Convert to ETF (not at Vanguard)

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stlutz
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Convert to ETF (not at Vanguard)

Post by stlutz » Thu Feb 15, 2018 12:10 am

Has anybody ever converted Vanguard mutual fund shares to ETF, but done so at another broker (Schwab, Fidelity, Merrill etc.)?

Vanguard's website says this is possible--I figured if anybody had ever actually done that it would have been amongst this group. :happy

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LiveSimple
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Re: Convert to ETF (not at Vanguard)

Post by LiveSimple » Thu Feb 15, 2018 8:13 am

Do not think, this is possible ?
Please can you provide the link from Vanguard, that says it is possible.

How could Vanguard says, how to manage at Schwab ?

livesoft
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Re: Convert to ETF (not at Vanguard)

Post by livesoft » Thu Feb 15, 2018 8:18 am

WellsTrade does viewtopic.php?t=211156 not.
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Nate79
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Re: Convert to ETF (not at Vanguard)

Post by Nate79 » Thu Feb 15, 2018 10:59 am

Call me skeptical.

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David Jay
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Re: Convert to ETF (not at Vanguard)

Post by David Jay » Thu Feb 15, 2018 11:06 am

stlutz wrote:
Thu Feb 15, 2018 12:10 am
Has anybody ever converted Vanguard mutual fund shares to ETF, but done so at another broker (Schwab, Fidelity, Merrill etc.)?

Vanguard's website says this is possible--I figured if anybody had ever actually done that it would have been amongst this group. :happy
Only for funds held in Vanguard accounts.
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stlutz
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Re: Convert to ETF (not at Vanguard)

Post by stlutz » Thu Feb 15, 2018 12:53 pm

What they say on their website is:

"If you own your Vanguard mutual fund shares through another broker, keep in mind that some brokers may not be able to convert fractional shares, which could result in a modest taxable gain for you. Other brokers may also charge a fee for a conversion. Contact your broker for more information."

The fund prospectus goes into detail as to what the custodian has to do in order to effectuate the conversion.

So, from VG's perspective it's not true that it cannot be done.

inbox788
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Re: Convert to ETF (not at Vanguard)

Post by inbox788 » Thu Feb 15, 2018 7:44 pm

Why bother doing it? I have funds at Vanguard and haven't had a reason.

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Earl Lemongrab
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Re: Convert to ETF (not at Vanguard)

Post by Earl Lemongrab » Fri Feb 16, 2018 3:56 pm

inbox788 wrote:
Thu Feb 15, 2018 7:44 pm
Why bother doing it? I have funds at Vanguard and haven't had a reason.
I guess you've missed all the various threads about other brokerages. Lots of people want to use some other custodian besides Vanguard. If you do, then holding ETFs makes a lot of sense.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

inbox788
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Re: Convert to ETF (not at Vanguard)

Post by inbox788 » Fri Feb 16, 2018 4:48 pm

Earl Lemongrab wrote:
Fri Feb 16, 2018 3:56 pm
inbox788 wrote:
Thu Feb 15, 2018 7:44 pm
Why bother doing it? I have funds at Vanguard and haven't had a reason.
I guess you've missed all the various threads about other brokerages. Lots of people want to use some other custodian besides Vanguard. If you do, then holding ETFs makes a lot of sense.
Sorry, I still don't get it. I assumed the mutual funds were already at another brokerage.

I've looked into it, and this ETF vs mutual fund for Vanguard Index funds left me with the conclusion the differences were negligible. The only reason might be small savings in EF.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds

Nate79
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Re: Convert to ETF (not at Vanguard)

Post by Nate79 » Fri Feb 16, 2018 5:34 pm

inbox788 wrote:
Fri Feb 16, 2018 4:48 pm
Earl Lemongrab wrote:
Fri Feb 16, 2018 3:56 pm
inbox788 wrote:
Thu Feb 15, 2018 7:44 pm
Why bother doing it? I have funds at Vanguard and haven't had a reason.
I guess you've missed all the various threads about other brokerages. Lots of people want to use some other custodian besides Vanguard. If you do, then holding ETFs makes a lot of sense.
Sorry, I still don't get it. I assumed the mutual funds were already at another brokerage.

I've looked into it, and this ETF vs mutual fund for Vanguard Index funds left me with the conclusion the differences were negligible. The only reason might be small savings in EF.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
Trading Vanguard mutual funds at almost (all?) other brokerages are extremely expensive. ETF's trade at the same trading fee as stocks, much cheaper (and many brokerages offer free trades). So if one wants to hold and make investments at other brokerages Vanguard funds, ETF's are almost always the better choice.

stlutz
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Re: Convert to ETF (not at Vanguard)

Post by stlutz » Fri Feb 16, 2018 7:00 pm

Thanks all. To provide some background, I have a mild interest in reducing the number of custodians I deal with. VG would be the preferred one to eliminate. However, it's generally assumed that to transfer out of VG you need to convert your funds to ETF. I've seen varying reports on this board as to how often they get the cost basis information correct when doing so. As such, I haven't really pursued this option.

