"Vanguard converting mutual fund accounts to brokerage?

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Makaveli
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Makaveli »

I am having a difficult time following along with everyone. Three calls to Vanguard and it's still murky - no one can seem to produce a clear explanation. Help please.

Transferring my brokerage account @ Fido to Vanguard for better Muni selection. I have my company stock and 2 mutual funds @ Fido. I am selling both mutual funds (tax-inefficient) and transferring the cash. I was also moving the individual stock over (in-kind transfer) but am no longer doing so since I will sell & diversify once I hit long-term cap gains. However, they initially signed me up for a Brokerage Account and Money Market Account.

If I am only looking to purchase VWITX, VTIAX, and VTSAX, can I do so in these accounts? Where do I transfer my cash to?
EyeDee
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Vanguard converting mutual fund accounts to brokerage?

Post by EyeDee »

.
Although I hope it does not happen, I would be willing to pay $20 a year to avoid a brokerage account. I probably would be willing to pay $20 for each of the five accounts we have at Vanguard.

That fact that it was to be done this by the first quarter 2014 and is now expected to be done by the end of 2016, is just one indication of why this would be a bad idea if it is mandatory.
toto238 wrote:The way the guy talked about it on the phone, it sounds like it's not technically "mandatory" just yet. But I'm guessing they're going to start putting more pressure on people as the majority of accounts get converted. Once 90% of accounts are upgraded, it may not be unreasonable of them to charge any old accounts an extra $20 annual fee to pay for the extra costs to their organization. Training employees on two systems, training their processors on two sets of procedures, etc. Sooner or later, we may have no choice but to upgrade.
Doc wrote: I was told they were supposed to have everyone on the new platform in first quarter 2014. They have lots of problems with details such as have been mentioned by others. One of the problems is that I had a fund closed to new investors and that was a problem. The fund has a zero balance. Go figure.
dolphinsaremammals wrote:I called Vanguard to ask when they expect to have everyone switched over...end of 2016.
Randy | SCA - Build Savings early by living below one's means, minimize Costs including taxes, and maintain a diverse Allocation.
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joe8d
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Re: Byzantine Retirement Plans

Post by joe8d »

Taylor Larimore wrote:
Did they provide any explanation why they withdrew $4000 instead of $2000?
Asif:

No "explanation" but they did say they would cancel the application as if nothing happened if requested within one week from the erroneous transaction.

A problem is that the $4,000 was put into a Roth IRA, and cancelling $2,000 will be treated as an IRA withdrawal. This means that future 2014 contributions will be limited to $1,000 (IRA maximum contributions per year).Our byzantine retirement plans are a disgrace that no one can fully understand..

Best wishes.
Taylor
No.They do some kind of administrated procedure that totaly wipes out that transaction.
All the Best, | Joe
ftobin
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by ftobin »

JW Nearly Retired wrote:Did you finally merge them at Fidelity? Any benefit from doing it?
After my employer began allowing accounts at "preferred brokers", of which Fidelity is one of three, I did convert my account into a brokerage account on my request. There has been no benefit yet, but if I find a need to buy iShares ETFs, Fidelity has many of them commission-free. (I've used TD Ameritrade primarily instead for ETFs since they have a good selection of Vanguard ETFs commission-free). I guess one minor benefit is that you can hold any amount of cash in the account, without having to put it into a money market fund that has a minimum -- this would have helped me once.
I've got a 35 year old mutual fund account at Fidelity as well as a 20-something year old Fido Brokerage account. Never a peep from them about merging anything. Is there some advantage to merging or shall I keep on leaving well enough alone?
Unless you're interested in trading iShares ETFs with Fidelity, I'd suggest leaving well enough alone.
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Re: "lame solution"

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Taylor Larimore wrote:I don't know who made the mistake. I, my friend, and a nice Vanguard representative helped with the application. I'm not going to make an issue of relatively small bank charges when it is easier for us to pay them (my friend gave me my money back).
You are of course free to do so although I would at the very least insist on a review of the phone recording.
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in_reality
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by in_reality »

Makaveli1988 wrote:I am having a difficult time following along with everyone. Three calls to Vanguard and it's still murky - no one can seem to produce a clear explanation. Help please.

