Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
jjet65
Posts: 2
Joined: Sat Aug 26, 2017 3:07 pm

Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Post by jjet65 » Tue Sep 12, 2017 3:53 pm

Any reasons not to transition my Vanguard accounts to brokerage account(s). I have a taxable Ira, Roth IRA, and taxable mutual fund account with Vanguard. I am getting notices that I can transition to a Brokerage Account at no charge. Vanguard states it will streamline their processes or bookkeeping, can't recall exactly how they worded it. I read the materials on their site explaining it. It looks to me like there is no drawback and seems if it makes it easier/less costly for Vanguard administering accounts why not go ahead, maybe it will even help keep costs down.
Thanks for any info.
John Swan

User avatar
Artsdoctor
Posts: 2944
Joined: Thu Jun 28, 2012 3:09 pm
Location: Los Angeles, CA

Re: Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Post by Artsdoctor » Tue Sep 12, 2017 7:40 pm

If you don't need a brokerage account, then don't upgrade. Brokerage accounts with their settlement funds are still not streamlined at Vanguard so I wouldn't do it unless they forced you to.


Silk McCue
Posts: 341
Joined: Thu Feb 25, 2016 7:11 pm

Re: Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Post by Silk McCue » Tue Oct 03, 2017 5:17 pm

I’m perfectly happy with having moved to the brokerage account. Past problems by some are no reason to not move forward.

User avatar
CAsage
Posts: 665
Joined: Sun Mar 27, 2016 6:25 pm

Re: Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Post by CAsage » Tue Oct 03, 2017 6:20 pm

I found it a non event. All brokerage, everything is fine.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

User avatar
celia
Posts: 7090
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Post by celia » Tue Oct 03, 2017 6:37 pm

There is no such thing as a "taxable IRA". Perhaps you mean "Traditional IRA" for which all withdrawals will be taxed

If you upgrade, you may have to reset your links to a checking account.
If you upgrade, you will have to reset automatic contributions and/or withdrawals.
If you upgrade, your mutual fund transaction history will disappear, so back it up first.
If you have given someone Agent Authorization on your accounts, you will have to set that up again.
Your mutual fund accounts will all get new account numbers.

IF YOU HAVE DONE A ROTH CONVERSION THIS YEAR AND THERE IS ANY CHANCE YOU WILL RECHARACTERIZE SOME/ALL OF IT, DON'T MERGE THAT ROTH WITH ANY OTHERS!

Indexboss
Posts: 33
Joined: Wed May 10, 2017 10:50 pm

Re: Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Post by Indexboss » Tue Oct 03, 2017 7:44 pm

I have the brokerage account, never had the other type. I have no complaints.

User avatar
Artsdoctor
Posts: 2944
Joined: Thu Jun 28, 2012 3:09 pm
Location: Los Angeles, CA

Re: Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Post by Artsdoctor » Wed Oct 04, 2017 4:14 pm

The problem with the brokerage account is that one cannot direct dividends of one fund to another. You'll either have to reinvest the dividend or send it to your settlement fund (or get a check). If you're used to reinvesting your dividends, this won't affect you. If you're in the habit of taking dividends and sending them where they're needed most, then you can lose several days of earnings that would not have happened in the older, more traditional mutual fund account model. One would think that this is not a big deal and it is often not; however, if you're taking relatively large dividends, you can lose up to 5 days of earning potential. This can translate into several hundred dollars a years, which I find annoying.

Pigeye Brewster
Posts: 28
Joined: Thu Oct 05, 2017 7:33 pm

Re: Any reason to not transition my vanguard IRA and taxable mutual fund accounts to Brokerage Accounts

Post by Pigeye Brewster » Thu Oct 05, 2017 7:50 pm

I received the email invitation to upgrade a couple of days ago. My assumption was that it would be a seamless transition since Vanguard already has all my account information, but when I clicked on the "Upgrade" button it was pretty much as if I wasn't already a Vanguard customer, i.e. none of the existing account information was carried over to the VBS form. Was I not doing it right?

Not a huge deal, but my account is titled in the name of my living trust and the documentation requirements are sort of involved. The path of least resistance will be to stick with the existing mutual fund type of account, especially since it suits my needs.

Post Reply