Moving from vanguard, what to do with funds?

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NYCaviator
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Moving from vanguard, what to do with funds?

Post by NYCaviator »

Love Vanguard funds, but I’m done with Vanguard brokerage. It seems like their CSRs have no training and can’t figure out even the simplest requests. Long story short, after dealing Vanguard CSRs’ repeated incompetence, I don’t trust them anymore.

We are invested in mutual funds. Mostly admiral. I want to switch to either Schwab or Fidelity. I still feel weird about buying ETFs (like they are just a fad that will go away), so I’ve never bought any.

Since I can’t buy VG funds at any other brokerage without a fee, should I just transfer the Admiral funds in kind and then invest in Schwab or Fidelity’s index funds? Should I just suck it up and stay at Vanguard to get access to the Admiral finds, or should I finally dip my toes into the water with Vanguard ETFs at Schwab or Fidelity? Taxes are a big concern as this is a brokerage account.
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Re: Moving from vanguard, what to do with funds?

Post by BUBear29 »

I’d say mutual funds are the thing going away, being replaced with ETFs.

I moved to Fidelity from Vanguard and invest in the fidelity mutual funds (3 fund) in my retirement accounts and vanguard etf’s in my taxable accounts
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Re: Moving from vanguard, what to do with funds?

Post by livesoft »

You have many options.

For many (but not all) Vanguard index funds, you can by phone (sorry but you have to deal with a CSR) do a tax-free conversion to the ETF share class if you like. Then you can continue to buy and/or sell that ETF share class at other brokers without paying a commission.

You could do any of those other things you wrote about, too.
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Re: Moving from vanguard, what to do with funds?

Post by abuss368 »

I almost never have a need to call Vanguard. However, when a need does arise I typically have never had any issues with client services. I am sorry to hear about your experience.
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Re: Moving from vanguard, what to do with funds?

Post by bltn »

With brokerage accounts at Vanguard and Fidelity for many years, I like the service from both equally. The lower fees make the fixed income funds better at Vanguard, generally.
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Re: Moving from vanguard, what to do with funds?

Post by NYCaviator »

livesoft wrote: Tue Aug 18, 2020 7:54 pm You have many options.

For many (but not all) Vanguard index funds, you can by phone (sorry but you have to deal with a CSR) do a tax-free conversion to the ETF share class if you like. Then you can continue to buy and/or sell that ETF share class at other brokers without paying a commission.

You could do any of those other things you wrote about, too.
Any reason not to hold funds and ETFs?
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Re: Moving from vanguard, what to do with funds?

Post by livesoft »

NYCaviator wrote: Tue Aug 18, 2020 8:51 pm Any reason not to hold funds and ETFs?
I own both, so I will say no, not really, though some people have higher anxiety with one or the other.
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sycamore
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Re: Moving from vanguard, what to do with funds?

Post by sycamore »

NYCaviator wrote: Tue Aug 18, 2020 7:46 pm ...Since I can’t buy VG funds at any other brokerage without a fee...
^^^ Not true. You can get some VG funds with no transaction fee at Chase You Invest.
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Re: Moving from vanguard, what to do with funds?

Post by 000 »

NYCaviator wrote: Tue Aug 18, 2020 8:51 pm
livesoft wrote: Tue Aug 18, 2020 7:54 pm You have many options.

For many (but not all) Vanguard index funds, you can by phone (sorry but you have to deal with a CSR) do a tax-free conversion to the ETF share class if you like. Then you can continue to buy and/or sell that ETF share class at other brokers without paying a commission.

You could do any of those other things you wrote about, too.
Any reason not to hold funds and ETFs?
Rebalancing between them is a bit more of an exercise.
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Re: Moving from vanguard, what to do with funds?

Post by rascott »

sycamore wrote: Tue Aug 18, 2020 9:07 pm
NYCaviator wrote: Tue Aug 18, 2020 7:46 pm ...Since I can’t buy VG funds at any other brokerage without a fee...
^^^ Not true. You can get some VG funds with no transaction fee at Chase You Invest.
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viewtopic.php?t=321442

+1.....I buy VTSAX at Chase with no fee.
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Re: Moving from vanguard, what to do with funds?