Transferring my brokerage account @ Fido to Vanguard for better Muni selection. I have my company stock and 2 mutual funds @ Fido. I am selling both mutual funds (tax-inefficient) and transferring the cash. I was also moving the individual stock over (in-kind transfer) but am no longer doing so since I will sell & diversify once I hit long-term cap gains. However, they initially signed me up for a Brokerage Account and Money Market Account.

If I am only looking to purchase VWITX, VTIAX, and VTSAX, can I do so in these accounts? Where do I transfer my cash to?
Transfer cash to the Money Market account.

If they have you in a combined account, you'll be able to buy mutual funds.

If you only have a brokerage and money market, you'd need a regular Vanguard account. In any case, the Money Market would be the sweep account for both the Brokerage and regular account.

It sounds like they set you up in a combined account. Anyway, cash goes to the Money Market. You definitely need a brokerage account to hold your company stock etc. The only question is if it's a combined account. No big deal I think. You'll find out soon enough.
sls239
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by sls239 »

I suppose that means I'll have a settlement fund for my roth, for my spouse's roth, for my spouse's rollover IRA, for our joint account, and for the kid's ESA. :annoyed

According to the FAQ, all the dividends will either be re-invested in that same fund or sent to the "settlement" fund.

So if I had the ESA set up to direct stock dividends to intermediate bond (as a way of allowing it to get more conservative over time) - I either have to reinvest them in stock and then go in and sell stock and buy intermediate bonds or have it sent to the settlement account and go in and use that to buy intermediate bond. :annoyed

And if I want dividends from our taxable account to go to our bank account (because we need to buy a car soon), they first have to be sent to the settlement fund, then I have to go in and have them sent from there to the bank. :annoyed

And I'll have to be re-authorized as an agent for my spouse's accounts. :annoyed

And I might not be able to continue my automatic exchanges? :annoyed

And I'll have to "temporarily" switch my cost basis to FIFO and apparently remember to switch it back? :annoyed

What the hell?
JDDS
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by JDDS »

It'll be interesting to see if any of this has a ripple affect to any account types that have just the mutual fund options right now, think Individual 401(k) or Simple IRA. I wouldn't hold my breath, but hey, maybe that means the old account structure will be grandfathered forever.
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beyou
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by beyou »

ftobin wrote:Fidelity used to have a dual-mode system like Vanguard, having mutual fund account separately from the brokerage. I kept a mutual fund-only account for many years after they merged their brokerage operation and fund operation. I was even allowed to create a new mutual fund-only account later when they didn't describe it anymore -- they were wondering why I needed it, but had no problems creating one for me.

Hopefully Vanguard is as flexible, otherwise I'll be forced have to move all my assets away.
Same here.

One problem I'll have is I own mostly Admiral shares in funds, that can not be traded at my company selected broker.

If I have no choice, considering just converting my admiral shares to ETFs in taxable accounts,
liquidating funds in tax deferred accounts, and transfer cash/ETFs to my company acct.
Hate to do it, liked having privacy from my employer, and commission free transactions at Vanguard.
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ps56k
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by ps56k »

yikes - glad I stumbled across this thread today....

My TRowe accounts are still all separate,
and when I asked them about the "umbrella" account concept years ago, they said nay.

also have my Fidelity funds 403(b) and my Schwab stocks, and my Vanguard funds -
Calm Man
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Calm Man »

I don't want it !!! I only use MFs and I don't want the darned brokerage account nor have to look at it..
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Gort
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Gort »

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G-Force
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by G-Force »

I don't understand why this change isn't viewed more positively. The change is allowing you to hold stock, bonds, etfs, and mutual funds all in the same account without having to keep it separate. There won't be any need for separate mutual fund and brokerage accounts. If all you want to buy is mutual funds, then you can do that. The changes is just making your accounts more flexible. I can't see any downside really.
ftobin
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by ftobin »

