Vanguard may have to raise fees!

[Texas Proud]

Opps... I should have asked what I wanted to ask... not mutual funds, but mutual insurance companies!!!

I know how mutual funds work.... and their separate legal entities...

 

[MooreBonds]

I wonder if any of these lawsuits/settlements with state agencies has anything to do with vanguard migrating their mutual funds into their brokerage house, where you now have all mutual funds listed as part of your brokerage holdings? Same with dropping Pershing and using their own internal settlement divsion? (or perhaps that one was a different issue?)

 

[Seattle]

Moving away from Vanguard

My question is any of you moving away from Vanguard proactively because of this situation? Or do you think it will take years to play out in the courts before anything affects us?

To me, it sounds like noise right now and I am going to ignore it and continue to run my plays with Vanguard until this gets more sorted out and formalized...

Thoughts?

 

[zesty]

Your instincts are in line with mine. The zeitgeist is very "Harrison Bergeron" these days - let's "equalize" everyone, not by expecting more from those who do little, but by taking from those who have accumulated more.

https://en.wikipedia.org/wiki/Harrison_Bergeron

I've always hoped that if that does happen it waits until 2084, because I'll most likely be dead by then.

 

[pb4uski]

Opps... I should have asked what I wanted to ask... not mutual funds, but mutual insurance companies!!!

I know how mutual funds work.... and their separate legal entities...

A mutual insurance company issues dividend paying aka participating policies (and also issues non-participating policies) and tracks actual/expected experience of sets of policies and dividends are declared to distribute any favorable experience. Usually, the premiums are very conservative so unless experience was very unfavorable to pricing assumptions there is likely to be a dividend.

Totally different animal from the Vanguard structure since it would all be in one legal entity although a mutual insurer might well have numerous non-insurance subsidiaries for different purposes (like perhaps managing, administering and marketing its own sponsored mutual funds).

 

[pb4uski]

My question is any of you moving away from Vanguard proactively because of this situation? Or do you think it will take years to play out in the courts before anything affects us?

To me, it sounds like noise right now and I am going to ignore it and continue to run my plays with Vanguard until this gets more sorted out and formalized...

Thoughts?

Totally agree.. I'm not doing anything until it appears that there will be a change... after all, there is limited information on the details of the situation and Vanguard may well win the fight, either in court or in Congress.

 

[dtbach]

The other thing is that who will get that profit? From what they say, the investors 'own' Vanguard.... so, if Vanguard made a profit, would it not have to send that profit to the investors?


From the little I know, a mutual insurance company sends checks to policy holders if they collected more in premiums than paid out in claims... but I could be way off on this... just do not know for sure.

I have been with USAA for years which I believe is a "member owned" company. Every year I get a check for the excess between what I have paid in premiums and their cost.