Vanguard brokerage account transition

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FracturedChaos
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Re: Vanguard brokerage account transition

Post by FracturedChaos »

I finally answered the call of the the Vanguard rep who calls me every few days to nag me about this and she basically says they are shutting down the old platform at the end of 2020, so migrating is pretty much required. Is this a sales tactic or does anyone else have some way to verify one way or the other if they are just pushing hard to move people or they actually are shutting it down?
staunchlydubious
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Re: Vanguard brokerage account transition

Post by staunchlydubious »

What can Vanguard do? It can't take your mutual fund shares away. As I understand it, those of us holding mutual fund shares in the "legacy" accounts are directly registered as the owners of our shares on the books and records of each of the mutual funds in which we are invested. Those books and records are maintained by The Vanguard Group, Inc., in its capacity as transfer agent for each of the Vanguard funds. Vanguard isn't going to cease being the transfer agent, and the transfer agent isn't going to be relieved of its obligation to maintain the records of your ownership and produce confirmations and statements of your transactions and holdings. This is all required by law, and it's going to continue to be required even if you move your accounts to brokerage.

So, what does it mean that they are going to "shut down the old platform?" They can't shut down the transfer agent or its reporting functions.

If you're being hassled by a Vanguard rep, I would demand a copy of the written policy that governs this transition (they've stopped calling it an "upgrade" because it isn't) from legacy account ownership to brokerage account ownership. Who adopted this policy? Did it come from the board of directors or is this just a management initiative coming out of Vanguard Marketing Corporation?

I haven't given Vanguard my final answer yet (I'm drafting a set of detailed questions for them first), but these are some of the drop-dead issues for me:
(1) I insist in holding my Vanguard shares in my name as the direct registered owner. Under no circumstances will I allow my shares to be held in "street name" through Vanguard Brokerage Services.
(2) The Vanguard Brokerage Account Agreement contains a number of provisions that I won't agree to. The most important being:
(a) ¶6.f. I don't owe Vanguard any money, I never have, and I never will. I refuse to grant them a lien on my mutual fund shares.
(b) ¶6.i. I refuse to have my shares held in street name. I don't want brokerage commingling them with the shares of any other customers. I've paid for my shares in full; I'm entitled to unambiguous absolute ownership of them.
(c) ¶9.a. If I have a legal dispute with Vanguard, I refuse to allow New York law to apply. I live in California. Vanguard actively conducts business in California. The State of New York has absolutely no relationship to any of my dealings with Vanguard regarding my ownership of Vanguard shares. I expect California law to apply.
(d) ¶9.c. If a Vanguard employee is negligent or incompetent or careless and causes me serious loss, why should I hold Vanguard harmless for my damages? Vanguard says I can only recover if its behavior is so egregious that it amounts to "gross negligence" or "willful misconduct." Sorry -- don't buy it.
(e) ¶9.f. I'm forced to give up my right to sue in court, and instead I'm required to agree to predispute mandatory arbitration. No thanks. These are the kinds of adhesion contracts that big employers are using against employees, big health care providers are using against patients, big Wall Street firms are using against their customers. We're shareholders and owners of The Vanguard Group. We're entitled to more respect. Alas, the fading memory of John Bogle.

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DameTime
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Re: Vanguard brokerage account transition

Post by DameTime »

After putting it off for some time, I would like to try and set myself up for Tax Loss Harvesting this year.

I have a Roth IRA and Taxable accounts at Vanguard and plan to TLH VTSAX (TSM) with VFIAX (S&P 500). My issue with TLH is that I do not want my dividends to reinvest automatically and accidentally trigger wash sale rules. The Roth account will not let me direct dividends to a money market fund (minimum $3,000) and of course, I don't want to direct it to my bank account either. The Taxable account has a settlement fund which I am directing my dividends to easily enough. No such option in the Roth IRA.

I sent Vanguard a message and they responded that I need to transition to a Brokerage account if I want access to a settlement fund in the "Brokerage Roth IRA." Is this a decent reason to convert my account? How did people TLH before the Brokerage accounts? If I am thinking about this all wrong, please let me know.
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Eagle33
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Re: Vanguard brokerage account transition

Post by Eagle33 »

DameTime wrote: Wed Feb 05, 2020 8:24 pm After putting it off for some time, I would like to try and set myself up for Tax Loss Harvesting this year.

I have a Roth IRA and Taxable accounts at Vanguard and plan to TLH VTSAX (TSM) with VFIAX (S&P 500). My issue with TLH is that I do not want my dividends to reinvest automatically and accidentally trigger wash sale rules. The Roth account will not let me direct dividends to a money market fund (minimum $3,000) and of course, I don't want to direct it to my bank account either. The Taxable account has a settlement fund which I am directing my dividends to easily enough. No such option in the Roth IRA.

I sent Vanguard a message and they responded that I need to transition to a Brokerage account if I want access to a settlement fund in the "Brokerage Roth IRA." Is this a decent reason to convert my account? How did people TLH before the Brokerage accounts? If I am thinking about this all wrong, please let me know.
To setup your Roth for next month TLH. Sell $3k of something in the Roth and buy minimum for money market fund. Then next day set dividend to go to the money market fund. Then next day sell $3k from money market and buy back into whatever fund you took it from the first place. Wait 30 days and then TLH.
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calvin+hobbes
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Re: Vanguard brokerage account transition

Post by calvin+hobbes »

Eagle33 wrote: Thu Feb 06, 2020 3:31 am To setup your Roth for next month TLH. Sell $3k of something in the Roth and buy minimum for money market fund. Then next day set dividend to go to the money market fund. Then next day sell $3k from money market and buy back into whatever fund you took it from the first place. Wait 30 days and then TLH.
Interesting, so the minimum does not have to be maintained? Good to know.
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DameTime
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Re: Vanguard brokerage account transition

Post by DameTime »

Eagle33 wrote: Thu Feb 06, 2020 3:31 am To setup your Roth for next month TLH. Sell $3k of something in the Roth and buy minimum for money market fund. Then next day set dividend to go to the money market fund. Then next day sell $3k from money market and buy back into whatever fund you took it from the first place. Wait 30 days and then TLH.
Good idea. Only thing is Vanguard won't let me buy back in to VTSAX for 30 days which is silly since you can't TLH from a Roth anyways. I suppose I could buy back in to VFIAX and still have the option to TLH from VTSAX in 30 days instead of waiting 60 days.
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Re: Vanguard brokerage account transition

Post by Jerry55 »

I was going to wait and see if VG forced me to transition to a Brokerage Account as I only have 2 mutual funds there.
I asked a series of questions (3) but here's the bottom line, as far as I'm concerned.....I don't have to transition to a Brokerage Account.
Their response to my question that I cared about, and I'll quote...

>> Benefits on upgrade.