G-Force wrote:I don't understand why this change isn't viewed more positively. The change is allowing you to hold stock, bonds, etfs, and mutual funds all in the same account without having to keep it separate. There won't be any need for separate mutual fund and brokerage accounts. If all you want to buy is mutual funds, then you can do that. The changes is just making your accounts more flexible. I can't see any downside really.
nisiprius says:
nisiprius wrote: ...but found out that you CANNOT set up automatic deposits, withdrawals, or exchanges between Vanguard funds once they are in the brokerage account. (In the traditional mutual fund accounts, you can, if you like set up an automatic exchange of $500 a month for 24 months from fund X to fund Y... etc.)
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TomatoTomahto
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by TomatoTomahto »

G-Force wrote:I don't understand why this change isn't viewed more positively. The change is allowing you to hold stock, bonds, etfs, and mutual funds all in the same account without having to keep it separate. There won't be any need for separate mutual fund and brokerage accounts. If all you want to buy is mutual funds, then you can do that. The changes is just making your accounts more flexible. I can't see any downside really.
G-Force,
My wife works for an investment bank. MF buys and sells must be reported to them, but stock transactions must be pre-approved (and also reported). Vanguard is not on their list of approved firms, but she is allowed to keep her MF accounts there because they are grandfathered and can only be used to house MFs, which by their nature are not susceptible to insider trading.

The brokerage account she had at Vanguard (holding only BRK stock) was required to be moved to Fidelity. I guess if necessary, we could move the rest of the assets from V to F, but as I understand it, F can only hold V funds as Investor shares, so we'd be paying higher ERs on $2M+ in assets. Not to mention that I hate F's web site and incessant marketing attempts. What a waste of time and energy.

So, that's our downside.
I get the FI part but not the RE part of FIRE.
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bru
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by bru »

Am I understanding this correct?

I specifically have and want different account numbers. I just opened a new individual account because I want the money invested to be considered separate from my other individual account. I have two different Roth IRA accounts as well.

Why should I have to have one account number for everything? If Vanguard intends do this they better have some way to differentiate accounts under the same name.

What about the checkbooks I have and other paperwork (deposit slips) that have account numbers? They are going to reissue all of them? If this is really true Vanguard must have a screw loose.
toto238
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by toto238 »

bru wrote:Am I understanding this correct?

I specifically have and want different account numbers. I just opened a new individual account because I want the money invested to be considered separate from my other individual account. I have two different Roth IRA accounts as well.

Why should I have to have one account number for everything? If Vanguard intends do this they better have some way to differentiate accounts under the same name.

What about the checkbooks I have and other paperwork (deposit slips) that have account numbers? They are going to reissue all of them? If this is really true Vanguard must have a screw loose.
So no you aren't understanding it correctly. Every account you have will have its own account number. Your roth has one account number, your non-retirement account has its own account number, etc. But previously, within each account there were two account numbers. One for VG mutual funds, and one for all brokerage assets. Now that's being consolidated.

My understanding is that they're no longer doing invest-by-mail slips. But you can go online and print out a pre-filled purchase form to mail a check in. As for check books, they're replacing all the check books with new ones, and you have to fill out a really short form and mail it to them.

I think it's important to bear in mind here that Vanguard is literally migrating hundreds of billions of dollars, and literally millions of different accounts from one computer system to another. This is a massive undertaking that we may not appreciate. If the worst thing to come of this is I have to order a new checkbook (WHICH IS FREE!), I will call it a success. Literally all I had to do was fill in my account number and sign it. Bam. Done. Mailed it, got a checkbook two weeks later. Free.
toto238
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by toto238 »

TomatoTomahto wrote:
G-Force wrote:I don't understand why this change isn't viewed more positively. The change is allowing you to hold stock, bonds, etfs, and mutual funds all in the same account without having to keep it separate. There won't be any need for separate mutual fund and brokerage accounts. If all you want to buy is mutual funds, then you can do that. The changes is just making your accounts more flexible. I can't see any downside really.
G-Force,
My wife works for an investment bank. MF buys and sells must be reported to them, but stock transactions must be pre-approved (and also reported). Vanguard is not on their list of approved firms, but she is allowed to keep her MF accounts there because they are grandfathered and can only be used to house MFs, which by their nature are not susceptible to insider trading.

