Anyone Switched to Vanguard Account Upgrade?

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Nick True
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Anyone Switched to Vanguard Account Upgrade?

Post by Nick True »

Has anyone switched their vanguard mutual fund and/or brokerage accounts to the one brokerage account upgrade? I am curious to know if the switch is worth it, and if it helps keep things more simple by having everything under the brokerage account. It says that under the new brokerage account you can trade basically everything rather than having to hold a brokerage account for stocks, ETFs, etc. and a separate mutual fund account for Vanguard mutual funds.

A new brokerage account holds Vanguard mutual funds, as well as Vanguard ETFs®, stocks, bonds, CDs, and mutual funds and ETFs from other companies. The account also will have a settlement fund, which is used to buy and sell Vanguard ETFs and other brokerage products.


If you haven't heard of this check out the details below:

http://www.vanguard.com/pdf/vbcfaq_062013.pdf

https://investor.vanguard.com/info/account-upgrade
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Doc
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Doc »

It's not happening.

I was invited to switch last year but when I tried I was not eligible. Each time I called (~4 or 5) I was given a different reason why I was not. When I corrected it - still not eligible but a different reason. Basically it is not happening because they have too many IT problems to overcome.

There is a long thread in the personal finance section: http://www.bogleheads.org/forum/viewtop ... e&start=50

That thread last update May 24, 2014.
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ResearchMed
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by ResearchMed »

We couldn't get it to work, for DH, who has several accounts, including IRA and 403b (both Employer and Employee contributions, separately).

However, it worked right away for my IRA.

As far as I can tell, it isn't much more than an "appearance' issue, although "just barely".
The "money market" sweep account now sits above the other "stuff", rather than the money market AND Vanguard mutual funds sitting above the other "stuff".
But that might be a function of exactly which holdings I've got; no idea.

The ONE thing that seems functionally different is if I want to purchase something, I am no longer given the easy choice of making a mistake of pulling money from a linked checking account.
The default now seems to be from a Money Market fund.
(That matters, as I wasn't eligible for an IRA contribution when I almost clicked "okay" when it defaulted to the outside checking account after I first transferred IRA money (all cash) from a Fidelity-held pension from a defunct former employer from decades ago.)

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Re: Anyone Switched to Vanguard Account Upgrade?

Post by jebmke »

I must be missing something. I don't see what problem they are trying to fix.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Doc »

jebmke wrote:I must be missing something. I don't see what problem they are trying to fix.
DW login:
None of your accounts can currently be upgraded. Click Where are my other accounts? below or call one of our investment professionals at 888-306-3387 for more information
.

Doc's Login: Ditto

You tell me. One of the last reasons was that a zero balance in a closed account makes the transition unworkable until the account reopens. Presumably you can't transfer a "closed to new investors" account even if you closed it entirely. :? The IT gods speak in strange tongues.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by jebmke »

I mean, I don't see what the Account Upgrade does for me if it worked.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by TomatoTomahto »

jebmke wrote:I mean, I don't see what the Account Upgrade does for me if it worked.
What it would do for us is make our accounts problematic. My wife's employer's Compliance Department allows her to have an account at Vanguard because it can contain only Vanguard mutual funds. Her brokerage account had to be moved to Fidelity. So, if the remaining account could be used to hold individual stocks, we would have to move it all elsewhere. Mind you, this was all even though the employer gets duplicate confirmations of any trade, prior permission is required for purchasing stock, etc.

It ain't broke, Vanguard, please don't fix it.
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cfs
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by cfs »

Not working.

This is what I am getting from Vanguard: None of your accounts can currently be upgraded. I don't need to change anything, at least for now.

Thanks for reading.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Dale_G »

I haven't been "invited", buth this would be a no go for me:
You’ll no longer be able to receive Vanguard fund
distributions by check, by automatic transfer to your
bank account, or by automatic reinvestment into
another Vanguard fund. If you currently use these
services, after the upgrade we’ll move the Vanguard
fund distributions to your settlement fund.
Right now all dividends in taxable go to the MM fund, and I move stuff around as I please. But when I am no longer around, it would be easier for my wife if dividends could automatically go to the bank account.

