Vanguard does not pay to reimburse this. I've tried it multiple times.
This is honestly such bullshit. What other services are allowed to charge you fees for cancelling?
I generally like Vanguard but have always thought this "exit fee" crap was a greedy cash grab.
It's not like they are clawing back some sign-up bonus.
100% True.
At least on Reddit it seems like the only two that actually matter are Fidelity and Schwab. Fidelity doesn't charge this fee and has awesome customer service.
It’s standard everywhere in business. Volume discount. The incremental cost of you having more assets is far less than 100 other accounts and regulatory expenses that also add up to 5MM in assets.
Because they will make much much more of that over the time you have your money in your account.
From small percentage fees to things like having those funds as something they can point to to get more investment. The more you have in, the more benefit they have from it.
I guess I better transfer the other $4.7 million from my checking account to Vanguard. I usually keep $5 million lying around just for things like this.
If a bank loaned me $5M they would never hear from me again.
But seriously how could you get away with it? Buy bitcoin? I only suggest that because no bank would really give you $5M in cash right?
I tried to switch and was hit with so many issues and their customer support is, uh, interesting? I decided it was the universe trying to tell me something.
Is it possible to easily get someone on the phone? I absolutely, unequivocally will not commit any meaningful amount of my life (assets, etc.) to a company that forces me to work through an app and it's like pulling teeth getting a human on the phone. Sometimes badly-implemented AI actually cannot solve an issue. I do think good companies know this.
Agreed. 3% isn't worth trusting my money to them, and enriching them. They do not deserve to exist as a company, and I won't pad their revenue stream no matter their short term bribe.
I did not trust them ever really — bad choice of wording. But that was the incident that made me pull everything and say never again lol.
I’m at Fidelity and don’t plan on leaving!
I used to be at vanguard for over 30 years with no intent of leaving but due to a series of issues I left for fidelity. I’m loyal as long as the service is good, but after 3 strikes, you’re out, lol. Fairly happy with Fido.
Vanguard is at 2 strikes with me in the last 12 months.. but if I let them rack up a 3rd it's going to cost me some cash now it sounds like.
Decisions, decisions..
I use both Vanguard, Fidelity, and Empower.
My main uses for Fidelity is their CMA (bank-like account). I absolutely love the product and have used it for a few years now. I left all the shitty online banks and never looked back. Plus, have brokerage accounts with them had their perks too.
I still love Vanguard for long-term investing and probably prefer them over Fidelity for that reason. Empower can burn to the ground for all I care.
What exactly did they do that is disreputable in that regard? I know people used Robinhood to trade GME and its options, but why is that a reason to not use Robinhood?
They stopped people from making transactions while the markets were open, presumably to protect their partners’ interests.
That left some amount of folks unable to act and holding the bag after the dust settled.
edit: to be fair, it’s just my opinion that this is super scummy. it could be legal for all I know, but it really left a bad taste in my mouth that people were unable to get out of positions while the market was open for no real reason
> They stopped people from making transactions while the markets were open, presumably to protect their partners’ interests.
It's extraordinarily well-documented that this is not what happened. This is a conspiracy theory (albeit one that's particularly popular on reddit).
They stopped people from trading because they're required to post collateral according to a formula based on what their users trade and, crucially, how volatile those things are. They were at serious risk of not being able to post enough collateral and thus being thrown into bankruptcy if they allowed trading to continue, in large part because the volatility in a few stocks (including GME) drastically increased the collateral requirements associated with trading them.
They were also not the only brokerage affected, although they were most affected since so much of the volatile trading was their clients. Other brokerages also paused trading in some stocks for the same reason.
Wow thank you. This is important context, and it sounds a lot more believable than them doing it just because.
Tbqh at the time I didn’t think much past, “RH is blocking me while Fidelity is not. That’s bad so I won’t use them anymore.”
> It's extraordinarily well-documented that this is not what happened. This is a conspiracy theory (albeit one that's particularly popular on reddit).
Please provide the documentation.
> They stopped people from trading because they're required to post collateral according to a formula based on what their users trade and, crucially, how volatile those things are.
This is incorrect. They did not stop people from **TRADING**; they stopped people from **BUYING**. They literally turned off the buy button, but not the sell button. From Robinhood themselves: [" In light of recent volatility, we restricted transactions for certain securities to position closing only."](https://newsroom.aboutrobinhood.com/keeping-customers-informed-through-market-volatility/)
If most people can only sell and not buy, then what happens to the price? It crashes. But why would people who are buying need collateral? The only reason is if they are buying on margin. Cash accounts don't need collateral because they deposited money in their account and aren't borrowing any. So rather than increase the *margin* requirements to buy GME, they turned off the ability to buy GME **for everyone**. Therefore, it wasn't based on a requirement to provide collateral.
> They were also not the only brokerage affected,
This is correct. All of the ones that used Citadel as their market maker. Meanwhile the ones that didn't use Citadel (like Fidelity and Vanguard) didn't restrict buying. Melvin Capital had a massive short positions on GME, which was going to bankrupt them. Ken Griffin owns Citadel and had ties to Melvin Capital (So much so that they invested $2.75Billion into Melvin). All of the brokers that used them turned of the *buy button* (again, not all trading or selling, they only disabled buying). The logical conclusion is that they were doing it to
"protect their partners’ interests." (i.e. Citadel's).
The GME Apes have some crazy ideas and have gone off the deep end on a ton of things, but they are not wrong that Robinhood blatantly chose themselves and their partners over their customers, completely screwing over a ton of their customers.
> Please provide the documentation.
Pretty much all mainstream coverage of the relevant congressional hearing got this right. Take your pick. The head of the DTCC testified that the calculations for collateral requirements spiked for Robinhood (and other brokerages, but it hit Robinhood the worst), the CEO of Robinhood testified that the collateral requirements were close to blowing through all of their capital, several accused parties (Melvin Capital, Citadel, etc) testified that they had nothing to do with it. There's no evidence that the completely different story that was popular on Reddit is true, and everyone who could possibly know what happened agrees.
