Vanguard Mutal Fund Roth vs Brokerage Roth

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Cody
Posts: 788
Joined: Sun Dec 02, 2007 9:19 am
Location: Stillwater, Mn

Vanguard Mutal Fund Roth vs Brokerage Roth

Post by Cody » Thu Dec 29, 2016 1:41 pm

I am currently setting up a second Roth IRA for roth conversions (in case I want to recharacterize later).

But my old Roth is a Vanguard Mutual Fund only Roth. The service guy at Vanguard said not many people use that kind anymore. Is there any reason to set up one kind of Roth over the other is I only use Mutual Funds? I like things to be the same (meaning I like to keep it simple with both Roth IRA being the same format.

Thanks,
Cody

User avatar
Duckie
Posts: 5087
Joined: Thu Mar 08, 2007 2:55 pm

Re: Vanguard Mutal Fund Roth vs Brokerage Roth

Post by Duckie » Thu Dec 29, 2016 6:30 pm

Cody wrote:But my old Roth is a Vanguard Mutual Fund only Roth. The service guy at Vanguard said not many people use that kind anymore. Is there any reason to set up one kind of Roth over the other is I only use Mutual Funds?

It's my understanding that you can't open a new account on the mutual fund-side anymore. Vanguard is slowing migrating all assets on the mutual fund-side of the business over to the brokerage-side. It's a three-step process:
  1. All new accounts are created on the brokerage-side only.
  2. People with both mutual fund-side and brokerage-side accounts are being systematically requested to "Upgrade" their mutual fund-side accounts by transferring them over to the brokerage-side. I'm not sure it's really an upgrade but it's happening. So far it isn't required, but I'm sure eventually people won't have a choice.
  3. People with just mutual fund-side accounts will be "Upgraded". I'm in this category and not looking forward to it.

inbox788
Posts: 4142
Joined: Thu Mar 15, 2012 5:24 pm

Re: Vanguard Mutal Fund Roth vs Brokerage Roth

Post by inbox788 » Thu Dec 29, 2016 7:40 pm

I don't like it either, but if that's the future, I'd rather live in a simpler world where this wasn't an issue, so I guess I'll be looking forward to having just the Brokerage Roth. Right now, my spouse has one and I have another. Can't really tell any significant difference. Don't even remember if one has mutual funds and the other ETF or both mutual funds, but in the process of doing backdoor roth, on one of the accounts a third account was opened, and so far has had zero funds and zero transactions. I just haven't gotten around to getting rid of the deadwood, but maybe if the transfer is done, they'll do it for me. And because it's Roth, switching from mutual fund to ETF or vice-versa shouldn't have any major effects. Hopefully it's really the non-issue I believe it to be for me.

Saphomd
Posts: 165
Joined: Tue Apr 03, 2012 6:11 pm
Location: SF, CA

Re: Vanguard Mutal Fund Roth vs Brokerage Roth

Post by Saphomd » Thu Dec 29, 2016 8:55 pm

Duckie wrote:
Cody wrote:But my old Roth is a Vanguard Mutual Fund only Roth. The service guy at Vanguard said not many people use that kind anymore. Is there any reason to set up one kind of Roth over the other is I only use Mutual Funds?

It's my understanding that you can't open a new account on the mutual fund-side anymore. Vanguard is slowing migrating all assets on the mutual fund-side of the business over to the brokerage-side. It's a three-step process:
  1. All new accounts are created on the brokerage-side only.
  2. People with both mutual fund-side and brokerage-side accounts are being systematically requested to "Upgrade" their mutual fund-side accounts by transferring them over to the brokerage-side. I'm not sure it's really an upgrade but it's happening. So far it isn't required, but I'm sure eventually people won't have a choice.
  3. People with just mutual fund-side accounts will be "Upgraded". I'm in this category and not looking forward to it.



I always thought that with a brokerage account, there are additional fees. Since I receive my statements electronically, I dont believe fees are applied. Does anyone know if its the same on the brokerage-side?

Post Reply