Vanguard Brokerage Announces a Cheaper Trade Commission Structure

Today, Vanguard announced a new trading commission structure for Vanguard brokerage accounts. Here is a quick overview of the new commision structure:

Assets invested in Vanguard funds and Vanguard ETFs®	Vanguard ETFs¹	Stocks and non-Vanguard ETFs
Less than $50,000	Free	$7 for the first 25 trades³ $20 for subsequent trades
$50,000–$500,000 (Voyager Services®)	Free	All trades: $7
$500,000–$ 1 million (Voyager Select Services®)	Free	All trades: $2
$1 million plus (Flagship Services™)	Free	Free for first 25 trades³ $2 for subsequent trades

Voyager Services, Voyager Select Services®, and Vanguard Flagship™ are trademarks of The Vanguard Group.

I have been using our Vanguard Advantage account as our primary brokerage account for a couple years now. This new commission structure even looks more attractive to me. As a Vanguard Flagship client we previously received 12 free trades a year and paid a very reasonable flat $8 fee per trade thereafter. Under the new trading structure we will get 25 free trades and then pay a flat $2 fee per trade thereafter. In addition all Vanguard ETF trades will now be free.

Does this Change Our Investment Purchase Strategy?
I think this will alter the frequency of our stock investment purchases. With a lower trading cost it makes traditional DRIPs less appealing to us and allows us to trade more frequently and in smaller amounts without increasing the trading costs. I can now make a couple limit order investments every month with as little as 1 share for basically no cost.

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