The brokerage account she had at Vanguard (holding only BRK stock) was required to be moved to Fidelity. I guess if necessary, we could move the rest of the assets from V to F, but as I understand it, F can only hold V funds as Investor shares, so we'd be paying higher ERs on $2M+ in assets. Not to mention that I hate F's web site and incessant marketing attempts. What a waste of time and energy.

So, that's our downside.
Some people simply can't have anything but MF accounts so I doubt that VG will take away the ability for those to exist. Most likely is that opening new mutual-fund-only accounts will be by paper form only.
toto238
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by toto238 »

ftobin wrote:
G-Force wrote:I don't understand why this change isn't viewed more positively. The change is allowing you to hold stock, bonds, etfs, and mutual funds all in the same account without having to keep it separate. There won't be any need for separate mutual fund and brokerage accounts. If all you want to buy is mutual funds, then you can do that. The changes is just making your accounts more flexible. I can't see any downside really.
nisiprius says:
nisiprius wrote: ...but found out that you CANNOT set up automatic deposits, withdrawals, or exchanges between Vanguard funds once they are in the brokerage account. (In the traditional mutual fund accounts, you can, if you like set up an automatic exchange of $500 a month for 24 months from fund X to fund Y... etc.)
My Automatic investments and automatic withdrawals still work perfect under the new accounts. It's only auto exchange that's temporarily not working. The guy at VG I talked to said they're working on it though. Im sure before they make it "mandatory" they'll have it fixed.
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Archie Sinclair
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Archie Sinclair »

Does anyone have any insight into why the below is the case? Is there some legal obstacle?
Vanguard FAQs wrote:You’ll no longer be able to receive Vanguard fund distributions by check, by automatic transfer to your bank account, or by automatic reinvestment into another Vanguard fund. If you currently use these services, after the upgrade we’ll move the Vanguard fund distributions to your settlement fund.
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bru
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by bru »

toto238 wrote: So no you aren't understanding it correctly. Every account you have will have its own account number. Your roth has one account number, your non-retirement account has its own account number, etc. But previously, within each account there were two account numbers. One for VG mutual funds, and one for all brokerage assets. Now that's being consolidated.
I have two individual accounts. They have different account numbers. Within them they will have whatever investments I choose under the account number and then the fund code. I don't have any brokerage assets so they all have the account number for mutual funds. I also have multiple IRAs with different account numbers.

I want and need separate account numbers. Under this new scenario will I be able to do that or not?
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Doc
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Doc »

bru wrote:I have two individual accounts. They have different account numbers. Within them they will have whatever investments I choose under the account number and then the fund code. I don't have any brokerage assets so they all have the account number for mutual funds. I also have multiple IRAs with different account numbers.

I want and need separate account numbers. Under this new scenario will I be able to do that or not?
I think there is a big misunderstanding about the "you will only have one account number" wording.

see concurrent thread
http://www.bogleheads.org/forum/viewtop ... 0#p2220435
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
rjb112
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by rjb112 »

House Blend wrote:FWIW, I will be opting out as long as possible.

I prefer all dividend and cap gain distributions in my taxable mutual fund account to go straight to my (external) bank account.

The new account structure only allows two choices for distributions: reinvest, or direct to a Money Market sweep account.

I'm surprised they will not be retaining the option to send div/cap gain distributions straight to an external bank account. Seems like an important service to retain.

The Vanguard rep told me the same thing, there will only be the two options, just as you said.
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Doc
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Doc »

rjb112 wrote: I'm surprised they will not be retaining the option to send div/cap gain distributions straight to an external bank account. Seems like an important service to retain
There are work arounds to this kind of stuff. It's just a matter of changing the way you were doing things. Put your dividends in MM and have an automatic withdrawal from your MM. OK you need to have a little extra in your MM. Do you now keep a little extra in your checking account? It's not really any different.

