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Vanguard ‘nickel-and-dimes Grandma’ after 49 years without junk fees

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In the fee-laden world of money management, the Vanguard Group has long enjoyed a reputation of shooting straight.

When Jack Bogle founded Vanguard almost 50 years ago, the idea was to create a company owned by its investors — aligning the company’s and customers’ incentives. That unique model, unlike shareholder-owned outfits like Schwab and Fidelity, pushed Vanguard to constantly look for ways to reduce fees, leading to minimal fee index funds, low fees for actively managed funds, and a general lack of chintzy or hidden fees.

“If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle,” Warren Buffett wrote in his 2016 letter to shareholders of Berkshire Hathaway. “He helped millions of investors realize far better returns on their savings than they otherwise would have earned … he is a hero to them and to me.”

But the company, founded in May of 1975, may be attempting to trade some of its hard-earned goodwill for the most banal of asset management vices: chintzy fees, including one that a longtime Vanguard observer calls “nickel-and-diming Grandma.” These are developments that, when considered next to Jack Bogle’s legacy, feel unusual and unBogle-like.

Let me take you through some of these changes, which will affect millions of customers, explain what’s going on, and give you Vanguard’s side of things.

First off, Vanguard has decided to sell many (it won’t say how many) small-business retirement accounts, including one of mine, to a firm called Ascensus. This company will impose fees on investors like me who currently pay no fees to Vanguard. The accounts Vanguard is selling include individual 401(k)s, SIMPLE IRAs, and multiparticipant SEP-IRAs.

Vanguard said it saw that the “needs of many small-business owners have evolved” as it evaluated its offerings, and it calls Ascensus “a leading provider of tax-advantaged savings and retirement solutions deeply committed to serving the unique needs of small business retirement plans.”

But from where I sit — and I’m sure I’m not alone — I’m going from having an individual 401(k) for which I pay no fees to a firm that will charge me at least $40 a year in fees, and possibly more.

Vanguard group founder John Bogle makes a point during an interview at his office on the Vanguard campus, near Valley Forge, Pennsylvania, January 16, 2003. Bogle, an industry guru, has publicly criticized the investment fund industry.Vanguard group founder John Bogle makes a point during an interview at his office on the Vanguard campus, near Valley Forge, Pennsylvania, January 16, 2003. Bogle, an industry guru, has publicly criticized the investment fund industry.

Vanguard group founder John Bogle makes a point during an interview at his office on the Vanguard campus, near Valley Forge, Penn., Jan. 16, 2003. Bogle, an industry guru, has publicly criticized the investment fund industry. (Reuters) (Reuters)

Interestingly, Vanguard isn’t selling its individual IRA business to Ascensus. Vanguard says that’s because it has lots of individual IRAs and thus benefits from economies of scale. Whereas selling the relatively few individual 401(k)s that it handles, Vanguard says, will keep costs down for the customers that it retains.

So why aren’t I converting my individual 401(k) to an individual IRA and suggesting that other affected Vanguard investors do the same? Because contributions to an individual 401(k) are generally deductible for local income tax purposes, but in some states — including mine — contributions to individual IRAs aren’t deductible.

This means that if individual 401(k) holders stay at Ascensus — I’m not sure what I’ll do — they’ll be hit with costs they had no way to anticipate when they opened and kept their accounts at Vanguard.

Then there’s the $25 fee that Vanguard will impose on people who own less than $1 million of Vanguard funds and buy or sell Vanguard funds by calling Vanguard phone reps rather than trading online.

“It seems like the only people paying that $25 fee will be retirees who have been lifelong Vanguard investors but aren’t comfortable with the internet,” says Jeff DeMaso, whose Independent Vanguard Adviser newsletter isn’t part of the Vanguard empire. That’s why DeMaso calls this fee “nickel-and-diming Grandma,” which strikes me as being accurate, funny, and sad.

Vanguard says that the vast majority of trades in its funds are done online and that charging a fee to some people who trade by phone will lower costs for everyone else.

