After establishing a reputation as the driver of low-cost mutual funds and ETFs, The Vanguard Group is shifting course slightly with new fees facing investors starting July 1.
The second-largest ETF issuer with more than $2.4 trillion in 86 exchange-traded funds, Vanguard is leaving fund expense ratios alone. Instead it’s layering on fees at the brokerage platform level, which some critics say will hit smaller investors the hardest. The new fee announcement follows by two months Vanguard’s notice that Chief Executive Officer Tim Buckley will be resigning by year end, which has sparked some speculation about a connection.
“To me, it feels like they’re letting the bottom line drive decision making instead of common sense,” said Jeff DeMaso, editor of The Independent Vanguard Adviser newsletter.
According to a notice the Malvern, Pa.-based asset manager sent to customers last week, Vanguard is introducing $25 transaction fees for calling the company for assistance in trading mutual funds and ETFs.
The fees apply to both Vanguard and non-Vanguard funds for any account below $1 million. There are also new fees related to options trading and American Depository Receipts, as well as a $100 fee to close or transfer an account.
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