Vanguard is threatening forced transition within 30 days.

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clip651
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Re: Vanguard is threatening forced transition within 30 days.

Post by clip651 »

XB70 wrote: Thu Jun 27, 2024 6:53 pm
clip651 wrote: Thu Jun 27, 2024 6:50 pm
JoeNJ28 wrote: Thu Jun 27, 2024 6:28 pm Vanguard is not making a separate brokerage account just for vanguard only assets. Don’t waste reps time asking it is a non starter from a business standpoint.
I think that XB70 just means they would have two brokerage accounts, not that VG would create a special type of account for XB70. One account with VG mutual funds, and the other with stuff from other fund families (and/or stocks, etc). (I don't think this would be particularly helpful - one might get the 1099 earlier for the one with only VG funds, but the 1099 for other fund families will still come out on whatever timeline it will come out on, based on when VG gets the info from the other companies.) But I have seen other posters say they had two brokerage accounts and then had to request to have them merged. So I don't see why someone couldn't have two brokerage accounts, and have some stuff in one, and different stuff in the other. And not have them merged.

I could be wrong in my interpretation, of course.
Why would someone want two brokerage accounts instead of one? Precisely to get the 1099 earlier in one. If that even were to work, unknown as of now.
Why would it help to get one 1099 earlier? You still have to wait for the other one to file your taxes.

If you really want your 1099 earlier, only hold VG mutual funds. Don't hold other stuff in your brokerage account(s), period.
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XB70
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Re: Vanguard is threatening forced transition within 30 days.

Post by XB70 »

clip651 wrote: Thu Jun 27, 2024 6:56 pm
XB70 wrote: Thu Jun 27, 2024 6:53 pm
clip651 wrote: Thu Jun 27, 2024 6:50 pm
JoeNJ28 wrote: Thu Jun 27, 2024 6:28 pm Vanguard is not making a separate brokerage account just for vanguard only assets. Don’t waste reps time asking it is a non starter from a business standpoint.
I think that XB70 just means they would have two brokerage accounts, not that VG would create a special type of account for XB70. One account with VG mutual funds, and the other with stuff from other fund families (and/or stocks, etc). (I don't think this would be particularly helpful - one might get the 1099 earlier for the one with only VG funds, but the 1099 for other fund families will still come out on whatever timeline it will come out on, based on when VG gets the info from the other companies.) But I have seen other posters say they had two brokerage accounts and then had to request to have them merged. So I don't see why someone couldn't have two brokerage accounts, and have some stuff in one, and different stuff in the other. And not have them merged.

I could be wrong in my interpretation, of course.
Why would someone want two brokerage accounts instead of one? Precisely to get the 1099 earlier in one. If that even were to work, unknown as of now.
Why would it help to get one 1099 earlier? You still have to wait for the other one to file your taxes.

If you really want your 1099 earlier, only hold VG mutual funds. Don't hold other stuff in your brokerage account(s), period.
That is a good point, which was raised in that discussion with the supervisor. Here was my answer: Something like 95% or more of my assets are Vanguard MFs, thus I can estimate the remaining non-Vanguard 1099 numbers, and be better off for knowing my Vanguard numbers. Less likely to get penalized for a poor quarterly estimate.
JoeNJ28
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Re: Vanguard is threatening forced transition within 30 days.

Post by JoeNJ28 »

1099s are issued in waves based on what was held in the account for the year. Having only a vanguard mutual fund in brokerage is just as quick as having only in mutual fund. It’s the same mutual fund that needs to generate the tax form. Also random interest on settlement funds won’t slow that down it doesn’t take them long to calculate simple interest on cash.
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anagram
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Re: Vanguard is threatening forced transition within 30 days.

Post by anagram »