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Re: Anyone Switched to Vanguard Account Upgrade?

Post by stlutz »

I wish Vanguard would just sell off VBS and just focus on providing the best mutual fund experience possible (which they don't). If somebody wants ETFs, those can be bought from any brokerage at a low or sometimes no cost.

Note: I prefer ETFs, at least for taxable accounts.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by jebmke »

stlutz wrote:I wish Vanguard would just sell off VBS and just focus on providing the best mutual fund experience possible (which they don't). If somebody wants ETFs, those can be bought from any brokerage at a low or sometimes no cost.
Why? I have a mix of funds and VG ETFs and have no problems. I don't pay any cost to VG to trade them.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by BigJohn »

Very interesting comments. I currently have a taxable mutual find account at VG but when I retire I'll have some NUA employer stock that needs to be moved into a taxable brokerage account. I went on the VG website to see if both could be held in a brokerage account. The site indicates that they can but with an asterisk indicating that this was true only for some brokerage accounts. Not a huge issue to have two accounts but sure would be less complicated to have just one if possible. When I inquired with my Flagship rep I received some boiler plate response promising this combined account was coming. A second inquiry into when got a very ambiguous answer that he'd keep me posted on status. Sounds like I shouldn't hold my breath and should plan on having two accounts.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Jack »

jebmke wrote:I must be missing something. I don't see what problem they are trying to fix.
One of the major complaints about the current Vanguard set up is that you have to wait up to three days for settlement after the sale of a stock or ETF on the brokerage side before you can reinvest the proceeds on the mutual fund side. That means three days in which your money is out of the market.

After the merger, you should be able to sell a stock or ETF and reinvest in a mutual fund the same day.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by indexfundfan »

I was the first to do the account upgrade. I noticed some things were not ironed out as I went along.

For example, I had an upgraded Roth account to hold ETFs. I wanted to do the annual backdoor Roth thing by first contributing to the tIRA account and then moving the funds to the upgraded Roth account. Unlike prevoius years, this was a no go and the reason was because the tIRA account was not the "same type" (i.e. not upgraded). So the rep had to first submit a request to upgrade the tIRA before the funds can be moved from the tIRA to the Roth IRA. This delays the Roth contribution by a few days. Not a big problem but things are certainly still being ironed out.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by potatoman »

Dale_G wrote:
You’ll no longer be able to receive Vanguard fund
distributions by check, by automatic transfer to your
bank account, or by automatic reinvestment into
another Vanguard fund. If you currently use these
services, after the upgrade we’ll move the Vanguard
fund distributions to your settlement fund.
So no auto reinvestment into another fund for mutual funds with the combined account...but does this mean that auto reinvestment into the same mutual fund will still be available? Have I misunderstood this?
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ResearchMed
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by ResearchMed »

potatoman wrote:
Dale_G wrote:
You’ll no longer be able to receive Vanguard fund
distributions by check, by automatic transfer to your
bank account, or by automatic reinvestment into
another Vanguard fund. If you currently use these
services, after the upgrade we’ll move the Vanguard
fund distributions to your settlement fund.
So no auto reinvestment into another fund for mutual funds with the combined account...but does this mean that auto reinvestment into the same mutual fund will still be available? Have I misunderstood this?
My IRA was 'upgraded', and it seems to make little difference, including only slightly in appearance.

The auto-reinvestment in mutual funds (including non-Vanguard funds) and ETF's is working the same way, automatically purchasing new shares of the same fund.

I don't have things set up to do any of the other "services" that apparently aren't going to work now, so I can't comment on those.

RM
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Doc »

Jack wrote:One of the major complaints about the current Vanguard set up is that you have to wait up to three days for settlement after the sale of a stock or ETF on the brokerage side before you can reinvest the proceeds on the mutual fund side. That means three days in which your money is out of the market.
Actually four days if you wanted to buy a Vanguard fund. Three days to get it to the MM account but it doesn't show up until it gets posted after close of business so you can't do an exchange until the fourth day.
Dale_G wrote:I haven't been "invited", but this would be a no go for me:
I don't think you are going to have a choice. I was told that all accounts were going to eventually be moved to the new platform. But then I've been told a lot of things that turned out otherwise.

