Low-fee pioneer Vanguard finally joins the crowd by dropping stock commissions to zero

Investing

Vanguard signage at a Morningstar Investment Conference.

M. Spencer Green | AP

Low-cost investing pioneer Vanguard has finally followed other peer brokerage firms in eliminating stock commissions entirely.

Charles Schwab was the first major broker to give investors zero-commission online trades, pressuring rivals to follow suit. Schwab announced on Oct. 1 that commissions would go from $4.95 for online trading of stocks and ETFs to zero. TD Ameritrade and ETrade quickly matched Schwab’s move and Fidelity followed a week later.

This move expands Vanguard’s commission-free platform that already included mutual funds since 1977 and nearly every ETF in the industry since 2018, a company release said.

Vanguard helped revolutionize the investment business by keeping costs as low as possible, an idea pushed by founder Jack Bogle. Bogle started Vanguard in 1975 under the name First Index Investment Trust and retired as Vanguard’s chairman and CEO in 1996. He believed in outperforming competition by offering low-cost investing.

Given its history, Vanguards announcement on Thursday is unsurprising as lowering the cost of investing is “business as usual for Vanguard,” said Karin Risi, managing director of Vanguard’s retail investor group, in the release.

“For 45 years, we’ve been dedicated to lowering the cost of index and active funds, ETFs, advice, and brokerage services to help investors achieve better outcomes,” Risi said.

As the investment industry continues to move towards eliminating fees, Vanguard said it encourages investors to “look beyond commissions and consider the all-in cost of their brokerage relationships, including fees, expenses, and opportunity costs.”

In addition to eliminating stock commissions, Vanguard also announced that it has updated its online experience and redesigned its mobile app.

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