Vanguard Reduces Brokerage Commissions

Late last week, I received an e-mail from a reader who had grown tired of Vanguard’s high brokerage commissions and was looking for an alternative. Then, just days later, Vanguard announced that they’ve re-worked their commission structure for brokerage transactions.

They’ve implemented two major changes. First, all Vanguard brokerage clients can now make commission-free trades with all Vanguard ETFs. Second, the cost of traded stock and non-Vanguard ETFs has been cut to a base level of $2 or $7, with some clients receiving 25 free trades per year, and others paying a higher rate after their first 20 trades.

Here’s a summary of the new fee structure:

The upshot is that it just got a whole lot cheaper to invest via the Vanguard Brokerage Service. In fact, it might just be time to convert some of our Vanguard mutual funds into their corresponding ETFs.

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