Vanguard Transactions Take Too Long

[FUEGO]

Yeah, but on the bright side, they have the lowest expenses out there...........

hmm, so that guy just paid a 5% sales charge at Vanguard. I forget, what is the sales charge on Class A american funds (equity funds) for invested assets under $25,000? Is it really still 5.75%??

 

[cute fuzzy bunny]

Too late, I already tagged him.

And yes, its 5.75%, although if you'd like you can skip that and pay 1.5% ER a year for the funds.

 

[FUEGO]

Too late, I already tagged him.

And yes, its 5.75%, although if you'd like you can skip that and pay 1.5% ER a year for the funds.

Hey, I'm unfortunately too familiar with those class B shares that I'm slowly getting rid of. Problem is you pay the 1.5% and then if you try to get out, they bend you over on the way out too (if you sell in less than 8 years). That's ok, the american funds I'm in have only under performed by a few percent over the last couple years. It's just money, right?

 

[FinanceDude]

hmm, so that guy just paid a 5% sales charge at Vanguard. I forget, what is the sales charge on Class A american funds (equity funds) for invested assets under $25,000? Is it really still 5.75%??

Is that a rhetorical question? I buy ETFs and stocks, so i can't help you...........

 

[FinanceDude]

Hey, I'm unfortunately too familiar with those class B shares that I'm slowly getting rid of. Problem is you pay the 1.5% and then if you try to get out, they bend you over on the way out too (if you sell in less than 8 years). That's ok, the american funds I'm in have only under performed by a few percent over the last couple years. It's just money, right?

Why don't you sell them if you think they are so bad?? Seems funny to slam a fund you own......

 

[73ss454]

Maybe he doesn't want to pay the capital gains, he's already been ripped off, no?

FD, do you think he bought them after he found this forum? (heh) Or do you think his broker told him all about the fees?

 

[FUEGO]

Why don't you sell them if you think they are so bad?? Seems funny to slam a fund you own......

I'm waiting for the class B to convert to class A so I don't pay a back end sales load. They are stuck in some old IRA's and the dollar amounts are low, so I've been lazy in not selling and transferring the funds to a consolidated IRA.

The class A shares I still own (the great majority of my Am Funds holdings) have a sales charge that is a sunk cost and I plan to be out completely by 2010. The ER is around 0.6%, so not ridiculous, but much higher than I am accustomed to paying. Right now the tax benefits of unwinding these slowly outweighs my desire to be rid of these laggard funds.

 

[FinanceDude]

FD, do you think he bought them after he found this forum? (heh) Or do you think his broker told him all about the fees?

If his advisor didn't that's BS. If the advisor pushed B shares, he/she should be fired by ALL clients, not just FUEGO......

 

[cute fuzzy bunny]

Oh I'm sure the advisor told him about the fees, just before feeding him the BS about how they were going to outperform funds that didnt charge a front end fee.

I mean, how good can those cheap, managerless funds be anyhow? You dont give the good stuff away for free.

 

[FUEGO]

If his advisor didn't that's BS. If the advisor pushed B shares, he/she should be fired by ALL clients, not just FUEGO......

I asked him "Well, which class should I go with, the A shares or the B shares?". He suggested the B shares.

The Edward Jones guy I had wasn't half bad - just doing his business making money off of suckers like me. He did give me some good advice about the 72t plan that I had not heard of before and that totally changed my financial and tax planning (for the better).

I eventually asked him what it would cost me to get into $10,000 or so of an ETF index fund or a no transaction cost vanguard fund through him. Vanguard funds weren't available and a $10,000 order would cost $100 in commission. That is when I decided huge commissions and lack of fund choices didn't serve me as an investor so I dumped him in favor of vanguard and fidelity.

 

[73ss454]

So FD, do you think you could put a call into Edward Jones and the guy fired? (heh)

 

[cute fuzzy bunny]

Only if he's an Obama supporter.

 

[retire@40]

I'm surprised the planner would even deal with you for a measly $10K (unless there was other money you didn't mention here).

I would think most financial planners wouldn't take on clients with less than $50K to $100K to invest.

I think a minimum to invest in a "Brinker" plan is around $100K, for example. Not sure how cost effective Brinker is, but I heard good stories about them from a few people.

 

[FUEGO]

I'm surprised the planner would even deal with you for a measly $10K (unless there was other money you didn't mention here).

I would think most financial planners wouldn't take on clients with less than $50K to $100K to invest.

I think a minimum to invest in a "Brinker" plan is around $100K, for example. Not sure how cost effective Brinker is, but I heard good stories about them from a few people.

My parents have large accounts with him. At the time I'm sure he was doing me a "favor" by setting up a couple of IRA's for me and DW. We did end up putting over $100k with him - but that was a long time ago before we had real money to invest (thank goodness).

He probably knew we would be potentially great clients shortly with decent inflows of cash given our family history there and where DW and I were at in life at the time. In other words he spotted a mark and made his move.

 

[FUEGO]

So FD, do you think you could put a call into Edward Jones and the guy fired? (heh)

I wouldn't want to get him fired. It's not like he tried to sell me an annuity or whole life or anything. Well, he did try to sell me whole life, but I kindly suggested that the $20/month term policy I could obtain would more than cover our needs at the time and would be a better investment.

 

[FinanceDude]

So FD, do you think you could put a call into Edward Jones and the guy fired? (heh)

The number one fund family for Ed Jones is American Funds, and has been for 20 years. I have heard of young reps getting fired for selling too much non-American Funds.........

 

[FinanceDude]

I asked him "Well, which class should I go with, the A shares or the B shares?". He suggested the B shares.

How much money was involved?

I eventually asked him what it would cost me to get into $10,000 or so of an ETF index fund or a no transaction cost vanguard fund through him. Vanguard funds weren't available and a $10,000 order would cost $100 in commission. That is when I decided huge commissions and lack of fund choices didn't serve me as an investor so I dumped him in favor of vanguard and fidelity.

yeah, they are NOT a discount broker. Also, they have a limited number of funds to sell.

 

[73ss454]

Yup, they can only sell the ones with the largest commissions, makes sense to me.

 

[FUEGO]

How much money was involved?

IIRC, $3000 for an IRA. Maybe $6000 if it was funded for 2 years. Today that is small potatoes, so I'm not overly worried about fixing it in a hurry.

 

[FinanceDude]

Yup, they can only sell the ones with the largest commissions, makes sense to me.

All the load funds are about 5.75% on purchases under $25,000.

 

[73ss454]

Yeah, I know the schedule well, I was once a member.

 

[FinanceDude]

Yeah, I know the schedule well, I was once a member.

Don't kill the messenger, I just provide facts...........

 

[73ss454]

I''m not mad at you I'm mad at me.(heh)

 

[FinanceDude]

I''m not mad at you I'm mad at me.(heh)

Maybe it was a time in your life when you were very busy, and thought you needed some help. Then, you found out he/she wasn't very helpful, provided no value, and just collected the 12b-1 trails, and you moved on............

 

[cute fuzzy bunny]

Don't kill the messenger, I just provide facts...........

Sometimes.