For those of you that are concerned that a single account platform will be a problem you shouldn't be worried at least in the long run. Most brokerage firms that offer their own mutual funds have a single platform and work very smoothly. Depending on the asset being sold you have either an instantaneous credit or in the case of a mutual fund a credit the next day. That credit will invest in your MM account in the next few days but is available intermediately to buy something else. Vanguard's current system is an exception to the rest of the industry. They are just a little slower than most others. A low cost business model has some drawbacks at times.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by minesweep »

cfs wrote:Not working.

This is what I am getting from Vanguard: None of your accounts can currently be upgraded.

Thanks for reading.
Ditto!

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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Sbashore »

I just completed an upgrade about a month ago. It was seamless and happened overnight. What I did was call Vanguard and they emailed me a link to an invitation to upgrade. After that it was all automatic and my account was upgraded overnight. What it did for me was that all I had was a brokerage account because I had transferred my Vanguard ETF's into Vanguard from another broker. I wanted to move into the mutual fund share class, but didn't want to sit out of the market for 3-4 days while the ETF sales settled. By upgrading the account I was able to sell the ETF's and buy mutual funds the same day.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by ftobin »

Doc wrote:Vanguard's current system is an exception to the rest of the industry. They are just a little slower than most others. A low cost business model has some drawbacks at times.
When I was with T Rowe Price, they had a separation between their mutual fund accounts and brokerage, like Vanguard. I just checked and it looks like they're still separate.

Fidelity used to have a separation as well but at some point merged them. I had a mutual-fund-only account there until just recently when our compliance department allowed a brokerage account there.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by SSSS »

A couple years ago before they announced this, I got $10 for doing a survey where I read the proposed documentation & answered questions on it.

It's cool to see that they actually implemented it, but apparently like most I'm not eligible.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by sperry8 »

Jack wrote:
jebmke wrote:I must be missing something. I don't see what problem they are trying to fix.
One of the major complaints about the current Vanguard set up is that you have to wait up to three days for settlement after the sale of a stock or ETF on the brokerage side before you can reinvest the proceeds on the mutual fund side. That means three days in which your money is out of the market.

After the merger, you should be able to sell a stock or ETF and reinvest in a mutual fund the same day.
This is a good benefit (I've run into this problem before). I just received an email allowing me to 'upgrade'. Is there any downside to doing this? I like the upside mentioned above.
BH contest results: 2019: #233 of 645 | 18: #150 of 493 | 17: #516 of 647 | 16: #121 of 610 | 15: #18 of 552 | 14: #225 of 503 | 13: #383 of 433 | 12: #366 of 410 | 11: #113 of 369 | 10: #53 of 282
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Bonnan »

I requested an upgrade in Nov 2014; it went smoothly. My rep implemented a dedicated account to facilitate my wife's request concerning check writing. Also looking forward to receiving consolidated 1090's for the 2015 tax year as it should make tax filing less complex. Will note that we are note frequent traders.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by sperry8 »

Bonnan wrote:I requested an upgrade in Nov 2014; it went smoothly. My rep implemented a dedicated account to facilitate my wife's request concerning check writing. Also looking forward to receiving consolidated 1090's for the 2015 tax year as it should make tax filing less complex. Will note that we are note frequent traders.
Good to hear it went smoothly. I am not a frequent trader either (2-3 trades max per year, mostly to TLH). But I am still left wondering if there is a downside to this "upgrade"?
BH contest results: 2019: #233 of 645 | 18: #150 of 493 | 17: #516 of 647 | 16: #121 of 610 | 15: #18 of 552 | 14: #225 of 503 | 13: #383 of 433 | 12: #366 of 410 | 11: #113 of 369 | 10: #53 of 282
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by iceport »

sperry8 wrote:
Bonnan wrote:I requested an upgrade in Nov 2014; it went smoothly. My rep implemented a dedicated account to facilitate my wife's request concerning check writing. Also looking forward to receiving consolidated 1090's for the 2015 tax year as it should make tax filing less complex. Will note that we are note frequent traders.
Good to hear it went smoothly. I am not a frequent trader either (2-3 trades max per year, mostly to TLH). But I am still left wondering if there is a downside to this "upgrade"?
I just received an "invitation" this morning, and after consulting this very long, spliced thread, decided to go ahead and take the plunge.

