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Vanguard Brokerage Account

Posted: Wed May 10, 2017 5:06 pm
by cjhud32
Forgive me if this has been addressed, but I could not locate any posting. Upon logging into my Vanguard account, I was prompted "transitioning my mutual fund account to a Vanguard Brokerage Account". It stated this this gives a simple, more flexible way to manage all investments while gaining access to "multiple types of investment choices, get SIPC protection for your account, and enjoy new conveniences that can help simplify your investing".

Being only five years into this game, I was curious as to whether a switch from my mutual fund account to a brokerage account makes any sense. I am unsure of these advantages.

Thank you!

Re: Vanguard Brokerage Account

Posted: Wed May 10, 2017 5:24 pm
by SpringMan
My understanding is Vanguard is gradually switching all their clients to brokerage accounts. I have mine switched over a while back. One advantage is availability of Vanguard ETFs which are free to trade. Another is the availability of Non Vanguard funds, some free to trade some not. One glitch was I lost my ability as an authorized user for my wife's account. Required a witnessed and notarized form to reestablish.

Re: Vanguard Brokerage Account

Posted: Wed May 10, 2017 5:28 pm
by livesoft
For locating other threads, please use the search term "Vanguard upgrade" and see what you get.

Re: Vanguard Brokerage Account

Posted: Wed May 10, 2017 6:11 pm
by sport
I find the mutual fund type of account easier to work with. If all I want to buy are Vanguard mutual funds, I don't need a sweep account. I can also make automatic exchanges between my mutual funds. I believe you cannot do that in the brokerage account.

Re: Vanguard Brokerage Account

Posted: Wed May 10, 2017 6:52 pm
by NibbanaBanana
It was really confusing and I'm sure I didn't completely understand it but I think the "upgrade" had something to do with new regulations requiring the federal money market fund rather than the prime (or other non federal) money market fund.

All said, it's nicer because you don't have to wait for funds to clear to reinvest them.

Re: Vanguard Brokerage Account

Posted: Wed May 10, 2017 8:29 pm
by gkaplan
livesoft wrote:For locating other threads, please use the search term "Vanguard upgrade" and see what you get.
Or "Vanguard brokerage," or just "brokerage."

Re: Vanguard Brokerage Account

Posted: Thu May 11, 2017 7:43 am
by Doc
NibbanaBanana wrote:It was really confusing and I'm sure I didn't completely understand it but I think the "upgrade" had something to do with new regulations requiring the federal money market fund rather than the prime (or other non federal) money market fund.

All said, it's nicer because you don't have to wait for funds to clear to reinvest them.
Two separate issues. Prime is no longer eligible as a settlement fund. That's a done deal. You have no choice. You can still keep prime you just get a second MM account for settlement.

Re: Vanguard Brokerage Account

Posted: Thu May 11, 2017 8:00 am
by Dandy
When I had mutual fund accounts (non brokerage) VG would withhold taxes on taxable distributions. That reduced the need for paying estimated taxes. When they switched that account to a brokerage account they stopped - without notice. The brokerage system doesn't allow withholding on taxable distributions I was told.

Re: Vanguard Brokerage Account

Posted: Thu May 11, 2017 10:32 am
by wfrobinette
sport wrote:I find the mutual fund type of account easier to work with. If all I want to buy are Vanguard mutual funds, I don't need a sweep account. I can also make automatic exchanges between my mutual funds. I believe you cannot do that in the brokerage account.
It appears to allow me to do that.

Re: Vanguard Brokerage Account

Posted: Thu May 11, 2017 11:15 am
by Doc
wfrobinette wrote:
sport wrote:I find the mutual fund type of account easier to work with. If all I want to buy are Vanguard mutual funds, I don't need a sweep account. I can also make automatic exchanges between my mutual funds. I believe you cannot do that in the brokerage account.
It appears to allow me to do that.
Vangaurd wrote:Set up or change an automatic exchange
Move money automatically between Vanguard mutual funds, on the schedule you choose. Not available for brokerage accounts. (Logon required.)
You can however exchange between mutual funds from the same fund company in brokerage accounts just not via a repeating basis.

In taxable accounts you could do a workaround with an automatic withdrawal/investment pair using your bank as a "transfer agent". I have no idea why anyone would want to do this.