Below you will find information on the benefits of upgrading to a Vanguard Brokerage Account.
***** Please note, upgrading from a mutual fund only account to a Vanguard Brokerage Account is voluntary *****
.
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Cheez-It Guy
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Re: Vanguard brokerage account transition

Post by Cheez-It Guy »

How many times are we going to rehash this? Just change it and they will stop nagging you. It's fine.
nolapepper
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Re: Vanguard brokerage account transition

Post by nolapepper »

I regret not reading posts before converting. I just found out that my total stock dividends holding is switched to cash, not reinvest or to a fund as I set before.

Checking on the computer now. It seems that I can not transfer the dividend to another fund. It says you can only choose bank transfer or check for vanguard mutual funds. I don't like this. Wish I could change it back!
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jeffyscott
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Re: Vanguard brokerage account transition

Post by jeffyscott »

DameTime wrote: Thu Feb 06, 2020 2:02 pmGood idea. Only thing is Vanguard won't let me buy back in to VTSAX for 30 days which is silly since you can't TLH from a Roth anyways. I suppose I could buy back in to VFIAX and still have the option to TLH from VTSAX in 30 days instead of waiting 60 days.
Just FYI, the restriction on buying after selling is to restrict frequent trading, it has nothing to do with whether or not you can TLH. As Vanguard states: Because excessive transactions can disrupt the management of a fund and increase the fund's costs for all shareholders, Vanguard places certain limits on exchanges and purchases.
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Re: Vanguard brokerage account transition

Post by abuss368 »

retiredjg wrote: Wed Aug 07, 2019 5:59 am You can do Roth conversions if both are on the old platform though.
Yes agreed. This is what I have been doing.
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rmayo
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Re: Vanguard brokerage account transition

Post by rmayo »

I have a non-spousal inherited IRA mutual fund account.

Has anyone in the same situation transitioned a non-spousal inherited IRA mutual fund account to an inherited IRA brokerage account?

I would prefer a brokerage account, but am worried about losing the beneficial life-time stretch provision I currently have, by transitioning to a brokerage account, due to Vanguard's wording in their provided PDF document https://www.vanguard.com/pdf/vbafqm.pdf.

Page 4 states "For each registration, you will open a new brokerage account with a new account number and move your Vanguard fund assets into it".

If it's a new account, would it not be subject to the 10 year non-spousal distribution rule, that went into effect this year, as part of the Secure Act?

Any insight you can provide is appreciated. Thank you.
The Big Apple
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Re: Vanguard brokerage account transition

Post by The Big Apple »

I received another nag e-mail today on this with slightly more detail on timing, although I am not sure what happens if you still refuse to transfer when the platform is eventually retired.
We're working toward the retirement of our old investment platform, which supports accounts that only hold Vanguard mutual funds. We'll continue to support clients on this old platform until it's retired from use in 2022 or earlier. But know that some of the features you've used in the past may not be available as we make updates and changes in the future.

We encourage you to transition to the new platform now because, going forward, all of our improvements and enhancements will be focused on the new platform only. So transitioning today will let you enjoy updates to the new brokerage platform, avoid any service disruptions on the old one, and give you access to some of our lowest-cost investments. If you choose to remain on the old platform, we'll notify you when we implement any service changes.
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Re: Vanguard brokerage account transition

Post by tomd37 »

I received a similar, but briefer, advisory today when I signed on to my account online. Right now I don't know if I will benefit in any way if I transition or if I will lose something. I just have two funds and two accounts; Total Stock Market and Total Bond Market Index in the traditional IRA (95%) and Total Stock Market Index (5%) in the taxable account. Any comments by anyone :?:
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Re: Vanguard brokerage account transition

Post by abuss368 »

I talked to Vanguard today on the telephone regarding a different matter. I took the call as an opportunity to also inquire. I received the same response: they are looking to exit and shut down the old platform. I am considering.

The statements stink as they are not true year to date statements. But then again I have given up on statements.
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Re: Vanguard brokerage account transition

Post by abuss368 »

I can see my wife’s accounts with my login and she can see mine with her login. I believe this is an agent form. Will that carry over or need to be completed with a medallion signature from the bank again?
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Re: Vanguard brokerage account transition

Post by beyou »

The Big Apple wrote: Fri May 15, 2020 3:00 pm I received another nag e-mail today on this with slightly more detail on timing, although I am not sure what happens if you still refuse to transfer when the platform is eventually retired.
We're working toward the retirement of our old investment platform, which supports accounts that only hold Vanguard mutual funds. We'll continue to support clients on this old platform until it's retired from use in 2022 or earlier. But know that some of the features you've used in the past may not be available as we make updates and changes in the future.

We encourage you to transition to the new platform now because, going forward, all of our improvements and enhancements will be focused on the new platform only. So transitioning today will let you enjoy updates to the new brokerage platform, avoid any service disruptions on the old one, and give you access to some of our lowest-cost investments. If you choose to remain on the old platform, we'll notify you when we implement any service changes.
I just opened a new fund-only “old” acct.
Paper request, not available online.
I had well known legal reason I had to do this.
The reason affects many people, Vanguard knows it. I don’t see them really getting rid of the old platform. Maybe they will go back to all paper, that should save $ ;-)
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Re: Vanguard brokerage account transition

Post by The Big Apple »

beyou wrote: Sat May 16, 2020 12:36 am Paper request, not available online.
I had well known legal reason I had to do this.
The reason affects many people, Vanguard knows it.
I know some employees in financial services have limitations in terms of what kind of accounts/assets they are allowed to have and how they are held. I personally still use some of the 'deposit-by-mail' slips which I understand is not available with the new brokerage account system. I can see them not putting anything new into the old platform, which works fine for me. All of their requests have been electronic - if/when they start sending me letters saying that it will be retired, I may start to worry a bit.

How did you get the paperwork to open the 'old account' type?
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Jerry55
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Re: Vanguard brokerage account transition

Post by Jerry55 »

I too, received the Nag-Mail and quickly disposed of it after reading.
They talk about all the wonderful things I can do with the brokerage account, like ETF's and the like.
My only issue is that, I'm retired, I have 2 accounts there that have been stagnant since 2011 and have not added anything.

I just LOOK at them.

However, last Sept. I told them to send my quarterly dividends from my Wellington account. I don't need to transfer for them to do that.
The other is a Wellesley ROTH IRA. I won't be touching that....maybe until it goes to my children as a legacy.
Last edited by Jerry55 on Sun May 17, 2020 12:25 am, edited 1 time in total.
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beyou
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Re: Vanguard brokerage account transition

Post by beyou »

The Big Apple wrote: Sat May 16, 2020 11:49 am
beyou wrote: Sat May 16, 2020 12:36 am Paper request, not available online.
I had well known legal reason I had to do this.
The reason affects many people, Vanguard knows it.
I know some employees in financial services have limitations in terms of what kind of accounts/assets they are allowed to have and how they are held. I personally still use some of the 'deposit-by-mail' slips which I understand is not available with the new brokerage account system. I can see them not putting anything new into the old platform, which works fine for me. All of their requests have been electronic - if/when they start sending me letters saying that it will be retired, I may start to worry a bit.