This may be the co-op mindset, but it feels like a tyranny of the majority. Considering that at least some people who’ve had Vanguard accounts for years aren’t set up to trade electronically, this charge just feels wrong.

As does the fact that Vanguard is willing to absorb the costs of people who own at least $1 million of Vanguard funds who trade by phone but not the costs of people who own less than $1 million.

Then there’s another cheesy charge: a new 1% fee on dividends received by Vanguard customers who hold foreign securities and American Depositary Receipts. This charge will cost me only about $4 a year and will be indirectly tax-deductible by reducing my taxable dividend income, but it still strikes me as tacky.

Vanguard said, “The fee helps to offset the operational costs associated with foreign securities and ADRs.” But it won’t provide any numbers about those costs or how many people the fee will impact.

Finally, there’s the new $100 fee that Vanguard may (or may not) charge people who own less than $5 million of Vanguard funds and transfer accounts to other brokerage houses. Vanguard says that the fee “helps to offset the costs of the asset transfer.” It’s another example of imposing costs on smaller investors but not on larger ones. It doesn’t feel right.

To be sure, Vanguard’s competitive situation has changed in the 49 years since Bogle launched the company. Back then, Wall Street mocked retail index funds. Now, index funds have become a huge segment of the market and some competitors are charging minuscule fees that are competitive with Vanguard’s.

Obviously, Vanguard has to change with the times — but the changes I’ve discussed here feel incongruous with the company’s legacy.

I can’t ask Bogle, who died in 2019, what he thinks about what’s going on at the company he founded. But for a firm that says its mission is “to take a stand for all investors, to treat them fairly, and to give them the best chance for investment success,” these new charges sure seem unseemly.

Allan Sloan is an award-winning financial journalist and contributor to Yahoo Finance.

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LAPD investigates double homicide in Exposition Park; shooter at large

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Two men were fatally shot Saturday afternoon while sitting in a car in a residential area of Exposition Park, and the shooter is at large, Los Angeles police said.

The victims, whose identities have not been released, were sitting in a sedan in the 1100 block of Browning Boulevard around 2 p.m. when the shooter walked up to the car and opened fire, said LAPD Capt. Michael Lorenz.

One of the gunshot victims died at the scene, and the other died at the hospital, Lorenz said. The shooter drove off.

“Homicide detectives are at the scene canvassing for physical evidence,” Lorenz said. “We have a lot of CCTV footage to look at.”

The head of the Los Angeles Police Department said there was “nothing right now” to indicate the shooting was gang-related.

“This could possibly be an isolated incident,” Lorenz said. “The suspect actually had a conversation with the victims prior to approaching the vehicle and firing rounds.”

A man in a suit standing behind yellow crime scene tape near shell casings, a white tent and several parked vehicles

Shell casings remain on the ground Saturday as a detective investigates the scene where two men were shot to death around 2 p.m. while sitting in a car.

(Michael Blackshire / Los Angeles Times)



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Former second in command of U.S. Navy arrested in connection with alleged bribery scheme

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A former commander of the U.S. Naval Forces in Europe and Africa was arrested Friday in connection with an alleged bribery scheme that officials say involved steering government contracts to a company in exchange for future employment, according to the Justice Department.

Robert Burke, 62, is accused of participating in the bribery scheme during his tenure as a four-star admiral from 2020 to 2022. According to an indictment unsealed Friday, Burke allegedly met with the co-CEOs of the unidentified company, Yongchul “Charlie” Kim and Meghan Messenger, in 2021 in an effort to re-establish its business relationship with the Navy — despite its contract being terminated in 2019 and the Navy instructing the company not to contact the admiral.

“At the meeting, the charged defendants allegedly agreed that Burke would use his position as a Navy Admiral to steer a sole-source contract to Company A in exchange for future employment at the company,” the Justice Department said in a news release. “They allegedly further agreed that Burke would use his official position to influence other Navy officers to award another contract to Company A to train a large portion of the Navy with a value Kim allegedly estimated to be ‘triple digit millions.’”

