Admiral shares, which require a minimum $100,000 investment, were introduced several years ago. Their expense ratios can be 50 percent or less than regular Investor shares, which have smaller minimum investments. For example, while the Investor shares of the Vanguard 500 fund have a 0.18 percent expense ratio, the Signal and Admiral shares charge just 0.09 percent.
Although the new Signal shares carry the same expense ratio as the Admiral shares, they work a bit differently. To be eligible to purchase Signal shares, a financial advisor must have a minimum of $5 million invested in that fund. The threshold is lowered to $1 million for defined contribution plans and at the underlying account level for non-influenced or directed assets. Those levels have raised the hackles of advisors whose clients used to qualify under the old Admiral shares program.
The move signals a major shift by Vanguard to focus on the advisor marketplace.