A primary consideration was that the risks seemed low for my situation. I only hold 3 "accounts:" one plain vanilla taxable Vanguard account for Vanguard mutual funds, one Vanguard Roth account for Vanguard mutual funds, and one VBS brokerage account, for Vanguard ETFs. So initially, I'm only converting/combining the Roth accounts. Two possible complications, cost basis accounting and banking practices, are essentially non-issues with the Roth accounts. (I don't use automatic transfers or automatic investments with the Roth accounts.)

The "in progress" notices appeared immediately. I don't know how it will all play out yet.

Image

I checked, and the taxable account is also eligible for conversion, but there is no need and there are greater risks.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by sperry8 »

Thank you - did not see that thread. Likely this should be merged into it. After reading the comments there I am not going to upgrade. Some have had issues with the conversion and with my limited trades I really don't see any upside.
BH contest results: 2019: #233 of 645 | 18: #150 of 493 | 17: #516 of 647 | 16: #121 of 610 | 15: #18 of 552 | 14: #225 of 503 | 13: #383 of 433 | 12: #366 of 410 | 11: #113 of 369 | 10: #53 of 282
RelaxMore
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by RelaxMore »

I just got invitation to "upgrade" at end of May and am really sorry I did. They did not disclose all the details, and in what I think is typical Vanguard fashion, they do not communicate well, their IT sucks big time, the presentation of stuff sucks big time, the only advantage Vanguard has is they operate mutual funds at low cost - BUT, my take is this "upgrade" is their attempt to move away from being a "mutual fund company" and they are going to try and be an online brokerage firm like all their competitors who do that so much better than Vanguard.

Problems with this "upgrade":
1) They do not disclose that if you have any mutual funds that pay daily interest (like bond funds), when the account is upgraded, those funds will effectively be sold and repurchased triggering a payout of the accrued daily distributions. That would not be a problem EXCEPT they do not honor your prior directions if they are to pay out the distributions, and instead they automatically reinvest them. I am not at all happy at this result.

2) When any mutual funds pay distributions, an extra day will be added before you see the transaction. The money might show as "available" in the settlement cash account, but there is not a trace of any transaction history to support any of this. Shoddy IT. Already, any stocks you hold take an extra day (OR MORE!) in the brokerage account for dividends/distributions to appear compared to a "real" brokerage firm like Ameritrade, Schwab, etc.

All I can say is I dread having to speak with anyone at Vanguard. They just are not customer-oriented or customer-friendly. There phone systems are extremely inefficient - you must waste your time every time you call listening to the same unnecessary drivel. (Schwab just implement the same 'my voice is my password' system as Vanguard, but with Schwab, you don't have to spend so much time and listen to that stupid Vanguard lady give you all the instruction on how it works before you are given the chance to say 'at vanguard my voice is my password'.... Schwab is a PLEASURE to deal with. Vanguard sucks. Schwab appreciates my business everytime I call. I can call Schwab 24x7. Schwab follows up. Vanguard - forget it.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by elgob.bogle »

RelaxMore - welcome to the forum!

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Re: Anyone Switched to Vanguard Account Upgrade?