Post by rascott »

NYCaviator wrote: Tue Aug 18, 2020 7:46 pm Love Vanguard funds, but I’m done with Vanguard brokerage. It seems like their CSRs have no training and can’t figure out even the simplest requests. Long story short, after dealing Vanguard CSRs’ repeated incompetence, I don’t trust them anymore.

We are invested in mutual funds. Mostly admiral. I want to switch to either Schwab or Fidelity. I still feel weird about buying ETFs (like they are just a fad that will go away), so I’ve never bought any.

Since I can’t buy VG funds at any other brokerage without a fee, should I just transfer the Admiral funds in kind and then invest in Schwab or Fidelity’s index funds? Should I just suck it up and stay at Vanguard to get access to the Admiral finds, or should I finally dip my toes into the water with Vanguard ETFs at Schwab or Fidelity? Taxes are a big concern as this is a brokerage account.

Mutual funds are what's going away. I think you are way off base there. Do some research on how they work and you'll understand why that's likely all to be left in the future.

But if you are just buying broad market index funds.... Fidelity and Schwab offer basically identical products as Vanguard if you really want to stick with mutual funds.

ETFs are ideal for taxable accounts, however.
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Re: Moving from vanguard, what to do with funds?

Post by abuss368 »

NYCaviator wrote: Tue Aug 18, 2020 8:51 pm
livesoft wrote: Tue Aug 18, 2020 7:54 pm You have many options.

For many (but not all) Vanguard index funds, you can by phone (sorry but you have to deal with a CSR) do a tax-free conversion to the ETF share class if you like. Then you can continue to buy and/or sell that ETF share class at other brokers without paying a commission.

You could do any of those other things you wrote about, too.
Any reason not to hold funds and ETFs?
Could only think of rebalancing a portfolio. I would consider one or the other for simplicity purposes.
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NYCaviator
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Re: Moving from vanguard, what to do with funds?

Post by NYCaviator »

rascott wrote: Tue Aug 18, 2020 11:25 pm
NYCaviator wrote: Tue Aug 18, 2020 7:46 pm Love Vanguard funds, but I’m done with Vanguard brokerage. It seems like their CSRs have no training and can’t figure out even the simplest requests. Long story short, after dealing Vanguard CSRs’ repeated incompetence, I don’t trust them anymore.

We are invested in mutual funds. Mostly admiral. I want to switch to either Schwab or Fidelity. I still feel weird about buying ETFs (like they are just a fad that will go away), so I’ve never bought any.

Since I can’t buy VG funds at any other brokerage without a fee, should I just transfer the Admiral funds in kind and then invest in Schwab or Fidelity’s index funds? Should I just suck it up and stay at Vanguard to get access to the Admiral finds, or should I finally dip my toes into the water with Vanguard ETFs at Schwab or Fidelity? Taxes are a big concern as this is a brokerage account.

Mutual funds are what's going away. I think you are way off base there. Do some research on how they work and you'll understand why that's likely all to be left in the future.

But if you are just buying broad market index funds.... Fidelity and Schwab offer basically identical products as Vanguard if you really want to stick with mutual funds.

ETFs are ideal for taxable accounts, however.
I’ve researched ETFs but what concerns me is bid/ask spread and not being able to auto invest. What makes you think mutual funds are going away? From what I understand almost 401ks offer ETFs yet.
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Re: Moving from vanguard, what to do with funds?

Post by rascott »

NYCaviator wrote: Wed Aug 19, 2020 6:48 am
rascott wrote: Tue Aug 18, 2020 11:25 pm
NYCaviator wrote: Tue Aug 18, 2020 7:46 pm Love Vanguard funds, but I’m done with Vanguard brokerage. It seems like their CSRs have no training and can’t figure out even the simplest requests. Long story short, after dealing Vanguard CSRs’ repeated incompetence, I don’t trust them anymore.