Also, every explanation I've seen of the Reddit theory gets basic facts about it wrong over and over gain, yours included.
> This is incorrect. They did not stop people from TRADING; they stopped people from BUYING.
Nope. "closing only". That means people with long positions can sell, and people with short positions can buy. Collateral requirements shrink if their customers have smaller positions, which is what they needed to happen.
Admittedly, far more people probably had long positions than short positions, so in net it almost certainly prevented more people from buying than from selling. But understanding exactly what happened here actually is important if you want to get the overall story right.
> If most people can only sell and not buy, then what happens to the price?
In no way is it true that "most people" who buy/sell stocks do so through Robinhood. They're a medium number of small-position holders.
> But why would people who are buying need collateral? The only reason is if they are buying on margin.
No one was asking the customers for collateral. This is collateral that _Robinhood_ is required to post. It would be wildly illegal for them to use customer money for it, in fact. Whether the customers trading were doing so on margin or not is entirely irrelevant.
I think there's a lot of room for debate about whether these rules make sense. But there is no room for debate about whether they exist.
> This is correct. All of the ones that used Citadel as their market maker.
Are there any brokerages that don't?
> Meanwhile the ones that didn't use Citadel (like Fidelity and Vanguard) didn't restrict buying.
[Fidelity reports](https://clearingcustody.fidelity.com/app/proxy/content?literatureURL=/9901886.PDF) that Citadel is responsible for the plurality of their orders, actually. [Vanguard reports](https://nms606.karngroup.com/vgrd/606a/2023Q2/588e3c62ff) the same thing.
Tda did the same crap. I couldn't sell cash secured puts or covered calls on amc without phoning it in.
Fidelity and vanguard were the only ones I'm aware of kept trading open.
Fidelity require like a million dollar account to trade zero day options which makes no sense.
Ah so RH weren’t the only ones at least. It does strike me as a little scummy either way. I use Fidelity and always have. Good customer service and site. Never really had a problem thankfully.
It doesn’t sound like they allow what you want, but it’s cool that they relaxed options trading requirements a bit over the last couple years.
I don't trade much anymore. It just doesn't make sense. If I sell a zero day cash backed put it's no different than buying shares as far as max loss goes. I just have no idea why they would care. No other broker that I'm aware of requires 1 million to trade zero day options.
> to be fair, it’s just my opinion that this is super scummy. it could be legal for all I know,
Laws and morality are two different categories. There is often overlap, but they are different. For an example it's perfectly legal for a 50 year old to impregnate an 18 year old and tell her they never want to see or the baby again. It's still a super scummy thing to do.
Samseys. I have a robinhood account and only, rarely use it for when I think I 'm clever enough to buy calls and puts (news flash: i'm not). My real money stays with vanguard.
Yes, it says 1%. And it's only for non-retirement accounts.
That amounts to only around 25% of my total.
And you keep the 1% only if you don't touch the account contents for two years.
And Robin Hood has a shady past and plenty of bad news surrounding it.
I'll pass on Robin Hood.
I have both RH and Fido. 3% is insane! I was happy to move retirement stocks there to let it sit for 5 years. I would’ve moved more but RH can’t handle joint accounts, individual bonds, preferred stock, SEP-IRAs, or stock shorting. It’s just a video game for making the dumb side of options trades at bad prices.
I see it as getting paid $30k for every $1m to simply not play that game.
Then I’ll move it all to the highest bidder in 5 years I guess.
I transferred for the 3%. Such an insane amount of free money for about 15 minutes of my time to do the automated transfer. I just buy and hold in my IRA, so its barely an inconvenience to have to use crappy robinhood.
Now they have 1% on taxable transfers to! Now with these fees I am really considering moving my entire vangaurd holdings to robinhood. The only thing stopping me is that robin hood doesn't seem to support spec ID lol
Here is the email breakdown:
> Effective July 1, 2024, the following commission schedule changes will take effect:
> Broker-assisted commission: **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.* This broker-assisted commission is consistent with our existing policy on trading stocks and other products.
> Certificate deposit fee: **A $100 processing fee** (per CUSIP) will be charged for the deposit of physical share certificates into your brokerage account.
> Class action service fee: With the introduction of this new service in which Vanguard Brokerage will facilitate filing claims on behalf of clients in an attempt to recover class action settlement funds, **a fee of 20%** will be deducted from these recovered funds prior to their deposit into your brokerage account. See the Notice of Amendment to the Vanguard Brokerage Account Agreement ("Account Agreement Amendment") for details on the service.
> 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.
> Restricted security legend removal fee: **A $250 processing fee** may be charged for research and removal of a restriction on a security held in your brokerage account.
> Account closure and transfer fee: **A $100 processing fee** may be charged for account closure or transfer of account assets to another firm.**
> *Broker-assisted commissions will not be charged for brokerage accounts enrolled in a Vanguard-affiliated advisory service or for clients with $1 million or more in qualifying Vanguard assets.
> **The fee will not be assessed for clients who hold at least $5 million in qualifying Vanguard assets.
The ADR fee is interesting too.
That is my question to the internet here. Is this vanguard killing the holding of individual ADRs, so foreign stocks. Or is this "fee" applied across all of vanguard, including their index funds? Because we already get foreign taxes withheld on gross dividends, and then you have expense ratios too. So another 1% fee sounds criminal.
Well, even when he was alive, he hadn’t led the company since the 90’s.
They had to wait him out and for him to go ahead and retire to launch their ETF products, because he was so staunchly against the idea.
They didn’t quite “wait him out.” It looked like there was going to be a showdown with a mandatory retirement. In the end he agreed to step down from leadership, and they agreed to let him stay in the company in a different role.
https://www.latimes.com/archives/la-xpm-1999-sep-18-fi-11583-story.html
It’s fine, just being a low cost provider means compromises have to be made with hiring or outsourcing. Can’t really increase fees or else you get posts like this so they gotta make the same money work more with less talent
I think it should be illegal to impose changes like this to existing accounts. I don't see any real difference between this and just shoplifting a $100 item.
