August 23, 2022 By Jonathan Ping 18 Comments
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If you have brokerage accounts with Vanguard, you may have received an email with the somewhat vague subject line “The fee policy is changing for brokerage accounts”. Whenever fees goes down, the subject line is usually “WE SAVED YOU MONEY BY DROPPING THIS FEE!! 🎉🎉🎉” Whenever fees goes up, it’s “btw we made some changes”. So you can guess what this means.
The new policy is that all Vanguard brokerage accounts have a $20 annual fee, unless you have any one of the following:
- You have elected e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates,
- Your brokerage accounts are enrolled in an advisory program serviced by an affiliate of Vanguard,
- You have at least $1 million in qualifying Vanguard assets, or
- You are a client who has an organization or a trust account registered under an employee identification number (EIN).
To my knowledge, the $20 annual fee used to be waived for accounts with at least $10,000 in assets. Basically, Vanguard has effectively added a paper statement fee to anyone with less than $1,000,000 in assets. That’s quite a big change in the number of affected customers. You can still elect to receive paper tax forms for no fee.
I don’t mind stopping monthly paper statements, especially since Vanguard does a good job of collecting everything from the past quarter onto their quarterly statements (and past year on their end-of-year statements). The March statement contains all the transactions for January through March, and so on. I’m also happy to receive electronic versions of prospectuses and such, those thick booklets add up to a lot of paper.
However, I do like having an annual paper statement and it would be nice if they still offered that option for free for those with $10,000+ in assets. That’s already reducing the amount of paper mailings by over 90%. Having dealt with estate issues, it’s just nice to have any sort of physical paper trail when searching for accounts. I always say that I’ll collect my monthly e-statements and manually print out a year-end for every single financial account for physical storage, but in reality I don’t.
Note: This fee is for Vanguard brokerage accounts. Vanguard mutual fund accounts also have their own new $20 fee, which is $20 for EACH Vanguard mutual fund (waived with at least $1 million in qualifying Vanguard assets). Vanguard really wants to you convert your mutual fund accounts to a brokerage account. (My opinion is that the conversion wasn’t that bad at all, but these days anything that might force a customer service interaction with Vanguard means a possible 1-hour phone hold time. 👎)
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