VG wants everyone to transfer to a brokerage account?

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livesoft
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Re: VG wants everyone to transfer to a brokerage account?

Post by livesoft » Thu Nov 23, 2017 2:59 pm

abuss368 wrote:
Thu Nov 23, 2017 2:32 pm
Does Vanguard keep track of cost basis and accounting for brokerage accounts like they do for mutual fund accounts?
Yes, it is the law.
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Doc
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Re: VG wants everyone to transfer to a brokerage account?

Post by Doc » Thu Nov 23, 2017 3:16 pm

abuss368 wrote:
Thu Nov 23, 2017 2:32 pm
Doc wrote:
Fri Sep 22, 2017 3:46 pm
DaftInvestor wrote:
Fri Sep 22, 2017 3:39 pm
goingup wrote:
Fri Sep 22, 2017 9:22 am
I haven't upgraded and won't until forced.
*We only use mutual funds
*Have multiple auto-exchanges set up between MM fund and other funds, which isn't possible in brokerage
*Have dividends from one fund directed to another fund, which isn't possible in brokerage

Upgrading to a brokerage would derail the automation.
I haven't been asked yet. The last automation is something I do. Do you know if they are planning on addressing these requirements in brokerage accounts?
Otherwise they are creating more manual work for us.
Having dividends reinvested in a taxable account is an accounting nightmare. Having those dividends reinvested in a separate account would be a nightmare squared.
Does Vanguard keep track of cost basis and accounting for brokerage accounts like they do for mutual fund accounts?
If you mean that they don't get it completely correct the answer is yes.

(Vanguard does not handle wash sale adjustments well. They get the adjusted cost right but not the adjusted open date. They use the wash sale something like the wash sale trigger date as the date acquired at least on the web site. So I now have a long term loss for a position acquired a few months ago according to them. If I sell the whole lot everything will be ok. But sometimes it happens that there are actually more than one lot involved and there is no way to use specific ID. I've given up on them and just take extra measures to avoid wash sales which means I have several more short term bond funds than I want. As long as you don't have multiple lots involved in the wash sale you should be ok - maybe.)
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FrugalInvestor
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Re: VG wants everyone to transfer to a brokerage account?

Post by FrugalInvestor » Thu Nov 23, 2017 3:31 pm

Years ago we had a brokerage account that we never used. As I recall at that time the brokerage and mutual fund accounts were separate. When the invitations began coming to consolidate all accounts under the brokerage umbrella I called Vanguard and told them that I had no use for the brokerage account and did not want to consolidate - I just wanted to keep my mutual fund account. The request was honored and as far as I can recall I haven't received any further requests to change in years.

I keep seeing these threads but have never seen anyone else reporting being able to get rid of the brokerage account and retain the mutual fund accounts. Am I unique in this respect?
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Bracket
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Re: VG wants everyone to transfer to a brokerage account?

Post by Bracket » Thu Nov 23, 2017 4:03 pm

I still have a hybrid account (one brokerage account, one taxable mutual fund account, one Roth IRA, one traditional IRA with a zero balance (used to hold money for a day or two each year before converting to Roth)) and have no plans to get rid of my mutual fund account unless they force me.

My dividends from the mutual fund account still go directly to my checking account, and I use my checking account to buy shares in the mutual fund--no settlement fund involved. I believe if I put it all in the brokerage I would lose this capability.

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Doc
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Re: VG wants everyone to transfer to a brokerage account?

Post by Doc » Thu Nov 23, 2017 4:12 pm

Bracket wrote:
Thu Nov 23, 2017 4:03 pm
I still have a hybrid account (one brokerage account, one taxable mutual fund account, one Roth IRA, one traditional IRA with a zero balance (used to hold money for a day or two each year before converting to Roth)) and have no plans to get rid of my mutual fund account unless they force me.

My dividends from the mutual fund account still go directly to my checking account, and I use my checking account to buy shares in the mutual fund--no settlement fund involved. I believe if I put it all in the brokerage I would lose this capability.
Choices are:
Vanguard Brokerage wrote:Reinvest
Transfer to settlement fund
Transfer to a bank account
Send me a check
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.

simas
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Re: VG wants everyone to transfer to a brokerage account?

Post by simas » Thu Nov 23, 2017 4:53 pm

"I keep seeing these threads but have never seen anyone else reporting being able to get rid of the brokerage account and retain the mutual fund accounts. Am I unique in this respect?"

No. if you happen to work in financial services (which is a huge sector of economy) that is pretty much the only way you can keep your own account with Vanguard by making it mutual funds only, due to compliance and oversight regulations. Formerly as employee of FINRA member broker dealer, ALL and every brokerage account could only exist at your employer (with very few , very specific exceptions i.e. spouses each working for different FINRA member), however in our policy there was specific language excluding the mutual fund only accounts..