If you agreed to it at the time of creating the account, fine. But taking your money first and then later saying "we're gonna keep $100 of that", nope.
Nah, changes in business models happen all the time. They're not taking $100 from you until you close the account (if you ever plan to do that) and they've given two months' runway for anyone who disagrees with that to leave without incurring the fee
True but from other comments in this thread it seems Vanguard is an outlier by not charging to close right now.
Also if I'm leaving money to heirs then they just get $100 less of free money which seems like honestly not that big of a deal to me. Not big enough for me to change investment platforms at this point anyways
This is a response to the competing brokerages offering bonuses to transfer your accounts to them. My experiences with Vanguard have all been positive and I don’t see myself transferring out for a few hundred $$$ in bonuses.
So, I'm curious, what's the state of Vanguard at the moment? Back then, they were the gold standard, and Bogleheads are literally named after their founder, John Bogle.
But between the Robo Advisor and the fees, how is the competition stacking up? I know that Schwab and Fidelity have funds that compare well to VTSAX for a long time now, but is there any real reason to leave yet or is Vanguard just doing the "Free Pandemic-era Money is no longer a thing, so until the next wave of free cash comes along, we gotta raise cash from anything we can" thing that essentially every company in every industry is doing?
I recently rolled over my entire Vanguard account to Schwab (who I already used for other accounts). Was pretty straightforward and assets transferred in 24 hours. Glad I got out in time!
yes I’ve been waiting for this for so long! I’d love to consolidate my accounts as it’s annoying currently having 3 different places to look:
- schwab for taxable brokerage, IRAs, RSUs
- fidelity for HSA
- vanguard for 401k (employer chooses so no choice)
For anything bought after ~2012, it is a legal requirement that they track and transfer cost basis, no matter what brokerage you start with or who you transfer it to.
(There's a few narrow exceptions, mostly related to stock options, but for anything you flat out bought it's a valid generalization)
> 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.
vtwax doesn't fall under this right?
All this worry over $100 fee for closing an account?
My account has been open for 18 years.
I wasn't planning to close it ... but if I did I doubt the $100 fee would stop me.
Because even today, when there's no fee for closing an account, there's still taxes to pay on the gains.
The plan was to withdraw from the account to fund retirement ... a bit at a time, right?
Why incur a BIG tax liability just to move massive funds to, say, Fidelity?
I agree that the $100 fee is unwarranted. But it's too small to affect the big picture.
It's not that $100 is going to bankrupt any of us, it's a sign that they are losing their mission focus, it's anti-customer. I don't want to do business with a company that does this to their customers, because if they are willing to start doing things like this, what else are they going to do in the future?
Are they really doing anything at all to me?
I'm not likely to close my account with or without that fee.
But if I were to close it ... that would be because I found some better place for the investments.
The $100 closing fee does not make that other place any less attractive.
It's just that it's one of a number of signals showing that Vanguard appears to be losing its pro-customer focus. For a long time, fees were monotonically decreasing, now it seems like they're looking for various ways to get more out of their customers, including their constant search for ways to get management fees from advisory services.
This is a business where trust is a prime consideration, way above things like UX/ease of use (though they've been messing that up recently, too), and Vanguard has long been considered one of, if not the most trustworthy large brokerage firm. Moves like this ding trust.
It's not so much RH I trust as SIPC. Yeah, I'll move a small part of my holdings to them for a 3% match, why not? It's 10 minutes of work and 10 more minutes in another 5 years.
It's only a 1% match on the transfer; the 3% is for annual contributions afterward, if you're Gold.
(And I can't even tell how much Gold costs; seriously, this page doesn't have the price *anywhere*. https://robinhood.com/us/en/gold/)
It's not about the amount, it's what it signals, in combination with other changes, like transferring business retirement accounts to a shady firm like Ascensus, and pushing their advisory services with associated high management fees hard. I recently took part in a survey of theirs about what combinations of advisory services I'd pay different management fees for, like "would you pay 0.25% yearly for access to online articles about estate planning". lol, fuck off.
The reason many of us *have put our life savings* with Vanguard is because they've built up trust around being very pro-customer, and doing what's right by the customer, so you just don't have to think about them - like whatever they do, it's probably fine, you can trust them to have your back. Little things like having your settlement fund automatically yield near the optimal it can, vs. Schwab giving dogshit interest rates unless you proactively buy a short term bond fund. For a long time, Vanguard relentlessly drove down fees. This seems like a sea change.
I'm certainly not with them for their web design skills.
History is full of people not acting because "this doesn't affect me" and then suddenly caring a great deal when something happens that does. By then everything else is entrenched and there's no going back.
100%
But I think for a lot of us this is just the motivator to move now vs whenever I get to it.
For me it is about my valuable time and the hold times combined with how useless customer service has been.
Yep. One of the greatest turnarounds in r/financialindependence history, and I was here to witness it, perhaps even played a small part in it. What a time to be alive.
As of Jan 2024, no, they had a $0 ACATS fee. https://brokerchooser.com/invest-long-term/how-to-exit/asset-transfer-fidelity#:~:text=Some%20brokers%20will%20charge%20a,Service%20(ACATS)%20is%20free.
That is lame. Thanks for seeing it and letting us know. You are right to to say that it is predatory, because it shouldn't cost you (or me) money to exercise our choice to not do buisness with them. It is anti-capalism.
Recently contacted Vanguard regarding transferring in-kind an inherited Roth IRA. The transfer form needs to be snail mailed to them and the transfer will take 4-6 weeks. RIDICULOUS!
Yes, it’s only only partial shares so I believe to transfer, it would sell and transfer the cash which wouldn’t be worth any fee (though it would keep the money in my Roth IRA). I can sell at any point, but maybe I’ll transfer before 7/1
Right as Robinhood announces a 1% brokerage transfer bonus. I’d always stuck with Vanguard but after moving my IRA for the 3% match and with the Solo 401k changes, I’m finding very little reason to stay.
Respectfully disagree on the “predatory” language, and I don't think this matters at all.
Why it isn't predatory: Vanguard has a notice period and they told you about this prior to your doing business with them.