XB70 wrote: Thu Jun 27, 2024 6:46 pm
anagram wrote: Thu Jun 27, 2024 6:30 pm
XB70 wrote: Thu Jun 27, 2024 6:18 pm I had my conversation with my rep and her supervisor. I can confirm that with respect to directed dividend functionality, formerly limited to the legacy accounts, it has been fixed (I cannot confirm that it has rolled to everyone); that is, Vanguard fund's dividends will be able to be directed (in advance of their dividend dates) to other Vanguard funds for purchase, same-day pricing, without time in a settlement fund. Halleluiah! I also asked if, or to whatever extent, this might be effected between fund families. That was deemed unlikely, but is a follow up question, about which I hope to hear later, as well. If Vanguard could pull that off, or to whatever extent, it would be a coup. Not holding my breath on that. Here is a question, at say Schwab or Fidelity (or elsewhere), do they allow directed dividend investment, within their fund family, as Vanguard does now?
As to my other main concern: 1099 issuance being sooner in legacy accounts--possibly weeks, than in a brokerage account, why that is, or if it can be fixed is unknown, as yet. I did bring up the idea of creating an all-and-only-Vanguard brokerage account, and holding non-Vanguard assets in a non-Vanguard brokerage account, separately, to possibly facilitate faster issuance of their respective 1099s, in the two accounts. I hope to hear back about this.
I also asked about if direct registration of my ownership of Vanguard mutual funds in a legacy account would change if transitioned to brokerage custodianship. I was told that it would not, and that my ownership would not be commingled in any omnibus account, with some separate ledger, in which my ownership were recorded, someplace in Vanguard's possession. But I insisted on my concern, and asked for confirmation of this, and possibly clarification of exactly any differences between holding in a legacy account, and holding in a brokerage account. I hope to hear more on this later.
I did ask if the supervisor if he could seek additional info--than is currently disclosed, on Vanguard's excess SIPC insurance--they claim to carry it, but don't reveal anything about it; particularly, (1) What the aggregate amounts is?; (2) What any individual account limits might be?; and (3) Who the insurer is? I hope to hear more about this later, but I may not.
Finally, I also asked about the timetable for forced transition. Yes, the final date by which time all legacy accounts will be transitioned is 12/31/2025, but despite the seeming 30-day notice of the recent e-mail, apparently legacy account holders are on some sort of scheduled transitioning process, and further notices and rep contact attempts can be expected before the forced transition is to happen. Furthermore, whether legacy account holders can seek to be put off, delayed, I don't know, perhaps not. Obviously how many such accounts are left, and at what rate they are being forced to transition, I don't know.
without time in a settlement fund
Simply not true. Ask me how I know? Well the magical appearance of a small amount of interest in the settlement fund as the dividends moved through. The dividends sit in the settlement fund for one day! And yes, the settlement fund had a balance of zero for months.

Perhaps you manually directed your dividend before the quite recent claimed change in that facility. Folks above have reported that it appears now to be possible, my rep set it up, knowing my exact desire, same-day, same-day pricing, no time in settlement fund, etc. It is likely quite new. I have not confirmed it personally, but perhaps others will do so. When you did it, and it was false, how long ago was that?
I was told that it would not, and that my ownership would not be commingled in any omnibus account, with some separate ledger, in which my ownership were recorded, someplace in Vanguard's possession.
Okay so how are Vanguard mutual funds held on the brokerage platform?

Presumably I would still have direct ownership. No, I do not know the details, or if there is any difference between legacy ownership and ownership within a brokerage account. Still waiting on that.

It is really worrying that you talked with a representative and her supervisor and got incorrect answers. At least one so far.
If that is correct, that would be disconcerting.
No I did not manually direct my dividends. I know what I am doing!

This happened this week so under the new system. I believe you are going to find the same thing, it is not zero time in the settlement fund.

Interesting if it is direct ownership. Will be interested to hear back from you. This is at odds from other posters.

Also it is much easier if you don't bold replies and reply in "blocks". See other replies in threads. I know it takes a little more effort but much easier for everyone to read.

Like this post:

viewtopic.php?p=7927079#p7927079
HawkeyePierce
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Re: Vanguard is threatening forced transition within 30 days.

Post by HawkeyePierce »

XB70 wrote: Wed Jun 26, 2024 9:54 pm
Eaglewood wrote: Tue Jun 25, 2024 11:06 am I too recently received a letter from Vanguard stating that if I did not transfer my mutual fund accounts to a brokerage account that Vanguard would do it for me, without my consent or authorization. So why is this an issue? (Note, if I am wrong about any of the following, please point it out.)

