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Vanguard

Investing Firm
With Vanguard you can access mutual funds, IRAs, ETFs, 401(k) plans, and more with personalized financial advice.

Overview

Vanguard is an investment firm with a difference. Its clients are its shareholders. Vanguard’s investment funds control the company, and its investors own those funds. As a result, net profits are returned to the investors or clients. Vanguard also offers brokerage, wealth management, and advisory services.

What is Vanguard?

Vanguard is a low-cost investment firm that implemented its current operating structure in 1975. Its founder John C. Bogle structured the company as a client-owned mutual fund company where net profits are returned to its investors, who are its shareholders. It is known for its below-average expense ratios for index and exchange-traded funds. Vanguard offers commission-free exchange-traded fund trades for more than 3,000 mutual funds with no transaction fees for long-term investors looking to buy and hold investments.

Vanguard’s Brokerage arm began in 1983 to provide its clients with the ability to invest in stocks and bonds. Its brokerage service is not intended for frequent or short-term traders but is more aligned with its investment philosophy.

Who are Vanguard’s Clients?

Vanguard is designed for long-term or retirement investors and those with at least $1,000 to invest. Its target clients are buy-and-hold investors who are not looking for real-time updates to help make decisions. The costs for investing are low for index and exchange-traded funds. 

New investors receive thoughtful guidance that informs investment decisions. For example, Vanguard introduced a curated list of ETFs to help clients create well-diversified portfolios. Vanguard is considered the dominant company in managed account services.

The company’s philosophy contrasts with that of active traders and investors. Its focus is on retirement and long-term investing, which does not demand streaming data, dynamic charts, and real-time indicators. 

What are Vanguard’s Products and Services?

Vanguard offers investment, brokerage, wealth management, and advisory services. Customers can invest in the following:

  • Mutual Funds
  • Stocks and ETFs 
  • Penny Stocks 
  • Bonds
  • International Investments

The company also offers a Personal Advisory and Digital Advisor service. Clients can select from variable and fixed annuities, educational accounts, IRAs, and 401k plans. Vanguard also provides financial planning, asset management, and trust services.

Investing with Vanguard

Vanguard relies heavily on traditional methods of communication between client and broker. Its goal is to improve the price of stock orders. It does not offer trade simulators or backtesting of trade strategy. In fact, the technology discourages active trading in favor of long-term investing.

Trading Technology

Vanguard’s website and trading platform require multiple steps to place a trade, some of which can only be made through a broker. The site lacks features that other online brokers offer. When looking at a trade ticket, the data is real-time; however, data outside the ticket can be delayed as much as 20 minutes. The platform does not retain parameter settings from order to order and lacks many customization options. The Vanguard platform will be frustrating for those wanting an active trading experience.

Mobile and Online Trading

The company’s mobile app does not provide real-time quotes for stocks and ETFs unless an order is placed. No charts are available, and many features direct users to the mobile website. However, the application provides a few features that are expected on today’s mobile application.

Customer Service

Customer service is restricted to telephone access. 

  • Personal Investors. 8 a.m. to 8 p.m. (EST) Monday through Friday.
  • Retirement plan participants and institutional investors. 8:30 a.m. to 9 p.m. (EST) Monday through Friday.
  • Financial advisors. 8:30 a.m. to 7 p.m. (EST) Monday through Friday.

Depending on the account size, the response time can vary. It does maintain a Twitter account that may be more responsive.

How Much Does Vanguard Cost?

Since its inception, Vanguard has operated a zero-commission trade on its ETF and index funds. For other transactions, Vanguard charges the following:

  • No commissions for online equity, ETF, index, or penny stock trades. 
  • Per contract fee of $1.00
  • Commission on mutual funds outside of Vanguard’s no-fee program is $50.00
  • Fee for fixed income accounts ranges from $0.00 to $2.00 per $1,000.
  • An annual service fee of $20.00
  • Live broker fees range from $20.00 to $50.00 per trade

Vanguard’s fees are based on the investment asset size. For example, Personal Advisory Service is only available to clients with $50,000 or more in Vanguard accounts.

How to Get Started with Vanguard

Opening an account with Vanguard means navigating to the online page to set up an account on the personal investor site. To open an account, an individual needs a banking account and routing number to transfer the funds to the Vanguard account. Once the application form is submitted, it is reviewed, and if approved, trading can begin in three to seven days. Alternatively, people can call the phone numbers on the contact us page.

FAQs About Vanguard (5)

  • Is Vanguard a good choice for beginners?

    Vanguard’s reputation for managed services and index funds make it a good choice for beginners who want to learn about investing with minimal risk; however, the $1,000 minimum may be too high for some initial investors.

  • Does Vanguard have hidden fees?

    Vanguard does not charge commission fees on in-fund trades, and all other fees are available upon request.

  • Why is Vanguard so popular?

    Vanguard’s popularity stems from its solid investment record, creation of index funds, and no-cost trades.

  • Does Vanguard charge transaction fees?

    Vanguard does not charge a transaction fee as long as the trade occurs within the Vanguard no-fee funds.

  • How much money do you need to start a Vanguard account?

    You need at least $1,000 to open an investment account.

Vanguard

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Vanguard Products and Services

Why Us

Low-Cost Funds

Vanguard's mutual funds are less expensive than the industry average, making the expense ratio of 0.10%. The average ratio for the industry is 0.45%.

Extensive Mutual Funds

Over 3,000 no transaction fee mutual funds, which gives you plenty of options to choose from. It has a Select program to help investors learn to diversify their portfolios while minimizing risk.

Investor Education

Learn about investment options and prioritize their goals, predict when they'll be able to retire with high-quality calculators and tools, estimate their retirement expenses, and weigh the benefits of converting a traditional IRA to a Roth.

Video

Choose Vanguard

Vanguard introduced the first index funds and continues to leverage that knowledge to achieve new economies of scale to reduce costs. Take a look at the extensive list of solid-performing mutual funds. Vanguard offers a strong portfolio of indexed mutual funds, many of which are top performers. In addition to its almost 50 years of investing experience, Vanguard is known for low-cost funds, extensive mutual funds and educational resources for investors.

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