Manager’s low fees have big appeal

QI am a fairly new reader of and want to invest in Vanguard for a longterm buy-and-hold. What is the benefit of investing in its Australian shares exchange traded fund (ETF) via a brokerage firm such as CommSec or SelfWealth versus opening a Vanguard account and investing directly? I can see that Vanguard does not charge any brokerage fees, so if I was to put money into this account every week or every fortnight, I’m not slapped with the $19.90 that CommSec charges or the $9.50 that SelfWealth charges.

Should I just invest with Vanguard directly or is there a benefit to investing through the brokerage firm as it is more liquid, meaning you can take your money out at any time? I think Vanguard may take one or two weeks for a withdrawal, but if I’m investing long term I don’t plan to withdraw any time soon.

If Vanguard is your preference, it seems to me you could just use its personal investor account, Tony. This allows you to buy and sell Vanguard managed funds, ETFs and, if you want to, ASX shares. You pay zero to buy Vanguard products.

There are plenty of terrific managers out there, but I must admit to having a soft spot for Vanguard. It was one of the first to come out and say that fees in the financial services industry were too high and to offer really competitive prices. Little to my surprise, investors loved this idea and today Vanguard manages $9 trillion in assets. That is important – size means scale and scale means low prices for investors.