Vanguard Switch to Brokerage Accounts

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Doc
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Re: Vanguard Switch to Brokerage Accounts

Post by Doc » Sat Aug 18, 2018 10:31 am

cowdogman wrote:
Sat Aug 18, 2018 10:01 am
2. Makes people who made the switch (like me) pissed off, especially seeing that the legacy accounts still exist and will continue to do so with no definite switch over date in sight.
I concur about being ... but for the opposite reason. For me the brokerage platform is much better despite its warts that require workarounds that I would rather not have to bother with. What irks me is that Vanguard is now having to support two platforms at added cost and resources when their CR was sub-par to begin with.
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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Eric
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Re: Vanguard Switch to Brokerage Accounts

Post by Eric » Sat Aug 18, 2018 10:47 am

I just wish that Vanguard would allow me to convert my individual 401(k) to the brokerage format. :?

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cowdogman
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Re: Vanguard Switch to Brokerage Accounts

Post by cowdogman » Sat Aug 18, 2018 10:48 am

What irks me is that Vanguard is now having to support two platforms at added cost and resources when their CR was sub-par to begin with.
Good point.

I opened a couple accounts (joint and individual 401(k)) with Fidelity over the last week and have moved a relatively small amount of money over, just to compare websites and customer service. First impression that I prefer the Vanguard site, but maybe that is just because I am used to it.

I have used the chat feature a couple times on the Fidelity website to ask a couple "how to" questions--and that was great--no need to call or send a secure message.

And Fidelity sent each of me and my wife an offer for transfer bonuses--that is, cash if we moved money over to Fidelity in the next couple months. The amounts were linked to the amount we transferred over--more $ for increasing transfer amounts.

Fintechnick
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Re: Vanguard Switch to Brokerage Accounts

Post by Fintechnick » Sat Aug 18, 2018 11:05 pm

I like the new brokerage accounts. Allows a wee bit more simplification. I have personally found no downside. And tax time is easier.

Direct deposit? It is easy enough to set up a recurring transfer from my bank account. That provides the same functionality as direct deposit with more control and flexibility.

Dividend reinvestment? I don’t mind handling that if I want dividend from one fund to reinvest into a different fund.

Check writing? Who still uses checks? I avoid them as much as possible. In any case it only takes 1 or 2 business days to ACH funds to my bank account. My bank is happy to print and mail a check to anybody for free, via the bill pay service.

From my perspective, sooner that Vanguard can shut down the old mutual fund platform and reduce costs, the better. Hoping for another 1 bp just from the shut down. Come on Bogleheads, jump in, the water is fine!

csm
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Re: Vanguard Switch to Brokerage Accounts

Post by csm » Sun Aug 19, 2018 11:20 am

I wish I had come here and searched for this topic before I made the seemingly required switch a few days ago.

I have been getting emails from Vanguard for months about how I would be required to switch to the new platform, and recently an email indicating it was a last chance (or some wording that I had to do this NOW).

When I logged into my account, I was faced with a prompt that seemed to be forcing me to make the change, indicating that my existing platform was being phased out. So I walked through the steps and made the change.

I should say that I only have Vanguard index funds.

I'm irritated by being forced into a brokerage account and now want to move everything over to my existing Fidelity account. What is the best way to do this? Do I start at the Fidelity account and 'pull' the money from Vanguard, or 'push' it from Vanguard to Fidelity?

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darkhorse346
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Re: Vanguard Switch to Brokerage Accounts

Post by darkhorse346 » Sun Aug 19, 2018 12:54 pm

csm wrote:
Sun Aug 19, 2018 11:20 am
I wish I had come here and searched for this topic before I made the seemingly required switch a few days ago.

I have been getting emails from Vanguard for months about how I would be required to switch to the new platform, and recently an email indicating it was a last chance (or some wording that I had to do this NOW).

When I logged into my account, I was faced with a prompt that seemed to be forcing me to make the change, indicating that my existing platform was being phased out. So I walked through the steps and made the change.

I should say that I only have Vanguard index funds.

I'm irritated by being forced into a brokerage account and now want to move everything over to my existing Fidelity account. What is the best way to do this? Do I start at the Fidelity account and 'pull' the money from Vanguard, or 'push' it from Vanguard to Fidelity?
If you know for sure that you're ready to transfer, contact Fidelity or go to their website to initiate the transfer. They will initiate the "pull".

Personally, I'd wait a week or two before doing anything. During this time, I'd compare the pros/cons of Vanguard vs Fidelity. Are you going to substantively gain anything by making this move?