In 2021, Burke allegedly awarded a $355,000 contract to the company to train personnel in Italy and Spain. The Justice Department claims Burke attempted to conceal the scheme by making “several false and misleading statements to the Navy,” including that he didn’t play a role in issuing a contract to the company, and that discussions about his employment there began months after the contract was issued.

Burke began working at the company in October 2022, according to the Justice Department.

Burke was charged with conspiracy to commit bribery, bribery, performing acts affecting a personal financial interest and concealing material facts from the U.S. He faces up to 30 years in prison if convicted.

NBC News has reached out to an attorney for Burke.

Kim and Messenger were each charged with conspiracy to commit bribery and bribery, per the Justice Department. They each face up to 20 years in prison if convicted. It’s not clear if Kim and Messenger have attorneys representing them at this time.

The Defense Criminal Investigative Service, the Naval Criminal Investigative Service and the FBI are investigating the case.

This article was originally published on NBCNews.com



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Review: The JBL PartyBox Stage 320 Is the Only Speaker I Want for My Parties

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JBL’s PartyBox Stage 320 is a powerful speaker with a well-balanced sound and punchy bass, with many features that make me want to host house parties just to have an excuse to use the speaker.

As the name implies, it’s a speaker made for parties, meaning it’s loud and fun but also has features made to enhance a party atmosphere. You can dabble in being a DJ with the Effect Lab, connect up to two microphones for karaoke, or even play over your music with an electric guitar. I was sent the PartyBox Stage 320 by JBL to review, and though it’s not cheap ($599.95), after spending some time with it, I think it’s worth every penny.

Pros and cons of the JBL PartyBox Stage 320

Pros

  • 240 Watts of output power or about 100 decibels of sound

  • A portable design that makes it easy to carry

  • Powerful bass

  • Adjustable EQ

  • Can have up to two microphones (or one microphone and one electric guitar)

  • Replaceable battery

  • Can play with just the power cord (without the battery)

  • Fun in-app features for parties

Cons

Specs

  • Battery life: Up to 18 hours (3 hours charge time)

  • Connectivity: Bluetooth 5.4 with Auracast support

  • Inputs: 2 ¼-inch jacks, 3.5mm aux input and USB-A port

  • Drivers: Two 6.5-inch woofers and two 25 mm dome tweeters

  • Power output: 240 W total

  • Water resistance: IPX4 (splashproof)

  • Size: 26.3 inches by 15.2 inches by 13.2 inches

  • Weight: 36.3 pounds

First Impressions of the JBL PartyBox Stage 320

This is the first PartyBox I’ve reviewed, even though they’ve been around for some time. I must admit that I wasn’t particularly excited about this speaker. The flashy pulse-beating lights looked gimmicky to me, and the speaker just seemed unnecessarily expensive. But as I learned more about the speaker, took it out to the soccer field, and messed with the app and features, I became obsessed with it.

JBL PartyBox Stage 320 in soccer field.


Credit: Daniel Oropeza photo.

I was able to comfortably roll the speaker through asphalt with its telescope handles and up a grassy hill to get 20 soccer players outdoors to enjoy some FIFA music. Like all JBL speakers, it comes with the JBL signature EQ, which sounds great out of the box. But you can customize the low, mid, and highs with five levers in the app.

Features of the JBL PartyBox Stage 320

Where the PartyBox Stage 320 shines for me is in its features, which you can control on the top of the speaker via an interactive control panel. The triangle-looking button to the right is the Auracast button, which allows you to pair two JBL TWS compatible speakers together or multiple JBL Aurocast speakers. The Bass Boost button on the right is a bass enhancer with a “deep” and a “punchy” option.

Panel control of the JBL PartyBox Stage 320.


Credit: Daniel Oropeza

Then you have the three emoji-looking buttons in the center, and this is where the (admittedly cheesy) fun starts. They’re the “party buttons” and each plays a different sound on the speaker that you can hear clearly over the music without interrupting it. You can change what each button does or says in the app, but for the most part, the first is the “voice,” or a cheesy party voice that you would hear a DJ say over a mic to hype the party up. The thumbs-up is the “Vibe Tone” which has my personal favorite sound, the classic DJ “horn.” And finally, the yellow disc is called “DJ sound” and is mostly different types of DJ scratches. I used many combinations of these sounds when hosting my Street FC games and had a blast messing with my players, depending on what was happening during the game.