I know you can at least transfer many Admiral share class funds to Schwab. I will go ahead and ask them if they can later convert to ETF if I was so inclined at a later date and if so if they have a fee. Will report back on their response.

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Earl Lemongrab
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Re: Convert to ETF (not at Vanguard)

Post by Earl Lemongrab » Sat Feb 17, 2018 12:41 am

inbox788 wrote:
Fri Feb 16, 2018 4:48 pm
Earl Lemongrab wrote:
Fri Feb 16, 2018 3:56 pm
inbox788 wrote:
Thu Feb 15, 2018 7:44 pm
Why bother doing it? I have funds at Vanguard and haven't had a reason.
I guess you've missed all the various threads about other brokerages. Lots of people want to use some other custodian besides Vanguard. If you do, then holding ETFs makes a lot of sense.
Sorry, I still don't get it. I assumed the mutual funds were already at another brokerage.

I've looked into it, and this ETF vs mutual fund for Vanguard Index funds left me with the conclusion the differences were negligible. The only reason might be small savings in EF.
What is the point of suggesting a move to Vanguard?

The difference between ETFs and funds at other brokerages is significant. For one, Admiral shares are generally unavailable. The other is transaction fees are significantly different.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

inbox788
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Re: Convert to ETF (not at Vanguard)

Post by inbox788 » Sat Feb 17, 2018 1:58 am

Earl Lemongrab wrote:
Sat Feb 17, 2018 12:41 am
What is the point of suggesting a move to Vanguard?

The difference between ETFs and funds at other brokerages is significant. For one, Admiral shares are generally unavailable. The other is transaction fees are significantly different.
I'm not sure I made that suggestion, but I do use Vanguard, and you gave a pretty good answer to why one should consider moving to Vanguard. OP, is there a reason you're trying to get away from Vanguard or you're stuck at another brokerage?

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tfb
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Re: Convert to ETF (not at Vanguard)

Post by tfb » Sat Feb 17, 2018 2:15 am

stlutz wrote:
Thu Feb 15, 2018 12:10 am
Has anybody ever converted Vanguard mutual fund shares to ETF, but done so at another broker (Schwab, Fidelity, Merrill etc.)?

Vanguard's website says this is possible--I figured if anybody had ever actually done that it would have been amongst this group. :happy
GammaPoint was able to do it at WellsTrade. viewtopic.php?p=733115#p733115
Harry Sit, taking a break from the forums.

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Earl Lemongrab
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Re: Convert to ETF (not at Vanguard)

Post by Earl Lemongrab » Sat Feb 17, 2018 9:02 am

inbox788 wrote:
Sat Feb 17, 2018 1:58 am
I'm not sure I made that suggestion, but I do use Vanguard, and you gave a pretty good answer to why one should consider moving to Vanguard. OP, is there a reason you're trying to get away from Vanguard or you're stuck at another brokerage?
Why would I use a brokerage that doesn't pay transfer bonuses?
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

inbox788
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Re: Convert to ETF (not at Vanguard)

Post by inbox788 » Sat Feb 17, 2018 2:02 pm

Earl Lemongrab wrote:
Sat Feb 17, 2018 9:02 am
inbox788 wrote:
Sat Feb 17, 2018 1:58 am
I'm not sure I made that suggestion, but I do use Vanguard, and you gave a pretty good answer to why one should consider moving to Vanguard. OP, is there a reason you're trying to get away from Vanguard or you're stuck at another brokerage?
Why would I use a brokerage that doesn't pay transfer bonuses?
Simplicity. Adequacy. Laziness. No free lunch.

Sure, you can game the credit card reward bonuses and sign up bonuses at brokerages, but there's a lot costs to me that make the teaser bonus not worth it to me. A $500 bonus sounds good, but then you lose a big chunk to taxes, plus that's extra work at tax time for me and my accountant. Then there's the work involved in transferring funds back and forth and making sure you jump through the right hoops (probably simpler than meeting some credit card spends), and sometimes (and with some institutions/programs) you have to get involved in fixing bonuses codes that seem to disappear from your account or existence. And there is the time out of the market during transfers that the monies are at risk (good and bad). So, any small bonuses and it's clearly not worth the hassle. For bigger bonuses, requires too much capital and risk. For some people, these complaints are minor inconveniences and pay is far more than work, so it's worth it to them. A rare person that really works the system can pretty much get all their free travel from bonuses, but to me it requires a lot of work (too much work) and I'm likely to mess things up. YMMV.

