Should You Stay With Vanguard Despite the New Fee Announcement?

Vanguard, one of Team Clark’s favorite brokerage firms, recently announced to its customers several “junk fees,” as money expert Clark Howard calls them, including the implementation of a $100 exit fee for most customers who close or transfer their account.

The changes are part of a new fee schedule and commission costs update that the firm is set to roll out on July 1, 2024, according to correspondence it sent out to its customers.

Clark has long championed Vanguard as one of his favorite investment and brokerage firms because of their great features and minimal fees — but he does have some strong thoughts on them now.

How Does Clark Feel About the New Fees at Vanguard?

“Vanguard’s been making a lot of changes over the years, which I don’t like,” Clark says. “I have no problem when you institute unfriendly changes on new customers, but what I don’t like is when Vanguard hands out these edicts and almost like on a whim, bam! — it’s there. Like with these new junk fees, I don’t like it. I don’t like their explanation that they sent out either.”

Although Vanguard has long allowed customers to trade funds over the phone at no cost, Clark says he’s not mad about that pending change.

“That is not unusual,” Clark says. “If you don’t do a trade electronically with a brokerage, it is very common that there is a fee for talking to a human. And so that one doesn’t really bother me, but this exit fee bothers me a lot.”

The new fees have garnered quite a bit of feedback in the Clark Community forum as well as elsewhere online, where many feel that Vanguard has found a way to add to its coffers by forcing new fees on retirees.

What Are Vanguard’s New Fees?

According to its updated fee schedule, Vanguard is instituting several new charges come July 1 affecting accounts with less than $1 million or more. Here are a few of them:

Fee	Details	Exemption
$100	Processing fee for account closure or the transfer of account assets to another firm.	Account holders with $5 million+ in qualifying assets.
$100	Processing fee to deposit physical CDs.	none
20%	Fee deducted from any class-action settlement funds recovered on your behalf before any of the proceeds are deposited into your brokerage account.	none
$25	Fee for ETF or mutual fund transactions made with a broker over the phone.	Broker accounts enrolled in a Vanguard-affiliated advisory service.

For the complete changes, see Vanguard’s updated fee schedule.

Is Clark Thinking About Leaving Vanguard Amid the Changes?

“I am sticking with Vanguard,” Clark says. He added that he wished that they engaged with customers before they announced the changes.

“I just don’t think this is the spirit that is traditional with Vanguard,” he adds. “Vanguard is owned by its account holders, but they’re not being asked for input on this stuff. They’re just being handed edicts, and that’s not the way this should play.”

So if you can stomach the new fees, Clark wants you to do like him: Stay put.

Other Options If You’re Determined To Leave Vanguard

Although Clark is staying put, you may be determined to exit Vanguard before the changes come this summer. Thankfully, other brokerage firms offer some alternatives to avoid Vanguard’s fees — if you want to leave.

Fidelity

For example, Fidelity offers $0 commission trades as well as no-cost transfers.

“Fidelity is a brilliantly-run company,” Clark says. “They have this ability to cut through the clutter and offer certain things that are clearly better than other people.”

Clark also thinks Fidelity is a good choice for first-time investors looking to learn where to put their money.

Want to learn more about the firm? Read our review of Fidelity Investments.

Charles Schwab

While Schwab typically will charge you a $50 fee to transfer away from them, they have been known to reimburse you any transfer fees accrued from other brokerages, depending on the amount and your persistence.

Clark says Schwab.com’s superior research capabilities make it a good choice for self-directed investors who don’t need a lot of help from robo-advisors.

Read our comparison guide: Fidelity vs. Vanguard vs. Schwab: Who’s better?