If you remember my post from the end of last year, I closed my brokerage account in order to pay off my home. I also wasn’t too happy when Vanguard (VBS) didn’t proceed correctly (they said it wasn’t their fault) with an arbitrage transaction, and I lost a little money. So, I also directly-registered some stocks that I wanted to keep and had the certificates sent to me.
In the meantime, I’ve been maxing out my (2007/2008) Roth IRAs, added to my DRIP account, and been saving to open another brokerage account.
This past week I decided to open a new brokerage account. I evaluated every brokerage firm available to me. I’ve had multiple bad experiences with TD Waterhouse (now TD Ameritrade) and Scottrade, so I dismissed them right off the bat. There are a few free-trade and low-trade brokerages that seemed interesting, but each had some limitations or requirements that I couldn’t live with. There are also some full-featured brokerages to choose from, but they were either too expensive or I didn’t trust them.
Can you figure out where I’m headed with this? Yep, I decided to go back with Vanguard’s Brokerage Services (VBS).
My decision came down to three things:
1. attitude, 2. trustworthiness, and 3. cost and convenience.
1. Attitude reflects on me. I’ve resigned myself to the fact that there are dumbasses at all firms and that eventually someone’s going to screw something up. If I want to have a brokerage account then I’m going to have to accept that I’m at their mercy and have little recourse. I’ve lowered my expectations.
2. Trustworthiness. I trust Vanguard with their fee structures. I know that they would be the least likely to increase, add or change fees once I open an account with them. For the most part, I also trust them to address any problems and fix their mistakes.
3. Cost and convenience. VBS isn’t one of the cheapest brokerages, but there aren’t any hidden fees and I get a small discount for being a Voyager client. Vanguard’s Prime Money Market Fund is also consistently one of the highest yielding sweep accounts available. I’m not a frequent trader and this sweep account is where I keep my emergency funds, so a high yield, ease of access, and check-writing capabilities are important to me. Having all of my investments with Vanguard is also convenient for record-keeping and tax purposes.
Next week I’m planning on sending back my stock certificates and moving my drip account to VBS.
Post a Comment