Brokerages with no-transaction fees for Vanguard funds

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Owl
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Brokerages with no-transaction fees for Vanguard funds

Post by Owl » Thu May 09, 2019 3:35 pm

Are there any brokerages, other than Vanguard, that offer Vanguard funds with no transaction fees to buy and sell those Vanguard funds?

I ask because I have a significant amount invested in different Vanguard funds (mutual funds and Vanguard ETFs), which I currently hold in a Vanguard brokerage account. Their customer service during the past year has become so terrible that I would like to move all my assets from Vanguard to another brokerage -- if I can find one that doesn't charge transaction fees to buy and sell Vanguard funds.

I've checked Fidelity and Schwab, both of which charge transaction fees for Vanguard funds. This has made me wonder if it may be the case that no brokerage other than Vanguard offers Vanguard funds on a no-transaction fee basis.

Thanks for any replies!

retiredjg
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by retiredjg » Thu May 09, 2019 3:42 pm

There have been a couple over time. I cannot remember which they are. However, even if you find one, it may not stay that way. I think it might have been TD Ameritrade that had no transaction cost for awhile on ETFs (not mutual funds) but have stopped doing it. Or maybe it was someone else. Not a great solution.

It is possible that some places will charge you to buy Vanguard but not to sell it. You could look into that and find one where you could transfer what yo have in-kind (without buying) and not have a cost to sell. Then if you need to buy something, buy their mutual fund instead of Vanguards. I'm thinking Fidelity and Schwab here because they have reasonable substitutes with Fido being better than Schwab in my opinion. Schwab's strength is in ETFs, not mutual funds.

deltaneutral83
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by deltaneutral83 » Thu May 09, 2019 3:52 pm

You can trade any ETF commission free with Merrill Edge if you have $100k in the account. Don't think so for Mutual Funds. This is one of the bigger cons of MF's as opposed to ETF's is mobility. But you should be able to convert MF's to ETF's while at VG, then move the ETF's.

student
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by student » Thu May 09, 2019 4:06 pm

As others have said, you can convert them to ETF and move them to a brokerage firm such as ME if you have enough assets to buy and sell for free. If you are looking for no-free Vanguard funds at other brokerages, the answer is probably not. You are not going to get something for nothing. Vanguard keeps its cost low so customer service suffers. Vanguard is not willing to pay other brokerages to have its funds there. So there is no incentive for brokerage firms to do it. They are providing customer service for what compensation if they do it?

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by neilpilot » Thu May 09, 2019 4:20 pm

As other's have said, it's probably best to convert MFs to ETFs before transferring from Vanguard. Then, unless you plan to trade often you should consider going with a discount broker such as ME or TDA that will give you a new account bonus. I gave up on ME due to customer service issues, but have been very happy with TDA. After the initial 60 days of free trades, it will likely take years of activity at $6.95 per ETF trade to even approach the $$ you can collect for new account and retention bonuses.

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by acanthurus » Thu May 09, 2019 4:20 pm

removed
Last edited by acanthurus on Tue Oct 15, 2019 12:54 pm, edited 1 time in total.

dbr
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by dbr » Thu May 09, 2019 4:43 pm

Even if you pay a commission to trade an ETF the cost may be very low compared to that for trading the mutual fund, low enough to be of little consequence if trades are large enough and infrequent enough. All my Vanguard funds are held at brokers where I pay a transaction cost, but the cost I pay on average over the years is as good as nil. It makes a difference whether or not one is steadily adding in accumulation or not. The one advantage I will give to taking dividends is that dividends may be sufficient to support withdrawals without paying a transaction cost. Sometimes sales do not have a cost though purchases do.

Ferdinand2014
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by Ferdinand2014 » Thu May 09, 2019 4:52 pm

Owl wrote:
Thu May 09, 2019 3:35 pm
Are there any brokerages, other than Vanguard, that offer Vanguard funds with no transaction fees to buy and sell those Vanguard funds?

I ask because I have a significant amount invested in different Vanguard funds (mutual funds and Vanguard ETFs), which I currently hold in a Vanguard brokerage account. Their customer service during the past year has become so terrible that I would like to move all my assets from Vanguard to another brokerage -- if I can find one that doesn't charge transaction fees to buy and sell Vanguard funds.

I've checked Fidelity and Schwab, both of which charge transaction fees for Vanguard funds. This has made me wonder if it may be the case that no brokerage other than Vanguard offers Vanguard funds on a no-transaction fee basis.

Thanks for any replies!
Fidelity charges 4.95 with vanguard ETF trades. They often have deals if you transfer for some free trades that are non i shares or Fidelity. Vanguard MF are 49-79 per trade often.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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PalmQueen
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by PalmQueen » Thu May 09, 2019 4:57 pm

In the Fidelity/Schwab world, ETFs are just $4.95/trade and you can likely score free trades based on your transfer of new funds.

