What's your tax rate? That's a pretty important variable I think you left out.

I think the way I would make the decision is to just figure out the value of your holdings in each scenario through time, and calculate how long it takes for the extra fees to cancel out the effect of the tax hit.

So Option 1: Sell today and move to vanguard. Tax hit is X$. Assume the fund yields the same as it did in the past 20 years or something.

Option 2: Keep what you have. Make same assumption about fund's yield, but subtract the difference in expenses each year.

Do this in excel, one row for each year. Once you have got the formulas right, drag it down and see at what point Option 1 beats Option 2. That information should help with the decision.

The only way I could see Option 2 being better long-term is if both of the following are true:

1. you have a very high tax rate, and

2. you either never sell these investments or would only sell them far ahead in the future, so the eventual tax hit when discounted back to today is negligible.

EDIT: When you've done the analysis, go back and modify your assumption about expected return - see what happens to your breakeven point when you change it. It's good to know what your worst-case is, and if you're fine with that then it's a good move.