Free Stock Trades at Vanguard!

[kork13]

I know many have predicted that it would happen to fall in line with its competitors, while others believed Vanguard's command of the MF market would allow them to buck the trend. But it's happened, and Vanguard announced yesterday that they're eliminating commission fees on all online stock trades (in addition to the free ETF trades that they've had for a while now).

Will it change how you invest? Will you be more open to picking up random, small-increment shares of individual companies?

[Like2Plan]

I was just pondering this new development. I don't know if it will change anything, but it is nice to know it is there.

[disneysteve]

I don't think it will change anything I do. I very, very rarely buy individual stocks and don't plan to suddenly start because commissions went away. I do invest in one of Vanguard's commission-free ETFs, though, so that's nice.

[Like2Plan]

I was thinking about experimenting with buying 1 share of DIS--since I have been buying about a share a month direct from DIS anyway (but, there is a $1.00 fee going the DRIP route). I wonder if I get to vote my share(s) that are held in a brokerage account? Also, I am uncertain if there is a minimum purchase. I put all the info in the boxes (including making a limit order), but I didn't go through with it. I'm not sure if I should transfer the funds into my settlement account before or after I make the order. And, it is after hours now anyway. I might work up the courage to put an order in on Monday during trading hours.

[disneysteve]

I wonder if I get to vote my share(s) that are held in a brokerage account? Also, I am uncertain if there is a minimum purchase.

You definitely get to vote shares held in your brokerage account. I own DIS and get ballots regularly.

Unless the transaction interface indicates so, I do not believe there is any minimum purchase. That's really a huge advantage to commissions going away - the ability to invest very small amounts of money at a time.

[scfr]

Unless the transaction interface indicates so, I do not believe there is any minimum purchase. That's really a huge advantage to commissions going away - the ability to invest very small amounts of money at a time.

As one of the 25+ million client-owners, I wonder:

What will this mean for Vanguard's costs?

[cypher1]

I also don't do individual stocks, so it really doesn't make a difference for me. But it's nice to know, if I ever decide to go that route.

[Like2Plan]

I put an order in on Monday. It has settled and I was able to elect my dividend options (pay to settlement account) and my cost basis method (specific Id). I decided not to reinvest my dividends because at this point they are going to be so small-my first dividend for this share won't be until July, so I have plenty of time to change my mind.

Maybe I will transfer my other shares over to Vanguard to keep them all in one place. This would also solve another problem I created for myself when I set up the DRIP account. I did not set it up as a TOD account and it is in my name only. When I asked about adding a beneficiary on the account I was told I had to change the registration of the stock. This would have involved paying a fee to establish a new account with the TOD designation and paying a transfer fee (both accounts--the new one and the old one) and a couple of gold medallion signatures. They have a new stock transfer agent now so maybe there is a different fee structure. But, with Vanguard the beneficiaries are set up by account not by security registration. So, I believe I already have this set properly.

[Singuy]

I am still wondering what people do when their accounts surpass the investor insurance limit as both my vanguard and Robinhood accounts surpassed 500k each.

[Like2Plan]

That would be a good question for you to ask Vanguard and Robinhood.

Otherwise, I guess you could spread your assets around to various brokerages.

[Like2Plan]

I am still wondering what people do when their accounts surpass the investor insurance limit as both my vanguard and Robinhood accounts surpassed 500k each.

Funny , but I was looking for something else and I just stumbled across this:

"Account protection information


Securities in your brokerage account are held in custody by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation. Vanguard Marketing Corporation is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at sipc.org External site.

To offer greater protection and security, Vanguard Marketing Corporation has secured additional coverage from Syndicates at Lloyd's of London for our brokerage clients. This additional insurance has the same customer eligibility requirements as SIPC. This coverage has an aggregate limit of $250 million for all claims of securities and cash and incorporates a per client coverage limit of $49.5 million for securities and $1.9 million for cash. This additional policy, provided by the Lloyd's of London Syndicates, is subject to its own terms and conditions. Coverage provided by SIPC and Lloyd's of London Syndicates does not protect against loss of market value of securities."

[kork13]

That's pretty cool. And provided to all customers at no additional cost? Sounds like a win to me!

[disneysteve]

That's pretty cool. And provided to all customers at no additional cost? Sounds like a win to me!

It's certainly to the company's benefit. They don't want customers going elsewhere as soon as their accounts approach the 500K mark. They'd lose millions in business.

[kork13]

It's certainly to the company's benefit. They don't want customers going elsewhere as soon as their accounts approach the 500K mark. They'd lose millions in business.

Good point. L2P, I think you need to reach out to Vanguard, they probably owe you some commissions on keeping such a big fish like Singuy in the net with them.

[disneysteve]

Good point. L2P, I think you need to reach out to Vanguard, they probably owe you some commissions on keeping such a big fish like Singuy in the net with them.

My Vanguard account is pretty close to 600K so I'm over that limit myself so I'm glad to know there is some kind of insurance on my account. To be honest, I wasn't even aware of the 500K limit.