Author Topic: Is there any advantage to owning a fund in a Vanguard account?  (Read 5421 times)

phoxygen

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The more I read, the bigger believer I am in Vanguard funds. Great. My questions is this, is there any financial advantage to keeping them in a Vanguard account versus another brokerage? I currently have an Etrade account that I need to manage some workplace stock options, I was wondering if I should just buy the Vanguard funds through them for simplicity sake.

cyclevillian

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #1 on: May 10, 2013, 08:12:49 AM »
i think the advantage would be that you won't pay a fee if you have a vanguard account and buy/sell a vanguard fund. guess it depends on how often you'd be buying or selling.

GreenGuava

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #2 on: May 10, 2013, 09:55:08 AM »
* You won't ever pay a fee for buying them at Vanguard.

* The $20 annual account fee is waived if you have over $50k there and/or if you sign up for e-delivery of statements

* Various benefits at the $50k, $500k, and $1M levels.

cbr shadow

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #3 on: May 10, 2013, 10:09:40 AM »
Can you tell me details about the benefits of $50k?  I like having a goal like that.  Recently my Roth IRA went over the $10k mark meaning I could exchange to admiral funds (VTSAX replacing VTSMX) which was great.  Looks like $50k is the next milestone.

Abe

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #4 on: May 10, 2013, 11:37:35 AM »
I use Vanguard for my funds. If one has over $50,000 total, there is no annual fee and the commission for all stock and non-Vanguard ETF is $7 (for Vanguard funds or ETFs, there is no commission). If you have over a minimum amount (varies between funds), you will have a lower annual fee for the fund. For example, for VTSMX if you have over $10,000 then your annual fee goes from 0.17 to 0.05%.  They will also have a financial planner look over your investments and advise you for $250 instead of $1000 (but I'd assume their advice is invest in index funds!).  Over $500,000 and they will advise you for free.

phoxygen

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #5 on: May 10, 2013, 12:40:28 PM »
Thanks everyone! Sounds worth the trade off of a little extra effort at tax time.

sheepstache

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #6 on: May 10, 2013, 05:24:22 PM »
Just to be clear, if you get all your statements electronically, there is no annual fee (to buy/own Vanguard mutual funds through Vanguard), regardless of what your total assets held there are.

The brokerage account has a $20 annual fee if you have under 50k in assets.  But you don't need a brokerage account to buy their mutual funds.

aj_yooper

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #7 on: May 10, 2013, 06:50:39 PM »
Vanguard is the principal low cost provider; they have great customer service and are happy to help you move the money to them.   Their website is extensive and helpful. The other houses have fees on top of fees: account maintenance, higher stock trading charges, loads on some funds, higher 12b fees, and fees to move your money out.  The other houses' fees seriously injure investment efficiency.  Stay away from them.  If you are forced to go into a plan that isn't optimal, pick the most efficient funds possible.  Then, if you leave the job, quickly move it to Vanguard.  Don't let it sit and burn your money.

GreenGuava

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #8 on: May 10, 2013, 10:50:45 PM »
Can you tell me details about the benefits of $50k?  I like having a goal like that.  Recently my Roth IRA went over the $10k mark meaning I could exchange to admiral funds (VTSAX replacing VTSMX) which was great.  Looks like $50k is the next milestone.

Sure.  Keep in mind that these are based on your total Vanguard holdings, held at Vanguard - unlike Admiral shares, it doesn't matter how much you have spread out over various funds or even accounts.  When I hit $50k at Vanguard, it was split between a traditional/rollover IRA, a Roth IRA, and my taxable account (Vanguard funds held in my 401(k) that isn't through Vanguard didn't count).  I still qualified for "Voyager" services (the name for the $50k threshold)

In the $50K - $500K range, there's no account fees (nor ever after $50k, nor if you have less than $50k and sign up for e-delivery);  you can get a CFP to make a plan for you (it's someone through Vanguard, but there's no commissions and the company is not-for-profit, so there isn't the same conflict of interest you'd get at, say, Edward Jones) for $250 (flat fee).  I know a few people who got this done, liked the advice, and followed it;  two of them subsequently found that Vanguard refunded the fee after they did so. 

If you feel like dabbling in individual stocks or non-Vanguard ETFs, trades are $7/each.  I haven't looked into other brokerages for this sort of thing (not where my interest lies), but I think this is about going rate. 

Once you hit $500K in Vanguard assets at Vanguard, you can get the CFP to work with you on a plan once a year complimentary (as in, no charge, although I suppose they'll say something nice about your tie too).  Stocks and non-Vanguard ETFs trade down to $2/per, if that's your thing (at $1M, the first 25 are free).

Here's the details at their website, if you're interested.

stinkindog

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Re: Is there any advantage to owning a fund in a Vanguard account?
« Reply #9 on: May 18, 2013, 09:46:37 AM »
glad i found this thread. i am not happy with t.rowe price and will be moving to vanguard.