I know that you know Vanguard lowered its fees on 87 funds because you tell me. It’s no surprise that Vanguard is racing to zero on its funds. It feels to me like they’re already there. But let’s not confuse this with what Vanguard is truly after—the higher-fee advisory business.
When Jack Bogle founded Vanguard, there was no advisory business. He offered a passive index fund for a low fee, no front or back-end loads, and no 12b-1 fees. It was the antithesis of high-fee Wall Street and packaged insurance products. It was especially attractive for those in the know who worked on Wall Street. (You don’t think they buy their own stuff, do you?).
Bogle’s offer attracted those in the know, like Dick Young, through Richard C. Young’s Intelligence Report. That’s probably why you and I are here today. You trusted Dick Young’s razor-sharp focus on low fees and doing right by the Main Street investor. It turns out there was room for an advisory business run today by his son Matt for readers who wanted more. Reading still requires action. Acting beats inertia.
But it all begins with trust. Who do you trust with your money so you can enjoy other aspects of your life with peace of mind and comfort? Life is short. Your retirement life is shorter. No one likes thinking about their own demise, but you want to make sure your family is in good hands when you’re gone. Vanguard wants that business.
Vanguard is putting its flag into the advice business, investing in their own now lower-fee products and charging an advisory fee. This is not the business Bogle was after. He might even agree with Your Survival Guy that with zero commissions, the case is made for owning individual stocks.
As a Vanguard customer, Your Survival Guy still needs to answer a security question every time I call.
I don’t like that.
I don’t like remembering that the name of my first pet was Muffin and how she was killed by a car when I was seven. That’s no way to begin a conversation, especially about investing. “Can someone get me a tissue? OK, where was I?”
Action Line: “Hang on, Mom, just to be sure it’s you; what was the name of your first-grade teacher?”
When you’re ready to talk, let’s talk. But only if you’re serious. Email me ejsmith@yoursurvivalguy.com.
Originally posted on Your Survival Guy.