How did you get the paperwork to open the 'old account' type?
It’s not “SOME” employees. EVERY one of the thousands of employees at my financial services firm, and many competitors, have to use an employer selected broker. I can pick from a couple of good choices and a few bad choices, but I CANNOT pick Vanguard Brokerage. That said we can own funds “directly held at the fund administrator” in an account that can only invest in open end funds from that administrator. No ETFs or stocks unless I use one of the approved brokers. This is done because those approved brokers agree to feed data with my trades and periodic holdings to my employer. This affects a large number of persons in a very large industry.

To get a new “old” acct just contacted customer service, told them I am subject to this common restriction, and they gave me an old paper form that has since been taken off the site. Mailed it in and they quickly added my new acct.

I have no issue with using the new platform, actually wish I could, and when I retire I wont care if they convert me.
In the mean time they can just leave the old platform as-is, and I’ll be fine. No new features needed to manage my fund portfolio on the old platform.
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Cheez-It Guy
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Re: Vanguard brokerage account transition

Post by Cheez-It Guy »

Some folks are just being needlessly stubborn about this. Just do it for the common good and move on.
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Re: Vanguard brokerage account transition

Post by abuss368 »

Cheez-It Guy wrote: Sat May 16, 2020 4:39 pm Some folks are just being needlessly stubborn about this. Just do it for the common good and move on.
The more I read about it I am not so sure I see a big deal over the change.
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Re: Vanguard brokerage account transition

Post by Jerry55 »

Cheez-It Guy wrote: Sat May 16, 2020 4:39 pm Some folks are just being needlessly stubborn about this. Just do it for the common good and move on.

Maybe you should do as you please, and move on.....

:oops: :annoyed :thumbsdown :thumbsdown :thumbsdown :thumbsdown :thumbsdown :thumbsdown :oops: :annoyed
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Cheez-It Guy
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Re: Vanguard brokerage account transition

Post by Cheez-It Guy »

Jerry55 wrote: Sun May 17, 2020 12:28 am
Cheez-It Guy wrote: Sat May 16, 2020 4:39 pm Some folks are just being needlessly stubborn about this. Just do it for the common good and move on.

Maybe you should do as you please, and move on.....

:oops: :annoyed :thumbsdown :thumbsdown :thumbsdown :thumbsdown :thumbsdown :thumbsdown :oops: :annoyed
I would like to, but this topic keeps popping up with the same circular discussions every time someone gets another prompt to migrate to the chosen account format. I continue to read it, because I want to understand people's reasons. To me, it looks like 10% of the people who haven't changed yet have a valid reason such as working in the financial industry where the account types they can use are limited and / or regulated, or perhaps they highly value one of the few features not available on the newer accounts. I have no quarrel about any of that. The other 90% fall into several categories. Some have persistent misunderstandings or misinformation about what the new account does or does not allow. Others get the account migration conflated with stocks and ETFs, which really are a completely separate topic. Some have simply delayed the decision as long as possible and are now feeling some increased pressure because a sunset date has finally been communicated. Then others just seem to enjoy refusing to change for no good reason that has ever been communicated. This last subgroup I would tend to consider bad customers who are driving up my costs.

One of the reasons I post in these threads is to try to avoid an echo chamber where it is only people that have a problem or an issue posting. I want to correct misunderstandings where I see them, and encourage people to think hard about their reasons for resisting the change. I changed all family accounts years ago and never looked back. It's barely a blip on the radar. It's the same Vanguard. It's the same login. You keep your mutual funds and the vast majority of the functionality to which you have become accustomed. It's not a taxable event. Your historical records including statements are available. Cost basis is preserved. You can easily keep zero dollars in your settlement fund if you prefer. You can have confidence that you are on the supported platform for the future. The sun will rise tomorrow.

Or, you can keep delaying the inevitable and get a charge out of sticking it to Vanguard and your fellow client owners for reasons that are clear only to you. Not migrating because "I don't want to! LOL!" is not really a good reason. And if some from this last class chose to leave Vanguard as a punishment as a result of being "forced" to make some minor change, that would really be a favorable development for Vanguard, as they would be unloading a difficult customer onto an unsuspecting competitor.

Perhaps this is an unfair assessment, but that's my take after months of reading these threads.

Folks, you aren't too old to change. Take the leap. The water's fine.
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Re: Vanguard brokerage account transition

Post by Jerry55 »

Cheez-It Guy wrote: Sun May 17, 2020 12:13 pm
Perhaps this is an unfair assessment, but that's my take after months of reading these threads.

Folks, you aren't too old to change. Take the leap. The water's fine.

Perhaps. Then again, if you get tired of reading some of these, and they are "Circular" to you....
Click on that little wrench at the bottom, Click on "Unsubscribe Topic" and stop following this thread.
It's easy, and those who are here talking about it won't be a bother to you.

Move on.

I do, if I get tired of it, as you apparently do.
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Cheez-It Guy
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Re: Vanguard brokerage account transition

Post by Cheez-It Guy »

I'm not subscribed to any threads at all, and never have been. I just browse threads with recent posting activity from the homepage. This is section-independent.
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Re: Vanguard brokerage account transition

Post by abuss368 »

Bogleheads -

I just called Vanguard client services again as I had additional questions regarding the account transition.

Notes:

* The goal is to move everyone from the mutual fund platform to the brokerage platform. They can not legally move the mutual fund accounts but I am not clear if in the future any type of account functionality would be limited or stopped.

* Mutual funds come over as is.

* This is not a conversion to ETFs. If ETFs are desired in the future, a brokerage account is needed and one can exchange at that time.

* It appears easy and seamless to do.

* Agency status between spouses will be retained. No need to fill out form and go to bank.

* Two tax forms this year but that will only add a few extra minutes to report on tax return.

* Monthly account statements that will say "YTD" but are not true "YTD" statements. I think Vanguard is simply not going to offer a complete YTD statement again. I have been simplifying and as such are not going to retain, save, print, electronic, etc. statements any longer. In almost 30 years I have never had one request for any statement ever. And I refuse to save a monthly statement per account per month. In a couple of years that is going be be a huge and growing pile of files.

* Vanguard retains the last 6-7 years of statements online.

If someone is not satisfied they may need to make a decision that works best for them including moving elsewhere.

