Skip to main content

Puny Financial Giants Finally Standing Up To 88-Year-Old Bully

Fidelity, Morgan Stanley aren't going to take it... anymore.
  • Author:
  • Updated:

For decades, Jack Bogle has let Wall Street know what he thinks of it: That the army of besuited money managers crowding the island of Manhattan and city of Boston are beneath his contempt as they literally steal their clients’ money to do a lousy job, all the while literally eating their lunch while doing so—Bogle’s Vanguard Group has gobbled up $3.5 trillion in assets during Bogle’s 80s.

A very dangerous man. (Screenshot)

Well, the downtrodden aren’t going to take it anymore. Poor little Fidelity Investments, which manages just $2.3 trillion of the $6.2 billion entrusted to it overall, isn’t going to pay for the pleasure of looking stupid at Bogle’s hands anymore.

Fidelity, the largest 401(k) plan administrator in the country, will now charge some new corporate customers that hire the firm to run their 401(k) plans a fee of 0.05% on assets invested in Vanguard funds. That new fee covers administrative services that Fidelity provides as a 401(k) record-keeper, a spokeswoman for the Boston firm said….

Executives from the two firms have been in talks for years over Vanguard’s refusal to pay the servicing costs. In December, leaders from both firms met at Vanguard’s Pennsylvania headquarters, and Fidelity executives pressed the firm to reconsider its stance, according to people familiar with the matter. Fidelity ultimately put the fee change in place without notifying Vanguard, the people said.

And it’s not just Fido! Morgan Stanley won’t be doing Vanguard’s bidding anymore, either, and neither will TD Ameritrade, all on principle, since shutting clients out of popular products easily available elsewhere is at best a dubious business proposition.

TD Ameritrade late last year overhauled its commission-free ETF trading lineup, dropping all 32 Vanguard products it had previously included….

While some moves have made rival funds relatively less expensive, they have so far done little to halt the tidal wave of new cash flowing into Vanguard’s products and in some cases risk driving investors loyal to Vanguard to the firm’s own retirement administration and brokerage businesses.

Wall Street to Vanguard: We’re Not Your Doormat [WSJ]



Fidelity Has New, Questionably Legal Solution To Its Mutual Fund Problem

What announced expense ratios can’t do, perhaps a mysterious and hidden fee will.

Getty Images

Morgan Stanley Doesn’t Even Want To Look At A Vanguard Fund

At least when it comes to paying its brokers.

A very dangerous man. (Screenshot)

Jack Bogle Will Have To Shake His Fist At Clouds From His Own Cloud Now

The Vanguard Group founder and expert shit-talker has died at 89.


David Solomon Wants To Help You Buy That New Vacuum Cleaner

In fairness, Marcus Goldman got his start peddling household goods, so….