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Vanguard's average fee is now 0.07% after biggest-ever cut

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Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#111
post #88

Earlier quoted context omitted.

No, zero means a 0% expense ratio and no minimums, as listed for the four funds at the top of https://www.fidelity.com/mutual-funds/investing-ideas/index-... . Unlike most other funds, these are captive to Fidelity so if you ever do an ACATS transfer they have to be liquidated.

That's the key, though if it's a tax-advantaged account it's not a major issue (as you can just transfer to an appropriate ETF and then ACATS that). In taxable it could cause you to have to stay with Fidelity or eat a tax bill.

It's an interesting reversal and highlights the power of competition - as a young part-time employee in college, my employer automatically contributed a few hundred dollars for me to a 403(b) type of retirement savings account. Fidelity was the custodian and after I left the job, it imposed a substantial monthly fee that eventually ate all of the money in the account, leaving me with zero. I always remember that episode when dealing with Fidelity.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#112

Earlier quoted context omitted.

We tried using vanguard. The UX/UI was so bad we went through the work of transferring everything to fidelity. They've got a pretty decent app. Vanguard has so much friction on what should be very simple and common tasks. There's no excuse for that. I can say pretty confidently that cutting fees won't be enough. They need a total rewrite of all their customer facing software and web stuff, and they probably need to r…

The idea of making financial decisions based on UI/UX is extraordinary to me.

It is to me too! I would never do that normally. It's just that it was THAT bad.

It took me MONTHS to figure out how to sell a particular fund to buy another one. Somehow every time I tried to do it, it failed. I kept coming back to it over and over and different things went wrong. It was also very difficult to figure out the status of an order.

It was literally that clunky, and I've been trading for decades. I run multiple businesses, I know how these things work, but their UI was awful.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#113
post #98

Earlier quoted context omitted.

TBH, I trust vanguard more, even if their website is absolutely worse. There's a saying, 'if you're not the customer, you're the product'. I expect trades on those index funds are getting 'front run' much like robinhood is getting front run. You might have a lower ER but your nav might effectively be higher when buying and lower when selling. Of course, I'm a 'buy and hold' investor so this doesn't really effect me m…

Fidelity uses those funds as marketing, and they make up for it with all the other services and funds they offer. It's intentional, and it's working. Vanguard is more and more becoming a group that just wants to run ETFs and if you want to use them, they're making it harder and harder. They recently dumped all their 401(k) and similar plans from being in-house to some other provider. Saves costs, makes support annoyi…

>Of course, you can use a Fidelity account to own Vanguard ETFs if you wanted.

Which I would highly recommend if you ever want to change brokers. the fidelity ZERO products are great but can only be held at fidelity while VOO shares can be transfered to any broker.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#114
post #109

Earlier quoted context omitted.

You have to hold the fund on the ex-dividend date... Pays out once in Dec. If you buy in Feb and sell in Oct, you're not getting your dividend although you earned most of it... If you had VTI, you'd get 3 of them.

Dividends are built into the NAV price. It just becomes taxable income when it is paid out.

Ah right

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#115

Earlier quoted context omitted.

We tried using vanguard. The UX/UI was so bad we went through the work of transferring everything to fidelity. They've got a pretty decent app. Vanguard has so much friction on what should be very simple and common tasks. There's no excuse for that. I can say pretty confidently that cutting fees won't be enough. They need a total rewrite of all their customer facing software and web stuff, and they probably need to r…

Vanguard recently made two horrible mistakes: 1. a typical "Grand UI Redesign" that made the site worse and removed a bunch of previously working features, and 2. They made all their users "migrate" their accounts from one type to another, a process that I found to be error prone and clunky. For 1, all of us software people have seen companies do this over and over, and it always sucks. For 2, why they couldn't do wh…

Vanguard's grand UI redesign was poorly done. At the time each team was responsible for some software product, and had a good ownership model. The issue imo was that the internal UI component library was poorly made and funded, and that the UX team was very old (most of the people were lifers that were hired in the 90s, no real experience in UI/UX,etc.) So people were just making the designs they were given. The Grand UI Redesign was a single new team that just made a heavy Angular UI application for the major areas, forcing product teams to be backend only. This caused discontinuity and didn't really fix the core issue.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#116
post #98

Earlier quoted context omitted.

TBH, I trust vanguard more, even if their website is absolutely worse. There's a saying, 'if you're not the customer, you're the product'. I expect trades on those index funds are getting 'front run' much like robinhood is getting front run. You might have a lower ER but your nav might effectively be higher when buying and lower when selling. Of course, I'm a 'buy and hold' investor so this doesn't really effect me m…

Fidelity uses those funds as marketing, and they make up for it with all the other services and funds they offer. It's intentional, and it's working. Vanguard is more and more becoming a group that just wants to run ETFs and if you want to use them, they're making it harder and harder. They recently dumped all their 401(k) and similar plans from being in-house to some other provider. Saves costs, makes support annoyi…

> Fidelity uses those funds as marketing, and they make up for it with all the other services and funds they offer. It's intentional, and it's working.