Fidelity currently offers 300 trades for $50,000 - $99,000 and 500 trades for $100,000+.
Schwab usually has something similar.

MFs are where it gets tricky. Commission at Fidelity is $75 and at Schwab is $49.95.
I don't believe MFs are included in the free trade incentives. Doesn't mean you can't negotiate something. (Doesn't mean you can either.)

You'd want to check out availability of any specific Admiral shares you may want to purchase. Not all are available and some have conditions.

grp2c
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by grp2c » Thu May 09, 2019 5:10 pm

VTSAX and VTIAX are no transaction fee funds at etrade. They might be free to trade at chase you invest as well.

https://www.etrade.wallst.com/v1/stocks ... AX&rsO=new

https://www.etrade.wallst.com/v1/stocks ... AX&rsO=new

gs2offroad
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by gs2offroad » Thu May 09, 2019 5:19 pm

E-trade has about 30 of the Vanguard ETFs commission free including VTI, VOO and BND

ras4250
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by ras4250 » Fri May 10, 2019 3:21 am

I hold VWINX and VWELX at Merrill. Transferred existing positions from Vanguard. If you set up an automatic investment to add to it, that is free. Dividend reinvestment is free too. The beauty of the automatic investment is you can change it, start it, or stop it any time. So unless you are buying and selling all the time you can just use it as a free way to purchase when you want.

Topic Author
Owl
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by Owl » Fri May 10, 2019 1:56 pm

Many thanks for the very helpful replies!

As you've suggested, I'll now look into TDAmeritrade and etrade, and also I'll contact Schwab again and ask if my account would be large enough for them to waive purchase fees on additional Vanguard MF shares. (It's the MF transaction fee issue that is the most important to us. We don't buy or sell our Vanguard ETFs often so the ETF commissions wouldn't be significant.)

My wife and I invested in Vanguard MFs so long ago that we'd have large capital gains to pay if we sold them and then bought comparable ETFs (I'm assuming this is what posters meant by converting the MFs to ETFs). Am I right about this? -- Otherwise we'd do this in a flash!

Again, many thanks for the helpful advice!

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HueyLD
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by HueyLD » Fri May 10, 2019 1:59 pm

You asked: “My wife and I invested in Vanguard MFs so long ago that we'd have large capital gains to pay if we sold them and then bought comparable ETFs (I'm assuming this is what posters meant by converting the MFs to ETFs). Am I right about this? -- Otherwise we'd do this in a flash!”

No, converting a MF to its equivalent ETF shares is a nontaxable exchange.

Topic Author
Owl
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by Owl » Fri May 10, 2019 2:45 pm

HueyLD --

I definitely did not know that!! This would be potentially very helpful information for my wife and me. Thank you for taking the time to tell me this.

Is a conversion of a MF to equivalent ETF shares not a reportable tax event to IRS? If I do this, would I simply sell the MF, and once the trade has settled, then buy the equivalent ETF -- or does Vanguard have a way to do a conversion without selling the MF and then buying the ETF?

How would I know in advance that I've chosen an ETF that qualifies as "equivalent" to the MF I'm leaving? (I'm sorry if my questions are naive, but it can't be helped without asking!)

Many thanks!

rkhusky
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by rkhusky » Fri May 10, 2019 2:56 pm

If you look at Vanguard’s page for a given mutual fund, there will be a link to the equivalent ETF, if there is one. Vice-versa for the ETF pages.

There should be a button for converting a MF to ETF. Or try exchanging MF directly to ETF. The site may direct you to a special page (it does that for Roth conversions).

Note that you cannot exchange back to a MF without paying taxes.
Last edited by rkhusky on Fri May 10, 2019 3:00 pm, edited 1 time in total.

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Nate79
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by Nate79 » Fri May 10, 2019 2:58 pm

Vanguard mutual funds can only be converted to the corresponding ETF at Vanguard if you want it to be a tax free event. So you would need to do this before you transfer them to another brokerage. The brokerage may have no fee to sell a mutual fund but if you want to buy there may be a purchase fee. So if you are only worried about the cost to sell existing mutual funds then transferring them to the new brokerage is probably not an issue but check with the new brokerage first.

TeeDee
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by TeeDee » Fri May 10, 2019 3:06 pm

Firstrade

classicindexer
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by classicindexer » Fri May 10, 2019 3:45 pm

Not sure if you bank with Chase... Chase You Invest (self directed brokerage) offers a lot of Vanguard mutual funds for no transaction fee and many with lower minimum initial investment. The list of funds is not available online anymore but you can call customer service and give them the fund symbol and they’ll tell you what the minimum initial investment is, a lot of them are as low as $1 initial minimum purchase for Admiral shares VTSAX, VTIAX, etc.

