Vanguard funds at Merrill Edge is there a catch?

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Blue456
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Vanguard funds at Merrill Edge is there a catch?

Post by Blue456 » Fri Nov 15, 2019 7:45 am

So Merrill Edge has VFIAX and VBTLX. Which means you can have a pretty low expense ratio 2 fund portfolio. Is there a catch?

Silk McCue
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by Silk McCue » Fri Nov 15, 2019 7:47 am

Blue456 wrote:
Fri Nov 15, 2019 7:45 am
So Merrill Edge has VFIAX and VBTLX. Which means you can have a pretty low expense ratio 2 fund portfolio. Is there a catch?
The catch is any fees charged by Merrill Edge beyond the ERs of the funds. There are zero at VG. What fees will ME charge you?

Cheers

stan1
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by stan1 » Fri Nov 15, 2019 7:53 am

What is the cost to buy these funds? Looks like $19.95 per purchase. That adds up if you are purchasing regularly. Maybe not a big deal if you are going to buy once and hold for a long time without making additional investments.

Use ETF share classes of those funds (VOO and BND) instead which have zero commission trades.

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Blue456
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by Blue456 » Fri Nov 15, 2019 8:02 am

stan1 wrote:
Fri Nov 15, 2019 7:53 am
What is the cost to buy these funds? Looks like $19.95 per purchase. That adds up if you are purchasing regularly. Maybe not a big deal if you are going to buy once and hold for a long time without making additional investments.

Use ETF share classes of those funds (VOO and BND) instead which have zero commission trades.
Im just buying once and holding. So I guess $40.

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Brianmcg321
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by Brianmcg321 » Fri Nov 15, 2019 8:05 am

There's the catch.

That $40 fee, compounded at 12% for 100 years would be worth $3.3mil. :moneybag
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.

Silk McCue
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by Silk McCue » Fri Nov 15, 2019 8:09 am

Blue456 wrote:
Fri Nov 15, 2019 8:02 am
stan1 wrote:
Fri Nov 15, 2019 7:53 am
What is the cost to buy these funds? Looks like $19.95 per purchase. That adds up if you are purchasing regularly. Maybe not a big deal if you are going to buy once and hold for a long time without making additional investments.

Use ETF share classes of those funds (VOO and BND) instead which have zero commission trades.
Im just buying once and holding. So I guess $40.
And $19.95 every time you sell in the future. There is no good reason to pay these type of fees given the other offerings in the marketplace.

Cheer

arf30
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by arf30 » Fri Nov 15, 2019 8:09 am

The main "catch" (beyond any fees) that I've seen bite some family members is that the agreement between your broker and the mutual fund provider can end at any time, leaving you with funds that you can't buy or sell, or have to transfer out, or worst case you're forced to liquidate. ETFs won't have that issue since they're traded on the open market. That's why it's generally recommended to do mutual funds direct through their provider instead of a 3rd party.

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dodecahedron
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by dodecahedron » Fri Nov 15, 2019 8:20 am

Silk McCue wrote:
Fri Nov 15, 2019 8:09 am
Blue456 wrote:
Fri Nov 15, 2019 8:02 am
stan1 wrote:
Fri Nov 15, 2019 7:53 am
What is the cost to buy these funds? Looks like $19.95 per purchase. That adds up if you are purchasing regularly. Maybe not a big deal if you are going to buy once and hold for a long time without making additional investments.

Use ETF share classes of those funds (VOO and BND) instead which have zero commission trades.
Im just buying once and holding. So I guess $40.
And $19.95 every time you sell in the future. There is no good reason to pay these type of fees given the other offerings in the marketplace.

Cheer
I have gotten thousands of dollars in BoA and Merrill bonuses of various forms from moving Vanguard funds in-kind to Merrill Edge. I originally bought the funds for free at Vanguard. These are long term buy and hold funds, though I do take the dividends in cash and reinvest them elsewhere. I have not paid *any* fees to Merrill Edge or BoA.

If and when I want to sell, I have the option of transferring funds in-kind elsewhere. (And in fact, I have already done that. It was cost-free to transfer since it was a partial transfer. However, if I decided to close out the account entirely there are other provided that would reimburse me the $75 fee for closing out my Merrill Edge account. Schwab would do it, for example, and they have already offered me cost-free transactions on Vanguard mutual funds as an added enticement to hold funds there and move more there.)

That said, I do not want to sell these funds anytime soon. There are large embedded capital gains. (I have transferred shares in-kind from Merrill Edge to Schwab not to sell them there but rather to facilitate in-kind donations of my Vanguard mutual funds into my Schwab DAF.)

Edited to add: by holding my Vanguard funds at custodians OTHER than Vanguard, I believe I am actually saving administrative costs for Vanguard, since they don´t have to deal with my tax paperwork, etc. So Vanguard fundholders should thank those of us who choose to hold our Vanguard funds at custodians outside Vanguard! We are reducing everyone´s costs!