The reason for concern is that this transfer fundamentally changes the ownership structure of my assets. Currently my fund shares are registered in my name—a “customer name”—on the books of the Vanguard funds that I own. I have sent money to Vanguard and Vanguard has purchased securities with this money with the securities themselves being kept by an independent custodian. There is one entity, the fund, between me and the underlying assets. Under the forced conversion Vanguard will strip my name off the books of the funds and re-title my shares in the name of a brokerage—this is, my shares will now be registered in a “street name,” not in my name, on the books of the funds leaving me with little more than an IOU from a broker.
Under this arrangement there are now two entities between me and the underlying assets. And two opportunities for things to go wrong. Although rare, custodians have had securities go missing. Custodians carry insurance for such situations. More frequently, brokerages have failed. Recently FTX collapsed and before that Madoff Investment Securities. And, several years ago Merrill Lynch needed to be merged into Bank of America to avoid failure. Sometimes when failures occur customer assets are found to be missing. Vanguard’s intended forced transfer unnecessarily doubles the opportunity for loss.
Vanguard points out that under the new structure assets will be protected by SIPC insurance. But such insurance is only needed because of the new structure. Also, is SIPC insurance enough? According to SIPC’s 2023 Annual Report, its Fund has about $4.5 billion and it has borrowing authority at the Treasury of $2.5 billion. Vanguard has informed me that it carries excess SIPC insurance with an aggregate of $250 million. That amounts to a total amount to pay claims of $7.250 billion. The maximum claim is $500,000. This implies that a total of 14,500 maximum claims could be paid. Clearly, most claims would be for much less than this. But Vanguard has 50 million customers and SIPC insures 3200+ brokers in addition to Vanguard. SIPC itself recognizes this as an issue, stating in its 2023 Annual Report “At the forefront of the Board’s concerns, therefore, is the adequacy of the SIPC Fund….”
So, what to do?
1. Accept the forced transition and hope for the best?
2. Challenge the legality of the forced transition? Individual investors simply do not have the resources to do this.
3. Transfer holdings to another broker? Doing so does not avoid the risk of potential broker failure.
4. Move some, not all, Vanguard holdings to other brokers so as to diversify broker failure risk? Possibly couple this with placing no new money with Vanguard but with other mutual fund providers that continue to offer mutual fund accounts?

I’m leaning towards number 4, but am still thinking about it.
Excellent post and points. I knew that there was a reason for being here. Thank you! I don't know how you got Vanguard to reveal that they carry $250M of excess SIPC insurance, but elsewhere it is not disclosed. That is not a lot vs. the competition, and it doesn't say if it limits individual account coverage, so much per account, as is revealed for some of the competition, nor who the insurer is, also revealed by some of the competition. This makes such excess SIPC insurance more than a mere marketing expense, I would aver.
I wouldn't consider the points around street ownership to be "excellent". FTX and Madoff were _not_ brokers! (Not in the legal SEC sense anyways) Their legal structures have zero resemblance to Vanguard's, comparing Vanguard to FTX or Madoff is nonsense. I would go so far as to call it FUD.

There are trillions of dollars in assets held in street name with zero problem. This isn't some newfangled approach by Vanguard.

Even when the Fed and Treasury let Lehman go under, not a single dime in assets held by Lehman on behalf of customers in brokerage accounts was lost. Those assets aren't on the broker's balance sheet, they are yours.
exodusNH
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Re: Vanguard is threatening forced transition within 30 days.

Post by exodusNH »

HawkeyePierce wrote: Thu Jun 27, 2024 9:06 pm There are trillions of dollars in assets held in street name with zero problem. This isn't some newfangled approach by Vanguard.
I've tried making this exact point.

It's a non-issue.

The level of fraud involved would be mind-boggling. Vanguard would have to commit fraud. Their auditors would have to overlook fraud. The custodian banks -- such as JP Morgan and Bank of NY Mellon would have to be complicit. The bank's auditors would have to also overlook it.

It's just one of those things people are latching onto because they don't want change.

At this point, it's really just the people whose employment situation requires monitoring of brokerage accounts that I can agree have legitimate concerns. I understand not wanting to have your employer monitoring everyone you and your spouse do.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

exodusNH wrote: Thu Jun 27, 2024 9:19 pm
HawkeyePierce wrote: Thu Jun 27, 2024 9:06 pm There are trillions of dollars in assets held in street name with zero problem. This isn't some newfangled approach by Vanguard.
I've tried making this exact point.

It's a non-issue.

The level of fraud involved would be mind-boggling. Vanguard would have to commit fraud. Their auditors would have to overlook fraud. The custodian banks -- such as JP Morgan and Bank of NY Mellon would have to be complicit. The bank's auditors would have to also overlook it.

It's just one of those things people are latching onto because they don't want change.