Topic Author
Owl
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by Owl » Fri May 10, 2019 4:52 pm

rkhusky - Many thanks for the clear MF to ETF conversion instructions!
Nate79 - Than you for the Firsttrade suggestion, which I'll check out.
classicindexer - And thanks for the Chase You Invest suggestion, which I'll also look into.

I greatly appreciate the many helpful and informative response to my posting! A multitude of thanks!

treadingwater
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by treadingwater » Fri May 10, 2019 4:54 pm

We just converted vtsax MF to vti (equvilant ETF) . I contacted Vanguard customer service and was told it could be done via phone call. The conversion appears to have taken place immediately and executed at the vti market price at the time of my phone call. I think this is the way to do it to not be out of the market and not create a taxable event.

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Owl
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by Owl » Fri May 10, 2019 4:57 pm

treadingwater - I appreciate that helpful idea. Thank you!

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by vu8 » Fri Jun 07, 2019 9:50 am

2 choices to my knowledge as of June 2019: First Trade and Chase You Invest

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by jhfenton » Fri Jun 07, 2019 10:05 am

rkhusky wrote:
Fri May 10, 2019 2:56 pm
If you look at Vanguard’s page for a given mutual fund, there will be a link to the equivalent ETF, if there is one. Vice-versa for the ETF pages.

There should be a button for converting a MF to ETF. Or try exchanging MF directly to ETF. The site may direct you to a special page (it does that for Roth conversions).

Note that you cannot exchange back to a MF without paying taxes.
treadingwater wrote:
Fri May 10, 2019 4:54 pm
We just converted vtsax MF to vti (equvilant ETF) . I contacted Vanguard customer service and was told it could be done via phone call. The conversion appears to have taken place immediately and executed at the vti market price at the time of my phone call. I think this is the way to do it to not be out of the market and not create a taxable event.
I have done the conversion many times. The tax-free conversion is not done immediately. It occurs overnight at the end of day NAV for the ETF, not live at the market price. I hope they did not erroneously do a buy-sale transaction for you.

As you discovered, it does require a phone call to Vanguard. Every time I get the same script about how the conversion will take place. I practically have it memorized at this point. The mutual fund shares being converted will disappear overnight. For one day, your account will be short the position. The ETF shares will appear the second day following your phone call. The conversion will be made as if you sold the mutual fund at the end of day NAV and purchased the ETF shares at the end of day NAV. Because neither number is known mid-day, conversions are not same-day events.

How did your "conversion" show up on your account history? It should show a transfer out and a transfer in, not a sale and a buy.

atdharris
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by atdharris » Fri Jun 07, 2019 10:46 am

Merrill gives you free trades if you have over $100k in your account. Vanguard MFs are not transaction free though. All ETFs and stocks are.

classicindexer
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by classicindexer » Fri Jun 07, 2019 10:48 am

classicindexer wrote:
Fri May 10, 2019 3:45 pm
Not sure if you bank with Chase... Chase You Invest (self directed brokerage) offers a lot of Vanguard mutual funds for no transaction fee and many with lower minimum initial investment. The list of funds is not available online anymore but you can call customer service and give them the fund symbol and they’ll tell you what the minimum initial investment is, a lot of them are as low as $1 initial minimum purchase for Admiral shares VTSAX, VTIAX, etc.
It looks like Chase You Invest has recently raised the minimum initial purchase from $1 to the normal $3,000 for a variety of the Admiral shares. They can still be purchased for no transaction fee.

vu8
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by vu8 » Fri Jun 07, 2019 12:21 pm

classicindexer wrote:
Fri Jun 07, 2019 10:48 am
It looks like Chase You Invest has recently raised the minimum initial purchase from $1 to the normal $3,000 for a variety of the Admiral shares. They can still be purchased for no transaction fee.
Fantastic information...

aednichols
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by aednichols » Fri Jun 07, 2019 1:58 pm

I opened a You Invest account and bought Federal Money Market (VMFXX) very easily with no fees. My idea is to have a pretty darn safe place to save while earning way more interest than their pathetic yield on savings accounts.

classicindexer
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by classicindexer » Fri Jun 07, 2019 2:15 pm

aednichols wrote:
Fri Jun 07, 2019 1:58 pm
I opened a You Invest account and bought Federal Money Market (VMFXX) very easily with no fees. My idea is to have a pretty darn safe place to save while earning way more interest than their pathetic yield on savings accounts.
I have the same strategy, although I went with VMMXX for the slightly better yield. I bought a little VBIAX (shorter term play money) when it was $1 initial minimum (less than the $3k). Eventually I'll buy VTSAX and VTIAX - was planning on dollar cost averaging it in You Invest with less than $3k initial, oh well.

