In what looks like a push to concentrate on well-established, asset-loaded firms, and on the heels of several articles in the press saying Vanguard is going after more affluent clientele, the firm has cut back on services to advisers with less than $5 million in custody with the company.

They are losing such perks as the ability to have their fees deducted from client assets, to do daily transaction downloads and to use consolidated position reporting.

The threshold had been $1 million. Vanguard started using the $5 million benchmark for prospective clients over the past year. Since the middle of the year, the company has been notifying existing clients they will be shifted to the retail side.

"We were expecting disappointment," said Martha Papariello, a principal with Vanguard's Institutional Investor Group. "And clients have registered just that."

Samuel Hull, a CFP with Northstar Financial Planning in Bedford, N.H., who just got Vanguard's "Dear John" letter, says he's "used Vanguard for little old ladies for a couple years," but is now "moving everybody out of Vanguard."

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