Post by SpringMan »

I lost the authority to trade on my spouse's IRA that I had prior to the upgrade. It took a couple tries to get it corrected. The notary I had notarize the form at my bank took it upon herself to also be one of the two witnesses. The law on this varies state by state. PA law apparently does not allow it, so we had to repeat a redo on the whole form getting it witnessed correctly. When this was corrected, I got a very strange email from Vanguard stating access to our joint brokerage account has been restricted. This account was already a brokerage account as we hold a Vanguard ETF and was not the IRA account I submitted the form for. Though the email said I was restricted, I could not see any restrictions. Called Vanguard and was told the message was computer generated because someone made a mistake and entered the wrong account number. Vanguard had corrected the problem but the email was auto-generated in the process. There was a bond fund in the IRA that was converted but I did not notice the problem RelaxMore reported regarding a sale and repurchase. I am not saying it did not happen, just I didn't notice. Also want to welcome RelaxMore to the forum.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by House Blend »

RelaxMore wrote:1) They do not disclose that if you have any mutual funds that pay daily interest (like bond funds), when the account is upgraded, those funds will effectively be sold and repurchased triggering a payout of the accrued daily distributions. That would not be a problem EXCEPT they do not honor your prior directions if they are to pay out the distributions, and instead they automatically reinvest them. I am not at all happy at this result.
Thanks for sharing your experience.

Here is a recent thread from another Boglehead who had the same thing happen (and was able to get it undone).
viewtopic.php?f=1&t=192090

FWIW, I would not describe this as funds "effectively be[ing] sold and repurchased triggering a payout of the accrued daily distributions". Actual selling (in a taxable account) would be a taxable event and would have Bogleheads marching in the streets in protest.

What is happening is that the accrued but-not-yet-distributed dividends are being distributed and then reinvested. The blunder is that they seem to be automatically reinvesting whether the customer wants it or not. But the accrued dividends in a bond fund do have to be distributed one way or another at the time of a transfer.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by BigJohn »

I agree with HouseBlend, there is no selling and rebuying but transactions in the new account are a bit more complicated than in the old MF only accounts. In the old MF accounts I would see a single transactions that took the monthly dividend and purchased an equivalent number of shares. In the new structure I see two transactions to get to the same endpoint. The first is disbursement of the dividend to the associated MM account with a second transaction to purchase in the brokerage account using funds from the MM account. On the conversion date, this is done with the MTD dividends from the old MF account. However, since all I've converted so far are IRA accounts I had it set-up for reinvestment and this wasn't an issue for me. I do appreciate the heads-up for when I convert my taxable account (I'm in no hurry so it maybe a while).

If it's a big deal you can work with VG on getting it reversed. If it's an aggravation and disappointment but not a big financial deal you might just go on-line and sell the shares you did not intend to purchase. Yes, I agree it should not have happened, only suggesting this as a path of least effort to resolve if the STCG/L is not a big deal.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by sperry8 »

BigJohn wrote:I agree with HouseBlend, there is no selling and rebuying but transactions in the new account are a bit more complicated than in the old MF only accounts. In the old MF accounts I would see a single transactions that took the monthly dividend and purchased an equivalent number of shares. In the new structure I see two transactions to get to the same endpoint. The first is disbursement of the dividend to the associated MM account with a second transaction to purchase in the brokerage account using funds from the MM account. On the conversion date, this is done with the MTD dividends from the old MF account. However, since all I've converted so far are IRA accounts I had it set-up for reinvestment and this wasn't an issue for me. I do appreciate the heads-up for when I convert my taxable account (I'm in no hurry so it maybe a while).

If it's a big deal you can work with VG on getting it reversed. If it's an aggravation and disappointment but not a big financial deal you might just go on-line and sell the shares you did not intend to purchase. Yes, I agree it should not have happened, only suggesting this as a path of least effort to resolve if the STCG/L is not a big deal.
This is exactly what happened to me about a week ago. I spoke with my Flagship rep and they are working to reverse it. It only happened for one taxable bond fund, but still I didn't request reinvestment and prefer my distributions be swept into my sweep acct Why VG can't keep elections the same at upgrade is beyond me. In any event it is supposed to be fixed although it has already been 5 days and nada. Will call again this week to see what is taking :confused
BH contest results: 2019: #233 of 645 | 18: #150 of 493 | 17: #516 of 647 | 16: #121 of 610 | 15: #18 of 552 | 14: #225 of 503 | 13: #383 of 433 | 12: #366 of 410 | 11: #113 of 369 | 10: #53 of 282
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by HIinvestor »

I was required to upgrade my old Roth IRA before I can convert my traditional IRA and add it to my Roth IRA. I will see how it goes. So far, have had to make two phone calls and send a fax trying to get it done. I just have all the Roth IRA invested in a REIT index fund, so it's pretty straight forward.
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by SSSS »

They finally offered me the ability to upgrade/merge my Roth IRA account, but not my taxable account (apparently my taxable account can't upgrade because it still has Direct Deposit "active", even though I haven't done Direct Deposit to it in 5+ years).

