Vanguard is boosting fees to urge holdout customers to do their own trades online

Investment giant Vanguard Group is renewing its effort to get customers to embrace online banking, annoying some longtime clients.

The company, which has spent the past decade urging longtime fund investors to move their savings into the company’s brokerage accounts, now plans to raise brokerage fees in a bid to get holdouts to finally start doing their own transactions online.

New fees, effective July 1, reflect “changes to our digital interaction expectations” for its 50 million customers, the company said in a recent email. Vanguard invests nearly $9 trillion and employs 20,000 staff, more than half in or near its Malvern, Pennsylvania, headquarters.

“The hits just keep coming!” says New Jersey-based Vanguard investor John Marshall, who felt doubly frustrated after the hassle of moving his money to a brokerage account last year to avoid earlier fees to be confronted now by the new brokerage fees.

“Vanguard made a big push” in recent years to get longtime mutual fund investors to move their money into brokerage accounts, said Jeff DeMaso,who publishes the Independent Vanguard Adviser newsletter. “Fees are now going up. It’s not a good look,” even if only a minority of customers will actually end up paying more.

In a statement, the company said: “Vanguard is committed to helping clients navigate toward secure, simpler and more seamless digital pathways.” The statement went on to say Vanguard mutual funds and exchange-traded funds (ETFs) can still be traded commission-free online — which is how “the vast majority” of Vanguard’s mutual fund and ETF trades are made, the company added.

If 99% of all Vanguard customers are online, that would still leave half a million affected by the new fees.

Those fees include:

—A $25 “broker-assisted commission” for purchases or sales of Vanguard mutual funds and ETFs over the phone, and for margin calls and debt payments — for customers with less than $1 million invested. (Vanguard already imposes such a fee on stock trades.)

—A $100 processing fee for closing a Vanguard account or transferring the assets to another firm.

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