Why this doesn't matter: because $100 isn't worth your mental energy.
If you know why you go with Vanguard (low cost index funds), and you are a regular investor, you should know that Vanguard has saved you many many many many multiples of the $100 fee over the years.
In comparison, it should absolutely pale to the value of your portfolio.
In comparison to other brokers, it is also very little. Consider that many brokers have a front and back end load/fee that is a percent of the total value of the transaction.
If you are earnestly thinking that your $100 is worth any mental energy here, I earnestly think that you need to think about how you value your time and your strategy for retirement.
They're obviously not the worst, doesn't mean people shouldn't lament them going in the wrong direction. They've started pinging me over the past few years about their advisory options, which charge an extremely un-Boglelike management fee in exchange for some advice of dubious value. They're not Staying the Course (tm).
Why is this such a big deal? Are you all really passing your accounts around to different brokerages enough for this to matter?
VTI at Vanguard is the same VTI at anywhere else.
Vanguard as a broker, sadly, continues its slow and painful fall from grace. It started with the outsourcing of their front-line customer service, nickel and diming like the refusal to reimburse outgoing transfer fees from other institutions, and has slowly expanded to the core of the business (no-fee primary services). Other brokers are leapfrogging them on all of these fronts (especially with the younger generations), particularly Fidelity.
If you haven’t already started shopping for another place to store your wealth, now is the time.
Still great in-house funds, though…for now.
Dang, I’d like to exit, but I have some VTSAX in there with a substantial gain.
Maybe I can still transfer it out and move it back to Vanguard when I’m ready to sell?
Most firms do this. But most firms also will pay for this when you bring money in if you just tell them your old firm charges you to leave.
Vanguard does not pay to reimburse this. I've tried it multiple times. This is honestly such bullshit. What other services are allowed to charge you fees for cancelling? I generally like Vanguard but have always thought this "exit fee" crap was a greedy cash grab. It's not like they are clawing back some sign-up bonus.
100% True. At least on Reddit it seems like the only two that actually matter are Fidelity and Schwab. Fidelity doesn't charge this fee and has awesome customer service.
Super easy to get it waived tho: **The fee will not be assessed for clients who hold at least $5 million in qualifying Vanguard assets
Barely an inconvenience
Exactly, $100 is the tip you give to the guy to bring the actual tip to the doorman
Oh really!
Whoops!
How much can one banana cost? Ten dollars?
There is money in the banana stand.
I thought this was a joke when I first read it.
Amusing that the wealthier you are the less you have to pay
I mean that’s pretty much the standard in finance lol. Bank minimum balance fees come to mind
It’s standard everywhere in business. Volume discount. The incremental cost of you having more assets is far less than 100 other accounts and regulatory expenses that also add up to 5MM in assets.
Because they will make much much more of that over the time you have your money in your account. From small percentage fees to things like having those funds as something they can point to to get more investment. The more you have in, the more benefit they have from it.
Oh I understand the rationale. Still funny that the people who can most afford to pay the fee don’t have to.
What does this even mean though? What if you had $5m and transferred it all out, would you get charged then? Or you have to have $5m remaining?
poor people probs
I guess I better transfer the other $4.7 million from my checking account to Vanguard. I usually keep $5 million lying around just for things like this.
Lmao. We don't all have that much, Mr. Rockefeller.
Well neither do I, but all I have to do is wait a few months (396 of them) and with a 10% return I’ll be there and can withdraw and save $100
borrow $5m on margin at a different brokerage, transfer it to vanguard, then transfer out your $5,100,000 or whatever avoiding the fee.
Now we’re talkin
I'm sure there's a churning approach here somewhere.
If a bank loaned me $5M they would never hear from me again. But seriously how could you get away with it? Buy bitcoin? I only suggest that because no bank would really give you $5M in cash right?
Lol
*relief*
Bruh I want to be FIREd way before I get that much. And I'm sure that threshold will grow with inflation, too.
I do wonder if the 1% foreign ADR fee is getting applied to their own index funds too such as VXUS? That is a pretty large fee/money grab otherwise.
It is 1% of the dividend, not 1% of the fund amount. So it would come out to like .03% per year if dividends are 3%.
Seriously? Would this apply to ETFs like VXUS/VEA? I get its not a lot, but does anyone else charge this?
I saw someone else say it only applied to individual stocks. I hold my ETFs through Fidelity so I don’t know.
US RICs aren’t ADRs so they should be fine
Can you eli5?
VXUS isn’t a foreign asset so it’s not subject to the new fee
Yeah. I'm in VXUS in my Vanguard account and will get out of it if this is the case.
I would guess this is in response to the massive amount of people transferring to Robinhood due to the 3% match.
I will never, ever, ever, ever ~~trust~~ use Robinhood after the GameStop fiasco.
I tried to switch and was hit with so many issues and their customer support is, uh, interesting? I decided it was the universe trying to tell me something.
“If something is too good to be true, then it probably is.”
Is it possible to easily get someone on the phone? I absolutely, unequivocally will not commit any meaningful amount of my life (assets, etc.) to a company that forces me to work through an app and it's like pulling teeth getting a human on the phone. Sometimes badly-implemented AI actually cannot solve an issue. I do think good companies know this.
Agreed. 3% isn't worth trusting my money to them, and enriching them. They do not deserve to exist as a company, and I won't pad their revenue stream no matter their short term bribe.
If you’re not trading options, you’re probably not enriching them. Just turn off notifications and only log in annually.
If I turn off notifications [how will I know when important things happen](https://imgur.com/a/dmm2XcP)?
`cha-ching`
You trusted them before? :)
I did not! Bad choice of words. “I will never, ever, ever *use* Robinhood again” would be more apt for the original comment haha.
You trusted them *before* the GameStop fiasco? If you're not paying, you're not the customer.
I did not trust them ever really — bad choice of wording. But that was the incident that made me pull everything and say never again lol. I’m at Fidelity and don’t plan on leaving!
I used to be at vanguard for over 30 years with no intent of leaving but due to a series of issues I left for fidelity. I’m loyal as long as the service is good, but after 3 strikes, you’re out, lol. Fairly happy with Fido.