I am probably moving forward in the next week or so and getting the transition completed for all accounts.
Last edited by abuss368 on Fri May 22, 2020 3:25 pm, edited 1 time in total.
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Re: Vanguard brokerage account transition

Post by abuss368 »

I am surprised more Bogleheads are not being proactive with planning and transition to the new brokerage account platform.
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Re: Vanguard brokerage account transition

Post by Cheez-It Guy »

^^Nice summary, and good for you for being proactive. Please report on your observations of the transition itself and post-transition landscape as an example for others in similar situations. The two tax forms in year of transition is a minor annoyance, but TurboTax can import both formats, and they both cover discrete and non-overlapping timelines. The main thing is that you need to remember that the brokerage account tax forms come out slightly later if you are prone to filing early. If you only hold Vanguard mutual funds in the new brokerage account format, I believe the expected timing for tax form availability is "late January". Avoidance of the two tax forms is why migrating in early January is advocated by some. For myself, I did it mid-year several years ago, and it was essentially a non-issue.
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Re: Vanguard brokerage account transition

Post by arcticpineapplecorp. »

Cheez-It Guy wrote: Sun May 17, 2020 12:13 pm Perhaps this is an unfair assessment, but that's my take after months of reading these threads.

Folks, you aren't too old to change. Take the leap. The water's fine.
can you address staunchlydubious' issues (below). I had not even considered these reasons and am glad staunchlydubious posted them. I have seen no response to these in particular and think they deserve some responses other than merely poo-pooing those of us who have valid concerns.
(1) I insist in holding my Vanguard shares in my name as the direct registered owner. Under no circumstances will I allow my shares to be held in "street name" through Vanguard Brokerage Services.
(2) The Vanguard Brokerage Account Agreement contains a number of provisions that I won't agree to. The most important being:
(a) ¶6.f. I don't owe Vanguard any money, I never have, and I never will. I refuse to grant them a lien on my mutual fund shares.
(b) ¶6.i. I refuse to have my shares held in street name. I don't want brokerage commingling them with the shares of any other customers. I've paid for my shares in full; I'm entitled to unambiguous absolute ownership of them.
(c) ¶9.a. If I have a legal dispute with Vanguard, I refuse to allow New York law to apply. I live in California. Vanguard actively conducts business in California. The State of New York has absolutely no relationship to any of my dealings with Vanguard regarding my ownership of Vanguard shares. I expect California law to apply.
(d) ¶9.c. If a Vanguard employee is negligent or incompetent or careless and causes me serious loss, why should I hold Vanguard harmless for my damages? Vanguard says I can only recover if its behavior is so egregious that it amounts to "gross negligence" or "willful misconduct." Sorry -- don't buy it.
(e) ¶9.f. I'm forced to give up my right to sue in court, and instead I'm required to agree to predispute mandatory arbitration. No thanks. These are the kinds of adhesion contracts that big employers are using against employees, big health care providers are using against patients, big Wall Street firms are using against their customers. We're shareholders and owners of The Vanguard Group. We're entitled to more respect. Alas, the fading memory of John Bogle.
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Re: Vanguard brokerage account transition

Post by abuss368 »

arcticpineapplecorp. wrote: Tue May 19, 2020 8:02 am
Cheez-It Guy wrote: Sun May 17, 2020 12:13 pm Perhaps this is an unfair assessment, but that's my take after months of reading these threads.

Folks, you aren't too old to change. Take the leap. The water's fine.
can you address staunchlydubious' issues (below). I had not even considered these reasons and am glad staunchlydubious posted them. I have seen no response to these in particular and think they deserve some responses other than merely poo-pooing those of us who have valid concerns.
(1) I insist in holding my Vanguard shares in my name as the direct registered owner. Under no circumstances will I allow my shares to be held in "street name" through Vanguard Brokerage Services.
(2) The Vanguard Brokerage Account Agreement contains a number of provisions that I won't agree to. The most important being:
(a) ¶6.f. I don't owe Vanguard any money, I never have, and I never will. I refuse to grant them a lien on my mutual fund shares.
(b) ¶6.i. I refuse to have my shares held in street name. I don't want brokerage commingling them with the shares of any other customers. I've paid for my shares in full; I'm entitled to unambiguous absolute ownership of them.
(c) ¶9.a. If I have a legal dispute with Vanguard, I refuse to allow New York law to apply. I live in California. Vanguard actively conducts business in California. The State of New York has absolutely no relationship to any of my dealings with Vanguard regarding my ownership of Vanguard shares. I expect California law to apply.
(d) ¶9.c. If a Vanguard employee is negligent or incompetent or careless and causes me serious loss, why should I hold Vanguard harmless for my damages? Vanguard says I can only recover if its behavior is so egregious that it amounts to "gross negligence" or "willful misconduct." Sorry -- don't buy it.
(e) ¶9.f. I'm forced to give up my right to sue in court, and instead I'm required to agree to predispute mandatory arbitration. No thanks. These are the kinds of adhesion contracts that big employers are using against employees, big health care providers are using against patients, big Wall Street firms are using against their customers. We're shareholders and owners of The Vanguard Group. We're entitled to more respect. Alas, the fading memory of John Bogle.
I did read that message upthread and was surprised. I can not see Vanguard modifying or making an exception to any of those issues.
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Re: Vanguard brokerage account transition

Post by arcticpineapplecorp. »

abuss368 wrote: Tue May 19, 2020 8:04 am
arcticpineapplecorp. wrote: Tue May 19, 2020 8:02 am
Cheez-It Guy wrote: Sun May 17, 2020 12:13 pm Perhaps this is an unfair assessment, but that's my take after months of reading these threads.

Folks, you aren't too old to change. Take the leap. The water's fine.
can you address staunchlydubious' issues (below). I had not even considered these reasons and am glad staunchlydubious posted them. I have seen no response to these in particular and think they deserve some responses other than merely poo-pooing those of us who have valid concerns.
(1) I insist in holding my Vanguard shares in my name as the direct registered owner. Under no circumstances will I allow my shares to be held in "street name" through Vanguard Brokerage Services.
(2) The Vanguard Brokerage Account Agreement contains a number of provisions that I won't agree to. The most important being:
(a) ¶6.f. I don't owe Vanguard any money, I never have, and I never will. I refuse to grant them a lien on my mutual fund shares.
(b) ¶6.i. I refuse to have my shares held in street name. I don't want brokerage commingling them with the shares of any other customers. I've paid for my shares in full; I'm entitled to unambiguous absolute ownership of them.
(c) ¶9.a. If I have a legal dispute with Vanguard, I refuse to allow New York law to apply. I live in California. Vanguard actively conducts business in California. The State of New York has absolutely no relationship to any of my dealings with Vanguard regarding my ownership of Vanguard shares. I expect California law to apply.
(d) ¶9.c. If a Vanguard employee is negligent or incompetent or careless and causes me serious loss, why should I hold Vanguard harmless for my damages? Vanguard says I can only recover if its behavior is so egregious that it amounts to "gross negligence" or "willful misconduct." Sorry -- don't buy it.
(e) ¶9.f. I'm forced to give up my right to sue in court, and instead I'm required to agree to predispute mandatory arbitration. No thanks. These are the kinds of adhesion contracts that big employers are using against employees, big health care providers are using against patients, big Wall Street firms are using against their customers. We're shareholders and owners of The Vanguard Group. We're entitled to more respect. Alas, the fading memory of John Bogle.
I did read that message upthread and was surprised. I can not see Vanguard modifying or making an exception to any of those issues.
Well then, these seem like pretty important reasons NOT to transition. I always say there are trade-offs in life. Many here are accusing us of driving up costs for them. But the other side of the equation is what are they giving up (see list above) to save a buck or two?
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Re: Vanguard brokerage account transition

Post by Broken Man 1999 »

Not that I am advocating this, but what prevents Vanguard from "divorcing" a customer they no longer wish to have a business relationship with?