> Vanguard is more and more becoming a group that just wants to run ETFs and if you want to use them, they're making it harder and harder. They recently dumped all their 401(k) and similar plans from being in-house to some other provider.

If this is true, then it must for individuals.. My company moved a little over a year ago TO vanguard for 401ks

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#117
post #61

Earlier quoted context omitted.

We tried using vanguard. The UX/UI was so bad we went through the work of transferring everything to fidelity. They've got a pretty decent app. Vanguard has so much friction on what should be very simple and common tasks. There's no excuse for that. I can say pretty confidently that cutting fees won't be enough. They need a total rewrite of all their customer facing software and web stuff, and they probably need to r…

That's because Vanguard is a buy and hold philosophy. They have previously stated that they designed their site for the bulk of the users. Those users log in just to check their balances in the 5 or fewer funds/ETFs that they hold. So instead of building something that would be reasonably easy for everyone, they built something that was easy for their primary (aging) user base. It's the same sort of mentality how the…

At some point you need to realize your gains—perhaps to rebalance a portfolio, or to pay for an expense, or because you’re retiring and now it’s time to enjoy the profits of your buying and holding. And a lot of people elect specific-lot cost basis accounting to minimize tax burden.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#118
post #3

Not mentioned in any of the coverage I've seen (or the interview with Vanguard's new CEO in the WSJ) is Fidelity. Fidelity used to be known for actively managed funds, but has been eating Vanguard's indexing lunch for the past 10 years or so. Part of this relates to its dominance in workplace accounts, but Vanguard hasn't helped itself with some bad customer-facing software updates and a perception that its service l…

We tried using vanguard. The UX/UI was so bad we went through the work of transferring everything to fidelity. They've got a pretty decent app. Vanguard has so much friction on what should be very simple and common tasks. There's no excuse for that. I can say pretty confidently that cutting fees won't be enough. They need a total rewrite of all their customer facing software and web stuff, and they probably need to r…

It's so bad. I don't even like logging in anymore. Padding/whitespace everywhere, no more alternating row colors. I despise mobile-first UIs. The old one many have looked dated but it was more information dense without being overwhelming.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#119

Earlier quoted context omitted.

PFOF is neither front running nor illegal. If you are curious about a brokers position on PFOF you can look up their disclosures. SEC Rule 605, 606 and 615 are the search terms you want when looking these up. Fidelity has a similar disclosure on this as Vsnguard, which is that they don’t engage in PFOF except for some options markets. Robinhood got in trouble for false advertising about PFOF not because they engaged…

PFOF isn't (typically) illegal, a better word might be "controversial". There's nothing free in this life: the zero commission brokers are making it up somehow. While the studies on how PFOF effects execution quality are varied, this summary [1] from Wharton seems fairly balanced. It's not as simple as citing NBBO and moving on. Personally I'm suspicious of the practice mostly because of the pretty clear conflicts of…

The zero commission brokers typically make most of their revenue on net interest margin. PFOF is a smaller portion.

Re: Vanguard's average fee is now 0.07% after biggest-ever cut

#120
post #3

Not mentioned in any of the coverage I've seen (or the interview with Vanguard's new CEO in the WSJ) is Fidelity. Fidelity used to be known for actively managed funds, but has been eating Vanguard's indexing lunch for the past 10 years or so. Part of this relates to its dominance in workplace accounts, but Vanguard hasn't helped itself with some bad customer-facing software updates and a perception that its service l…

We tried using vanguard. The UX/UI was so bad we went through the work of transferring everything to fidelity. They've got a pretty decent app. Vanguard has so much friction on what should be very simple and common tasks. There's no excuse for that. I can say pretty confidently that cutting fees won't be enough. They need a total rewrite of all their customer facing software and web stuff, and they probably need to r…

Vanguard's website revamp in the past three years was disappointing because in the past, I can visit just one (landing) page and get almost all of the info I need about my holdings + actions I could take on them and my accounts. Now, I have to click through a myriad of pages to do what I want. Plus, in Firefox browser at least, if you want to 'Exit' the order and some other pages, it simply doesn't work, so I have to type the 'vanguard.com' in the browser's URL field and ping it again.

This is an example of not breaking what was not broken (or at least, keep most of what was useful instead of replacing everything with "new and cool" stuff just because ).

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