It’s one of Clark’s favorite discount investment brokerages…and it’s growth is off the charts!
Vanguard has now crossed the $4 trillion asset threshold for the first time ever. That makes Vanguard the second largest financial house behind Blackrock, trailing them by roughly $1 trillion in assets.
So what makes Vanguard so special? What are they doing right?
Vanguard’s customers are its shareholders
Vanguard is like a co-op for investing that’s owned by its shareholders, similar to how a credit union is a co-op for banking.
At Vanguard, they’ve managed to offer better returns on money because everything they do is to hold down expenses for their customers. They charge one-sixth the management expenses of the industry average. That means paying 18 cents in management fees per $100 invested in Vanguard products vs. paying $1.23 for the same $100 invested in competitor’s actively managed funds, according to independent investment research firm Morningstar.
Vanguard’s business model is an unusual one for Wall Street to stomach. Many on Wall Street have long brushed them off as that cutesy little place in Pennsylvania saying, ‘Oh, they’re not really Wall Street.’
Clark finds himself amused at that kind of attitude.
‘Thank goodness they’re not Wall Street because every choice they make is about you as their customer and shareholder-owner!’ the consumer champ laughs.
If you like using fee-only financial planners as Clark has talked about, many of them will heavily do your investing with Vanguard to hold your costs down. It makes them look better because your performance over time with their guidance will be a whole lot better!