Rating: 
- Stocks & ETFs: $7 for the first 25 trades, $20 for subsequent trades for accounts with < $50,000
- Options: Standard Service $20 + $1 per contract, Voyager Services $7 +
$1 per contract, Voyager Select, Flagship, and Flagship Select Services $2 + $1 per contract
- Mutual Funds: Standard - $35 Voyager® and Voyager Select® - $20 Flagship - $8 Vanguard Mutual Funds - Free
Vanguard Review
Vanguard is a client-owned brokerage firm that provides some unique investment services. The company has a band of loyal followers
who swear by the ownership model and pricing structure. Let's take a closer look at this unique broker and see what it has to offer
for investors.
The Cost of Trading
Vanguard's commission schedule is somewhat complex. Larger accounts receive discounts on trades. A regular account (called "Standard")
is any account with less than $50,000 invested in Vanguard ETF's and mutual funds . These accounts are charged $7 for the first 25
stock and ETF trades in a year. The price increases to $20 after 25 trades.
Investors who have at least $50,000 deposited in Vanguard funds receive unlimited trades at $7. An account balance of $500,000 or
more reduces the commission to just $2. Clients who have $1,000,000 receive 25 trades per year commission-free. Large accounts
receive other discounts as well, such as reduced fees on checkbook reorders, option trades, and fixed-income investments.
U.S. Treasury bonds at Vanguard are free to trade. Existing issues of municipal, agency, and corporate bonds in Standard and Voyager accounts cost $2 per $1,000 face value, while the other three accounts pay a lower $1 per $1,000 face value.
Vanguard Brokerage IRA Fees
There is no minimum opening deposit requirement to open an IRA at Vanguard. These accounts come with no setup, inactivity, or
closing fees. However, there are several other fees, some of which can be evaded. The first fee is the regular $20 annual fee.
Furthermore, there is a $20 charge for a Vanguard mutual fund if it has a balance under $10,000. Retirement savers should be aware
that they can avoid these fees by signing up for electronic delivery of statements. Even better, IRA's with assets above $50,000 are
not charged the fees to begin with. Custodial IRA's with Vanguard have no special fees beyond the fees already mentioned.
A SIMPLE IRA carries a $25 annual fee if it has a Vanguard fund. The broker charges the fee for every Vanguard fund. So if a SIMPLE account has three Vanguard funds in it, the annual charge would be $75. Typical for the broker, the fee policy is waived for accounts above $50,000.
Mutual and Exchange-traded Funds
Vanguard is well-known as a proponent of passively-managed funds with low fees, although the broker does offer some actively-managed funds. The average expense ratio of Vanguard funds is just 0.18%.
There are 126 Vanguard mutual funds, which have no transaction fee. There are also 55 Vanguard ETF’s, and of course they too are free to trade. The broker's S&P 500 index ETF has an expense ratio of just 0.05%, very low by any standard.
Vanguard clients have access to more than 16,000 mutual funds in total. Many of these have no load and no transaction fee. Mutual funds that do carry a transaction fee are $35 in a Standard account, $20 in Voyager accounts, and $8 in Flagship accounts. The transaction fee is applied to purchases, sales, and exchanges.
The broker charges a $20 annual fee for each Vanguard mutual fund below $10,000 in a Standard account if it isn't enrolled in electronic delivery of documents.
Research and Education
Vanguard has numerous educational pamphlets available on its website in pdf format. The broker also has several articles on education and retirement planning. A useful retirement calculator helps investors determine how much monthly income they will need during retirement.
The website has basic screeners for stocks, mutual funds, and ETF's. One screener searches for both ETF's and mutual funds. Analyst reports on equities are available from Argus and MarketGrader free of charge. Other brokers, such as Schwab, provide reports from more than two analysts.
The website has mostly articles, although there are many Vanguard videos on YouTube. These videos cover a range of topics, such as retirement planning and how to buy CD's at the broker.
Vanguard has an active blog and Twitter account. Traders can find helpful investment information at these sites.
Vanguard Personal Advisor Services is an advisory service for Vanguard customers who have an account balance of at least $50,000. Users of this service receive investment advice and a financial plan.
