Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

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acljump
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Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by acljump » Wed Mar 25, 2020 10:06 pm

I'm a long time owner of a Vanguard Mutual Fund account for my Traditional IRA

This year, I decided to add a Roth IRA account at Vanguard. When I completed the Roth IRA account application process online, I was surprised to find out that Vanguard opened the account as a brokerage account.

Admittedly, I've been out of the loop and I know that Vanguard has been trying to phase away the mutual fund accounts to brokerage accounts: https://www.mymoneyblog.com/vanguard-me ... -cons.html

However, did Vanguard remove the ability to open a mutual fund only account entirely?

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Jerry55
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Jerry55 » Wed Mar 25, 2020 10:13 pm

I was considering doing the same, so, I'll watch this post with keen interest.
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catlady
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by catlady » Wed Mar 25, 2020 10:13 pm

Yes, a couple of years ago.

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Eagle33
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Eagle33 » Wed Mar 25, 2020 10:16 pm

Maybe if your VG accounts are north of $10M they may make an exception?
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by pkcrafter » Wed Mar 25, 2020 10:22 pm

Here is your answer: scroll down....

Vanguard Brokerage --

https://www.vanguard.com/pdf/vbcfaq_062013.pdf
Our new account structure offers a simple way to organize all your investments. You’ll no longer need an account for Vanguard mutual funds and a separate one for brokerage products, such as ETFs (exchange-traded funds) and stocks. You’ll simply have an account that can hold the investments you choose
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by beyou » Wed Mar 25, 2020 11:13 pm

If you have a good reason, they can still open mf
only accts (via paper app). I opened one online last year, this year had to use paper, both with customer service intervention. But what is your reason ? I had an employer restriction.

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acljump
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by acljump » Thu Mar 26, 2020 7:58 am

I haven't had the need to open a new Vanguard account in a long time. The last time I did it, Vanguard created a mutual fund account only.

I was just surprised that Vanguard didn't include the option now.

I've searched Vanguard's website and there doesn't appear to be any info that allows you to create a mutual fund only account. If Vanguard still offers that option, I guess they removed the capability to do it online.

I don't have a specific reason for opening a mutual fund only account -- it is just what I am used to as opposed to a brokerage account.

Ultimately, I can live with my Roth IRA being put into a Vanguard brokerage account.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by retire2022 » Thu Mar 26, 2020 8:27 am

Sound like story of Sleepy Hollow, Ichabod Crane which he woke up and the world has changed.

The brokerage account option as Catlady put it been several years and it functions more or less the same way as MF only.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by tibbitts » Thu Mar 26, 2020 8:52 am

acljump wrote:
Wed Mar 25, 2020 10:06 pm
I'm a long time owner of a Vanguard Mutual Fund account for my Traditional IRA

This year, I decided to add a Roth IRA account at Vanguard. When I completed the Roth IRA account application process online, I was surprised to find out that Vanguard opened the account as a brokerage account.

Admittedly, I've been out of the loop and I know that Vanguard has been trying to phase away the mutual fund accounts to brokerage accounts: https://www.mymoneyblog.com/vanguard-me ... -cons.html

However, did Vanguard remove the ability to open a mutual fund only account entirely?
I thought the option was removed, at least for public consumption, roughly la decade ago.

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Cheez-It Guy
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Cheez-It Guy » Thu Mar 26, 2020 8:56 am

beyou wrote:
Wed Mar 25, 2020 11:13 pm
If you have a good reason, they can still open mf
only accts (via paper app). I opened one online last year, this year had to use paper, both with customer service intervention. But what is your reason ? I had an employer restriction.
And MOST people do not have a good reason. I liked the new brokerage account format because it allowed me to merge two taxable accounts into one across two different logins. Net reduction of two accounts. I like simplicity.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by dwickenh » Thu Mar 26, 2020 9:04 am

Brokerage accounts are fine, simple, and easy to use at Vanguard. Change is hard.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Wiggums » Thu Mar 26, 2020 9:10 am

My brother opened an account and brokerage account was the only option.

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acljump
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by acljump » Thu Mar 26, 2020 9:29 am

retire2022 wrote:
Thu Mar 26, 2020 8:27 am
Sound like story of Sleepy Hollow, Ichabod Crane which he woke up and the world has changed.

