Vanguard Admirals Don't Raise Costs for Small Guys

This summer the Vanguard Group pitched its plans to offer discounted expense ratios to its biggest and most loyal shareholders as another entry on a long list of good deeds done for shareholders.

Investors and pundits applauded the proposal to create the new, lower-cost Admiral share class. The plan, however, elicited sharp criticism from some quarters, especially since Vanguard noted it might have to raise traditional investor class expense ratios of some of its funds in order to offer the cheaper shares to qualified shareholders. That irked some investors, some of whom went as far as to accuse Vanguard of taxing small investors to give a break to more affluent shareholders.