Vanguard has been guiding its mutual fund clients toward its brokerage platform for years, but now it's making the transition mandatory.
The asset manager plans to phase out its legacy mutual fund platform by the end of next year. It’s informing clients that those who don’t take action will be automatically moved to a brokerage account.
“Moving forward, our Vanguard Brokerage Account platform will be the sole method for personal investor clients to invest directly with Vanguard,” the company states.
Vanguard began notifying clients of this transition in August, implementing the shift in phases.
“We’re upgrading accounts in stages and communicating with clients accordingly,” Vanguard says. “If you have an account still on our legacy platform, you should expect a notification soon if you haven’t already.”
In 2022, Vanguard introduced a $20 annual fee per account for investors remaining on the legacy platform. Under this model, each fund was treated as a separate account, so clients holding multiple funds incurred fees for each one.
At the time, Vanguard explained these fees as necessary “to offset the costs and complexity of maintaining this system.”
The Vanguard brokerage account provides a broader suite of investment options, including stocks, bonds, mutual funds, and ETFs from other asset managers. Legacy platform clients had access only to Vanguard’s proprietary funds.
The brokerage account also features access to Vanguard’s robo-advisor service and Securities Investor Protection Corp. coverage up to allowable limits on most securities.
