Vanguard cuts brokerage costs for some investors

BOSTON, Sept 5 (Reuters) - Vanguard Group said on Wednesday it is cutting online stock trading costs for some account holders and giving them more investment choices in a move to retain client assets amid growing competition.

Vanguard said investors who have at least $100,000 in its low-cost mutual funds will be eligible for discounted financial planning and lower online brokerage commissions. The benefits were earlier available only to Vanguard shareholders who invested $250,000 or more.

Investors who have $1 million or more invested with it will be allowed to open new accounts and make additional purchases of five previously closed Vanguard funds -- Explorer Fund, PRIMECAP Fund, Capital Opportunity Fund, Health Care Fund and Precious Metals and Mining Fund.

"It's a competitive move," said Daniel Wiener, editor of the Independent Adviser for Vanguard Investors. Wiener said Vanguard was facing competition from asset managers such as Fidelity Investments as well as discount brokerages such as Charles Schwab Corp (SCHW.O).

"You are seeing mergers in the discount brokerage area. As these guys gain scale, they can also provide competition particularly in the ETF marketplace," he added.

Exchange-traded funds (ETFs) are like index mutual funds but trade like stocks on an exchange. In recent years, Vanguard has made a big push into the ETF marketplace.

For investors with a minimum $100,000 in Vanguard funds, online trading commissions on stocks priced at $1 or more have been lowered to $20, or 2 cents per share, whichever is greater, from $25. The investors will now pay $250 for a financial plan, down from $1,000.

"We are making it more rewarding for investors to place most, if not all, of their investment eggs in Vanguard's basket," Vanguard Chief Executive John Brennan said in a statement. (Reporting by Muralikumar Anantharaman)