That's fine with me, because I'm thinking I probably only want to upgrade my Roth IRA account anyway.

Really the only reason I want to upgrade my Roth IRA account is for the ability to rebalance from a Vanguard ETF into a Vanguard mutual fund without it taking most of a week.

The reason I don't really want to upgrade my taxable account is because I use checkwriting from a short-term bond fund, and apparently there are some major changes to checkwriting with a merged account. The documentation isn't really clear, but it seems like you get one checkbook for the entire brokerage account, and checks you write could come out of any money market or bond fund in the account, but you don't really get to control where it comes from? The documentation is also unclear on whether or not you can even do checkwriting on a merged account without qualifying and signing up for VangaurdAdvantage.

They also already automatically switched my IRA brokerage settlement fund from Prime to Federal as they said they were going to do on all brokerage accounts (upgraded or not), but my normal non-IRA brokerage settlement account is still Prime so I guess they're doing that gradually.

EDIT: Even though I don't want to upgrade my taxable account, I was curious what the exact implications would be, so I deleted the old unused Direct Deposit information that was blocking the account from being upgradeable. This made my taxable account upgradeable, but unfortunately it also made it impossible to upgrade my Roth IRA account WITHOUT upgrading my taxable account. Since I really wanted to upgrade my Roth IRA account only, I had to un-qualify my taxable account again by entering some Direct Deposit information that I never intend to use. I was then able to start the upgrade process on my Roth IRA account without being forced to upgrade my taxable account as well. Very counter-intuitive!
Last edited by SSSS on Sat Jul 23, 2016 1:18 pm, edited 1 time in total.
dbr
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by dbr »

SSSS wrote:
They also already automatically switched my IRA brokerage settlement fund from Prime to Federal as they said they were going to do on all brokerage accounts (upgraded or not), but my normal non-IRA brokerage settlement account is still Prime so I guess they're doing that gradually.
I think that may be due to Federal regulations at all brokers that have nothing to do with Vanguard account mergers. My brokers have switched settlement account/money market fund arrangements as well.
Geologist
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Geologist »

My mother's account was upgraded because she had a brokerage as well as a mutual fund account. Since she is 91 and I have power of attorney, I handled the activity. Based on this experience, I will be in no rush to upgrade my mutual fund-only accounts.

First, as others have mentioned, the upgrade causes bond funds to distribute dividends mid-month. While overall this was not a big deal, this was not described to me. It was disconcerting and decent customer service should describe exactly the steps that will occur.

Second, I find the transaction history reporting of the new platform more difficult to decipher. Money can be credited to the new Federal MM settlement account without creating a transaction simultaneously in the Federal Money Market account itself. You can go to a list of all transactions and piece together what has happened, but you (the customer) has to do this. I never had this issue in the old system. Mutual fund transactions in the old system were listed in a clean fashion, but are not simply listed now unless you click down several levels in the reporting. Overall, I don't find the appearance of the records as clean. This may simplify Vanguard's computer systems, but is not customer-friendly.
jocdoc
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by jocdoc »

I switched last month.
I lost the ability for automatic exchange from one fund to the other with the switch. I can only do automatic investments from my checking or settlement fund.
The only other real change is the forced use of their money market fund for settlement.
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mfswatz9
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by mfswatz9 »

I haven't switched and I'm not planning to.
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sperry8
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by sperry8 »

sperry8 wrote:
BigJohn wrote:I agree with HouseBlend, there is no selling and rebuying but transactions in the new account are a bit more complicated than in the old MF only accounts. In the old MF accounts I would see a single transactions that took the monthly dividend and purchased an equivalent number of shares. In the new structure I see two transactions to get to the same endpoint. The first is disbursement of the dividend to the associated MM account with a second transaction to purchase in the brokerage account using funds from the MM account. On the conversion date, this is done with the MTD dividends from the old MF account. However, since all I've converted so far are IRA accounts I had it set-up for reinvestment and this wasn't an issue for me. I do appreciate the heads-up for when I convert my taxable account (I'm in no hurry so it maybe a while).

