intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

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dodecahedron
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intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by dodecahedron » Tue Jun 11, 2019 1:26 am

I am working on consolidating and streamlining my accounts with a view towards simplifying my financial life, particularly as I consider the possibility that my eventual incapacitation may require my daughters to take over my affairs. (Hopefully this is a long way off, but good to be prepared well ahead of time.)

I have done a fair amount of tire-kicking at various custodians (and collected some brokerage bonuses along the way) but Schwab has emerged as a leading candidate. I am happy with their DAF and the fact that I was able to move my Vanguard mutual funds (as well as my ETFs) there in-kind. Schwab´s website interface is easy to navigate. They were by far the easiest to deal with when I was settling my late husband´s estate and moving his accounts into my name. I am hopeful they will be similarly helpful to my POA daughter if and when she needs to take over my financial affairs. I like that they have a brick and mortar office nearby to deal with any paperwork issues.

As noted, I was able move my VG mutual funds there in-kind in my taxable account and have no plans to sell them during my lifetime due to large embedded gains. (I am periodically donating shares to my Schwab DAF.) But I was not planning to buy any more Vanguard funds as Schwab´s low cost index funds seem to cover my investment needs going forward.

So I was pretty surprised earlier this evening to get an unsolicited email from Schwab offering to waive all purchase fees for buying Vanguard mutual funds in my Schwab account. I did not ask for this. I did not indicate that I was planning to purchase any more shares of Vanguard mutual funds. The only purchases I have made at Schwab thus far are of Schwab mutual funds.

Has anyone else gotten this offer? It seems rather odd that Schwab is incentivizing me to rethink my previous decision that I could live without additional purchases of Vanguard mutual funds going forward. They seem to have *assumed* that just because I moved Vanguard mutual funds there (in my taxable account ONLY), that must mean I am planning to buy more.

One hole I had noticed is that Schwab does not seem to have a low cost balanced index fund like VBIAX. (Schwab does have a balanced fund, SWOBX, but its expense ratio is 50 basis points vs. 7 basis points for VBIAX.)

Any other Schwab investors have other suggestions for Vanguard funds they might want to buy if purchase fees were waived?

Workable Goblin
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by Workable Goblin » Tue Jun 11, 2019 1:57 am

dodecahedron wrote:
Tue Jun 11, 2019 1:26 am
Any other Schwab investors have other suggestions for Vanguard funds they might want to buy if purchase fees were waived?
The Vanguard balanced funds, absolutely. I've been a Schwab customer for years now, and it's really glaring that they lack any kind of reasonable (i.e., low-cost) all-in-one non-target-date funds like Vanguard has. From what I recall there are a few other gaps and holes in their lineup, but that's the biggest one. Even if was possible fee-free I probably wouldn't actually buy any shares right now for various reasons, but it would certainly be interesting in the future.

Also, to your other question I have not gotten any such offers. I suppose the fact that I don't own any Vanguard shares there (having never had Vanguard as a broker, and obviously not willing to pay Schwab's fees for buying out of their ecosystem) means that they don't think I would be interested.

mchampse
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by mchampse » Tue Jun 11, 2019 2:01 am

Who knows? You probably fit a profile that they think would look favorably on being able to buy commission-free Vanguard funds.

Did you get a sign-up bonus? Some people move money to get a signup bonus and then move it out. This could be a standard offer to anyone transferring assets from Vanguard to entice them to stay rather than transfer your assets back after you get your signup bonus.

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Nestegg_User
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by Nestegg_User » Tue Jun 11, 2019 2:25 am

as I've stated in other threads, if you've got enough in Schwab, they offer you the option of having one or two other companies funds at no cost ( I've got Vanguard set up for mine). It's possible that the office you use has seen that you have vanguard funds and wants to make you aware of that option (and of course keep your account at Schwab)

chw
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by chw » Tue Jun 11, 2019 5:49 am

My Schwab consultant offered to waive all fees for purchasing Vanguard funds several years ago. I wasn’t able to buy Admiral shares as time went along, so switched to the ETF version of the same Vanguard product with a waived trading fee. :happy

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ResearchMed
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by ResearchMed » Tue Jun 11, 2019 6:54 am

Nestegg_User wrote:
Tue Jun 11, 2019 2:25 am
as I've stated in other threads, if you've got enough in Schwab, they offer you the option of having one or two other companies funds at no cost ( I've got Vanguard set up for mine). It's possible that the office you use has seen that you have vanguard funds and wants to make you aware of that option (and of course keep your account at Schwab)
Do you know what the approximate "enough" is to keep at Schwab?
I'm sure it can vary, but perhaps one approximation?

Thanks.

RM
This signature is a placebo. You are in the control group.

ljb1234
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by ljb1234 » Tue Jun 11, 2019 7:33 am

ResearchMed wrote:
Tue Jun 11, 2019 6:54 am
Nestegg_User wrote:
Tue Jun 11, 2019 2:25 am
as I've stated in other threads, if you've got enough in Schwab, they offer you the option of having one or two other companies funds at no cost ( I've got Vanguard set up for mine). It's possible that the office you use has seen that you have vanguard funds and wants to make you aware of that option (and of course keep your account at Schwab)
Do you know what the approximate "enough" is to keep at Schwab?
I'm sure it can vary, but perhaps one approximation?