Many of us are putting all dividends and interest in our MM and then allocating the excess to bonds or stocks every few months as we perceive the need. It's no different then driving your car in England. Once you make up your mind to stop getting into the (American) driver's side its no big deal. (Backing up by looking in the rear view mirror is still a PITA.)
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
rjb112
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by rjb112 »

"Put your dividends in MM and have an automatic withdrawal from your MM"



Do you have to specify a dollar amount for the automatic withdrawal? That amount would change with each mutual fund distribution. How does that automatic withdrawal work?
You won't know the dollar amount unless you take the notice of distribution and calculate it.
Lynette
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Lynette »

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toto238
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by toto238 »

bru wrote:
toto238 wrote: So no you aren't understanding it correctly. Every account you have will have its own account number. Your roth has one account number, your non-retirement account has its own account number, etc. But previously, within each account there were two account numbers. One for VG mutual funds, and one for all brokerage assets. Now that's being consolidated.
I have two individual accounts. They have different account numbers. Within them they will have whatever investments I choose under the account number and then the fund code. I don't have any brokerage assets so they all have the account number for mutual funds. I also have multiple IRAs with different account numbers.

I want and need separate account numbers. Under this new scenario will I be able to do that or not?
Yes you will be able to have two separate accounts. Under the previous scenario, if you ever wanted any brokerage assets, you would've technically had 4 accounts, with each one split between brokerage and mutual funds. Now you will only have two accounts and two account numbers.
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beyou
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by beyou »

Some people simply can't have anything but MF accounts so I doubt that VG will take away the ability for those to exist. Most likely is that opening new mutual-fund-only accounts will be by paper form only.
Unclear
https://investor.vanguard.com/info/account-upgrade

FAQ :

Why doesn't Vanguard automatically switch my accounts to the new account structure? Why do I have to do it?
While we would love to be able to switch your accounts to the new structure for you, we can't. The new account structure involves moving the assets in your Vanguard mutual fund accounts into upgraded brokerage accounts—or into new brokerage accounts if you're not already a brokerage client. In either case, we need your permission.

What if I don't act?
To best serve our clients, we're phasing in the changes to the new account structure over the next several months. We encourage you to act now to be among the first to enjoy the benefits of being able to hold any type of investment in your accounts.
They will not get my permission, at least not while I am restricted from having any broker I want (by my employer).
If they do it without my permission, I convert to ETFs and transfer out. My broker would PAY me to move the assets
(always have bonuses to transfer accounts). Given the small # of people this impacts, who can't have this account,
I don't see why they would want to maintain the old systems and processes indefinitely. They might do so longer than stated
above, but as an IT person, I am sure they will want to phase out some older software that supports the original structure.
I am not against the move at all, if I did not have my personal restrictions. I just can't take advantage of it.
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by MnD »

G-Force wrote:I don't understand why this change isn't viewed more positively. The change is allowing you to hold stock, bonds, etfs, and mutual funds all in the same account without having to keep it separate. There won't be any need for separate mutual fund and brokerage accounts. If all you want to buy is mutual funds, then you can do that. The changes is just making your accounts more flexible. I can't see any downside really.
I agree.
I won't even consider having any accounts at Vanguard until they have completely reformed their systems to a smoothly running one-account all-purpose model.
It's what I've had since the late 1980's starting at Quick and Reilly then Schwab. They'll also have to offer very well integrated banking if they want a chance at being our financial home for our assets when we retire in a few years. And be very competitive on all other fees and costs in addition to their current very low ER funds and ETF's. I think they have a ways to go and in the mean time I have positions in their ETF's held elsewhere.
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toto238
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by toto238 »

MnD wrote:
G-Force wrote:I don't understand why this change isn't viewed more positively. The change is allowing you to hold stock, bonds, etfs, and mutual funds all in the same account without having to keep it separate. There won't be any need for separate mutual fund and brokerage accounts. If all you want to buy is mutual funds, then you can do that. The changes is just making your accounts more flexible. I can't see any downside really.
I agree.
I won't even consider having any accounts at Vanguard until they have completely reformed their systems to a smoothly running one-account all-purpose model.
It's what I've had since the late 1980's starting at Quick and Reilly then Schwab. They'll also have to offer very well integrated banking if they want a chance at being our financial home for our assets when we retire in a few years. And be very competitive on all other fees and costs in addition to their current very low ER funds and ETF's. I think they have a ways to go and in the mean time I have positions in their ETF's held elsewhere.
I could be wrong, but I'm highly skeptical that Vanguard is ever going to be a bank, per se. They already offer check writing, money markets that maintain steady value, wiring services, and with enough money you can get a debit card and billpay with them.

