What happens if you let Vanguard convert you to a brokerage account

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rjm_cali
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What happens if you let Vanguard convert you to a brokerage account

Post by rjm_cali »

Under my Vanguard account I have the following
  • Brokerage account
  • Roth IRA Brokerage account
  • Living Trust account
  • Living Trust Brokerage account
If I go through the "upgrade" process, will any of the accounts get merged ?

I'd ask Vanguard but have you ever rung Vanguard ? We had to set an account up for my wife in her own name this past week. I was shocked I tell you when the online sign up wouldn't work for something as simple as an account. Then an hour on hold before getting connected to a voice mail. Did not inspire confidence.

Anyhoo would appreciate any insight.
sycamore
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by sycamore »

rjm_cali wrote: Thu Aug 04, 2022 4:47 pm Under my Vanguard account I have the following
  • Brokerage account
  • Roth IRA Brokerage account
  • Living Trust account
  • Living Trust Brokerage account
If I go through the "upgrade" process, will any of the accounts get merged ?
...
Based on my experience, each account has to be upgraded separately. I didn't run into problems.

I only upgraded individual (titled in my name) accounts, not trust accounts. So I'm not sure how they're handled.
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asset_chaos
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by asset_chaos »

The Roth will stay Roth, the individual brokerage account will remain a brokerage account, the living trust mutual fund and brokerage accounts should merge into one living trust brokerage account. Really only Vanguard can tell you for sure.

Through the search box you can find several long threads on others' experience on converting a Vanguard mutual fund only account into a brokerage account. Long story short, it is not an upgrade, but it's not something to fear either. You gain a few features, you lose a few features. If you are using the features you lose, you'll find the conversion mildly annoying. If you aren't using those lost features, you won't notice much change at all.
Regards, | | Guy
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squirrel1963
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by squirrel1963 »

I converted brokerage, IRA and Roth IRA with no issues and also converted some mutual funds to their ETF equivalent, something you can only do after the conversion.
In particular I converted (at no cost) VIAAX to VIGI, as VIAAX has 0.25% purchase/redemption fee, and VIGI does not. VIGI ER is also 1 bps cheaper than VIAAX.

I don't think Vang would ever merge accounts, but it's probably better to call and ask if you are concerned.
| LMP | safe portfolio: TIPS ladder + I-bonds + Treasuries | risky portfolio: US stocks / US REIT / International stocks |
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Metsfan91
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by Metsfan91 »

rjm_cali wrote: Thu Aug 04, 2022 4:47 pm
  • Living Trust account
  • Living Trust Brokerage account
If I go through the "upgrade" process, will any of the accounts get merged ?

Assuming ownership is same for these two accounts, these would be prime candidates for merge. Do you need two need two living trust brokerage account?
"Know what you own, and know why you own it." — Peter Lynch
Dontridetheindexdown
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by Dontridetheindexdown »

The most important change is that you will receive 2 sets of tax forms next year, the first set for the mutual accounts, and a month later, a set of tax forms for the brokerage accounts.

DO NOT file taxes until, and after, you have received BOTH SETS of tax forms.

You will need to input all of the information on all of the forms to file your taxes.
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BL
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by BL »

I received the two statements/1099s for the year I converted, as mentioned above. After that, it is just one. You might avoid it by doing this on Jan. 2 of the next year so there are no transactions on the new brokerage this year. It is not much trouble so don't know how far I would go to avoid this. I would go through all the authorizations and who would inherit, etc., to be sure it was not lost in the transition.

Have recently used one of the advantages: purchasing treasury bills/notes and CDs. If I want ETFs, that would also be enabled.
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Mel Lindauer
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by Mel Lindauer »

One especially annoying disappointment for me was the new brokerage monthly statements. They state that they are YTD but actually they only cover the current month. Why does this matter? Under the old system, YTD statements were actually YTD and you only had to retain the latest one. At the end of the year, you only had to retain the December statement that covered the entire year's activity. Very convenient.

Now, with the brokerage statement, you have to keep 12 monthly statements if you want a complete record of the year's activity.

There are a number of other issues that I've called to Vanguard's attention that made the switch unpleasant for me, and I'm sure for others, too.

While Vanguard calls it an "Upgrade", I call it a downgrade in many respects.
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MadHungarian
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by MadHungarian »

BL wrote: Thu Aug 04, 2022 8:52 pm I received the two statements/1099s for the year I converted, as mentioned above. After that, it is just one. You might avoid it by doing this on Jan. 2 of the next year so there are no transactions on the new brokerage this year. It is not much trouble so don't know how far I would go to avoid this. I would go through all the authorizations and who would inherit, etc., to be sure it was not lost in the transition.