Does Vanguard's brokerage platform conform to all state/federal regulations? One would certainly hope so. So, I would assume there is no state/federal regulation that directs Vanguard to keep the MF platform going forward.

Does a person have a right to be a customer of any business?

I think at some point clients will either move to the brokerage platform, or they will choose to leave Vanguard, or perhaps their choice will be made for them.

I converted early in the process because we had assets in most every type account on each platform. Cutting our number of accounts in half was a great thing for us. But, that is just me.

Vanguard received a lot of flack about their CMA account being discontinued. Yet they did so, as a business decision. I imagine the business decision of closing MF platform involves many, many dollars more that the CMA business decision.

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Re: Vanguard brokerage account transition

Post by rob »

Broken Man 1999 wrote: Tue May 19, 2020 8:43 am Not that I am advocating this, but what prevents Vanguard from "divorcing" a customer they no longer wish to have a business relationship with?
This is exactly what's been done here.... Vanguard now brings in trillions and they don't need the hassle; people who need minority features (compliance reporting, dividend reinvest, ytd statements etc.) are been not so subtly divorced over the conversion period because they are just deadwood... Another example is the features lost - cash mgt functions, named reps etc. Most of the features discussed above could have fairly easily been introduced over the last handful of years that the "new" platform has existed. It's sad...
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Re: Vanguard brokerage account transition

Post by abuss368 »

arcticpineapplecorp. wrote: Tue May 19, 2020 8:15 am
abuss368 wrote: Tue May 19, 2020 8:04 am
arcticpineapplecorp. wrote: Tue May 19, 2020 8:02 am
Cheez-It Guy wrote: Sun May 17, 2020 12:13 pm Perhaps this is an unfair assessment, but that's my take after months of reading these threads.

Folks, you aren't too old to change. Take the leap. The water's fine.
can you address staunchlydubious' issues (below). I had not even considered these reasons and am glad staunchlydubious posted them. I have seen no response to these in particular and think they deserve some responses other than merely poo-pooing those of us who have valid concerns.
(1) I insist in holding my Vanguard shares in my name as the direct registered owner. Under no circumstances will I allow my shares to be held in "street name" through Vanguard Brokerage Services.
(2) The Vanguard Brokerage Account Agreement contains a number of provisions that I won't agree to. The most important being:
(a) ¶6.f. I don't owe Vanguard any money, I never have, and I never will. I refuse to grant them a lien on my mutual fund shares.
(b) ¶6.i. I refuse to have my shares held in street name. I don't want brokerage commingling them with the shares of any other customers. I've paid for my shares in full; I'm entitled to unambiguous absolute ownership of them.
(c) ¶9.a. If I have a legal dispute with Vanguard, I refuse to allow New York law to apply. I live in California. Vanguard actively conducts business in California. The State of New York has absolutely no relationship to any of my dealings with Vanguard regarding my ownership of Vanguard shares. I expect California law to apply.
(d) ¶9.c. If a Vanguard employee is negligent or incompetent or careless and causes me serious loss, why should I hold Vanguard harmless for my damages? Vanguard says I can only recover if its behavior is so egregious that it amounts to "gross negligence" or "willful misconduct." Sorry -- don't buy it.
(e) ¶9.f. I'm forced to give up my right to sue in court, and instead I'm required to agree to predispute mandatory arbitration. No thanks. These are the kinds of adhesion contracts that big employers are using against employees, big health care providers are using against patients, big Wall Street firms are using against their customers. We're shareholders and owners of The Vanguard Group. We're entitled to more respect. Alas, the fading memory of John Bogle.
I did read that message upthread and was surprised. I can not see Vanguard modifying or making an exception to any of those issues.
Well then, these seem like pretty important reasons NOT to transition. I always say there are trade-offs in life. Many here are accusing us of driving up costs for them. But the other side of the equation is what are they giving up (see list above) to save a buck or two?
That may be. However Vanguard is planning to move all accounts. What would be an alternative? Leave Vanguard? Is this any different than any other brokerage type of account?

I don't know.
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Re: Vanguard brokerage account transition

Post by Broken Man 1999 »

rob wrote: Tue May 19, 2020 9:05 am
Broken Man 1999 wrote: Tue May 19, 2020 8:43 am Not that I am advocating this, but what prevents Vanguard from "divorcing" a customer they no longer wish to have a business relationship with?
This is exactly what's been done here.... Vanguard now brings in trillions and they don't need the hassle; people who need minority features (compliance reporting, dividend reinvest, ytd statements etc.) are been not so subtly divorced over the conversion period because they are just deadwood... Another example is the features lost - cash mgt functions, named reps etc. Most of the features discussed above could have fairly easily been introduced over the last handful of years that the "new" platform has existed. It's sad...
Yes, but those features cost. I'm more interested in saving investment expenses at Vanguard than receiving TurboTax, or the very few extras given as a Flagship client. I'm very OK with Vanguard being the Walmart of investment companies.

Trees need periodic pruning to remove the deadwood. Pruning can reinvigorate the tree. The same holds true for businesses.

At the end of the day, those who are upset enough can very easily leave Vanguard, even taking their Vanguard funds/ETFs with them. Many have done so, and I imagine many more will. Nice thing is when Vanguard's offerings are held elsewhere, it has been stated that Vanguard sheds some activities/expenses. What the actual savings are for Vanguard I have no idea.

Very few business relationships I have had over the decades of adult life remain that are still doing business the way they did decades ago. My longest business relationship is with my credit union, which I joined in 1973. The "extra" services we used to enjoy are long gone. Yet, the actual banking services are still there. If I jump through a couple of hoops, all my banking services are still free. So, at the end of the day they still do the activities related to their being a credit union. Extra services... no, none.

I will be the first to admit I set low expectations on my business relationships. Especially those who are keepers of my $$$. For Vanguard I expect a plain, vanilla, no frills type service. I don't expect extras. And, to Vanguard's credit, I get exactly what I expect. But, my accounts are in order, and my occasional inquiry made is handled to my satisfaction. I have enough funds to be able to use TurboTax even without Vanguard's assistance, or, perhaps because Vanguard didn't waste resources on frills that I didn't want but would be paying for anyway.