The brokerage account option as Catlady put it been several years and it functions more or less the same way as MF only.
Hilarious, yes Sleepy Hollow is a correct analogy in this case.

Right now, I have three accounts in Vanguard:
1) A Traditional IRA mutual fund only account
2) A Traditional IRA brokerage account (with zero funds currently in it)
3) This newly opened Roth IRA brokerage account

If I upgrade the Traditional IRA mutual fund only account into a "merged brokerage account", what happens to my existing Traditional IRA brokerage account? Does it still exist or is it deleted entirely?

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by pkcrafter » Thu Mar 26, 2020 10:14 am

From Vanguard-- (see my link above)

* Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and aren’t protected by SIPC. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Nate79 » Thu Mar 26, 2020 10:29 am

acljump wrote:
Thu Mar 26, 2020 7:58 am
I haven't had the need to open a new Vanguard account in a long time. The last time I did it, Vanguard created a mutual fund account only.

I was just surprised that Vanguard didn't include the option now.

I've searched Vanguard's website and there doesn't appear to be any info that allows you to create a mutual fund only account. If Vanguard still offers that option, I guess they removed the capability to do it online.

I don't have a specific reason for opening a mutual fund only account -- it is just what I am used to as opposed to a brokerage account.

Ultimately, I can live with my Roth IRA being put into a Vanguard brokerage account.
There are many threads on here about Vanguard transitioning to Brokerage accounts and that the option for mutual fund account is removed. Long term their strategy is to remove mutual fund accounts. There is debate about how they will treat legacy mutual fund accounts but there is a strong urge from Vanguard to convert mutual fund accounts to brokerage accounts.

That's right, Vanguard is trying to enter the 21st century.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by beyou » Thu Mar 26, 2020 10:37 am

pkcrafter wrote:
Thu Mar 26, 2020 10:14 am
From Vanguard-- (see my link above)

* Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and aren’t protected by SIPC. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC.

Paul
From the Bogleheads wiki :

https://www.bogleheads.org/wiki/SIPC_pr ... tual_funds

“If you hold assets within a brokerage account, then your holding is protected by the SIPC, but you are no safer, because the SIPC merely protects you against the extra risk you incur by trusting a brokerage firm to hold them for you.”

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by beyou » Thu Mar 26, 2020 10:40 am

Wiggums wrote:
Thu Mar 26, 2020 9:10 am
My brother opened an account and brokerage account was the only option.
Only option online, offline you can open fund only accts.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by ruralavalon » Thu Mar 26, 2020 10:44 am

acljump wrote:
Thu Mar 26, 2020 9:29 am
retire2022 wrote:
Thu Mar 26, 2020 8:27 am
Sound like story of Sleepy Hollow, Ichabod Crane which he woke up and the world has changed.

The brokerage account option as Catlady put it been several years and it functions more or less the same way as MF only.
Hilarious, yes Sleepy Hollow is a correct analogy in this case.

Right now, I have three accounts in Vanguard:
1) A Traditional IRA mutual fund only account
2) A Traditional IRA brokerage account (with zero funds currently in it)
3) This newly opened Roth IRA brokerage account

If I upgrade the Traditional IRA mutual fund only account into a "merged brokerage account", what happens to my existing Traditional IRA brokerage account? Does it still exist or is it deleted entirely?
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Chicken lady » Thu Mar 26, 2020 10:51 am

Call them and ask for help in setting up a mutual fund. It can happen.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by beyou » Thu Mar 26, 2020 11:15 am

Cheez-It Guy wrote:
Thu Mar 26, 2020 8:56 am
beyou wrote:
Wed Mar 25, 2020 11:13 pm
If you have a good reason, they can still open mf
only accts (via paper app). I opened one online last year, this year had to use paper, both with customer service intervention. But what is your reason ? I had an employer restriction.
And MOST people do not have a good reason. I liked the new brokerage account format because it allowed me to merge two taxable accounts into one across two different logins. Net reduction of two accounts. I like simplicity.
I have a single login for many separate mf accts, both registered in my name and spouse, taxable and multiple IRAs.

