PhillyDeals: Vanguard ends commissions on exchange-traded funds
There's a price war in the retail-investment business. Vanguard Group said Tuesday that it had stopped charging commissions for buying and selling its exchange-traded funds, which are raking in an average of nearly $1 billion a week in new investments at the Malvern-based mutual-fund group.
There's a price war in the retail-investment business.
Vanguard Group said Tuesday that it had stopped charging commissions for buying and selling its exchange-traded funds, which are raking in an average of nearly $1 billion a week in new investments at the Malvern-based mutual-fund group.
It also said it was cutting trading fees to about $7, and as low as $2, for most customers at its discount brokerage arm.
Vanguard, the largest mutual-fund firm, with $1.4 trillion in assets, ranks third for ETFs, trailing BlackRock's iShare-brand funds and State Street Global Advisors' SPDRs, according to Morningstar data.
Vanguard is copying cost-cutting rivals such as Fidelity Investments and Charles Schwab in waiving the commissions and cutting trading fees, says Daniel P. Wiener, Brooklyn-based publisher of the Independent Adviser for Vanguard Investors newsletter.
One-stop borrowing
"It's a very tough environment to borrow money, and we are trying to make it easier," Ami Kassar tells me.
The former "chief innovation officer" at bankrupt credit-card lender Advanta Corp., Kassar and his Advanta colleague, Paul Tiefling, started MultiFunding L.L.C. in Plymouth Meeting in February.
Using software from Biz2Credit L.L.C., of New York, MultiFunding offers a way to apply to up to 125 lenders in a single application, screened for each bank's loan, capital, credit and asset targets, Kassar said.
Kassar says he's processing $25 million worth of loans, from $150,000 to $4 million.
How does MultiFunding get paid? Borrowers' choice: "Either an hourly fee, like they would pay a lawyer or an accountant, $150 to $200 an hour," Kassar said. "Or loan fees, depending on the complexity of the deal and how hard we have to work to raise the money. The top deals would cost 2.5 percent." So far, everyone's picked the loan fees.
Start-up leaves Chesco
"Morgantown is the next Exton, Malvern, and King of Prussia," says Glenn Porter, a manager at tiny enterprise-software services provider LMC Software Solutions.
LMC is moving from Chadds Ford, Chester County, to the new Morgan Corporate Center, a master-planned development at the reclaimed former Grace Mine in southern Berks County.
It's a longer commute for chief executive Fran Connolly, of Avondale. But the move was sweetened by $50,000 from the Ben Franklin Technology Partners of Northeastern Pennsylvania, plus an investment (LMC won't say how much) from former SAP and Siebel Systems executive Jeremy Coote.
"Rents were less, the Berks County-Lancaster County labor pool was attractive, and taxes were lower - there is no wage tax," Porter told me. LMC plans to double U.S. employment to six by year's end, and to 28 through 2012; it also uses contractors in India.
U.S. vs. PNC
If proposed federal bank reforms pass, "I see closed branches, reduced hours, part-time tellers replacing full-time tellers, monthly statement fees, payday loans, and other innovations making banking less desirable and more expensive for everyone" at PNC Financial Services Group, the biggest bank based in Pennsylvania, writes veteran bank analyst Richard X. Bove in a report for Rochdale Research L.L.C.
PNC has projected that new limits on overdraft charges and credit-card fees will cost the bank about $155 million, after tax, this year.
"PNC supports a number of proposed regulatory changes, and we believe we are well-positioned for the future," spokesman Fred Solomon told me.
Publisher hiring
Tom Gregory's Infinity Publishing, a West Conshohocken vanity press that says it has put out 6,000 titles for 4,000 writers for a fee (now $499 each) and a cut of sales, has been taken over by New Harbour Partners L.L.C. and investor Arthur Gutch, of Boston.
Gutch told me he'll be in West Conshy "two or three days a week" to run the 22-person firm, with help from Gregory's son Mark. "We're looking to hire author advocates" to help sell new book ideas, he added. Infinity's top seller, Michigan author Len Renier's Unintended Consequences and How to Avoid Them, has sold about 21,000 copies.