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by Hector » Fri Jun 07, 2019 2:22 pm

retiredjg wrote:
Thu May 09, 2019 3:42 pm
There have been a couple over time. I cannot remember which they are. However, even if you find one, it may not stay that way. I think it might have been TD Ameritrade that had no transaction cost for awhile on ETFs (not mutual funds) but have stopped doing it. Or maybe it was someone else. Not a great solution.

It is possible that some places will charge you to buy Vanguard but not to sell it. You could look into that and find one where you could transfer what yo have in-kind (without buying) and not have a cost to sell. Then if you need to buy something, buy their mutual fund instead of Vanguards. I'm thinking Fidelity and Schwab here because they have reasonable substitutes with Fido being better than Schwab in my opinion. Schwab's strength is in ETFs, not mutual funds.
TD Ameritrade changed ETFs that they used to provide commission free. Here is their latest list of commission free ETFs: https://research.tdameritrade.com/grid/ ... onfree.asp

drzzzzz
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by drzzzzz » Fri Jun 07, 2019 2:37 pm

Just a caveat that has been mentioned - not all Vanguard funds have an ETF version. Please check that on the phone with a rep since you don't want positions that have a large long term gain to turn into a taxable event by going from a mutual fund to a DIFFERENT ETF. I have however exchanged multiple mutual funds such as VTSAX to the ETF version VTI and it happens easily without any fees or is not taxable. One other thing when doing such an exchange, make sure you print out a screen shot of your cost basis for the funds that you bought that you are exchanging since Vanguard is not always perfect at getting the cost basis correct.

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by CRTR » Sat Jun 08, 2019 7:51 am

Owl wrote:
Thu May 09, 2019 3:35 pm
Are there any brokerages, other than Vanguard, that offer Vanguard funds with no transaction fees to buy and sell those Vanguard funds?

I ask because I have a significant amount invested in different Vanguard funds (mutual funds and Vanguard ETFs), which I currently hold in a Vanguard brokerage account. Their customer service during the past year has become so terrible that I would like to move all my assets from Vanguard to another brokerage -- if I can find one that doesn't charge transaction fees to buy and sell Vanguard funds.

I've checked Fidelity and Schwab, both of which charge transaction fees for Vanguard funds. This has made me wonder if it may be the case that no brokerage other than Vanguard offers Vanguard funds on a no-transaction fee basis.

Thanks for any replies!
Etrade has ALL Vanguard Index funds, Admiral Share Class AND ALL Vanguard ETFs as transaction free!

bennettg
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Re: Brokerages with no-transaction fees for Vanguard funds

Post by bennettg » Mon Aug 12, 2019 11:17 am

acanthurus wrote:
Thu May 09, 2019 4:20 pm
Schwab will waive purchase fees for all Vanguard funds that are available for purchase at non-Vanguard brokers if you have a large enough account. They'll usually do this for a single fund family (Vanguard, Pimco, whatever) - your choice - assuming you have a couple hundred k there.
Hi. Can you share more information about this? How did you get them? Thank you.

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by usagi » Mon Aug 12, 2019 1:11 pm

I must admit I am a bit puzzled as to why you would want to reward a firm with lousy customer service by continuing to purchase more of their products. Other firms now have comparable offerings, often at lower cost.

I have the same issue. huge capital gains at Vanguard. My solution: I turned off dividend reinvestment and flow everything to Fidelity and purchase ishare etfs which have lower ERs. My plan is to hold the Vanguard products till death and let my heirs divest themselves of Vanguard.

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by bondsr4me » Mon Aug 12, 2019 1:26 pm

Owl wrote:
Thu May 09, 2019 3:35 pm
Are there any brokerages, other than Vanguard, that offer Vanguard funds with no transaction fees to buy and sell those Vanguard funds?

I ask because I have a significant amount invested in different Vanguard funds (mutual funds and Vanguard ETFs), which I currently hold in a Vanguard brokerage account. Their customer service during the past year has become so terrible that I would like to move all my assets from Vanguard to another brokerage -- if I can find one that doesn't charge transaction fees to buy and sell Vanguard funds.

I've checked Fidelity and Schwab, both of which charge transaction fees for Vanguard funds. This has made me wonder if it may be the case that no brokerage other than Vanguard offers Vanguard funds on a no-transaction fee basis.

Thanks for any replies!
I would convert the "mutual funds" to ETF's while still at Vanguard.
Then you can transfer to Fidelity or Schwab.
Depending on the size of your account, you should be able to get Free Trades at both Fidelity and Schwab.
Then you won't have trade commissions to deal with for a while.
Fidelity gave me 200 free trades good for 2 years; on my second year now.
Hope this helps.

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by aristotelian » Mon Aug 12, 2019 2:39 pm

Merrill gives 100 free trades per month on ETFs. That is about 98 more than I need.

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Re: Brokerages with no-transaction fees for Vanguard funds

Post by acanthurus » Mon Sep 09, 2019 2:44 pm

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