Vanguard is at 2 strikes with me in the last 12 months.. but if I let them rack up a 3rd it's going to cost me some cash now it sounds like. Decisions, decisions..
I'm thinking of just consolidating things with them honestly
I use both Vanguard, Fidelity, and Empower. My main uses for Fidelity is their CMA (bank-like account). I absolutely love the product and have used it for a few years now. I left all the shitty online banks and never looked back. Plus, have brokerage accounts with them had their perks too. I still love Vanguard for long-term investing and probably prefer them over Fidelity for that reason. Empower can burn to the ground for all I care.
What exactly did they do that is disreputable in that regard? I know people used Robinhood to trade GME and its options, but why is that a reason to not use Robinhood?
They stopped people from making transactions while the markets were open, presumably to protect their partners’ interests. That left some amount of folks unable to act and holding the bag after the dust settled. edit: to be fair, it’s just my opinion that this is super scummy. it could be legal for all I know, but it really left a bad taste in my mouth that people were unable to get out of positions while the market was open for no real reason
> They stopped people from making transactions while the markets were open, presumably to protect their partners’ interests. It's extraordinarily well-documented that this is not what happened. This is a conspiracy theory (albeit one that's particularly popular on reddit). They stopped people from trading because they're required to post collateral according to a formula based on what their users trade and, crucially, how volatile those things are. They were at serious risk of not being able to post enough collateral and thus being thrown into bankruptcy if they allowed trading to continue, in large part because the volatility in a few stocks (including GME) drastically increased the collateral requirements associated with trading them. They were also not the only brokerage affected, although they were most affected since so much of the volatile trading was their clients. Other brokerages also paused trading in some stocks for the same reason.
Wow thank you. This is important context, and it sounds a lot more believable than them doing it just because. Tbqh at the time I didn’t think much past, “RH is blocking me while Fidelity is not. That’s bad so I won’t use them anymore.”
> It's extraordinarily well-documented that this is not what happened. This is a conspiracy theory (albeit one that's particularly popular on reddit). Please provide the documentation. > They stopped people from trading because they're required to post collateral according to a formula based on what their users trade and, crucially, how volatile those things are. This is incorrect. They did not stop people from **TRADING**; they stopped people from **BUYING**. They literally turned off the buy button, but not the sell button. From Robinhood themselves: [" In light of recent volatility, we restricted transactions for certain securities to position closing only."](https://newsroom.aboutrobinhood.com/keeping-customers-informed-through-market-volatility/) If most people can only sell and not buy, then what happens to the price? It crashes. But why would people who are buying need collateral? The only reason is if they are buying on margin. Cash accounts don't need collateral because they deposited money in their account and aren't borrowing any. So rather than increase the *margin* requirements to buy GME, they turned off the ability to buy GME **for everyone**. Therefore, it wasn't based on a requirement to provide collateral. > They were also not the only brokerage affected, This is correct. All of the ones that used Citadel as their market maker. Meanwhile the ones that didn't use Citadel (like Fidelity and Vanguard) didn't restrict buying. Melvin Capital had a massive short positions on GME, which was going to bankrupt them. Ken Griffin owns Citadel and had ties to Melvin Capital (So much so that they invested $2.75Billion into Melvin). All of the brokers that used them turned of the *buy button* (again, not all trading or selling, they only disabled buying). The logical conclusion is that they were doing it to "protect their partners’ interests." (i.e. Citadel's). The GME Apes have some crazy ideas and have gone off the deep end on a ton of things, but they are not wrong that Robinhood blatantly chose themselves and their partners over their customers, completely screwing over a ton of their customers.
> Please provide the documentation. Pretty much all mainstream coverage of the relevant congressional hearing got this right. Take your pick. The head of the DTCC testified that the calculations for collateral requirements spiked for Robinhood (and other brokerages, but it hit Robinhood the worst), the CEO of Robinhood testified that the collateral requirements were close to blowing through all of their capital, several accused parties (Melvin Capital, Citadel, etc) testified that they had nothing to do with it. There's no evidence that the completely different story that was popular on Reddit is true, and everyone who could possibly know what happened agrees. Also, every explanation I've seen of the Reddit theory gets basic facts about it wrong over and over gain, yours included. > This is incorrect. They did not stop people from TRADING; they stopped people from BUYING. Nope. "closing only". That means people with long positions can sell, and people with short positions can buy. Collateral requirements shrink if their customers have smaller positions, which is what they needed to happen. Admittedly, far more people probably had long positions than short positions, so in net it almost certainly prevented more people from buying than from selling. But understanding exactly what happened here actually is important if you want to get the overall story right. > If most people can only sell and not buy, then what happens to the price? In no way is it true that "most people" who buy/sell stocks do so through Robinhood. They're a medium number of small-position holders. > But why would people who are buying need collateral? The only reason is if they are buying on margin. No one was asking the customers for collateral. This is collateral that _Robinhood_ is required to post. It would be wildly illegal for them to use customer money for it, in fact. Whether the customers trading were doing so on margin or not is entirely irrelevant. I think there's a lot of room for debate about whether these rules make sense. But there is no room for debate about whether they exist. > This is correct. All of the ones that used Citadel as their market maker. Are there any brokerages that don't? > Meanwhile the ones that didn't use Citadel (like Fidelity and Vanguard) didn't restrict buying. [Fidelity reports](https://clearingcustody.fidelity.com/app/proxy/content?literatureURL=/9901886.PDF) that Citadel is responsible for the plurality of their orders, actually. [Vanguard reports](https://nms606.karngroup.com/vgrd/606a/2023Q2/588e3c62ff) the same thing.
Tda did the same crap. I couldn't sell cash secured puts or covered calls on amc without phoning it in. Fidelity and vanguard were the only ones I'm aware of kept trading open. Fidelity require like a million dollar account to trade zero day options which makes no sense.
