(Update 12/23/24: I just went ahead and transferred out some ETFs out of Vanguard and did not seem to get hit with any fees. Mine was not a full account transfer – it was two ETFs that were completely transferred out and one that was partially transferred out. It could still be that for full account transfers they would hit us with $100 fee. An easy way around this should be to just leave the account open without any funds – transfer over all assets and leave a few dollars there, withdraw those few dollars, and then just let the account languish; hopefully that’ll help avoid fees. I’d be interested in hearing other people’s experiences since the anyone else has experience since the 7/1/24 change.)
Original Post 5/1/24:
Vanguard sent out an email with some updates coming to their fee schedule, effective July 1, 2024. I’ll post the full email image at the end of this post and you can see the updated Vanguard fee schedule at this pdf.
Two things that jumped out, as pointed out by readers:
- Vanguard added a $100 Account closure and transfer fee: “A $100 processing fee may be charged for account closure or transfer of account assets to another firm.”
This can be very relevant for those of us who like to transfer brokerage funds to get brokerage bonuses. I’m not certain if the $100 (which “may be charged”) will apply when transferring out partial assets or a portion of one holding. Regardless, it’s a new thing to be worried about with Vanguard. Some people find Fidelity to be the best brokerage hub account.
2) Vanguard added a 1% fee on some foreign dividends: “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.”
I haven’t fully wrapped my head around this yet, but this might substantially increase the overall expense ratio for foreign holdings. For example, I keep a chunk of my investments in VXUS which has an expense ratio of .08%. Let’s say that the stock gives around 3% in annual dividends annually. The expense ratio would end up being .11% instead of .08%. (For each $100 in VXUS holding, you’ll pay $.08 for the .08% expense ratio, plus you’ll pay $.03 for the 1% cost on the $3 of dividends paid. Total cost ends up $.11 per $100 for a total expense ratio of .11%.) Readers note that the 1% fee is only for stocks that trade on foreign exchanges, not funds like VXUS which trade on US exchanges.
3) $25 for broker-assisted trades: “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.”
The changes aren’t terrible overall, but I am weighing whether to switch from Vanguard to Fidelity or another brokerage. Feel free to share your analysis or thoughts about the various fee changes in the comments below.
Can we do this for multiple accounts? Say a brokerage, traditional and roth IRA?
The wording on the linked schedule of fees has changed to indicate that there is no fee for a partial transfer, confirming Chuck’s 12/23/24 update. It now says:
Vanguard Brokerage may charge a $100 processing fee for each account closure and full transfer of account assets to another firm.
May charge is not WILL charge. Big difference. Designed for individuals creating excessive costs
In Soviet Russia, mutual fund owns you!
it’s pretty standard for a brokerage not to charge for a partial transfer online full. i transferred out of chase and left a couple stocks and then sold them and took money out. chase usually charges fee for full transfer. i think this basically applies for all brokerages that have a transfer out fee
Fidelity has ridiculous money market fees compared to Vanguard. All my cash went to Vanguard
Are you referring to expense ratios specifically or are there other fees?
Expense ratios are about 0.3% higher at Fidelity for similar funds
.42%far too much compared to .009
Yield is all that matters, as it is calculated after expenses.
I’m planning to leave mine “open” with a penny – for both P1 and P2 – until we depart this physical plane for the astral, hoping they must spend much more than two cents to try to find us and/or our next of kin.
Interesting, but it doesn’t say there’s a fee for partial transfers here: https://personal1.vanguard.com/pdf/v414.pdf?2210079054
I was wondering if I was missing something. I opened an Roth IRA with Merrill Edge November 1 and fully transferred 2 of the 3 funds I held at Vanguard. I still have the account at Vanguard open with the one fund. I expected to get hit with the $100 fee for the transfer based on their schedule but nothing ever hit. Merill said that they would reimburse the fee but I never saw any fee assessed.
You did not do a full account transfer. You transferred a couple funds and left assets there; that’s a partial transfer.
There is no fee on partial transfers.
Fidelity also sometimes gives out free turbo tax