20% of the US indices are financial services companies.
Some % of employees of those firms have a list of brokers they can use, and few include Vanguard brokerage. Schwab and etrade are on my list of “approved” brokers. Any directly held mutual fund is ok at any fund company.
This applies to the thousands of employees at my firm and all our competitors.

Vanguard either needs to market their brokerage to compete with Etrade and Schwab, or allow fund accts, or lose many clients. For now they are allowing fund only accts.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Cheez-It Guy » Thu Mar 26, 2020 11:24 am

^I understand that you had a good reason.

I mentioned two logins because of other family accounts I also manage. So there were two separate opportunities to consolidate accounts.

Who should Vanguard market their brokerage accounts to? Your employer? Or is there some regulatory body that decides which brokers are acceptable for those employed in the financial services industry?

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Jerry55 » Thu Mar 26, 2020 11:32 pm

I have Wellesley Roth IRA and Wellington Taxable, and got those "Nag Screens" to transition my accounts.
After sending them a secure message, I received an answer, and I will select the part that proves me correct. I Don't Need to transition.
Being retired, all I can do is maybe open another Mutual Fund, but I have no interest in ETFs or otherwise.

>> 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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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Cheez-It Guy » Fri Mar 27, 2020 6:14 am

Jerry55 wrote:
Thu Mar 26, 2020 11:32 pm
I have Wellesley Roth IRA and Wellington Taxable, and got those "Nag Screens" to transition my accounts.
After sending them a secure message, I received an answer, and I will select the part that proves me correct. I Don't Need to transition.
Being retired, all I can do is maybe open another Mutual Fund, but I have no interest in ETFs or otherwise.

>> 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 *****.
Jerry, I've noticed you seem to post in many threads around this same topic. It's not clear to me what your reason is for not moving to the new account format. You appear to have an extremely simple account setup which could continue to be mutual-fund-only post-transition to a brokerage account. In my view, continuing to stay on the old platform which Vanguard clearly prefers people to migrate away from is increasing the costs and complexity for all. So, yes, it's voluntary when you read the finest fine print, but what is the reason for your reluctance? I'd do it just to get rid of the nag screens and to know I'm on the supported platform of choice for the future. You've clearly read a lot about this, so I'm sure you have a good reason. Just curious.

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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Jerry55 » Fri Mar 27, 2020 7:53 pm

Cheez-It Guy wrote:
Fri Mar 27, 2020 6:14 am
You've clearly read a lot about this, so I'm sure you have a good reason. Just curious.
No reason to move or change. My Roth IRA is for legacy purposes, and I just want them to send my quarterly payments from Wellington.
I only log on quarterly to see what my dividends, etc will be, then I'm gone.

Otherwise, I ignore any and all nag screens. I was married, now retired, and my ex wife will tell ya I'm good at ignoring stuff. :sharebeer
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Cheez-It Guy
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Re: Vanguard Removed Option to Open Mutual Fund Only Non Brokerage Account?

Post by Cheez-It Guy » Fri Mar 27, 2020 8:03 pm

Jerry55 wrote:
Fri Mar 27, 2020 7:53 pm
Cheez-It Guy wrote:
Fri Mar 27, 2020 6:14 am
You've clearly read a lot about this, so I'm sure you have a good reason. Just curious.
No reason to move or change. My Roth IRA is for legacy purposes, and I just want them to send my quarterly payments from Wellington.
I only log on quarterly to see what my dividends, etc will be, then I'm gone.

Otherwise, I ignore any and all nag screens. I was married, now retired, and my ex wife will tell ya I'm good at ignoring stuff. :sharebeer
Thanks for the reply. I would say the reason is because you're on a platform they are trying to retire. They can't force you to do it (yet), but if a company has given me good service over the years, and clearly wants me to make a simple change, and if there is no meaningful detrimental impact to me, I do it, and move on with my life. I don't want to be needlessly earmarked as a difficult customer or client. It's give and take in this world. If I'm easy for them to work with, I feel more justified in demanding a higher or deeper level of service from them when that's required. I think you'd be quite fine either way, but it seems unlikely there's going to be any new information in these threads to sway you. I don't enjoy being nagged. I converted. One less annoyance.

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