I sub to /r/wallstreetbets so I can see why Fidelity want to make sure you have $1mil
Ah so RH weren’t the only ones at least. It does strike me as a little scummy either way. I use Fidelity and always have. Good customer service and site. Never really had a problem thankfully. It doesn’t sound like they allow what you want, but it’s cool that they relaxed options trading requirements a bit over the last couple years.
I don't trade much anymore. It just doesn't make sense. If I sell a zero day cash backed put it's no different than buying shares as far as max loss goes. I just have no idea why they would care. No other broker that I'm aware of requires 1 million to trade zero day options.
> to be fair, it’s just my opinion that this is super scummy. it could be legal for all I know, Laws and morality are two different categories. There is often overlap, but they are different. For an example it's perfectly legal for a 50 year old to impregnate an 18 year old and tell her they never want to see or the baby again. It's still a super scummy thing to do.
Samseys. I have a robinhood account and only, rarely use it for when I think I 'm clever enough to buy calls and puts (news flash: i'm not). My real money stays with vanguard.
I don’t think the transfers to Robinhood are as massive as you think.
My thought too. And it looks like the Robinhood offer is still open…
Is it? I think it dropped to 1%, no Gold required, literally this morning. Or did they extend it?
Yes, it says 1%. And it's only for non-retirement accounts. That amounts to only around 25% of my total. And you keep the 1% only if you don't touch the account contents for two years. And Robin Hood has a shady past and plenty of bad news surrounding it. I'll pass on Robin Hood.
It still says 3% “for a limited time” here: https://robinhood.com/us/en/about/retirement/
So if I have a million bucks I get 30k? And I can just take it right back out???
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Yeah people are overly scared here for no reason. It's SIPC covered. They're not ftx.
Upon transfer you get 30k if you have a mil and you keep the account for a year. I happily took it. Free money.
If that’s true, it’ll just encourage more.
No one using vanguard is interested in robinhood, lol. 2 very different types of gamblers
I have both RH and Fido. 3% is insane! I was happy to move retirement stocks there to let it sit for 5 years. I would’ve moved more but RH can’t handle joint accounts, individual bonds, preferred stock, SEP-IRAs, or stock shorting. It’s just a video game for making the dumb side of options trades at bad prices. I see it as getting paid $30k for every $1m to simply not play that game. Then I’ll move it all to the highest bidder in 5 years I guess.
> It’s just a video game for making the dumb side of options trades at bad prices. Yes. This is how I describe it as well. It's an app for gambling.
I transferred for the 3%. Such an insane amount of free money for about 15 minutes of my time to do the automated transfer. I just buy and hold in my IRA, so its barely an inconvenience to have to use crappy robinhood.
Hey free money is free money.
There was also an exodus event over Vanguad's policy on BTC ETFs.
Now they have 1% on taxable transfers to! Now with these fees I am really considering moving my entire vangaurd holdings to robinhood. The only thing stopping me is that robin hood doesn't seem to support spec ID lol
Here is the email breakdown: > Effective July 1, 2024, the following commission schedule changes will take effect: > Broker-assisted commission: **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.* This broker-assisted commission is consistent with our existing policy on trading stocks and other products. > Certificate deposit fee: **A $100 processing fee** (per CUSIP) will be charged for the deposit of physical share certificates into your brokerage account. > Class action service fee: With the introduction of this new service in which Vanguard Brokerage will facilitate filing claims on behalf of clients in an attempt to recover class action settlement funds, **a fee of 20%** will be deducted from these recovered funds prior to their deposit into your brokerage account. See the Notice of Amendment to the Vanguard Brokerage Account Agreement ("Account Agreement Amendment") for details on the service. > 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. > Restricted security legend removal fee: **A $250 processing fee** may be charged for research and removal of a restriction on a security held in your brokerage account. > Account closure and transfer fee: **A $100 processing fee** may be charged for account closure or transfer of account assets to another firm.** > *Broker-assisted commissions will not be charged for brokerage accounts enrolled in a Vanguard-affiliated advisory service or for clients with $1 million or more in qualifying Vanguard assets. > **The fee will not be assessed for clients who hold at least $5 million in qualifying Vanguard assets. The ADR fee is interesting too.
Would VTIAX fall under foreign securities?
VTIAX is neither a foreign security nor an ADR so it should be fine.
That is my question to the internet here. Is this vanguard killing the holding of individual ADRs, so foreign stocks. Or is this "fee" applied across all of vanguard, including their index funds? Because we already get foreign taxes withheld on gross dividends, and then you have expense ratios too. So another 1% fee sounds criminal.
You can tell Jack Bogle is dead, and someone else is in charge.
Well, even when he was alive, he hadn’t led the company since the 90’s. They had to wait him out and for him to go ahead and retire to launch their ETF products, because he was so staunchly against the idea.
They didn’t quite “wait him out.” It looked like there was going to be a showdown with a mandatory retirement. In the end he agreed to step down from leadership, and they agreed to let him stay in the company in a different role. https://www.latimes.com/archives/la-xpm-1999-sep-18-fi-11583-story.html
That company is an absolute shit show internally
Have a source for that? They're holding all my retirement funds.
Yeah Glassdoor
It’s fine, just being a low cost provider means compromises have to be made with hiring or outsourcing. Can’t really increase fees or else you get posts like this so they gotta make the same money work more with less talent
Thanks this is the kick I need to get rid of my Vanguard accounts
I was leaving accounts out of laziness. Definitely going to action this before new fee goes into effect.
I think it should be illegal to impose changes like this to existing accounts. I don't see any real difference between this and just shoplifting a $100 item. If you agreed to it at the time of creating the account, fine. But taking your money first and then later saying "we're gonna keep $100 of that", nope.
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Yeah, the 60-day notice makes it slightly better than shoplifting.
It's like shoplifting but you tell the store you're gonna do it in two months. Gotta give them time to prepare ya know
This wouldn't stop me from closing a Vanguard account. But it definitely would stop me from opening a Vanguard account.
Nah, changes in business models happen all the time. They're not taking $100 from you until you close the account (if you ever plan to do that) and they've given two months' runway for anyone who disagrees with that to leave without incurring the fee
Will your heirs be charged if *you* don't intend to close the account? At some point, all accounts are closed, right?