You can change what each panel button does in the JBL speaker app.


Credit: Daniel Oropeza

The sliders at the top of the panel control the EQ of a microphone. You can change the bass and treble and add echo to the sound, making it fun to mimic certain lead singer sounds during karaoke. The speaker app lets you go even deeper into most of these features.

You can change how your kareoke microphone sounds like.


Credit: Daniel Oropeza

The JBL PartyBox app

The JBL PartyBox app is easy to use, although it can be slow to connect to the speaker sometimes. Here, I was able to control the lights in more detail and customize which lights I wanted to use. But where I think JBL really set itself apart from portable party speakers was with the “Effect Lab.”

Speaker menu in the JBL speaker app.


Credit: Daniel Oropeza

The Effect Lab is essentially a mini DJ mixer. I’ve never DJ-ed before, so it took some time to understand what each function does and how to use it properly, but I had a lot of fun learning on-the-go with trial and error. There are no directions in the app on how to use it, but you can easily learn what everything does with the internet and after 10 minutes of playing around with it, I got a good hang of it. Combine this with some microphones for karaoke, and I have myself a deadly combination to hype up, embarrass, or impress my friends at my next house party.

The JBL Effect Lab lets you DJ your music.


Credit: Daniel Oropeza

Details done right

The PartyBox Stage 320 does the little things right that make a huge difference to a party speaker. The battery is replaceable, which means the speaker’s longevity is not dependent on the battery’s lifespan. I love that you can use the speaker with just a power cord as well, so I can leave the speaker on for very long periods of time and still have my fully charged battery if I want to be completely portable. The speaker also gets a noticeable audio boost when plugged in. The battery itself lasts up to 18 hours at 50% volume, which is loud enough for an indoor house party. When I set the volume to 70% (which I don’t recommend doing indoors), with the lights on and the Bass Boost on, the battery lasted about seven hours.

Removable battery.


Credit: Daniel Oropeza

Another impressive detail is that JBL made it very difficult to create that ultra-whiny feedback sound when you have a microphone plugged into the speaker. I have to essentially rub the microphone on the speaker to hear some sort of feedback. JBL seems to be using technology to suppress the feedback sound, giving you instead a more space-ship-zooming-by sound rather than the high-pitch feedback sound we all hate. (When I turned the echo, treble, and boost sliders up on the mic settings, I was more likely to get feedback, though.)

Back panel of the JBL PartyBox Stage 320.


Credit: Daniel Oropeza

The back panel also has an LED light that is useful when trying to plug things in at at night. As mentioned, you can connect up to two microphones to the speaker or one microphone and an electric guitar. There’s also an AUX in if I want to practice my karaoke singing or DJ scratching without disturbing my dog. I don’t have other speakers I can daisy-chain together, but the option is there if I want to connect the speaker with another one.

Closing thoughts

JBL PartyBox Stage 320 in grass.


Credit: Daniel Oropeza

The JBL PartyBox Stage 320 exceeded my expectations as a party speaker. Although the speaker is on the heavy side at about 36 pounds, the handle and thick wheels make it easy to move around in different terrains. It is disappointing it isn’t waterproof, with only an IPX4 rating, and that the speaker doesn’t include a microphone.

Even though it has a powerful bass, the sound is well-balanced and doesn’t overtake the vocals or treble. The interactive DJ features on the speaker and in the app take the speaker to another level of fun for parties and karaoke sessions. I loved having the option to have up to two microphones or an electric guitar plugged in, giving me a lot of possibilities on how to set up. Being able to change the battery and use the speaker with just the power cord also gives the speaker a great deal of longevity and dependence for long sessions.

I would recommend the JBL PartyBox Stage 320 to those who love hosting house parties or karaoke sessions. While the speaker is pricey at $599.95, I think it’s worth the cost for someone looking for a great party speaker filled with fun features.





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