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Re: VG wants everyone to transfer to a brokerage account?

Post by Bracket » Thu Nov 23, 2017 5:56 pm

Doc wrote:
Thu Nov 23, 2017 4:12 pm
Bracket wrote:
Thu Nov 23, 2017 4:03 pm
I still have a hybrid account (one brokerage account, one taxable mutual fund account, one Roth IRA, one traditional IRA with a zero balance (used to hold money for a day or two each year before converting to Roth)) and have no plans to get rid of my mutual fund account unless they force me.

My dividends from the mutual fund account still go directly to my checking account, and I use my checking account to buy shares in the mutual fund--no settlement fund involved. I believe if I put it all in the brokerage I would lose this capability.
Choices are:
Vanguard Brokerage wrote:Reinvest
Transfer to settlement fund
Transfer to a bank account
Send me a check
Just logged on and you are correct. Was there ever a time where you had to use the settlement fund or have I just been misinformed for 10 years?

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Doc
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Re: VG wants everyone to transfer to a brokerage account?

Post by Doc » Thu Nov 23, 2017 6:10 pm

Bracket wrote:
Thu Nov 23, 2017 5:56 pm
Just logged on and you are correct. Was there ever a time where you had to use the settlement fund or have I just been misinformed for 10 years?
Don't know. Not something I would do.

But what you can't do on the "new" platform is direct your dividends to another fund other than your settlement fund. Some people find this troublesome but again it's something I have no use for.
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randomizer
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Re: VG wants everyone to transfer to a brokerage account?

Post by randomizer » Thu Nov 23, 2017 8:02 pm

pfrank wrote:
Thu Nov 23, 2017 12:29 pm
Here is an update. After many phone calls to Vanguard, my money was finally transferred between the accounts. Although it is an "upgrade", you still have to submit the paperwork as if it is a new account. My wife and I were able to submit the trust brokerage account form and trust documents via DocuSign. All of the other forms (bank information, check writing, etc.) required a wet signature and had to be mailed in. You also had to re-establish automatic investments. This only applies to trust accounts.

The other issue was why our money held in limbo. Here was the problem: when Vanguard opened my new trust brokerage account they only used my and my wife's middle initials. The original mutual fund account and associated trust paperwork listed our full middle names. The Vanguard computer system would not link the two accounts to do a transfer of assets even though it was the same social security numbers. A manager finally found the issue and corrected the problem. Now everything is fine. Good luck!
Ugh, what a giant pain in the butt (even without the hiccup with your middle names it sounds bad enough).

I was thinking about "upgrading" to give me more flexibility (eg. the option of converting some mutual funds to ETFs for transfer to another broker) but it really doesn't seem worth it.
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BigJohn
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Re: VG wants everyone to transfer to a brokerage account?

Post by BigJohn » Thu Nov 23, 2017 8:15 pm

Bracket wrote:
Thu Nov 23, 2017 5:56 pm
Just logged on and you are correct. Was there ever a time where you had to use the settlement fund or have I just been misinformed for 10 years?
I think when VG first had brokerage accounts this was the case but they have added capability since then. For a long time I resisted upgrading for just this reason. I recently went ahead and with the change in order to close and transfer in a small account from another broker in my pursuit of simplification. After the conversion was complete, I went in to check the reinvestment options and my "transfer to bank account" instructions for the VG mutual funds were carried over correctly. The account I transferred in contained a few individual stocks and for some reason, those dividends can only go to the settlement fund. The same is true for proceeds of a sale, funds can be directed straight to the bank, stocks only go to the settlement fund. Not sure why the difference but it worked the same in my other account so nothing lost.

For anyone contemplating this change these is a difference in how check writing is handled. In the old MF account the checks were based on individual mutual funds. If you had several funds eligible for check writing, you could have several check books. In the brokerage account, there is only one option and the checks are written on the settlement fund. You can identify one eligible mutual fund as a back-up to be used if there are insufficient funds in the settlement account. Not a major issue for me but a change that might be important to some.

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Veiled
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Re: VG wants everyone to transfer to a brokerage account?

Post by Veiled » Thu Nov 23, 2017 9:06 pm

I recently opened a Roth and realized that it was placed in a brokerage account only when I refreshed personal capital. It would be nice to consolidate my taxable account and my Roth and if VG is going toward all brokerage accounts, I assumed that I would just consolidate. I feel pretty illiterate reading this thread and I'll have to do a little more reading about the pros/cons of brokerage accounts, though.
Pardon me as I read these one hundred and fifty-seven SP vs LLC vs Scorp threads...

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