So they have virtually all the features of a bank. But they're not a bank and don't think they ever will be. To be a bank they would have to be a member of the FDIC, pay for that insurance, and then the money to pay for that would come from somewhere. Their banking fees would either be ridiculously high, they would have to make extremely risky loans, or they would have to raise expenses for their mutual funds. What more, banks are subject to a whole new set of regulations and could get labeled as "systemically important". All that new regulation creates issues, possibly ruining the most important element about Vanguard, which is their unique corporate structure.

So no they're not going to become a bank, and I'm glad for it. However, free checkwriting is nice.
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Doc
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Doc »

toto238 wrote:I could be wrong, but I'm highly skeptical that Vanguard is ever going to be a bank, per se.
Schwab and others followed Vanguard with low cost index funds. Schwab created a bank a few years ago. Maybe Vanguard will follow Schwab.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
toto238
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by toto238 »

Doc wrote:
toto238 wrote:I could be wrong, but I'm highly skeptical that Vanguard is ever going to be a bank, per se.
Schwab and others followed Vanguard with low cost index funds. Schwab created a bank a few years ago. Maybe Vanguard will follow Schwab.
While it's possible to be a low-cost investor with Schwab, they don't make their money off the people who choose their ETFs only. They either barely break even or lose money on those. They get their profits from every other part of their operation. Active funds, account fees, management fees, etc etc. They can have a bank because the extra cost can be charged to their banking customers or easily spread out among their other businesses (for instance through higher expense ratios). Or they can cut their profits in the short term while they wait for the investment in being a bank to pay off.

Vanguard doesn't have a profit they can cut into. Their only choice is to either charge ridiculous fees for banking services, or to charge their non-banking customers more through expense ratios to subsidize those that want to bank until the system grows enough to support itself.

As a non-banking customer, I don't want my expense ratios to go up to pay for those that do want banking. As I don't use Vanguard's checkwriting, I'd like it if they got rid of that too since I'm essentially paying for it in my expense ratios but have no use if it. But I understand in the real world, you can't direct where your money goes once it's gone. Sometimes it will go towards things that don't benefit you in any way shape or form. When it's small things I don't sweat it. But becoming a bank would a fundamental shift in what Vanguard does, creating massive expenses.
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JamesSFO
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by JamesSFO »

toto238 wrote:... Their only choice is to either charge ridiculous fees for banking services, or to charge their non-banking customers more through expense ratios to subsidize those that want to bank until the system grows enough to support itself.
Is that necessarily true?

An obvious counterexample springs to mind: most credit unions offer banking services at very low costs and many are quite successful.
G-Force
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by G-Force »

JamesSFO wrote:
toto238 wrote:... Their only choice is to either charge ridiculous fees for banking services, or to charge their non-banking customers more through expense ratios to subsidize those that want to bank until the system grows enough to support itself.
Is that necessarily true?

An obvious counterexample springs to mind: most credit unions offer banking services at very low costs and many are quite successful.
Credit Unions pay for those services by loaning money out to others and charging interest. AFAIK, Vanguard does not loan out money.
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by seeshells »

:? -deleted-
Last edited by seeshells on Sun Aug 09, 2015 8:42 pm, edited 1 time in total.
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oneleaf
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by oneleaf »

Anyone that converted had any issues with agent authorization settings transferring over?
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Doc
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Doc »

oneleaf wrote:Anyone that converted had any issues with agent authorization settings transferring over?
Maybe. (This is really screwy.)

OK we haven't switched because Vanguard has issues. One was that our joint mutual fund account did not have an associated brokerage account. So I added one - still nothing in it. At about that time we were told DW needed to update my agency to full. Did that. I can now transfer money from her account to her personal outside accounts. (Maybe I always could.) But I can't transfer money from our joint account to those same (hers) outside personal accounts. But she can transfer money from our joint account to her personal outside accounts. Neither of us can transfer anything from our joint account to her Vanguard personal account. (Except by going through Vanguard's correspondence bank which takes about 3 business days.) But I can transfer money from the joint account to my own Vanguard ROTH. (Always could and still can.)