We are invested in mutual funds. Mostly admiral. I want to switch to either Schwab or Fidelity. I still feel weird about buying ETFs (like they are just a fad that will go away), so I’ve never bought any.

Since I can’t buy VG funds at any other brokerage without a fee, should I just transfer the Admiral funds in kind and then invest in Schwab or Fidelity’s index funds? Should I just suck it up and stay at Vanguard to get access to the Admiral finds, or should I finally dip my toes into the water with Vanguard ETFs at Schwab or Fidelity? Taxes are a big concern as this is a brokerage account.

Mutual funds are what's going away. I think you are way off base there. Do some research on how they work and you'll understand why that's likely all to be left in the future.

But if you are just buying broad market index funds.... Fidelity and Schwab offer basically identical products as Vanguard if you really want to stick with mutual funds.

ETFs are ideal for taxable accounts, however.
I’ve researched ETFs but what concerns me is bid/ask spread and not being able to auto invest. What makes you think mutual funds are going away? From what I understand almost 401ks offer ETFs yet.
Mutual funds have bid/ ask spreads as well.... they are just hidden from your view. But the fund still has to go buy all the same stocks. It's also an irrelevant amount. The spread is minuscule.

And no I don't actually think MFs will go away.... but do think they will be used less and less for truly passive index funds.
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Re: Moving from vanguard, what to do with funds?

Post by bluegill »

"Since I can’t buy VG funds at any other brokerage without a fee, should I just transfer the Admiral funds in kind and then invest in Schwab or Fidelity’s index funds?" TRANSFER FUNDS IN KIND

invest in Schwab or Fidelity’s index funds? NO, WHAT's WRONG WITH YOUR VANGUARD FUNDS; PROBABLY NOTHING
[/i][/i]

"Should I just suck it up and stay at Vanguard to get access to the Admiral finds, or should I finally dip my toes into the water with Vanguard ETFs at Schwab or Fidelity?"
NO IF YOU SWITCH TO ETFs YOU WILL HAVE A TAXABLE TRANSACTION
You will have NO improvement from switching from Total Stock Market MF to Total Stock Market ETF.
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Re: Moving from vanguard, what to do with funds?

Post by galawdawg »

If you are not completely decided on Fidelity of Schwab, you may want to consider E*TRADE. No transaction fees on most Vanguard mutual funds and excellent customer service. They also offer cash bonuses. Here is a list I compiled of Vanguard no transaction fee mutual funds at E*TRADE: https://drive.google.com/file/d/1OpHwVx ... sp=sharing. Here is their current bonus offer: https://us.etrade.com/what-we-offer/how ... /brokerage. If you are interested, I'd recommend you contact a representative who can often sweeten the pot on the publicized bonus offer and/or consolidate retirement and non-retirement account balances used to calculate your bonus. I switched to E*TRADE about a year ago after thirty years at Vanguard and couldn't be happier.

If you are settled upon FIdelity or Schwab, when you buy a Vanguard mutual fund (including when you rebalance) you will pay a transaction fee. It has been reported by several Bogleheads that Schwab has offered some who have a sizeable portfolio a transaction fee waiver for one family of funds (such as Vanguard), so you may want to ask at both Schwab and Fidelity to see if you would qualify for a waiver of the transaction fees on Vanguard mutual funds.

Good luck!
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Re: Moving from vanguard, what to do with funds?

Post by LadyGeek »

This thread is now in the Personal Investments forum (investment help).
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Re: Moving from vanguard, what to do with funds?

Post by lostdog »

E-trade has some no transaction Vanguard mutual funds. Check their list, your funds might be on it.

Do a search on E-trade on this forum.
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Re: Moving from vanguard, what to do with funds?

Post by aristotelian »

Convert current holdings to ETF's as livesoft suggested and transfer to Fidelity. Then buy Fidelity mutual funds with new money.
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Re: Moving from vanguard, what to do with funds?