At this point, it's really just the people whose employment situation requires monitoring of brokerage accounts that I can agree have legitimate concerns. I understand not wanting to have your employer monitoring everyone you and your spouse do.
Outrage has been in a deflationary spiral for quite some time now.
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dagsboro
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Re: Vanguard is threatening forced transition within 30 days.

Post by dagsboro »

During my recent transition from legacy to brokerage as required by Vanguard, I found my Voyager phone representatives very helpful. "Kevin" in particular was meticulous in his explanations and he found an error which would have inconvenienced me. While most of the account transition process was straight forward, I did have difficulty interpreting the Vanguard explanations for whose signature goes where in the Electronic Bank Transfer form requiring notarizations of signatures. For me, excellent service is a very high priority and I believe that quality is remembered long after price is forgotten.
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XB70
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Re: Vanguard is threatening forced transition within 30 days.

Post by XB70 »

dagsboro wrote: Fri Jun 28, 2024 10:51 am During my recent transition from legacy to brokerage as required by Vanguard, I found my Voyager phone representatives very helpful. "Kevin" in particular was meticulous in his explanations and he found an error which would have inconvenienced me. While most of the account transition process was straight forward, I did have difficulty interpreting the Vanguard explanations for whose signature goes where in the Electronic Bank Transfer form requiring notarizations of signatures. For me, excellent service is a very high priority and I believe that quality is remembered long after price is forgotten.
Apparently it is not uncommon to screw up the transition, so having one's hand held through it, may be advisable. Thanks.
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XB70
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Re: Vanguard is threatening forced transition within 30 days.

Post by XB70 »

To reiterate "the issues" with "transitioning" from a legacy account to the all-brokerage account:
(1) Vanguard fund 1099s come week(s) faster in the all-Vanguard legacy accounts, but the question remains if this could be obviated by segregating one's Vanguard funds into a Vanguard-only brokerage account, leaving a non-Vanguard brokerage account for non-Vanguard assets. Unknown as of now; inquiry still pending.
(2) Loss of directed dividends from one Vanguard fund to another is claimed to have been fixed, if not yet rolled to all brokerage accounts. Although at least one poster here claims that it is not so, that there is time in a settlement account still for him, at least. As explained to me, it was to be direct, Vanguard fund to Vanguard fund, same-day, same-day pricing, no settlement fund time. Once I transition, I can report if it really works for me, as claimed, no loss in brokerage. Hope so.
(3) Loss of dollar cost averaging claimed by some, is not confirmed.
(4) IRA conversion losses are not confirmed.
(5) Loss of YTD fund reporting, has a work around, as discussed.
(6) Omnibus ownership of Vanguard funds in brokerage vs. legacy accounts is refuted by my rep's supervisor. True? I would welcome something definitive on this, albeit vehemently claimed by some posters here to be a red herring.
(7) Excess SIPC insurance of Vanguard's has been reported here in aggregate to be $250M by one poster, but not disclosed by Vanguard which only acknowledges having it, not any amount in aggregate, nor per account limits, nor who the insurer is. Why relevant? Because we will all be in brokerage eventually. Vanguard's competitors do reveal more about theirs, albeit theirs are mixed disclosures, Fidelity better than Schwab, I haven't looked at others. Is this just a "marketing expense," or it is a real thing, and knowing the actual numbers worthy of comparison, if we could get disclosure from Vanguard? Another red herring, or worth pursuit?
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SimpleGift
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Re: Vanguard is threatening forced transition within 30 days.

Post by SimpleGift »

XB70 wrote: Tue Jul 02, 2024 5:44 pm Apparently it is not uncommon to screw up the transition, so having one's hand held through it, may be advisable. Thanks.
Yes, we recently transitioned two mutual fund accounts from the old platform to the brokerage platform. We were helped immensely by first connecting with the Transition Team by phone, where we got a person who walked us through all the applications, signatures, and transition details. This individual even followed up a week later to check that our dividend and capital gain options, cost basis selections, checkwriting and agent authorizations were all in order. Thank you, Nathan!.

Can't recommend the Transition Team enough. They've been throught this process so many times by now, with so many diverse Vanguard clients, that they know well how to avoid the potential pitfalls.
Last edited by SimpleGift on Tue Jul 02, 2024 7:04 pm, edited 2 times in total.
02nz
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Re: Vanguard is threatening forced transition within 30 days.

