Vanguard Group plans to close its legacy mutual fund platform for retail investors by year-end 2025, a move that one Vanguard watcher considers both unsurprising and, for many investors, unwelcome.
The asset manager has announced on its website that it's "upgrading" accounts on the old platform to Vanguard brokerage accounts and will retire access on the legacy service by the end of next year.
"Going forward, our Vanguard Brokerage Account platform — a modern investing experience with access to additional investment products and services such as Vanguard ETFs, our advice offers, and our new Cash Plus Account — will be the only way Personal Investor clients can invest directly with Vanguard," the company says.
"We've begun to notify clients that their accounts will become eligible for automatic transition beginning in late August 2024 and extending into 2025. We're upgrading accounts in phases and communicating to clients in a similar fashion. If you're a current client with an account remaining on our legacy investment platform, you can expect to receive your notification soon if you haven't already."
The legacy platform offers only Vanguard mutual funds, while the brokerage allows investors to trade Vanguard and non-Vanguard mutual funds, ETFs, stocks, bonds and CDs.
Jeff DeMaso, The Independent Vanguard Adviser editor, in a post Friday, said the move had been anticipated.
"Long foreshadowed, Vanguard is finally pulling the plug on the legacy mutual fund account platform that has served investors for decades," he wrote.
"The move isn't surprising. Vanguard has been pushing customers to transition from the old system to its brokerage platform for a decade, sometimes with dollar incentives. In 2023, for instance, Vanguard added a $25 fee for each mutual fund account still held on the old system," DeMaso said, noting investors who switched to e-delivery or had $5 million in with the firm assets were exempt.
