the face to small investors as it does not apply to those with 5 million. Also, they call themselves the low cost leader yet they are not anymore. Both Fidelity and Schwab offer lower cost funds than VG and Fifelity even has some zero cost funds.
In addition, who else strips you of 1% of your ADR dividends? These fees are ludicrous as is the justification that they need to cover costs. Nobody else implements this fee in the industry.
Finally, fees might make sense if they had 24/7 customer service or a good interface of their website. However, both are horrendous.
Good riddance to VG.