Vanguard to simplify account fees

The Vanguard Group Inc. today said it plans to simplify its account fees, and will also offer ways for investors to avoid them entirely.
APR 26, 2007
The Vanguard Group Inc. today said it plans to simplify its account fees, and will also offer ways for investors to avoid them entirely. The Malvern, Pa.-based mutual fund firm said it will eliminate four account-related fees and replace them with a single account service fee. Vanguard’s annual fees currently are based on account type, fund type and account balance. For instance, a $10 custodial fee is charged on individual retirement accounts with balances below $5,000. Vanguard also charges a $10 maintenance fee on index fund accounts with balances below $10,000 and a $10 custodial fee on Education Savings Accounts with balances below $5,000. It also charges a $10 low-balance fee on all general accounts with balances below $2,500. Beginning in June, Vanguard will implement a single-fee approach that will assess a $20 yearly fee on all fund accounts with balances below $10,000. Under the new plan, shareholders will also have three options to invest fee-free. One way would be to establish account access on Vanguard.com and select electronic delivery of statements, reports and prospectuses. The second way would be by maintaining total Vanguard fund assets of $100,000 or more. The third option would be consolidating accounts or investing additional assets to bring all account balances to $10,000 or more. “We are pleased to simplify our fees and provide the opportunity to our shareholders to pay no fees beyond our low fund expense ratios,” said Vanguard Chief Executive John J. Brennan in a statement.

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