I'm looking to purchase shares of an ETF (e.g. one of the Vanguard growth funds) but I'm wondering if there's any advantage to setting up an account directly with vanguard vs my current brokerage? For example, are the expense ratios any different? I know I'll pay per trade instead, but that's a minor concern.

  • Is there an annual fee for having your brokerage account? Some brokerage accounts (often from discount brokerages) charge nothing, others (typically full-service brokerages where you have a personal representative who might call you once a day/week/month suggesting investments) charge a fraction (e.g. 1% per year) of the assets under management, and this will add to the perceived expense ratio of the ETF you want to buy. Some brokerages will allow you to buy and sell certain specific ETFs without transaction fees, and so on. Mar 31 '19 at 20:03
  • @DilipSarwate: An account directly with Vanguard will have an additional maintenance fee, except it is ridiculously easy to avoid. Last I checked your options were to have a certain amount in the fund, or a certain amount total with them, or (easiest of all) select to have documents electronically delivered.
    – Ben Voigt
    Apr 1 '19 at 0:32
  • So is there a difference between putting money into a fund through Vanguard or buying VUG directly? I'm still not clear.
    – fny
    Apr 1 '19 at 0:48
  • @DilipSarwate There's no annual fee with the brokerage. Just $5 per trade. I'm just not sure if I should buy a fund through Vanguard or buy VUG directly.
    – fny
    Apr 7 '19 at 16:29
  • Some people like to make all their mutual fund investments through their brokerage account regardless of costs and fees because of the convenience of having all their financial information available on a single screen at their brokerage. One can buy a Vanguard ETF on the Vanguard sit without paying any fees but this purchase is done through a Vanguard Brokerage Account so that is two different brokerage accounts to keep track of. So it is up to the OP; is paying $5 per trade to his current brokerage worth it when the same can be done without a fee at Vanguard but means two accounts to track? Apr 7 '19 at 22:24

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.