Only you can answer that question. Good luck. :beer

Rupert
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Re: Vanguard Switch to Brokerage Accounts

Post by Rupert » Tue Aug 21, 2018 7:53 am

Just fyi: Vanguard has updated its website so that you can convert a traditional IRA brokerage account to a mutual fund Roth IRA account on-line without calling a Vanguard rep for help, i.e., you can execute a backdoor Roth between the brokerage and non-brokerage platforms using just the website.

baseball2horse
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Re: Vanguard Switch to Brokerage Accounts

Post by baseball2horse » Thu Sep 13, 2018 9:20 am

ThisTimeItsDifferent wrote:
Fri Aug 17, 2018 7:28 am
baseball2horse wrote:
Thu Aug 16, 2018 3:54 pm
Gig em wrote:
Fri Aug 10, 2018 9:11 am
Something I really want is the abilities to have direct deposit directly into a Vanguard mutual fund. My pay is not constant, so my plan is divert 10% into the house fund. My employer will allow this.

Vanguard told me I could do this with a brokerage account. Not true. You can only direct deposit into a federal money mart. However you can do this with the old mutual fund accounts.
I mean sure maybe the money briefly stops in the MM account but then it automatically goes into the account you specify so it really makes no difference with free trading. I have direct deposit set up from my bank every month into two funds in a brokerage account and its works just fine
Do you have to manually move the direct deposit from the MM/settlement account into the mutual fund of choice if you have brokerage accounts?
Nope!

I set up a monthly automatic transaction linked my bank account. and every month XX amount gets invested into my indexes funds without me doing a single thing

tj
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Re: Vanguard Switch to Brokerage Accounts

Post by tj » Thu Sep 13, 2018 3:29 pm

Cloud wrote:
Sat Aug 18, 2018 7:36 am
UpperNwGuy wrote:
Fri Aug 17, 2018 9:42 pm
Why are people so afraid of the brokerage account? I find it to be very easy to use. In fact (and this might be heresy around here), I find it easier to use than Schwab. All my investments are in Vanguard mutual funds. I have no ETFs and no individual stocks or bonds.
The brokerage accout doesn't support automatically sending the dividend payments to my linked bank account every month. I have better things to do then request this every month. All of our IRA accounts we allowed to be converted but our cash account will not be converted until Vanguard supports the same features as the legacy account. I've asked Vanguard several times when this will be supported. It's been 2 years and I'm still waiting.

Mine absolutely supports this. What is no longer functional is that you can't reinvest the dividends into a different fund, but you absolutely can automate dividends from mutual funds into your bank account

Dead Man Walking
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Re: Vanguard Switch to Brokerage Accounts

Post by Dead Man Walking » Thu Sep 13, 2018 11:21 pm

A mandatory switch to brokerage accounts would demonstrate the weakness of Vanguard's IT department. A representative should be able to determine the type of account an investor has when he calls. A mouse click or touch on his monitor should take him to the appropriate platform. This should not be an expensive program. When I gas up my car, I'm given a choice between a debit card and a credit card. Does Marathon have better IT guys than Vanguard?

If they can't handle it in house, Vanguard should investigate moving their customer service off shore. I'm sure the cost of operating two platforms would not be a problem for many off shore providers.

Vanguard is simply providing a platform that services the investors of the 21st century. ETFs, brokered CDs, treasuries, stocks, and bonds are expected to be offered by investment companies these days. Simply providing mutual funds is not a viable business model in the current environment even though it is an inexpensive model.

Costs matter; however, offering multiple platforms in the digital age, shouldn't be a significant expense for a company of Vanguard's size. I'm sure some Bogleheads will disagree with my hypothesis. Please document the cost difference that has been claimed by prior posters. I'm an old fart that has drunk the kool aid that computer geeks have been selling about the inexpensive costs of the digital age!

DMW

digit8
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Re: Vanguard Switch to Brokerage Accounts

Post by digit8 » Thu Sep 20, 2018 10:08 am

cowdogman wrote:
Sat Aug 18, 2018 10:01 am
Although it is interesting to hear people's thoughts on the pro and cons of the switch to brokerage accounts, I think the underlying issue most "legacy" account holder have is that they have spent years fine tuning their relationship with Vanguard (especially with regard to the treatment of dividend payments)--and now Vanguard is disrupting that with the switch to Brokerage accounts.
+1 on this, and the self inflicted damage being done. However beneficial, Vanguard has not presented the change in what I'd call an up-and-up kind of way. My sister mentioned to me how they were "upgrading the website", and just needed some information to "transition". I took a look through with her and sure enough, it was a change to a brokerage account.
She's no dummy- working on a third Masters degree just for the fun of it- but until I pointed out the first mention of a brokerage account on the fourth(!) page of explanation, she had no idea that she would be signing up for anything but a change in the look of the website.
Ultimately she's going with the brokerage account. But she's going while feeling more than a little salty about it and I can't blame her.
"You can't latte yourself to bankruptcy. The bladder won't allow it." | -Katherine Porter

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