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Re: Vanguard brokerage account transition

Post by NYCPete »

So it appears a sticking point for some is the ownership issue of shares and the delay that could arise in transferring shares in the event that Vanguard Brokerage goes into bankruptcy. For those who worry less about a $6.2 trillion dollar firm with 17,000 employees going bankrupt, what other issues might there be?

Here's what the SEC has to say about holding shares in street name:

https://www.sec.gov/reportspubs/investo ... echtm.html
Street Name Registration
You may have your security registered in street name and held in your account at your broker-dealer. Many brokerage firms will automatically put your securities into street name unless you give them specific instructions to the contrary. Under street name registration, your firm will keep records showing you as the real or "beneficial" owner, but you will not be listed directly on the issuer's books. Instead, your brokerage firm (or some other nominee) will appear as the owner on the issuer's books.

While you will not receive a certificate, your firm will send to you, at least four times a year, an account statement that lists all your securities at the broker-dealer. Your broker-dealer will also credit your account with your dividend and interest payments and will provide you with consolidated tax information. Your broker-dealer will send you issuer mailings such as annual reports and proxies.

The advantages of letting your brokerage firm hold your securities in "street name" include:
Because your securities are already with your broker, you can place limit orders that direct your broker to sell a security at a specific price.

Your brokerage firm is responsible for safeguarding your securities certificates so you don't have to worry about your securities certificates being lost or stolen.

Your brokerage firm may keep you informed of important developments, such as tender offers or when bonds are called.

It is easier to set up a margin account.

The disadvantages include:
You may experience a slight delay in receiving your dividend and interest payments from your brokerage firm. For example, some firms only pass along these payments to investors on a weekly, bi-weekly, or monthly basis.

Since your name is not on the books of the company, the company will not mail important corporate communications directly to you.
I can personally attest that I'm not waiting weeks for a dividend or interest payment by having a Vanguard Brokerage account. I'd be curious to see if any of the thousands of Boglehead posters can share experiences otherwise. To the second disadvantage, why on earth would Vanguard withhold corporate communications involving Vanguard brokerage account holders of VG mutual funds, but send them to the legacy account holders? Can anyone on Bogleheads confirm this is actually happening?

What does FINRA have to say about street name versus direct registration?

https://www.finra.org/investors/insight ... reet-names
The street name system is designed to withstand even a brokerage firm meltdown. When a firm faces liquidation, regulators, including the SEC and FINRA, work to ensure that customers’ securities are transferred to another firm. Keeping investments in street names can actually make the process easier because all of the documentation will be in one centralized account.
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Re: Vanguard brokerage account transition

Post by Cheez-It Guy »

arcticpineapplecorp. wrote: Tue May 19, 2020 8:02 am
Cheez-It Guy wrote: Sun May 17, 2020 12:13 pm Perhaps this is an unfair assessment, but that's my take after months of reading these threads.

Folks, you aren't too old to change. Take the leap. The water's fine.
can you address staunchlydubious' issues (below). I had not even considered these reasons and am glad staunchlydubious posted them. I have seen no response to these in particular and think they deserve some responses other than merely poo-pooing those of us who have valid concerns.
(1) I insist in holding my Vanguard shares in my name as the direct registered owner. Under no circumstances will I allow my shares to be held in "street name" through Vanguard Brokerage Services.
(2) The Vanguard Brokerage Account Agreement contains a number of provisions that I won't agree to. The most important being:
(a) ¶6.f. I don't owe Vanguard any money, I never have, and I never will. I refuse to grant them a lien on my mutual fund shares.
(b) ¶6.i. I refuse to have my shares held in street name. I don't want brokerage commingling them with the shares of any other customers. I've paid for my shares in full; I'm entitled to unambiguous absolute ownership of them.
(c) ¶9.a. If I have a legal dispute with Vanguard, I refuse to allow New York law to apply. I live in California. Vanguard actively conducts business in California. The State of New York has absolutely no relationship to any of my dealings with Vanguard regarding my ownership of Vanguard shares. I expect California law to apply.
(d) ¶9.c. If a Vanguard employee is negligent or incompetent or careless and causes me serious loss, why should I hold Vanguard harmless for my damages? Vanguard says I can only recover if its behavior is so egregious that it amounts to "gross negligence" or "willful misconduct." Sorry -- don't buy it.
(e) ¶9.f. I'm forced to give up my right to sue in court, and instead I'm required to agree to predispute mandatory arbitration. No thanks. These are the kinds of adhesion contracts that big employers are using against employees, big health care providers are using against patients, big Wall Street firms are using against their customers. We're shareholders and owners of The Vanguard Group. We're entitled to more respect. Alas, the fading memory of John Bogle.
Good questions. No, I cannot answer questions with that much technical specificity. It's something that is so far outside of my day-to-day consideration as to have no impact to me, so I have not explored. NYCPete took a stab above.

I think another challenge is where are you going to move to find these certain fringe specifics of the old Vanguard platform, at least without making other compromises? Good luck. Sometimes industries and technologies change and it becomes difficult to have all your preferences met. I prefer a manual transmission, but most moderate quality and reasonably-priced practical vehicles no longer even offer this option in the US market. I settled for an automatic on last purchase. Still miss the manual sometimes, but I don't when I'm in stop-and-go traffic, and it still gets me where I need to go. I'd usually also rather take the plunge before it is forced on me to have some time to troubleshoot.
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Re: Vanguard brokerage account transition

Post by BigJohn »

arcticpineapplecorp. wrote: Tue May 19, 2020 8:15 am
abuss368 wrote: Tue May 19, 2020 8:04 am
arcticpineapplecorp. wrote: Tue May 19, 2020 8:02 am can you address staunchlydubious' issues (below). I had not even considered these reasons and am glad staunchlydubious posted them. I have seen no response to these in particular and think they deserve some responses other than merely poo-pooing those of us who have valid concerns.
(1) I insist in holding my Vanguard shares in my name as the direct registered owner. Under no circumstances will I allow my shares to be held in "street name" through Vanguard Brokerage Services.
(2) The Vanguard Brokerage Account Agreement contains a number of provisions that I won't agree to. The most important being:
(a) ¶6.f. I don't owe Vanguard any money, I never have, and I never will. I refuse to grant them a lien on my mutual fund shares.
(b) ¶6.i. I refuse to have my shares held in street name. I don't want brokerage commingling them with the shares of any other customers. I've paid for my shares in full; I'm entitled to unambiguous absolute ownership of them.
(c) ¶9.a. If I have a legal dispute with Vanguard, I refuse to allow New York law to apply. I live in California. Vanguard actively conducts business in California. The State of New York has absolutely no relationship to any of my dealings with Vanguard regarding my ownership of Vanguard shares. I expect California law to apply.
(d) ¶9.c. If a Vanguard employee is negligent or incompetent or careless and causes me serious loss, why should I hold Vanguard harmless for my damages? Vanguard says I can only recover if its behavior is so egregious that it amounts to "gross negligence" or "willful misconduct." Sorry -- don't buy it.
(e) ¶9.f. I'm forced to give up my right to sue in court, and instead I'm required to agree to predispute mandatory arbitration. No thanks. These are the kinds of adhesion contracts that big employers are using against employees, big health care providers are using against patients, big Wall Street firms are using against their customers. We're shareholders and owners of The Vanguard Group. We're entitled to more respect. Alas, the fading memory of John Bogle.
I did read that message upthread and was surprised. I can not see Vanguard modifying or making an exception to any of those issues.
Well then, these seem like pretty important reasons NOT to transition. I always say there are trade-offs in life. Many here are accusing us of driving up costs for them. But the other side of the equation is what are they giving up (see list above) to save a buck or two?
First two questions... This appears to be a list of issues from reading the brokerage account agreement. Are we sure that some or all of these provisions don’t also apply to the VG mutual fund accounts? I searched for the MF account agreement but couldn’t find it, however, I’d be surprised if much of this wasn’t in there also. Would these provisions be materially different with a new account at Fidelity, Schwab, etc? Once again, I doubt it. Glad to be proven wrong on either of both if someone has data.

