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Vanguard Cuts Fees for Third Time

Vanguard cuts fees, Covisum acquires PrairieSmarts and RBC's takeover electrifies wealth profits.

In the latest move in the battle for the lowest fees, Vanguard has cut expense ratios on 68 mutual fund and ETF share classes. Based on the average fund assets over a 12-month period and the change in fees through fiscal year 2016, the fund giant estimates the change will save clients more than $105 million. This is the third fee reduction Vanguard has announced over the last few months, covering a total of 124 fund share classes. The latest move includes lower fees on 10 international ETFs. In addition, fees for Admiral Shares of the firm’s actively managed Vanguard Intermediate-Term Tax-Exempt Fund, the industry’s largest municipal bond fund, fell from 12 to 9 basis points. The firm also lowered expenses on Admiral and Investor Shares of its factor offering, the Global Minimum Volatility Fund. "While Vanguard is lowering—and will continue to lower—the cost of investing, the so-called fee war is essentially over on the beta battleground. Investors have won," said Vanguard CEO Bill McNabb. "The new fronts in the fee war are active management and advice. Again, investors will ultimately win." Charles Schwab recently announced it was slashing trading costs and expenses on certain index funds and ETFs.

Covisum Acquires PrairieSmarts

Covisum, a retirement income planning technology firm formerly known as Social Security Timing, acquired PrairieSmarts, another fintech firm focused on risk management. The companies plan to continue supporting all of their products, as well as integrations with Orion and Redtail, but said advisors will soon be able to use both on a single web-based portal. Eventually, the PrairieSmarts name will be absorbed by Covisum. Joe Elsasser, Covisum’s president, said the idea is to couple PrairieSmarts’ “SmartRisk” technology with his firm’s social security and tax software. Elsasser added, “both firms realize that having solid analytics matters.”

RBC's City National Takeover Has Electrified Wealth Profits

Royal Bank of Canada, the country's largest lender by assets, announced a surge in wealth management profit during a Friday earnings call. Since RBC acquired City National in 2015, wealth management profit is up 42 percent. The boost was especially welcomed, since there is still much uncertainty regarding economic policies in the Trump administration's pipeline, and the current strength of the U.S. economy relative to Canada's, according to Bloomberg.

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