Post by sschoe2 »

I wouldn't hesitate to get ETF's. I personally have had no issues with Vanguard because I never need to deal with customer service. I just ACH in the money and buy the funds and ETF and get my tax forms at the end of the year. I have VTMSX (Tax Managed Small Cap) which doesn't have an ETF so that would be a problem if I ever left.
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Re: Moving from vanguard, what to do with funds?

Post by arf30 »

Convert to ETF and transfer to brokerage of choice, preferably for a bonus.
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Re: Moving from vanguard, what to do with funds?

Post by Carguy85 »

Am I missing something by doing everything on my iPhone through vanguards app? I only have 2-3 funds though and have a checking account linked to vanguard. I print off a tax form when ready and give it to my accountant...I’m not a fancy guy. What types of things have you been unable to do on your own? Genuinely curious for if/when this may come up for me.
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Re: Moving from vanguard, what to do with funds?

Post by nix4me »

I would convert your Vanguard Funds to their equivalent ETFs. Then I would transfer to Fidelity (or Schwab). If you don’t want to use ETFs - Then I would leave those investments alone and make new investments in Fidelity (or Schwab) mutual funds. If converting to ETFs going forward, then I would just continue buying the ETFs that you hold.

And if the account(s) are tax deferred, then there is no harm converting back from ETFs to Fidelity or Schwab funds if you don’t want to use ETFs.

The Wiki lists the Fidelity and Schwab funds that map to the Vanguard favorites and they are actually cheaper is some cases at Fidelity and Schwab.
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Re: Moving from vanguard, what to do with funds?

Post by bondsr4me »

Convert your VG funds to VG ETF's (if an ETF is available for the fund) and then transfer to Schwab or Fidelity.
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Re: Moving from vanguard, what to do with funds?

Post by sycamore »

Carguy85 wrote: Thu Aug 20, 2020 8:24 am Am I missing something by doing everything on my iPhone through vanguards app? I only have 2-3 funds though and have a checking account linked to vanguard. I print off a tax form when ready and give it to my accountant...I’m not a fancy guy. What types of things have you been unable to do on your own? Genuinely curious for if/when this may come up for me.
You're not missing anything major IMO. Most investors are reasonably well served by any of the major firms (Fidelity, Schwab, Vanguard, E*Trade, TDA, etc.).

From what I've read here, it seems the main impetus for someone switching from Vanguard has been a poor experience with Vanguard's customer service.

Another reason is that Vanguard doesn't allow purchasing fractional ETF shares, which is necessary if you want to purchase an ETF in dollar units rather than shares. E.g., when you want to set up a recurring purchase of $1000 of VTI. Fidelity allows this through its mobile app.

There's also a rare gripe with Vanguard not allowing purchases of certain "exotic" products -- leveraged, inverse, and commodity exchange-traded products.
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Re: Moving from vanguard, what to do with funds?

Post by NMBob »

the spread on vti and bnd are likely almost insignificant because of the size and demand of the etf. i think the spread has been 1 penny on vti when i have bought it a few times. You should look at the spreads tomorrow when the market is open, (not when it is closed.)

from an old motley fool, first thing google found me....
" though, the bigger, broader-based ETFs tend to have low bid-ask spreads. At Vanguard, for instance, Vanguard Total Bond (NYSE: BND) and Vanguard Total Stock (NYSE: VTI) have bid-ask spreads of 0.01% and 0.02% respectively, while one of its corporate bond ETFs sports a whopping 0.32% spread."
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Re: Moving from vanguard, what to do with funds?

Post by Rajsx »

I believe one cannot convert from Total Bond Index VBTLX to BND, but if in Tax Deferred accounts, I guess one can sell VBTLX & then buy ETFs.

Am I correct ?
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Re: Moving from vanguard, what to do with funds?

Post by 000 »

Rajsx wrote: Thu Aug 20, 2020 5:05 pm I believe one cannot convert from Total Bond Index VBTLX to BND, but if in Tax Deferred accounts, I guess one can sell VBTLX & then buy ETFs.

Am I correct ?
Yes. The reason conversion is prohibited is the dividends accrue differently.
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