Vanguard’s claim to fame is that it runs everything “at cost” because of its ownership structure (i.e., no external shareholders demanding a profit). And the benefit to Vanguard clients has been tremendous over the years.
In a recent article for Financial Planning, Allan Roth pointed out that Schwab is now basically able to run their entire asset management business below cost — offering what many would see as superior service, while charging fees as low or lower than Vanguard’s.
The key point is that Schwab simply has a different business model (most especially, a key other revenue source), so they are able to use their asset management business as a loss leader, whereas Vanguard must break even on theirs.
- Does Schwab’s Growth Threaten Vanguard’s Domination? from Allan Roth
Other Recommended Reading
- A Tale of Two Retirements: FIRE and Traditional from Chris Mamula
- 2020 Presidential Candidates’ Proposed Changes to Social Security from the Center for Retirement Research at Boston College
- The Impact of Minimum Wage on Social Security Disability Participation from Gary Engelhardt
- Retiring in Florida: The Villages vs a More Common Reality from Kim Blanton
- Do Older SSDI Applicants Return to Work After Denial of Benefits? from Jody Schimmel Hyde and April Yanuyan Wu
- Avoiding “Surprise” Medicare Expenses from Joanne Giardini-Russel
- Strategies for Young Investors — Christine Benz interview with Maria Bruno (requires free Morningstar account)
Thanks for reading!
What is the Best Age to Claim Social Security?
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SOURCE: Oblivious Investor – Read entire story here.