[triangleman]

Also worth knowing: Charles Schwab has reduced the minimum investment to $1 for 10 different index funds, many of which have expense ratios of 0.06% or lower. Their S&P 500 fund, for instance, has an expense ratio of 0.03% for any investment amount. Vanguard by comparison charges 0.15%, 0.04% for investments greater than $10k, and 0.03% for $3+ million.

[pc86]

I use CS for my brokerage account and don't have any complaints about it.

[Abundnce10]

That sounds much cheaper than the 0.25% that Betterment charges me. Do you happen to know if they offer a traditional/roth IRA and how much they charge?

[jjeaff]

They do. Vanguard doesn't charge anything extra for retirement accounts. It's just a matter of ticking a box when you sign up. Schwab is probably similar.

[jonfriese33]

I have a Schwab Roth IRA. They don't charge anything.

[toephu2]

What if Schwab raises the .03% fee for their S&P 500 mutual fund to .06% in a few years? They can change their rates anytime right? In that case it would have better to stick with VOO? Of course Vanguard could raise their rates too.

[jjeaff]

The one advantage of Vanguard is that the company itself is owned by its funds. So the very people who pay the admin fees are the ones who vote the leadership in or out. So raising fees would be unlikely unless necessary and they are known to be very frugal as a company as well so I feel like they are unlikely to need more fees. Especially with almost $3 Trillion under management.

Of course, there isn't any real cost to switching. So you could always switch to Schwab or vice versa as needed.

[kcorbitt]

There isn't a large cost to switching brokerages and keeping the same funds (although it's a pain and some places do claw back $50 or so on the way out the door), but there could be a major cost to switching funds within your brokerage, eg. switching from SCHB to VTI. If you're not in a tax-deferred account, that switch will cause you to realize capital gains and pay a 15% tax at the moment of sale.

That's why I prefer to stick with Vanguard: like you explained, fund holders are their corporate owners and they're supremely unincentivized to perform a bait and switch. Schwab, on the other hand, could decide to raise admin fees 10 basis points tomorrow if they decided the revenue justified the increased churn.