Vanguard PSA account to ETF's

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zossteve
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Joined: Mon Mar 05, 2018 4:32 pm

Vanguard PSA account to ETF's

Post by zossteve » Tue Sep 10, 2019 4:26 pm

Had a call with my PSA advisor today. He told me that Vanguard wants to move all PSA customers from mutual funds to ETF's. The reasoning behind this is lower expense ratios and new functionality that they will be adding to the PSA platform. Has anybody else been told this or done this conversion? Are there any gotcha's or reasons not to do this?

Thanks,
Steve

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: Vanguard PSA account to ETF's

Post by retiredjg » Tue Sep 10, 2019 4:40 pm

I've read a post from another poster who also mentioned they had heard this from their PAS advisor.

The only "gotcha" I can think of, and I'm not even sure this would happen, is that if you decide to take back the reins and manage your own account, I think you would be stuck in ETFs. That would be fine for people who don't mind ETFs.

Some of us are old fogeys and prefer mutual funds to ETFs. That would be a downside for me if I intended to use PAS as training wheels (with the intention of taking it all back under my control at a later date).

livesoft
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Re: Vanguard PSA account to ETF's

Post by livesoft » Tue Sep 10, 2019 4:45 pm

retiredjg wrote:
Tue Sep 10, 2019 4:40 pm
The only "gotcha" I can think of, and I'm not even sure this would happen, is that if you decide to take back the reins and manage your own account, I think you would be stuck in ETFs. That would be fine for people who don't mind ETFs.
That's an interesting observation. I would not put it past Vanguard to have thought of this as way to make their PAS a little more "sticky" with regards to client retention. OTOH, one could easily transfer out ETFs for a bonus at another brokerage.
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retiredjg
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Re: Vanguard PSA account to ETF's

Post by retiredjg » Tue Sep 10, 2019 5:01 pm

livesoft wrote:
Tue Sep 10, 2019 4:45 pm
retiredjg wrote:
Tue Sep 10, 2019 4:40 pm
The only "gotcha" I can think of, and I'm not even sure this would happen, is that if you decide to take back the reins and manage your own account, I think you would be stuck in ETFs. That would be fine for people who don't mind ETFs.
That's an interesting observation. I would not put it past Vanguard to have thought of this as way to make their PAS a little more "sticky" with regards to client retention. OTOH, one could easily transfer out ETFs for a bonus at another brokerage.
Well...I wondered that too. :(

I suppose if one is only on training wheels for a year or so, the capital gains for getting back to mutual fund would not be too bad. And learning to use ETFs might not be that bad either. I'm sure I could learn, but thinking I might just not like them much from what I've read here.

It was just a thought.

I think if I decided I needed to use an advisor that Vanguard's PAS is the only one I trust. The possible fact that it might cost me some to move back to mutual funds when leaving PAS would not be an issue if/when I decide I actually need an advisor.

MotoTrojan
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Joined: Wed Feb 01, 2017 8:39 pm

Re: Vanguard PSA account to ETF's

Post by MotoTrojan » Wed Sep 11, 2019 12:16 am

Some of the PSA portfolios I've seen are a bit too cute, holding complex fund arrangements similar to a robo-advisor. I understand why, but I can't get behind it. This just seems like another level; why not educate the customer, and then let them decide without any pressure.

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