Post by 02nz »

Doctor Rhythm wrote: Sat Jun 15, 2024 12:01 am
Vanguard funds can be traded and held elsewhere. Is there an advantage to holding them in a VBS account? This is not rhetorical, I am asking--anyone? How will Vanguard's mutual company status help me now? Should I move? Where?
Welcome to the forum.

I think a more useful question to ask is "How will moving my Vanguard mutual funds from Vanguard to another brokerage benefit me?"

For example:
-- will my transaction costs be lower?
-- will transactions process more quickly?
-- will money no longer need to pass through a sweep account (ie, can distributions from one Vanguard fund be immediately used to buy a different fund)?
-- will tax documents arrive earlier?
-- will the user experience be better (app, website, etc)?

I have accounts at two other brokerages besides Vanguard. For me, there is no meaningful advantage to be gained. That's why I haven't moved my portfolio out of Vanguard.
I'll add a question: How much can I earn in brokerage bonuses? In my case it has been 5 figures. :moneybag
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Re: Vanguard is threatening forced transition within 30 days.

Post by Dottie57 »

Gaston wrote: Sat Jun 15, 2024 3:15 am
Big Dog wrote: Sat Jun 15, 2024 12:11 am 1099's aren't legally due until the end of Jan
I didn’t know this. I’ve never received a 1099 from Fidelity before mid-February.
This. Am always waiting.
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Re: Vanguard is threatening forced transition within 30 days.

Post by tibbitts »

SimpleGift wrote: Tue Jul 02, 2024 6:26 pm
XB70 wrote: Tue Jul 02, 2024 5:44 pm Apparently it is not uncommon to screw up the transition, so having one's hand held through it, may be advisable. Thanks.
Yes, we recently transitioned two mutual fund accounts from the old platform to the brokerage platform. We were helped immensely by first connecting with the Transition Team by phone, where we got a person who walked us through all the applications, signatures, and transition details. This individual even followed up a week later to check that our dividend and capital gain options, cost basis selections, checkwriting and agent authorizations were all in order. Thank you, Nathan!.

Can't recommend the Transition Team enough. They've been throught this process so many times by now, with so many diverse Vanguard clients, that they know well how to avoid the potential pitfalls.
Certainly Vanguard discourages contacting them proactively vs. doing the transition online. Maybe doing so would have headed off my agent authorization problem... but I didn't know that would be a problem. Perhaps there isn't sufficient staff to accommodate everyone proactively calling to chat about their transition.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

I happened to transition our legacy MF account (all VG funds, of course) and didn't add any assets to the new brokerage account.

The brokerage statement was available one week after the MF 1099. "Weeks for a brokerage statement probably involve assets other than funds. Those assets would never be on the legacy system.

All we have is Divs -- no B, Int. The brokerage Div required one entry. The MF Divs required 8 entries (8 funds).
Last edited by jebmke on Tue Jul 02, 2024 7:40 pm, edited 1 time in total.
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telemark
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Re: Vanguard is threatening forced transition within 30 days.

Post by telemark »

Dottie57 wrote: Tue Jul 02, 2024 6:43 pm
Gaston wrote: Sat Jun 15, 2024 3:15 am
Big Dog wrote: Sat Jun 15, 2024 12:11 am 1099's aren't legally due until the end of Jan
I didnt know this. Ive never received a 1099 from Fidelity before mid-February.
This. Am always waiting.
Looking at my email log, I see a "Your tax form is available" from Fidelity dated January 19 of this year. Your experience may of course vary.
AQ
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Re: Vanguard is threatening forced transition within 30 days.

Post by AQ »

SimpleGift wrote: Tue Jul 02, 2024 6:26 pm
XB70 wrote: Tue Jul 02, 2024 5:44 pm Apparently it is not uncommon to screw up the transition, so having one's hand held through it, may be advisable. Thanks.
Yes, we recently transitioned two mutual fund accounts from the old platform to the brokerage platform. We were helped immensely by first connecting with the Transition Team by phone, where we got a person who walked us through all the applications, signatures, and transition details. This individual even followed up a week later to check that our dividend and capital gain options, cost basis selections, checkwriting and agent authorizations were all in order. Thank you, Nathan!.

Can't recommend the Transition Team enough. They've been throught this process so many times by now, with so many diverse Vanguard clients, that they know well how to avoid the potential pitfalls.
Do you or someone else mind sharing how to contact the Transition Team? I probably prefer a hand-holding process... Thanks!
rkhusky
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Re: Vanguard is threatening forced transition within 30 days.