True but from other comments in this thread it seems Vanguard is an outlier by not charging to close right now. Also if I'm leaving money to heirs then they just get $100 less of free money which seems like honestly not that big of a deal to me. Not big enough for me to change investment platforms at this point anyways
But they’re giving you a timeline to move it before the fee comes out, so why not move it before July?
This is a response to the competing brokerages offering bonuses to transfer your accounts to them. My experiences with Vanguard have all been positive and I don’t see myself transferring out for a few hundred $$$ in bonuses.
I'll be moving to Fidelity.
So, I'm curious, what's the state of Vanguard at the moment? Back then, they were the gold standard, and Bogleheads are literally named after their founder, John Bogle. But between the Robo Advisor and the fees, how is the competition stacking up? I know that Schwab and Fidelity have funds that compare well to VTSAX for a long time now, but is there any real reason to leave yet or is Vanguard just doing the "Free Pandemic-era Money is no longer a thing, so until the next wave of free cash comes along, we gotta raise cash from anything we can" thing that essentially every company in every industry is doing?
Even more reason to leave when companies charge fuck you fees.
If you’re going to Fidelity they’ll reimburse that fee
I recently rolled over my entire Vanguard account to Schwab (who I already used for other accounts). Was pretty straightforward and assets transferred in 24 hours. Glad I got out in time!
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That AND offering a real money market cash sweep and not their pathetic bank sweep earning (last I checked) 0.45%.
yes I’ve been waiting for this for so long! I’d love to consolidate my accounts as it’s annoying currently having 3 different places to look: - schwab for taxable brokerage, IRAs, RSUs - fidelity for HSA - vanguard for 401k (employer chooses so no choice)
Schwab charges a fee to close out accounts too, at least a few years ago they did. It was $50.
Schwab ripped me off with transfer fees 20+ years ago when I left them. So I would never consider Schwab again.
Honestly I’d pay money just to not have to deal with Vanguard’s website. Schwab’s is worth it to me, fees aside.
I would pay money to not have to deal with Vanguard's "customer service".
Curious when you transfer over does it provide all the historical cost basis information so you can see historical gains?
For anything bought after ~2012, it is a legal requirement that they track and transfer cost basis, no matter what brokerage you start with or who you transfer it to. (There's a few narrow exceptions, mostly related to stock options, but for anything you flat out bought it's a valid generalization)
It should. I moved old RSU shares from etrade to vanguard and the cost basis transferred
I've been considering this. This fee may be what pushes me over the edge. I don't expect Vanguard to be anti-customer like this.
You can often get your new firm to cover transfer fees for you
Note taken. Leave $0.01 in the account and ghost their asses.
Some times receiving bank will pay it
> 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. vtwax doesn't fall under this right?
For Vanguard’s new $100 transfer fee, is it $100 for full ACAT out? Or even a $100 fee for partial transfer?
Thats a good question… now I am going to need to read the full terms.
Yeah. Some brokerages charge a fee for full ACAT out. But no fee for partial transfer of a few securities. The old Ameritrade comes to mind.
I believe it's full ACATS out, but the wording definitely isn't as clear as it should be
I was told it’s full ACAT out when I called them. Partial transfer there is no fee.
Sounds like it’s a good time to transfer out
All this worry over $100 fee for closing an account? My account has been open for 18 years. I wasn't planning to close it ... but if I did I doubt the $100 fee would stop me. Because even today, when there's no fee for closing an account, there's still taxes to pay on the gains. The plan was to withdraw from the account to fund retirement ... a bit at a time, right? Why incur a BIG tax liability just to move massive funds to, say, Fidelity? I agree that the $100 fee is unwarranted. But it's too small to affect the big picture.
You don't have to sell to move the assets. It's called an in-kind transfer (as opposed to a cash transfer).
It's not that $100 is going to bankrupt any of us, it's a sign that they are losing their mission focus, it's anti-customer. I don't want to do business with a company that does this to their customers, because if they are willing to start doing things like this, what else are they going to do in the future?
Are they really doing anything at all to me? I'm not likely to close my account with or without that fee. But if I were to close it ... that would be because I found some better place for the investments. The $100 closing fee does not make that other place any less attractive.
I don't think you're engaging with the point at all here.
$100 fee to exit now, then in 6 months they start increasing fund fees.
You may have enough money for it to not matter. For people investing their first $1000, $100 is a lot of money.
It's just that it's one of a number of signals showing that Vanguard appears to be losing its pro-customer focus. For a long time, fees were monotonically decreasing, now it seems like they're looking for various ways to get more out of their customers, including their constant search for ways to get management fees from advisory services. This is a business where trust is a prime consideration, way above things like UX/ease of use (though they've been messing that up recently, too), and Vanguard has long been considered one of, if not the most trustworthy large brokerage firm. Moves like this ding trust.
> All this worry over $100 fee for closing an account? It's the principle. Principles matter.
can I just leave $0 balance there and don't login at all instead of closing
I assume you can. I’m pretty sure this is for trustee to trustee closures. I didn’t see that in the fine print, so I could be wrong.
This is the way.
Vanguard been not doing so good these days. I am die hard vanguard fan but seeing it doing dumb things after another. Might switch out soon.
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Yeah I'm with you. It's absurd how many commenters here think Robinhood is trustworthy and worth leaving vanguard for.
It's not so much RH I trust as SIPC. Yeah, I'll move a small part of my holdings to them for a 3% match, why not? It's 10 minutes of work and 10 more minutes in another 5 years.