Have recently used one of the advantages: purchasing treasury bills/notes and CDs. If I want ETFs, that would also be enabled.
I would not recommend doing anything with Vanguard on Jan 2nd or any other potentially peak time. When doing something potentially risky/uncertain with them, i'd recommend picking the least risky time of the year.

Yeah, i've got to upgrade my legacy accounts too, but i've already been dealing with the new-style Vanguard brokerage accounts for my parents, and i'm not overly fond of the format. In particular, the statements are a continual pain to decipher, with all those double transactions and the obfuscation of the settlement fund which makes it difficult to figure out where the money went. And there's also like 6-12 times as many statements to deal with as well now. That's supposedly progress.
MadHungarian
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by MadHungarian »

Mel Lindauer wrote: Thu Aug 04, 2022 10:40 pm . . .
Under the old system, YTD statements were actually YTD and you only had to retain the latest one. At the end of the year, you only had to retain the December statement that covered the entire year's activity. Very convenient.
. . .
Yes, that was very convenient for me too, in earlier years.
Fortunately, the Covid thing finally convinced/forced me to switch more to digital storage, so it's a little easier for me to store all the additional statements now. But perversely, i still like to get paper statements from most companies, whenever possible, because it's easier to scan them in than it is to log on to 25 different company websites to download statements each month, not to mention remembering to actually do so. Paper statements just fit much easier into my bill-paying system, even if they just then get scanned and shredded. High-tech ludditism, i guess.
But i'm really getting off topic now!
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celia
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by celia »

What happens if you let Vanguard convert you to a brokerage account
I would rather they turn me into a frog. They can live inexpensively. :happy

But if I have to be a brokerage account, I hope they convert me into a Roth IRA!
Isn't that where conversions end up anyway?
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
grok87
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by grok87 »

Mel Lindauer wrote: Thu Aug 04, 2022 10:40 pm One especially annoying disappointment for me was the new brokerage monthly statements. They state that they are YTD but actually they only cover the current month. Why does this matter? Under the old system, YTD statements were actually YTD and you only had to retain the latest one. At the end of the year, you only had to retain the December statement that covered the entire year's activity. Very convenient.

Now, with the brokerage statement, you have to keep 12 monthly statements if you want a complete record of the year's activity.

There are a number of other issues that I've called to Vanguard's attention that made the switch unpleasant for me, and I'm sure for others, too.

While Vanguard calls it an "Upgrade", I call it a downgrade in many respects.
thanks, that's good to know
RIP Mr. Bogle.
dbr
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by dbr »

Mel Lindauer wrote: Thu Aug 04, 2022 10:40 pm One especially annoying disappointment for me was the new brokerage monthly statements. They state that they are YTD but actually they only cover the current month. Why does this matter? Under the old system, YTD statements were actually YTD and you only had to retain the latest one. At the end of the year, you only had to retain the December statement that covered the entire year's activity. Very convenient.
How can a brokerage send out a statement that labels some of the data as something that it is not. I have never had an account at Vanguard, but that is simply bizarre. I suppose in fact it is reasonable to see both a monthly tabulation and a year to date tabulation.

I do my own bookkeeping and don't read monthly statements beyond checking that there is nothing untoward, specifically what transactions have occurred and is the end of month total correct.
rkhusky
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by rkhusky »

Mel Lindauer wrote: Thu Aug 04, 2022 10:40 pm Now, with the brokerage statement, you have to keep 12 monthly statements if you want a complete record of the year's activity.
I use Vanguard's custom report page to generate a full year report for my brokerage account, with separate sections for each mutual fund. But I can just keep the December report for my mutual fund accounts, since it is for the full year and is broken down into sections for each mutual fund.
Topic Author
rjm_cali
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Re: What happens if you let Vanguard convert you to a brokerage account

Post by rjm_cali »

I think I'll wait a little longer although I'm going to have to convert my funds to UK reporting later this year ahead of a move back to the UK. Can't say as I've been overly impressed with Vanguard's IT systems of late. Tried to setup something as simple as an account for my wife this past few weeks. That took a phone call to them to actually get the account and online access sorted. Now we can't access the account due to the too many redirect error that others seem to have had in the past. And yes , tried multiple browsers, multiple PCs , cleared various cookies (not my first rodeo) and still can't get on. We have a six figure sum to get invested and I'd like it in the market now , not next year.

To add insult to injury they appear to have the accounts setup online in my wife's exe's surname not her now married name but the letters they send out go to her married surname. Irritating as that is and fixable at some point I'd like to know why it happened in the first place. Phone support could not provide any answers to either problem and a ticket is now in. Jeez they're slow....
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