If it's a big deal you can work with VG on getting it reversed. If it's an aggravation and disappointment but not a big financial deal you might just go on-line and sell the shares you did not intend to purchase. Yes, I agree it should not have happened, only suggesting this as a path of least effort to resolve if the STCG/L is not a big deal.
This is exactly what happened to me about a week ago. I spoke with my Flagship rep and they are working to reverse it. It only happened for one taxable bond fund, but still I didn't request reinvestment and prefer my distributions be swept into my sweep acct Why VG can't keep elections the same at upgrade is beyond me. In any event it is supposed to be fixed although it has already been 5 days and nada. Will call again this week to see what is taking :confused
Just an update - they eventually fixed it (something like the 7th day). Everything works well now and no data was lost. Ultimately happy with the conversion.
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blueman2
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by blueman2 »

So what happens if I refuse to change? I really do not see any benefit to me for the change, and it sounds like it might chew up several hours on my time fixing things this breaks and trying to understand the new system.
Rainmaker41
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Rainmaker41 »

My Roth IRA, T-IRA, and taxable accounts at Vanguard were all upgraded to brokerage, with the settlement funds changed to the Federal Money Market Fund. The settlement funds changed over at seemingly random times over the last few months.

As far as I can tell none of this has any affect on me. I only have one mutual fund, and only in the Roth IRA. I did a Roth conversion from the T-IRA this year, so the the T-IRA and taxable accounts are just empty leftovers until I have to roll over a workplace plan or retire and take RMD's from pre-tax IRA in 45 years. I have no need for a settlement fund as I do automatic reinvestment.
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Doc
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Doc »

blueman2 wrote:So what happens if I refuse to change? I really do not see any benefit to me for the change, and it sounds like it might chew up several hours on my time fixing things this breaks and trying to understand the new system.
I don't think you will have a choice. When they started this they said "eventually all ....". This may have been diluted somewhat but they are not going to keep two different IT systems with different rules. If you have only Vg funds maybe you can keep the old platform but I don't belive they will let you have both a MF account and a brokerage account with the same "ownership".
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
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TomatoTomahto
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by TomatoTomahto »

Doc wrote:
blueman2 wrote:So what happens if I refuse to change? I really do not see any benefit to me for the change, and it sounds like it might chew up several hours on my time fixing things this breaks and trying to understand the new system.
I don't think you will have a choice. When they started this they said "eventually all ....". This may have been diluted somewhat but they are not going to keep two different IT systems with different rules. If you have only Vg funds maybe you can keep the old platform but I don't belive they will let you have both a MF account and a brokerage account with the same "ownership".
Unless my wife's employer changes its refusal to allow brokerage accounts (except at a very short list of firms) or Vanguard gets itself included on the list of firms, it would be a royal PITA for us. I think Vanguard will grandfather us in; here's hoping.
Okay, I get it; I won't be political or controversial. The Earth is flat.
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blueman2
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by blueman2 »

All I really care about is the check writing issue. I write a lot of checks from my current money market account, and having to switch to a new set of checks and time it so that my old ones are still valid during the changeover is complex. I just don't want to have to deal with it.

To me, it seems Vanguard is making this much more complex than it should be. There should be a way to make all of this more invisible. I understand the need for investors to approve the change, but why must the change be so intrusive? Particularly from a check writing standpoint. Not to mention all the issues with re-investment settings.

