Here's a sarcastic communication from a member the financial service sales force.   It's a good indication of why I think most people are better off on their own.

"Perhaps you can address the following two questions to your favorite company Vanguard.

1. Why are they raising their account minimums?

2. If John Bogle is right about index funds why does Vanguard offer any other funds that are not index funds?

3. As a no-load (no-help) fund family does all their employees work for free or volunteer their time?

---B.B."

As you can see, B.B. has some trouble counting. Worse, while a good salesperson knows both his product and his competitors, this salesman lives in a world of well defended ignorance. While there are a lot of wonderful people in financial services, the sad truth is that most investors won't get to meet them because there are so many others like B.B...

But let's answer the questions.

Many people have been upset by question No. 1, the recent account minimum increase at Vanguard. As of November 1, new IRA and custodial accounts will have an opening minimum of $3,000, up from $1,000 before November 1. Investors with less money will still be able to invest in the Vanguard STAR fund, a fund of funds, which will retain the $1,000 minimum. For $3.70 a year in fees, your $1,000 investment in this fund brings you top 20 percent performance. That makes it a great starter fund.

Do the math and it's pretty easy to understand why Vanguard is raising account minimums. Mutual fund companies earn fees based on assets under management. So a $1,000 investment in a Vanguard index fund with an expense ratio of 0.18 percent brings in a total of $1.80 a year. Increasing the minimum to $3,000 brings the annual income up to $5.40 a year. A managed fund like Vanguard Wellington, with an expense ratio of 0.31 percent, brings in $3.10 for a $1,000 minimum but $9.30 for a $3,000 minimum.

Either way, it's still a lot less than the average mutual fund. The average fund has an expense ratio of 1.37 percent and a typical minimum IRA investment of $1,000. It will receive $13.70 in annual revenue, well over what Vanguard will receive even with its higher minimums.

The answer to question No. 2 is that John Bogle isn't a one-trick pony. While he is best known as the creator of retail index funds, he created a mutually owned mutual fund company first. It is a fundamentally different animal from traditional mutual fund firms. The combination of the mutual structure and the practice of hiring outside money managers at well negotiated fees worked to produce annual expense ratios that continue to challenge the entire industry.

The answer to question No. 3 is that John Bogle and his successor Jack Brennan both know you have to offer competitive salaries and benefits to attract and retain good people. Trust me--- they are not starving in Valley Forge. The question B.B. and others should be asking is how Vanguard can pay its people so well while charging its customers a fraction of what others charge.

Perhaps the others are overcharging.

Nor is it necessary to be Vanguard or an indexer to charge fees that are far better for the investor, even if he needs help. As I have pointed out in many columns, the American Funds group is distributed through conventional "full service" brokerage firms but can be a better deal for investors than many of the more expensive no-load funds.

How can that be?

American Funds pays conventional upfront commissions but keeps operating expenses low. Its 10 largest "A" share funds have an average expense ratio of only 0.67 percent. That's about half the average of all "A" share funds.

It's also well under the average of all true no load funds.   Of the 6,447 genuine managed no-load funds, 4,457 have expense ratios higher than to big 10 at American Funds.

Bottom line: Fees at most financial services firms are excessive.