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Learning, Sharing, and Teaching => Investor Alley => Topic started by: psu256 on July 11, 2013, 02:28:26 PM

Title: Is this normal, or is Schwab being evil/stupid?
Post by: psu256 on July 11, 2013, 02:28:26 PM
I was curious about what was available in the self-directed portion of the 401k that is available to me at work. It is basically a Schwab brokerage account. So, I set up my username/password with Schwab and went browsing their offerings. I went looking for index funds, and I saw that VTSMX (among others) was available for a minimum $10k investment, $75 fee at buy time, no fee at sale.

That fee sounds pretty ridiculous to me but as I've never had a brokerage account, I can't say for sure. Opinions?
Title: Re: Is this normal, or is Schwab being evil/stupid?
Post by: Joet on July 11, 2013, 02:35:22 PM
I think you're looking at the vanguard mutual fund vs ETF charges. When not investing primarily through Vanguard direct, you'll want to use the ETF equivalent not the mutual fund to bypass that fee, normal trading fees would apply to the ETF. This has nothing to do with Schwab

In this specific case, VTI is the equivalent ETF
Title: Re: Is this normal, or is Schwab being evil/stupid?
Post by: psu256 on July 11, 2013, 02:53:13 PM
Thanks for the info! I found where the ETFs are on their website. ETF transactions are $8.95 in fees, and I only need to maintain 1k minimum balance. Sounds a lot more reasonable. :)

The "built-in" funds in my current 401k are doing quite lousy compared to the ones at my old employer (I've kept it there rather than roll it over into an IRA because they have done really well.) I'd like to move at least some on my current investments over and see how it goes. (I don't know how long it will take to show up on my employer's website but the account doesn't show up yet.)

Title: Re: Is this normal, or is Schwab being evil/stupid?
Post by: JamesAt15 on July 11, 2013, 06:42:29 PM
You might also want to consider looking at Schwab's own low-ER index funds, unless you're dead-set on using Vanguard products.  The Schwab funds are pretty good alternatives, very low ERs, and can be traded with no fees.

Take a look at the Bogleheads summary of the Schwab funds here (http://www.bogleheads.org/wiki/Charles_Schwab). Looks like that page is a bit old so it's best to then compare with the current data on the Schwab web site.

I live overseas and it is difficult for me to open a Vanguard account, so I have just been using my Schwab account and using their funds as alternatives to the Vanguard funds.