Second a comment.... in today’s world these terms and conditions just are what they are. I would prefer not to have arbitration clauses, or be required to give up my personal data to use Google/FB/Amazon but that’s reality. You can either accept them or you can choose not to do business with the company. All of the things on the list above fall into that category as far as I’m concerned.

Third a prediction... As I understand it, VG cannot force you to open a brokerage account. So, I think VG is going to make it increasingly difficult for people to stay on the old platform. Some combination of fees, loss of functionality, loss of access to some types of purchases, etc. I honestly don’t have a problem with that strategy. This is obviously an increment cost so the people that use it should pay. I don’t know if VG has the legal right to terminate the relationship unilaterally but if they do, that’s probably their end game. So, if I was wedded to the old platform I’d be starting to look at the next best alternative to see if the grass is really greener or not. I’m sure it will be for some but I’m guessing that it won’t be for all.
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Re: Vanguard brokerage account transition

Post by Eagle33 »

Our household is split between the 2 platforms - Spouse accounts are brokerage & mine are old MF accounts. Both of us only have VG MFs.

I think VG is hoping to simplify its organizational structure from 2 separate legal units that have similar responsibilities, but provide the services under different rule/regulations. Looking at our 1099-Rs there are 2 different payee TINs. In fact they have different PO box numbers AND their zip code 4-digit zip building codes are different.

I find it interesting that only 1 of my 2 IRA accounts have the link to convert the account. I have not received any communication of the future forced conversion of my accounts. Will this tke as long as VG is currently taking eliminating Flagship assigned reps (my rep was gone a year ago, while some on this site still have their rep)?

Would anyone be incentivized to make the switch if VG lower MF's ER to match ETF ER if the MF is held in a brokerage style account?
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Re: Vanguard brokerage account transition

Post by jeffyscott »

Eagle33 wrote: Wed May 20, 2020 1:02 amWould anyone be incentivized to make the switch if VG lower MF's ER to match ETF ER if the MF is held in a brokerage style account?
Yes. But I don't think they could charge a different ER...or actually, I guess they could by making it a different share class. And maybe they would not even need to create a new one, perhaps could be accomplished by making the institutional share class available at a low minimum to those who hold in brokerage. Even if it were to require the old $10K or even $50K as a minimum, that would inspire me to make the transition.

We have both types of accounts, too. Since we use only Vanguard MF in these accounts and have no interest in switching to ETFs, there is no reason to make a change at this time.
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Re: Vanguard brokerage account transition

Post by abuss368 »

jeffyscott wrote: Wed May 20, 2020 5:11 am
Eagle33 wrote: Wed May 20, 2020 1:02 amWould anyone be incentivized to make the switch if VG lower MF's ER to match ETF ER if the MF is held in a brokerage style account?
Yes. But I don't think they could charge a different ER...or actually, I guess they could by making it a different share class. And maybe they would not even need to create a new one, perhaps could be accomplished by making the institutional share class available at a low minimum to those who hold in brokerage. Even if it were to require the old $10K or even $50K as a minimum, that would inspire me to make the transition.

We have both types of accounts, too. Since we use only Vanguard MF in these accounts and have no interest in switching to ETFs, there is no reason to make a change at this time.
Moving to brokerage does not mean you must use ETFs.
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Re: Vanguard brokerage account transition

Post by jeffyscott »

abuss368 wrote: Wed May 20, 2020 6:35 am
jeffyscott wrote: Wed May 20, 2020 5:11 am
Eagle33 wrote: Wed May 20, 2020 1:02 amWould anyone be incentivized to make the switch if VG lower MF's ER to match ETF ER if the MF is held in a brokerage style account?
Yes. But I don't think they could charge a different ER...or actually, I guess they could by making it a different share class. And maybe they would not even need to create a new one, perhaps could be accomplished by making the institutional share class available at a low minimum to those who hold in brokerage. Even if it were to require the old $10K or even $50K as a minimum, that would inspire me to make the transition.

We have both types of accounts, too. Since we use only Vanguard MF in these accounts and have no interest in switching to ETFs, there is no reason to make a change at this time.
Moving to brokerage does not mean you must use ETFs.
I didn't intend to imply it did. Having no interest in moving from Vanguard mutual funds to ETFs means that there is no reason for me to move to a brokerage account.
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Re: Vanguard brokerage account transition

Post by Cheez-It Guy »

Let's flip it around. What is YOUR reason NOT to move? If you don't have a strong reason not to, why not do it to assist with an obvious asset manager priority, be on the selected platform for the future, and generally be agreeable?
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Re: Vanguard brokerage account transition

Post by anakinskywalker »

Broken Man 1999 wrote: Tue May 19, 2020 9:37 am
rob wrote: Tue May 19, 2020 9:05 am
Broken Man 1999 wrote: Tue May 19, 2020 8:43 am Not that I am advocating this, but what prevents Vanguard from "divorcing" a customer they no longer wish to have a business relationship with?
This is exactly what's been done here.... Vanguard now brings in trillions and they don't need the hassle; people who need minority features (compliance reporting, dividend reinvest, ytd statements etc.) are been not so subtly divorced over the conversion period because they are just deadwood... Another example is the features lost - cash mgt functions, named reps etc. Most of the features discussed above could have fairly easily been introduced over the last handful of years that the "new" platform has existed. It's sad...
Yes, but those features cost. I'm more interested in saving investment expenses at Vanguard than receiving TurboTax, or the very few extras given as a Flagship client. I'm very OK with Vanguard being the Walmart of investment companies.

Trees need periodic pruning to remove the deadwood. Pruning can reinvigorate the tree. The same holds true for businesses.

At the end of the day, those who are upset enough can very easily leave Vanguard, even taking their Vanguard funds/ETFs with them. Many have done so, and I imagine many more will. Nice thing is when Vanguard's offerings are held elsewhere, it has been stated that Vanguard sheds some activities/expenses. What the actual savings are for Vanguard I have no idea.