Thanks.

RM
I know that with > $1M AUM they will waive either the mutual fund fee or the ETF fee. Do not know what the lowest number is.

MnD
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by MnD » Tue Jun 11, 2019 7:52 am

I asked my assigned rep at Schwab if he would do this and he agreed.
It was in the context of moving funds in as cash from a 401-K rollover and needing to re-establish some fund positions that would normally have fees. Schwab doesn't charge fees on fund sales or to reinvest fund distributions and I'm retired, so it would be a one-time or at least an infrequent event.

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dodecahedron
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by dodecahedron » Tue Jun 11, 2019 1:11 pm

mchampse wrote:
Tue Jun 11, 2019 2:01 am
Did you get a sign-up bonus? Some people move money to get a signup bonus and then move it out. This could be a standard offer to anyone transferring assets from Vanguard to entice them to stay rather than transfer your assets back after you get your signup bonus.
I did not get a signup bonus several years ago when I moved assets in a taxable account from Vanguard to Schwab to facilitate using their DAF,which I preferred to Vanguard´s, nor when I later transferred funds from my TIAA Roth IRA though I recall I was sort of hoping for one on the latter. (I thought I was using a link that offered the signup bonus.) However, I was already a longtime Schwab client (my late husband and business partner had set up SEP-IRAs for both of us there many years ago) and although both those SEP-IRAs had since been rolled into my accounts elsewhere, I was not sure I would ¨count¨ as a ¨new Schwab client.¨

I do have more assets to potentially transfer into Schwab, but for a variety of reasons (e.g., direct CDs maturing in the next couple of years, funds in a TIAA 403b that will not be subject to RMDs as long as I continue to work for my employer part-time), it will be a lengthy process to consolidate those at Schwab. It would be nice to get a bonus, but it is not necessarily a deal killer.

an_asker
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Re: intrigued and puzzled by Schwab offer to waive fees on Vanguard mutual fund purchases

Post by an_asker » Tue Jun 11, 2019 1:40 pm

dodecahedron wrote:
Tue Jun 11, 2019 1:26 am
I am working on consolidating and streamlining my accounts with a view towards simplifying my financial life, particularly as I consider the possibility that my eventual incapacitation may require my daughters to take over my affairs. (Hopefully this is a long way off, but good to be prepared well ahead of time.)

I have done a fair amount of tire-kicking at various custodians (and collected some brokerage bonuses along the way) but Schwab has emerged as a leading candidate. I am happy with their DAF and the fact that I was able to move my Vanguard mutual funds (as well as my ETFs) there in-kind. Schwab´s website interface is easy to navigate. They were by far the easiest to deal with when I was settling my late husband´s estate and moving his accounts into my name. I am hopeful they will be similarly helpful to my POA daughter if and when she needs to take over my financial affairs. I like that they have a brick and mortar office nearby to deal with any paperwork issues.

As noted, I was able move my VG mutual funds there in-kind in my taxable account and have no plans to sell them during my lifetime due to large embedded gains. (I am periodically donating shares to my Schwab DAF.) But I was not planning to buy any more Vanguard funds as Schwab´s low cost index funds seem to cover my investment needs going forward.

So I was pretty surprised earlier this evening to get an unsolicited email from Schwab offering to waive all purchase fees for buying Vanguard mutual funds in my Schwab account. I did not ask for this. I did not indicate that I was planning to purchase any more shares of Vanguard mutual funds. The only purchases I have made at Schwab thus far are of Schwab mutual funds.

Has anyone else gotten this offer? It seems rather odd that Schwab is incentivizing me to rethink my previous decision that I could live without additional purchases of Vanguard mutual funds going forward. They seem to have *assumed* that just because I moved Vanguard mutual funds there (in my taxable account ONLY), that must mean I am planning to buy more.

One hole I had noticed is that Schwab does not seem to have a low cost balanced index fund like VBIAX. (Schwab does have a balanced fund, SWOBX, but its expense ratio is 50 basis points vs. 7 basis points for VBIAX.)

Any other Schwab investors have other suggestions for Vanguard funds they might want to buy if purchase fees were waived?
Disclaimer: this does not even attempt to answer your question

It is strange that you have had such a nice experience with Schwab DAF. If there was one thing I've disliked in my over two decades of experience with Schwab, it's been that. First of all, I didn't appreciate their annual fees; secondly, the person I spoke with - it appeared that I was getting the same person multiple times (though I could be wrong) - was unhelpful (to put it mildly) to rude. I didn't complain about it because a) it was not like we had a lot of money in there (I thought maybe that was something that counted against us?!!)and b) we drew down all of it in a few years anyway.

PS: That said, it still worked for what we wanted out of it.

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