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Vanguard’s ‘Nickel-And-Dimes Grandmother’ Celebrates 49 Years Tax-Free

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(CTN News) – In spite of the fact that the world of money management is replete with fees, the Vanguard Group has maintained a strong reputation for keeping a level head.

Vanguard was founded by Jack Bogle about half a century ago with the purpose of establishing a corporation that would be owned by investors.

This would bring the incentives of the company and its consumers into alignment. Vanguard was perpetually driven to find ways to reduce fees by this distinctive business model, which resulted in minimal fee index funds, low fees for actively managed funds, and an overall absence of chivalrous or concealed charges.

This was in contrast to shareholder-owned firms such as Schwab and Fidelity, which were able to find ways to reduce fees.

“If a statue is ever erected to honor the individual who has done the most for American investors, it should be Jack Bogle,” Warren Buffett stated in a letter to Berkshire Hathaway shareholders in 2016. Bogle may be considered the person who has done the most for American investors.

“He assisted millions of investors in attaining significantly higher returns on their savings than they would have otherwise obtained… both they and I regard him as a hero.”

On the other hand, it would appear that the company, which was established in May 1975, is making an effort to trade part of its well-earned reputation for the most basic of asset management vices: chintzy fees, one of which a longtime observer of the Vanguard refers to as “nickel-and-diming Grandma.”

Taking into consideration the legacy of Jack Bogle, these developments appear to be uncommon and divergent from the Bogle character that is typically associated with the term.

With your permission, I will take you through a number of these changes, which will have an effect on millions of consumers,

Describe what is happening, and provide Vanguard’s point of view.

When it comes to retirement plans, sales

To begin, Vanguard has made the decision to sell a sizeable number of retirement accounts for small businesses, including one of mine, to a corporation known as Ascensus.

This decision was made effective immediately. Unlike Vanguard, this group will charge fees to investors like me, who are not required to pay any fees at this time. However, this company will charge costs to investors.

Individual 401(k)s, SIMPLE IRAs, and SEP-IRAs with multiple participants are all available for purchase through Vanguard.

Ascensus is described as “a leading provider of tax-advantaged savings and retirement solutions with a profound commitment to serving the specific needs of small business retirement plans,” according to Vanguard, which stated that it observed that the “needs of many small-business owners have evolved” while evaluating its offerings.

Vanguard also stated that it had observed that the “needs of many small-business owners have evolved.”

Nevertheless, from my perspective — and I am certain that I am not the only one in this regard — I am in the process of switching from a fee-free individual 401(k) to a company that will charge me at least $40 annually in fees, including the possibility of additional fees.

Vanguard is not providing Ascensus with its individual IRA business, which is an important point to note. Vanguard asserts that it is able to take advantage of economies of scale as a result of the huge number of individual IRAs that it manages.

Vanguard, on the other hand, says that it is able to effectively lower expenditures for the clients that it maintains by selling the relatively small number of individual 401(k)s that it manages.


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Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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