Explorer
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by Explorer » Fri Nov 15, 2019 8:23 am

A while back I heard that there are some Vanguard mutual funds available at Merrill with NTF. You may want to call them to confirm.

deltaneutral83
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by deltaneutral83 » Fri Nov 15, 2019 8:31 am

Explorer wrote:
Fri Nov 15, 2019 8:23 am
A while back I heard that there are some Vanguard mutual funds available at Merrill with NTF. You may want to call them to confirm.
Yea they told me "A" shares of American Funds were fine to sell without commissions.

Silk McCue
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by Silk McCue » Fri Nov 15, 2019 8:40 am

dodecahedron wrote:
Fri Nov 15, 2019 8:20 am
...

I have gotten thousands of dollars in BoA and Merrill bonuses of various forms from moving Vanguard funds in-kind to Merrill Edge. I originally bought the funds for free at Vanguard. These are long term buy and hold funds, though I do take the dividends in cash and reinvest them elsewhere. I have not paid *any* fees to Merrill Edge or BoA.

...
Since the OP has made no mention of using this well known strategy as a part of their question my assumption is as they are not. If they are that would have been an important financial fact to add to the original post.

Cheers

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dodecahedron
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by dodecahedron » Fri Nov 15, 2019 8:46 am

Silk McCue wrote:
Fri Nov 15, 2019 8:40 am
dodecahedron wrote:
Fri Nov 15, 2019 8:20 am
...

I have gotten thousands of dollars in BoA and Merrill bonuses of various forms from moving Vanguard funds in-kind to Merrill Edge. I originally bought the funds for free at Vanguard. These are long term buy and hold funds, though I do take the dividends in cash and reinvest them elsewhere. I have not paid *any* fees to Merrill Edge or BoA.

...
Since the OP has made no mention of using this well known strategy as a part of their question my assumption is as they are not. If they are that would have been an important financial fact to add to the original post.

Cheers
I am not sure how ¨well-known¨ this strategy is. I did not know about it until about a year after I joined these forums. There was a lot of information to absorb and it was kind of overwhelming to process it all. The OP just joined this forum last summer.

Silk McCue
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by Silk McCue » Fri Nov 15, 2019 8:53 am

dodecahedron wrote:
Fri Nov 15, 2019 8:46 am
I am not sure how ¨well-known¨ this strategy is. I did not know about it until about a year after I joined these forums. There was a lot of information to absorb and it was kind of overwhelming to process it all. The OP just joined this forum last summer.
It is well known to me because I have been here for 4 years and seen numerous threads on it. Regardless of whether is was well known to the OP or not, I assume that they would have mentioned they were doing so if it were a part of this decision making process. Since they didn't I stand my original point which was a pretty straightforward one.

Cheers

deltaneutral83
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by deltaneutral83 » Fri Nov 15, 2019 9:01 am

dodecahedron wrote:
Fri Nov 15, 2019 8:46 am
I am not sure how ¨well-known¨ this strategy is. I did not know about it until about a year after I joined these forums. There was a lot of information to absorb and it was kind of overwhelming to process it all. The OP just joined this forum last summer.
I may be misunderstanding but I haven't ever heard of moving ETFs or MF's in kind and ever being charged a fee? Brokerage bonuses have also been around a while? I believe that the OP is talking about actually selling the Vanguard MFs at another house, in this case, Merrill. Some of these firms like to charge a nominal fee to if you move the entire account that the incoming account will usually pick up if you ask nicely in addition to the intro bonus but it sounds like the OP is just talking about leaving his VG account open and moving MF over in kind to Merrill.
Last edited by deltaneutral83 on Fri Nov 15, 2019 9:02 am, edited 1 time in total.

stan1
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by stan1 » Fri Nov 15, 2019 9:02 am

Blue456 wrote:
Fri Nov 15, 2019 8:02 am
stan1 wrote:
Fri Nov 15, 2019 7:53 am
What is the cost to buy these funds? Looks like $19.95 per purchase. That adds up if you are purchasing regularly. Maybe not a big deal if you are going to buy once and hold for a long time without making additional investments.

Use ETF share classes of those funds (VOO and BND) instead which have zero commission trades.
Im just buying once and holding. So I guess $40.
If its that simple and you are going to buy once with no planned additional buying and selling of shares I'd probably be OK with the $40 one time fee, but I'd still prefer the ETF route because it is easier to move the shares to any other brokerage I might want to use in the future.

MichCPA
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by MichCPA » Fri Nov 15, 2019 9:36 am

Brianmcg321 wrote:
Fri Nov 15, 2019 8:05 am
There's the catch.

That $40 fee, compounded at 12% for 100 years would be worth $3.3mil. :moneybag
I agree that paying the fees is unnecessary, but this is seriously overplaying the situation. An 80-20 split between VTSAX and VBTLX has a 9.5% average compounded return from 1926 to 2015 per Vanguard. That knocks the number down to 350k. If you pull out the 2.96% inflation over the period its, $22,500. Since I don't plan to live to 128, lets bring the period down to 67 (I would be 95). That is $2,800.

I am not going to worry about 2,800 67 years in the future.

Nummerkins
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Re: Vanguard funds at Merrill Edge is there a catch?

Post by Nummerkins » Fri Nov 15, 2019 9:42 am

Convert to ETFs and transfer to ME. I did to collect a bonus. Zero fees.

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