None of this makes any sense and I think it all started when we added the joint brokerage account after the "upgrade" started. I am guessing that Vanguard had some transfers/exchanges that were allowed for mutual fund accounts but will not be allowed in brokerage accounts and our adding the new brokerage account changed the old rules somehow.
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oneleaf
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by oneleaf »

Doc wrote:
oneleaf wrote:Anyone that converted had any issues with agent authorization settings transferring over?
Maybe. (This is really screwy.)

OK we haven't switched because Vanguard has issues. One was that our joint mutual fund account did not have an associated brokerage account. So I added one - still nothing in it. At about that time we were told DW needed to update my agency to full. Did that. I can now transfer money from her account to her personal outside accounts. (Maybe I always could.) But I can't transfer money from our joint account to those same (hers) outside personal accounts. But she can transfer money from our joint account to her personal outside accounts. Neither of us can transfer anything from our joint account to her Vanguard personal account. (Except by going through Vanguard's correspondence bank which takes about 3 business days.) But I can transfer money from the joint account to my own Vanguard ROTH. (Always could and still can.)

None of this makes any sense and I think it all started when we added the joint brokerage account after the "upgrade" started. I am guessing that Vanguard had some transfers/exchanges that were allowed for mutual fund accounts but will not be allowed in brokerage accounts and our adding the new brokerage account changed the old rules somehow.
Thanks for the feedback. I will make sure I discuss this with them before we convert.
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Jazz56 »

Can I ask how you know if the change has occurred? In the last few weeks I added a brokerage account to my existing Traditional IRA, so that it has both mutual fund and stock/ETF components within that IRA. They appear in my summary as Traditional IRA and Traditional IRA Brokerage (with respective holdings underneath). I have to add their totals myself to know what the balance is in that Traditional IRA account. Will this change nest the ETF and stock holdings under just one heading with the mutual funds?

I have not asked for a consolidation but am trying to figure out if what was done already is all that there is to it. (Hoping this is the old and not the new setup).

Thanks very much,

Jazz
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oneleaf
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by oneleaf »

Jazz56 wrote:Can I ask how you know if the change has occurred? In the last few weeks I added a brokerage account to my existing Traditional IRA, so that it has both mutual fund and stock/ETF components within that IRA. They appear in my summary as Traditional IRA and Traditional IRA Brokerage (with respective holdings underneath). I have to add their totals myself to know what the balance is in that Traditional IRA account. Will this change nest the ETF and stock holdings under just one heading with the mutual funds?

I have not asked for a consolidation but am trying to figure out if what was done already is all that there is to it. (Hoping this is the old and not the new setup).

Thanks very much,

Jazz
Looks like you are still under the old structure.
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TomatoTomahto
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by TomatoTomahto »

I emailed our Vanguard rep. He called the following day and told me that he had put a note into our file indicating that we did NOT wish to be converted, as doing so would require us to move our accounts elsewhere.

He understood the issues, and said it was not mandatory or automatic.
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kd2008
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by kd2008 »

Brokerage accounts receive their tax forms fairly late while Vanguard mutual fund accounts are usually in by end of Jan (as long as no REITs are involved). Would the account upgrade affect this and if so how? Would the upgraded "brokerage" account that only has mutual funds receive its tax forms earlier?
Jazz56
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Jazz56 »

oneleaf wrote:
Jazz56 wrote:Can I ask how you know if the change has occurred? In the last few weeks I added a brokerage account to my existing Traditional IRA, so that it has both mutual fund and stock/ETF components within that IRA. They appear in my summary as Traditional IRA and Traditional IRA Brokerage (with respective holdings underneath). I have to add their totals myself to know what the balance is in that Traditional IRA account. Will this change nest the ETF and stock holdings under just one heading with the mutual funds?

I have not asked for a consolidation but am trying to figure out if what was done already is all that there is to it. (Hoping this is the old and not the new setup).