Cash Management Features
Vanguard offers a hybrid brokerage-cash management account called Vanguard Advantage. It is available to Voyager Select clients and above. This policy effectively
requires customers to have a staggering $500,000 on deposit just to have banking features. Voyager Select clients must pay a $30 annual fee and $9.95 for checks.
Flagship clients pay no fees for Vanguard Advantage. Clients of Vanguard Personal Advisor Services are also eligible for Vanguard Advantage.
ATM withdrawals are free at PNC banks in the United States.
Customer Service
Vanguard can be contacted via phone, e-mail, and snail mail. Unfortunately, customer service is only available Monday through Friday, 8 am to 10 pm, EST. Other brokers,
such as E*Trade, have 24/7 customer service. Vanguard does have a phone number for investors outside the U.S.
Trading Tools
The firm's website is user friendly, although it can be somewhat buggy in Google Chrome. Compared to
TD Ameritrade's
website, Vanguard's is a little more difficult to navigate.
Trading takes place within the web browser with simple order pages. Helpful information on how to place an order is displayed near the order pane. Charting is available
and includes some technical analysis tools.
On the research page for equities, there are no buy and sell buttons. Traders have to navigate to another page to place an order, a slight inconvenience.
Regrettably, Vanguard does not have an advanced platform which is offered at many other brokers.
Mobile Trading
Vanguard has applications for iPhone, iPad, Android, and Kindle Fire. The interface is easy to navigate. Users can place trades, make a mobile check deposit, and contact customer service. Traders can access account confirmations and statements in pdf format on the app. Users can sign up for account activity alerts, which can be sent by text message or email. The app has a printer icon, which allows users to print any page in the app, a unique feature.
There are a few weaknesses with Vanguard's app. Unlike Schwab's app, there is no option to transfer funds or pay bills. And unlike E*Trade's app, there are
no educational or news videos.
Vanguard Review Summary
Vanguard is an excellent choice for buy-and-hold investors who have at least $50,000 to invest in Vanguard funds. Active traders who
invest primarily in stocks and ETFs will do better at
Ally Invest or
Firstrade.
Vanguard Promotion
None at this time.
Vanguard Commissions
| Investments | Price |
|---|
| Stocks and ETFs |
$7 for the first 25 trades, $20 for subsequent trades for account with less than $50,000. |
|
$7 for account with $50,000–$500,000 invested in Vanguard products (Voyager Services®). |
|
By phone trades $25. |
|
$2 for account with $500,000–$1,000,000 invested in Vanguard products (Voyager Select Services®). By phone trades $2. |
|
Free for first 25 trades, $2 for subsequent trades for account with $1 million-$10 million (Flagship Services™) |
|
Free for first 500 trades, $2 for subsequent trades for account with over $10 million (Flagship Select Services™) |
| Vanguard ETFs | Free* |
| Options |
Standard Service $20 + $1 per contract
Voyager Services $7 + $1 per contract
Voyager Select, Flagship, and Flagship Select Services $2 + $1 per contract
|
| Mutual funds | Vanguard mutual funds - free. All others: Standard - $35; Voyager® and Voyager Select® - $20; Flagship - $8 |
| U.S. Treasury | Free for new and existing issues. |
| U.S. government agency securities, corporate bonds, and CDs |
New issues free. Standard and Voyager $2 per $1,000 face amount ($250 maximum).
Voyager Select, Flagship, and Flagship Select $1 per $1,000 face amount ($250 maximum)
|
| Mortgage-backed securities & commercial papers | $50 per transaction. |
| UITs | Selling UITs $35 per transaction. |
Vanguard IRA & Account Fees
| Fee | Amount |
|---|
| IRA Setup Fee | $0 |
| Annual IRA Fee | $20, $0 with conditions* |
| IRA Termination Fee | $0 |
| Full Account Transfer Out | $0 |
| Partial Account Transfer Out | $0 |
| Outgoing Wire Fees (Domestic) | $0 |
| Outgoing Wire Fees (International) | $0 |
| All Vanguard fees » |
Vanguard
reviewed by TopRatedFirms.com
Rating: 3