Very few business relationships I have had over the decades of adult life remain that are still doing business the way they did decades ago. My longest business relationship is with my credit union, which I joined in 1973. The "extra" services we used to enjoy are long gone. Yet, the actual banking services are still there. If I jump through a couple of hoops, all my banking services are still free. So, at the end of the day they still do the activities related to their being a credit union. Extra services... no, none.

I will be the first to admit I set low expectations on my business relationships. Especially those who are keepers of my $$$. For Vanguard I expect a plain, vanilla, no frills type service. I don't expect extras. And, to Vanguard's credit, I get exactly what I expect. But, my accounts are in order, and my occasional inquiry made is handled to my satisfaction. I have enough funds to be able to use TurboTax even without Vanguard's assistance, or, perhaps because Vanguard didn't waste resources on frills that I didn't want but would be paying for anyway.

Broken Man 1999
Because of the uncertainty over the future of the Vanguard MF accounts, I've been forced to decide to stop adding new money into Vanguard.

I'm not comfortable holding assets over SIPC insurance limits in a brokerage account.

If I'm forced out of the MF account you can bet I will not be subsidizing Vanguard brokerage operations with my expense ratio payments by holding Vanguard ETFs or MFs elsewhere. I will be giving my business to a company that treats me with the same respect that I give it.

I'm actively preparing for this exit scenario in terms of managing capital gains/losses in case I'm forced to liquidate all my Vanguard holdings. And as I said, I've stopped adding new money into Vanguard.

Anakin
ruud
Posts: 320
Joined: Sat Mar 03, 2007 1:28 pm
Location: san francisco bay area

Re: Vanguard brokerage account transition

Post by ruud »

anakinskywalker wrote: Wed May 20, 2020 11:46 am Because of the uncertainty over the future of the Vanguard MF accounts, I've been forced to decide to stop adding new money into Vanguard.

I'm not comfortable holding assets over SIPC insurance limits in a brokerage account.
So what is your alternative?
.
anakinskywalker
Posts: 478
Joined: Sun Aug 24, 2008 8:20 pm

Re: Vanguard brokerage account transition

Post by anakinskywalker »

ruud wrote: Wed May 20, 2020 11:51 am
anakinskywalker wrote: Wed May 20, 2020 11:46 am Because of the uncertainty over the future of the Vanguard MF accounts, I've been forced to decide to stop adding new money into Vanguard.

I'm not comfortable holding assets over SIPC insurance limits in a brokerage account.
So what is your alternative?
I am going to look into private banking type options. I'm also interested in hearing about other wealth management options other BHs are using and are happy with.

It's not pleasant to be treated like garbage. "We'll make things unpleasant for you until you leave." is not what I like hearing. I'm sure I'm not alone in this.

I'm also confident that there must exist at least one wealth management company that is willing to provide a suitably protected investment account for zero-customer-support-needing 7+ digit customers. I think having me and folks like me as customers is actually quite profitable, and if Vanguard doesn't want us I'm sure we will find someone else out there willing to make this "huge sacrifice" of "helping us out". :-)

Anakin
Broken Man 1999
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Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, inland on high ground!

Re: Vanguard brokerage account transition

Post by Broken Man 1999 »

anakinskywalker wrote: Wed May 20, 2020 12:05 pm
ruud wrote: Wed May 20, 2020 11:51 am
anakinskywalker wrote: Wed May 20, 2020 11:46 am Because of the uncertainty over the future of the Vanguard MF accounts, I've been forced to decide to stop adding new money into Vanguard.

I'm not comfortable holding assets over SIPC insurance limits in a brokerage account.
So what is your alternative?
I am going to look into private banking type options. I'm also interested in hearing about other wealth management options other BHs are using and are happy with.

It's not pleasant to be treated like garbage. "We'll make things unpleasant for you until you leave." is not what I like hearing. I'm sure I'm not alone in this.

I'm also confident that there must exist at least one wealth management company that is willing to provide a suitably protected investment account for zero-customer-support-needing 7+ digit customers. I think having me and folks like me as customers is actually quite profitable, and if Vanguard doesn't want us I'm sure we will find someone else out there willing to make this "huge sacrifice" of "helping us out". :-)

Anakin
Good for you, seriously. I applaud people who have the guts to vote with their feet. I hope you are high up in the 7 digit club, 'cause if you are not you won't be getting much cheese.

Try this exercise: Figure your ERs you are paying at Vanguard. Now, a question: How profitable is your 7 digit portfolio going to be for a wealth manager? The wealth manager will absolutely be quite profitable. But, how profitable will your portfolio be to you?

Good luck wherever you land!

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
nanameg
Posts: 434
Joined: Fri Mar 20, 2020 10:57 am

Re: Vanguard brokerage account transition

Post by nanameg »

jeffyscott wrote: Wed May 20, 2020 5:11 am
Eagle33 wrote: Wed May 20, 2020 1:02 amWould anyone be incentivized to make the switch if VG lower MF's ER to match ETF ER if the MF is held in a brokerage style account?
Yes. But I don't think they could charge a different ER...or actually, I guess they could by making it a different share class. And maybe they would not even need to create a new one, perhaps could be accomplished by making the institutional share class available at a low minimum to those who hold in brokerage. Even if it were to require the old $10K or even $50K as a minimum, that would inspire me to make the transition.

We have both types of accounts, too. Since we use only Vanguard MF in these accounts and have no interest in switching to ETFs, there is no reason to make a change at this time.
I’ve mentioned in several posts that PAS clients are being “ forced” to change to ETF’s as well as use the brokerage platform. No choice. No more mutual funds if u use the PAS.

Is this going to be the next step? Brokerage platform only for all of Vanguard clients ... then ETF’s only for all vanguard clients?
mc2
Posts: 177
Joined: Wed Jan 13, 2016 10:27 am

Re: Vanguard brokerage account transition

Post by mc2 »

Eagle33 wrote: Wed May 20, 2020 1:02 am Our household is split between the 2 platforms - Spouse accounts are brokerage & mine are old MF accounts. Both of us only have VG MFs.

I think VG is hoping to simplify its organizational structure from 2 separate legal units that have similar responsibilities, but provide the services under different rule/regulations. Looking at our 1099-Rs there are 2 different payee TINs. In fact they have different PO box numbers AND their zip code 4-digit zip building codes are different.
Their redundant model is the problem in hindsight, and it makes sense to streamline everything. I've often been annoyed with VG user interface compared to TD and Fidelity. While I don't have much of a problem now that I'm used to VG, Fidelity's UI was always super intuitive, clean and clear. YOu should see my 401k broker's UI-it's the Rube Goldberg of financial websites. WHat pixxes me off is that they charge 0.6% mgt fee, which is 0.2% higher than our former.(/rant)

But in the end, either upgrade or bolt.
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