Oh, and the dishonesty in calling this an 'upgrade' bothers me. Very un-Vanguard like behavior all around on this one.
15202guy
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by 15202guy »

I was very disappointed to see that Vanguard does not acknowledge the pre-"upgrade" ability to invest fund distributions into other funds (I am looking at their documentation for the upgrade at http://www.vanguard.com/pdf/faqbroch.pdf). I find this feature to be quite useful, and am very disappointed I will eventually lose it. I can't help but wonder whether this is a deliberate misstatement to make it look like the "upgraded" account has no drawbacks compared with the old structure.
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Doc
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Doc »

blueman2 wrote:All I really care about is the check writing issue. I write a lot of checks from my current money market account, and having to switch to a new set of checks and time it so that my old ones are still valid during the changeover is complex. I just don't want to have to deal with it.
15202guy wrote:To me, it seems Vanguard is making this much more complex than it should be
Your current Vanguard MM account is a separate legal entity from Vanguard Brokerage Service. The First National Bank of Tupelo has no relationship to the First National Bank of Hoboken even if the first three words in their name are the same.

(I made up the bank names. I have no idea if they actually exist.)

Hey guys do me a favor. Since you have Vanguard checks look up the bank they are drawn on and let us know what it is. It's just curiosity on my part. Maybe it's the First National Bank of Valley Forge.

Link for the ABP lookup:

http://routingnumber.aba.com/
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
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Vegomatic
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Vegomatic »

Re: 15202guy's Jan 28 comment regarding the loss - upon "upgrade" of the OLD account's ability to automatically invest mutual fund distributions into other mutual funds is a key concern for me.

To make a long story short, I manage my retired Mom's VG accounts, and have used that ability - to automatically reinvest fund distributions into another fund - as a "no work" way to manage my Mom's RMD [Required Minimum Distribution] withdrawals. I have all of her other funds distribute their dividends and capital gains into her retirement account Wellesley Fund, and then have her take her RMD's from the Wellesley Fund.

Works like a charm - for the past dozen or so years - and makes everything soooo! simple. If VG attempted to take that away I would probably transfer our family's various retirement accounts elsewhere, and switch to an all-ETF implementation.
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SSSS
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by SSSS »

Doc wrote:Hey guys do me a favor. Since you have Vanguard checks look up the bank they are drawn on and let us know what it is. It's just curiosity on my part. Maybe it's the First National Bank of Valley Forge.
For my non-upgraded account, the checks say Wachovia -- obviously I haven't had new checks printed in a while. The router number now resolves to Wells Fargo.
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Doc
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Re: Anyone Switched to Vanguard Account Upgrade?

Post by Doc »

SSSS wrote:
Doc wrote:Hey guys do me a favor. Since you have Vanguard checks look up the bank they are drawn on and let us know what it is. It's just curiosity on my part. Maybe it's the First National Bank of Valley Forge.
For my non-upgraded account, the checks say Wachovia -- obviously I haven't had new checks printed in a while. The router number now resolves to Wells Fargo.
Thanks SSSS,

The bank that you write the checks on is not really a big issue whether it is Wachovia or Wells Fargo with Vanguard or Schwab Bank if you are investing with Schwab. It doesn't matter if the Charles Schwab Corporation owns all the stock of Schwab Bank or that Vanguard Marketing Corporation ( a private corporation) does not own all the stock of Wells Fargo. They are all separate corporate entities. Maybe Charles Schwab Corp has a little more influence over Schwab Bank then Vanguard has over Well Fargo but both banks are governed by the same banking regulations not who owns them.

The check writing procedures or the old Vg platform and the new Vg platform are governed by banking regs not Vanguard's "I wish".

If some want to discuss why Vanguard marketing switched from Wachovia to Wells Fargo then go ahead. But since even though we Vanguard Mutual fund investors own Vanguard Marketing who chose which bank to use before and after, we are not likely to get an explanation. Vanguard marketing is not a public corporation and they don't have to tell SSSS and Doc as indirect owners why they did what.

The check writing options on the old and new platforms may be a PITA to some but we we can't do anything about it so we should stop itching.

( I do find it strange that Vanguard changed it's direct deposit correspondent bank from ??? to JP Morgan also. Interesting according to Bloomberg "Vanguard Marketing Corporation does not have any Key Executives recorded" ) :twisted: http://www.bloomberg.com/research/stock ... =217802527
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
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