Is this really the reason or a reason for converting mutual funds to ETFs? And is it recurring? You'd think if you wanted ETFs, you'd just start with them after a one time conversion.

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Earl Lemongrab
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Re: Convert to ETF (not at Vanguard)

Post by Earl Lemongrab » Sun Feb 18, 2018 10:42 am

inbox788 wrote:
Sat Feb 17, 2018 2:02 pm
Earl Lemongrab wrote:
Sat Feb 17, 2018 9:02 am

Why would I use a brokerage that doesn't pay transfer bonuses?
Simplicity. Adequacy. Laziness. No free lunch.
If the lunch isn't free, then why I haven't received the bill? Do you actually have any experience with these brokerages, or just platitudes?
Sure, you can game the credit card reward bonuses and sign up bonuses at brokerages, but there's a lot costs to me that make the teaser bonus not worth it to me. A $500 bonus sounds good, but then you lose a big chunk to taxes, plus that's extra work at tax time for me and my accountant.
For one thing, bonuses in Roth are not taxed. And so what if you lose a bit taxes? The "extra work" is adding an entry for a 1099-MISC. Oh noes!
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

inbox788
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Re: Convert to ETF (not at Vanguard)

Post by inbox788 » Sun Feb 18, 2018 12:44 pm

Earl Lemongrab wrote:
Sun Feb 18, 2018 10:42 am
inbox788 wrote:
Sat Feb 17, 2018 2:02 pm
Earl Lemongrab wrote:
Sat Feb 17, 2018 9:02 am

Why would I use a brokerage that doesn't pay transfer bonuses?
Simplicity. Adequacy. Laziness. No free lunch.
If the lunch isn't free, then why I haven't received the bill? Do you actually have any experience with these brokerages, or just platitudes?
Sure, you can game the credit card reward bonuses and sign up bonuses at brokerages, but there's a lot costs to me that make the teaser bonus not worth it to me. A $500 bonus sounds good, but then you lose a big chunk to taxes, plus that's extra work at tax time for me and my accountant.
For one thing, bonuses in Roth are not taxed. And so what if you lose a bit taxes? The "extra work" is adding an entry for a 1099-MISC. Oh noes!
This thread isn't about bonuses, but as far as your free lunch, someone else paid for it. If you want to enjoy other "free lunches" try visiting some investment seminars or timeshare presentations, and maybe you too can write a book about it.
viewtopic.php?f=2&t=240907#p3770126
BTW, do you pick up pennies on the ground? I still do sometimes (superstition), even though I read that it's less than minimum wage. viewtopic.php?t=102866
Also, I avoid rebates because it's too much work/trouble. So I'm leaving some money on the table, don't know if that fully translates to more for others. So we all make random choices, some rational, other not so much. There was a time when I would take on every overtime double shift I could. Why not, get paid more for less work. Now I'm fortunate enough and tired enough that I can afford not to, and someone else who values it more can take it.

Anyway, getting back to converting mutual funds to ETF, is bouncing around for best deals a common reason why folks actually do this? And do folks really do this more than once in a great while?

OP, why are you converting? Are you needing to do this on a regular basis or more than just once?

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Earl Lemongrab
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Re: Convert to ETF (not at Vanguard)

Post by Earl Lemongrab » Sun Feb 18, 2018 1:31 pm

inbox788 wrote:
Sun Feb 18, 2018 12:44 pm
This thread isn't about bonuses, but as far as your free lunch, someone else paid for it.
Why would I care who paid, as long as it isn't me?
Anyway, getting back to converting mutual funds to ETF, is bouncing around for best deals a common reason why folks actually do this? And do folks really do this more than once in a great while?
In general, a desire to hold Vanguard assets at another custodian, for whatever reason, is a good one for conversion. I only coverted a few funds purchased years ago in Roth, other than that it's all be new purchase of ETFs.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

stlutz
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Re: Convert to ETF (not at Vanguard)

Post by stlutz » Sun Feb 18, 2018 4:59 pm

OP, why are you converting? Are you needing to do this on a regular basis or more than just once?
I'm not asking the question because I'm after bonuses. I have accounts at VG, Schwab, and Fidelity. I wouldn't mind scaling back to the later two. Admiral shares outside of VG can be problematic. Hence my question.

As I indicated above I'll ask Schwab this week and see what they say and report back.

stlutz
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Re: Convert to ETF (not at Vanguard)

Post by stlutz » Tue Feb 20, 2018 9:10 pm

As an update to the two or so people who are interested, Schwab confirmed that they would not do the conversion on their end.

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