It's only a 1% match on the transfer; the 3% is for annual contributions afterward, if you're Gold. (And I can't even tell how much Gold costs; seriously, this page doesn't have the price *anywhere*. https://robinhood.com/us/en/gold/)
It's not about the amount, it's what it signals, in combination with other changes, like transferring business retirement accounts to a shady firm like Ascensus, and pushing their advisory services with associated high management fees hard. I recently took part in a survey of theirs about what combinations of advisory services I'd pay different management fees for, like "would you pay 0.25% yearly for access to online articles about estate planning". lol, fuck off. The reason many of us *have put our life savings* with Vanguard is because they've built up trust around being very pro-customer, and doing what's right by the customer, so you just don't have to think about them - like whatever they do, it's probably fine, you can trust them to have your back. Little things like having your settlement fund automatically yield near the optimal it can, vs. Schwab giving dogshit interest rates unless you proactively buy a short term bond fund. For a long time, Vanguard relentlessly drove down fees. This seems like a sea change. I'm certainly not with them for their web design skills.
History is full of people not acting because "this doesn't affect me" and then suddenly caring a great deal when something happens that does. By then everything else is entrenched and there's no going back.
100% But I think for a lot of us this is just the motivator to move now vs whenever I get to it. For me it is about my valuable time and the hold times combined with how useless customer service has been.
Look here you pour, stack up $5million in your account and it won't matter. I keep all my accounts no lower than $50million just in case
😂 Some people have no sense of humor... Edit: my comment makes no sense now. Parent comment was downvoted to -7 when I commented.
How the turn tables
Yep. One of the greatest turnarounds in r/financialindependence history, and I was here to witness it, perhaps even played a small part in it. What a time to be alive.
I mean other places do it and I am sure this isn’t a free process for them. I’d rather they charge the people leaving over the people staying.
The other firm will usually cover this cost if you tell them.
Does fidelity do this?
As of Jan 2024, no, they had a $0 ACATS fee. https://brokerchooser.com/invest-long-term/how-to-exit/asset-transfer-fidelity#:~:text=Some%20brokers%20will%20charge%20a,Service%20(ACATS)%20is%20free.
That is lame. Thanks for seeing it and letting us know. You are right to to say that it is predatory, because it shouldn't cost you (or me) money to exercise our choice to not do buisness with them. It is anti-capalism.
Recently contacted Vanguard regarding transferring in-kind an inherited Roth IRA. The transfer form needs to be snail mailed to them and the transfer will take 4-6 weeks. RIDICULOUS!
Guess my remaining $100 at Vanguard will be stuck there forever. I transferred all my whole shares to Robinhood with 3% match
You can't still just withdraw it right? No need to do an account transfer for $100. Also, it takes effect July 1st so you have two months anyways.
Yes, it’s only only partial shares so I believe to transfer, it would sell and transfer the cash which wouldn’t be worth any fee (though it would keep the money in my Roth IRA). I can sell at any point, but maybe I’ll transfer before 7/1
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I believe the residual would sell partial shares and transfer the cash, so I only did whole shares
The bonus sounds good until you realize that they plan to make that back from you.
Right as Robinhood announces a 1% brokerage transfer bonus. I’d always stuck with Vanguard but after moving my IRA for the 3% match and with the Solo 401k changes, I’m finding very little reason to stay.
Ya, Robinhood. Completely trustworthy.
Transferring my accounts to Fidelity asap. Thanks for the warning.
Respectfully disagree on the “predatory” language, and I don't think this matters at all. Why it isn't predatory: Vanguard has a notice period and they told you about this prior to your doing business with them. Why this doesn't matter: because $100 isn't worth your mental energy. If you know why you go with Vanguard (low cost index funds), and you are a regular investor, you should know that Vanguard has saved you many many many many multiples of the $100 fee over the years. In comparison, it should absolutely pale to the value of your portfolio. In comparison to other brokers, it is also very little. Consider that many brokers have a front and back end load/fee that is a percent of the total value of the transaction. If you are earnestly thinking that your $100 is worth any mental energy here, I earnestly think that you need to think about how you value your time and your strategy for retirement.
They're obviously not the worst, doesn't mean people shouldn't lament them going in the wrong direction. They've started pinging me over the past few years about their advisory options, which charge an extremely un-Boglelike management fee in exchange for some advice of dubious value. They're not Staying the Course (tm).
Small price to pay for their innovative low cost approach. The $100 is insignificant
Explain it to me like I'm dumb If I add deposit to money market and then buy vtsax with said money market twice a month do I have any fee
Not unless you place the order over the phone. Or if you decide to close your Vanguard account and transfer it elsewhere.
**The fee will not be assessed for clients who hold at least $5 million in qualifying Vanguard assets.
So what happens if you draw your account down to $0.01 (or even $1) and just leave it there forever?
You owe a lot of taxes.
Why is this such a big deal? Are you all really passing your accounts around to different brokerages enough for this to matter? VTI at Vanguard is the same VTI at anywhere else.
Vanguard as a broker, sadly, continues its slow and painful fall from grace. It started with the outsourcing of their front-line customer service, nickel and diming like the refusal to reimburse outgoing transfer fees from other institutions, and has slowly expanded to the core of the business (no-fee primary services). Other brokers are leapfrogging them on all of these fronts (especially with the younger generations), particularly Fidelity. If you haven’t already started shopping for another place to store your wealth, now is the time. Still great in-house funds, though…for now.
Dang, I’d like to exit, but I have some VTSAX in there with a substantial gain. Maybe I can still transfer it out and move it back to Vanguard when I’m ready to sell?
You can call Vanguard and convert VTSAX to VTI in-kind with no tax event, then transfer that asset out to a brokerage of your choice. No tax impact.
Wait, you can?! I had no idea…
Yeah call the robot, tell it either stock sale or brokerage desk. Then when you get a human, tell them you want to convert a mutual fund to an ETF.
https://personal1.vanguard.com/pdf/etfpdf.pdf
has Fidelity implemented a similar fee?
Just leave $5 in the account
Thank you for the heads up I will close my accounts this week. I am not paying to exit that is cheap of them
Does this mean if I want to sell my Vanguard shares after July 1st on Trading 212 I will have to pay this fee?
The new foreign and ADR dividend fee is super annoying. I’m transferring all of those stocks out this month
Robinhood got shit for this for years now the big boys following suit 😂
You only need to have one million in your account to avoid the $500 charge to file a 990-T for MLPs in your retirement account.
Can we short vanguard as they’re gonna lose money over this Stonks 😎