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Rating:Vanguard Enhances Service Offerings for Lower Minimums Not Rated 3.0 Email Routing List Email & Route  Print Print
Wednesday, September 05, 2007

Vanguard Enhances Service Offerings for Lower Minimums

News summary by MFWire's editors

Vanguard is amping up the competition for investors, with a spate of enhanced services for shareholders who invest at least $100,000 in the firm’s no-load, low-cost mutual funds. The previous minimum for the services was $250,000. Investors can be part of one of three tiers, based on much they invest. Each tier comes with certain benefits.


Vanguard is extending its enhanced services to Vanguard shareholders who invest at least $100,000 in the firm’s no-load, low-cost mutual funds. These services, which include discounted financial planning and lower online brokerage commissions, were previously available to shareholders with $250,000 or more invested at Vanguard.

“We’re pleased to bring even greater value – additional services, lower costs, and more personal attention – to a greater number of Vanguard shareholders,” said Vanguard CEO John J. Brennan.

Vanguard’s enhanced services now feature three tiers based on a shareholder’s total assets in Vanguard® investments: Voyager™ ($100,000–$500,000), Voyager Select™ ($500,000–$1,000,000), and Flagship™ (more than $1,000,000). Vanguard has also expanded the benefits within each service level.

*Previously, a Vanguard Financial Plan cost $1,000 for shareholders with less than $250,000 invested at Vanguard and was complimentary to those with $250,000 or more in Vanguard investments.

“Simply put, we are making it more rewarding for investors to place most, if not all, of their investment eggs in Vanguard’s basket. The ‘all-in’ costs of keeping a financial relationship with Vanguard are extraordinarily low, and we believe our value proposition is unmatched in the financial services industry,” said Mr. Brennan.

For example, Vanguard Flagship clients enjoy 12 commission-free online brokerage trades per year, a complimentary financial plan, cash management services, and a dedicated representative.* Flagship shareholders will also be permitted to open new accounts and make additional purchases of five previously closed funds, including Vanguard Explorer™ Fund, Vanguard PRIMECAP Fund, Vanguard Capital Opportunity Fund, Vanguard Health Care Fund, and Vanguard Precious Metals and Mining Fund. (Vanguard will closely monitor the funds’ cash flows and can change the purchase policies of the funds again at any time.)

Vanguard has a long history of reducing investor costs and sharing with clients the savings achieved through economies of scale in the firm’s investment products, including mutual funds, variable annuities, and exchange-traded funds, as well as in its financial planning and brokerage services. Since the beginning of the decade, the average expense ratio of Vanguard funds has declined by nearly 30%, resulting in savings to shareholders of roughly $1 billion in 2006.

Vanguard is currently notifying shareholders of the new services and cost savings.

Membership is based on total household assets invested in Vanguard funds and ETFs, 529 plans, small-business plans, employer-sponsored retirement plans, and annuities held through Vanguard.

The Vanguard Group, headquartered in Valley Forge, Pennsylvania, is the nation’s second-largest mutual fund firm and a leading provider of company-sponsored retirement plan services. Vanguard manages more than $1.2 trillion in U.S. mutual fund assets, including more than $325 billion in employer-sponsored retirement plans. Vanguard offers more than 140 funds to U.S. investors and more than 40 additional funds in foreign markets.

NOTES:

*No commission will apply to the first 12 online trades in each calendar year to any combination of stocks priced at $1 or more per shares, exchange-traded funds (ETFs), options, or transaction-fee mutual funds. The number of trades is limited to 12 per Flagship membership annually.

For more information about Vanguard funds, visit www.vanguard.com, or call 800-662-7447 to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

Mutual funds and all investments are subject to risk.

All asset figures are as of August 31, 2007, unless otherwise noted.

Vanguard International Explorer Fund will remain closed to new accounts.

Vanguard, Voyager, Voyager Select, Flagship, VanguardAdvantage, and Explorer are trademarks of The Vanguard Group, Inc. All other marks are the property of their respective owners.

Vanguard Brokerage Services is a division of Vanguard Marketing Corporation, Member FINRA.

Vanguard Marketing Corporation, Distributor.  

Edited by: Erin Kello


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