Thanks very much,

Jazz
Looks like you are still under the old structure.
Thanks very much Oneleaf. I was hoping the "new" structure was more consolidated, but wasn't sure since the structure I outlined was just given to me when I added the brokerage this last month. Appreciate the insight. :happy
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Query re Vanguard letter urging brokerage account by Nov. 14

Post by Riversider »

[Merged into original thread, see below. --admin LadyGeek]

Apologies: this has already probably been covered here in the forum but I couldn't find anything after searching a while. I got a letter from Vanguard a couple/few weeks ago saying I either "needed to" or it was "recommended" (I can't remember the wording; need to find the letter in one of my piles) that I change my holdings into a brokerage account by a Nov. 14 deadline. I couldn't tell if this was some mandatory thing or strongly preferred (by Vanguard) for some reason, or what was going on. If this has been hashed out previously, please point me to the link(s). What I have is a Rollover IRA ("large") and a Roth IRA ("small"). Anybody with the scoop and details, I'm all ears. Thanks for your input as always. -- Riversider :?:
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Re: Query re Vanguard letter urging brokerage account by Nov

Post by cfs »

Riversider wrote:Apologies: this has already probably been covered here in the forum but I couldn't find anything after searching a while. I got a letter from Vanguard a couple/few weeks ago saying I either "needed to" or it was "recommended" (I can't remember the wording; need to find the letter in one of my piles) that I change my holdings into a brokerage account by a Nov. 14 deadline. I couldn't tell if this was some mandatory thing or strongly preferred (by Vanguard) for some reason, or what was going on. If this has been hashed out previously, please point me to the link(s). What I have is a Rollover IRA ("large") and a Roth IRA ("small"). Anybody with the scoop and details, I'm all ears. Thanks for your input as always. -- Riversider :?:
Riversider, nothing to panic, I have not made the change (not allowed by Vanguard yet due to my complex portfolio).

Attached is the latest conversation on this subject.

http://www.bogleheads.org/forum/viewtop ... 7#p2215637
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RetiredinKaty
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Re: Query re Vanguard letter urging brokerage account by Nov

Post by RetiredinKaty »

I received an email today saying Vanguard needed my permission to combine my unused brokerage accounts with my mutual fund accounts in the brokerages (IRA and Roth) before December 1. I was aware of the discussion thread above and re-read it, I read VG's fact sheet and the amendments to the brokerage agreement, and then I authorized the change. Don't know for sure where this is going, but if I am not completely happy I will move my money somewhere else.

Regards.
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Re: Query re Vanguard letter urging brokerage account by Nov

Post by Riversider »

Thanks for that link, cfs. Very helpful. I think it might be important reading for all Vanguard clients who may have missed it or were confused as I was. My initial take is that Vanguard would rather stop having to manage the transfers of money from various Vanguard accounts into peoples' various bank checking and savings accounts. Instead, they just want the easy sweep of all profits into a Prime Money Market fund. And leave it to the client to handle and set up transfers out of that one fund. And for those with both non-brokerage AND brokerage accounts, it may make sense to have it all under one unbrella. But what rankles a bit is that the message is not clear: Is this mandatory? or suggested only? Or, we'll do it to you at some point if you don't do it yourself by the 14th of November. -- Riversider
Riversider
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Re: "Vanguard converting mutual fund accounts to brokerage?

Post by Riversider »

My initial take is that Vanguard would rather stop having to manage the transfers of money from various Vanguard accounts into peoples' various bank checking and savings accounts. Instead, they just want the easy sweep of all profits into a Prime Money Market fund. And leave it to the client to handle and set up transfers out of that one fund. And for those with both non-brokerage AND brokerage accounts, it may make sense to have it all under one umbrella. But what rankles a bit is that the message is not clear: Is this mandatory? or suggested only? Or, "we'll do it to you at some point if you don't do it yourself by the 14th of November." -- Riversider
Angst
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Re: Query re Vanguard letter urging brokerage account by Nov

Post by Angst »

I'd suggest just giving them a call. It might be easier and more quickly to the point than pursuing this thread.
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Re: Query re Vanguard letter urging brokerage account by Nov

Post by Toons »

Angst wrote:I'd suggest just giving them a call. It might be easier and more quickly to the point than pursuing this thread.
+1 :happy
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