Vanguard built its whole reputation on making investing cheaper. So it says something that the firm just agreed to buy Altruist, a platform serving financial advisers, in a deal the Journal reports is valued around $4 billion. The cheapest company in the business is betting big that advice is the valuable part now.
The details, from the August 27 paper: Altruist, founded in 2018, handles custody, account-opening, billing and reporting for independent advisers. It was valued at $1.9 billion in April 2025, so the price roughly doubled in sixteen months. Charles Schwab shares slipped 2.6% on the news. The market got the message.
The investing part costs three dollars
Owning the market has never been cheaper. Vanguard’s S&P 500 fund, holding nearly $1 trillion, charges 0.03% — three dollars a year on every $10,000, per the Journal’s May 5 fee survey.
An August 22 piece marked the 50th birthday of the first Vanguard index fund, which raised a paltry $11 million at launch and was mocked as folly. Today passive funds hold more than half of U.S. fund assets, and fund expenses keep drifting toward zero.
Star managers do not rescue the math either. Over the past 15 years, only 10% of U.S. mutual-fund managers tracking the S&P 500 beat the index, per S&P Global.
| What the plumbing costs | Annual fee |
|---|---|
| Vanguard S&P 500 index fund | 0.03% — $3 per $10,000 |
| Average active ETF | 0.4% |
| Average active mutual fund | about 0.6% |
| Mutual funds, in their glory days | 1% or more |
The expensive part is in the mirror
If the funds are nearly free, what is left to pay for? The gap between what funds earn and what their owners actually keep.
Morningstar measured it, as the Journal noted on May 29: over a decade, U.S. fund investors earned 1.2 percentage points a year less than the very funds they sat in. That is not a fee. That is behavior — buying after the rise, selling after the fall.
Jason Zweig’s July 11 column has the brutal version. Bitcoin traded near $46,000 when the first bitcoin ETFs launched in January 2024, and near $58,700 by mid-2026. The coin rose. Yet investors in those funds lost an average of 5.8% a year, Morningstar’s Jeffrey Ptak estimates, because money flooded in at the top and fled at the bottom.
Zweig adds the honest footnote: advisers and big institutions underperform their own investments, too. So the fee is not for stock-picking magic. It buys the plan that stops the bleeding — a set allocation, rebalanced into weakness and out of strength, ideally inside a retirement account.
The word that matters is fiduciary
Robert Pozen, a former Fidelity president, argued in a May 22 op-ed that many people can skip advisers entirely. His figure: advisers charge an average of 1% of assets. Buy an index fund, rebalance once a year, keep the 1%. He is right that plenty of disciplined people can.
The catch is what fills the vacuum for everyone else. More than half of U.S. and U.K. adults have asked an AI chatbot for financial advice, per MIT research cited in an August 3 Journal column on fiduciary duty. A March 2026 Stanford study found the models to be flattering people-pleasers.
A fiduciary has a legal duty to put your interests first, with real consequences for failing. A chatbot has neither. When a Journal reporter let ChatGPT manage a hypothetical $1 million portfolio for a May 11 story, it botched simple arithmetic and left too much in cash.
So here is the honest answer to what a fee buys. Not secret stocks. A written plan with dates on it, a legal duty of loyalty, and a person who talks you out of the worst trade of your life.
Start by pricing what you already own. Our 401(k) fee review shows where costs hide in a plan document, and our 401(k) history page explains how they got there. Then check whether your adviser has filled in the goals-and-timeline section our financial planning hub calls The Center, because that page is the deliverable.