Post by rkhusky »

We transitioned 4 accounts by clicking the button and had no issues and I imagine that is the experience of the vast majority of people with simple brokerage and IRA accounts.

I will be glad when Vanguard finally puts the old platform out of its misery and we can be done with all the kvetching and wasted CSR time for which we all pay.
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sycamore
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Re: Vanguard is threatening forced transition within 30 days.

Post by sycamore »

rkhusky wrote: Tue Jul 02, 2024 10:05 pm We transitioned 4 accounts by clicking the button and had no issues and I imagine that is the experience of the vast majority of people with simple brokerage and IRA accounts.

I will be glad when Vanguard finally puts the old platform out of its misery and we can be done with all the kvetching and wasted CSR time for which we all pay.
I have a feeling the old platform will be around a while -- there are certain customers who can't transition for various reasons. Like certain non-retail customers. Or so I read in a couple of threads.

And the website will continue to have problems, e.g. regarding things that happen with either a mutual fund only account or a brokerage account, which is to say a great majority of the web site functionality.

But, yes, it will be nice to eventually have fewer discussions about platform this and platform that, and more about fun stuff like US vs International, the long delayed return of small cap value outperformance, or even why did my fund suddenly drop in value? :)
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SimpleGift
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Re: Vanguard is threatening forced transition within 30 days.

Post by SimpleGift »

AQ wrote: Tue Jul 02, 2024 9:53 pm Do you or someone else mind sharing how to contact the Transition Team? I probably prefer a hand-holding process... Thanks!
We reached out by phone to our Flagship representative, who put us in touch with a Transition Team person. Whether this access is a perk just restricted to Flagship status at Vanguard ($1 to $5 million in household assets), I can't say.
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Oicuryy
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Re: Vanguard is threatening forced transition within 30 days.

Post by Oicuryy »

XB70 wrote: Tue Jul 02, 2024 6:18 pm (6) Omnibus ownership of Vanguard funds in brokerage vs. legacy accounts is refuted by my rep's supervisor. True? I would welcome something definitive on this, albeit vehemently claimed by some posters here to be a red herring.
This line from Vanguard's web site contradicts what the rep said.
Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and are not 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 is threatening forced transition within 30 days.

Post by alex_686 »

Oicuryy wrote: Tue Jul 02, 2024 11:54 pm
XB70 wrote: Tue Jul 02, 2024 6:18 pm (6) Omnibus ownership of Vanguard funds in brokerage vs. legacy accounts is refuted by my rep's supervisor. True? I would welcome something definitive on this, albeit vehemently claimed by some posters here to be a red herring.
This line from Vanguard's web site contradicts what the rep said.
Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and are not protected by SIPC. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC.
Ron
How does that snippet prove one thing or another?

Assets held in a brokerage account are protected by SIPC if held in a omnibus account or direct registration. Under either format assets are held by the brokerage. Maybe not “held held”, but the brokerage is responsible for statements and reporting and that what counts.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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Re: Vanguard is threatening forced transition within 30 days.

Post by alex_686 »

XB70 wrote: Tue Jul 02, 2024 6:18 pm (6) Omnibus ownership of Vanguard funds in brokerage vs. legacy accounts is refuted by my rep's supervisor. True? I would welcome something definitive on this, albeit vehemently claimed by some posters here to be a red herring.
I am curious - what did the supervisor say? Did they directly reference the network level and the registration level?

If so I would both be surprised and delighted. As I mentioned before this knowledge tends to be way out of most customer reps knowledge base.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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Re: Vanguard is threatening forced transition within 30 days.

Post by pawtucket »

Makefile wrote: Thu Jun 27, 2024 4:16 pm
retiringwhen wrote: Thu Jun 27, 2024 3:56 pm 5.) YTD report is supported, albeit by an alternative scheme using the Transaction history report. I personally use the download Center and get the data in a .csv file, much more useful. that worked for MF accounts, and it works everyday for my brokerage accounts. Transaction reports have been working well since at least 2018 and I use them every year to create and end of year report for archival purposes.
There are reports elsewhere that, by phone, you can have Vanguard set some flag on your brokerage account that will cause the December statement to have the whole year's worth of transaction-level detail for your mutual funds, giving parity on this issue with the mutual fund accounts.
I'm the person who originally brought up the YTD statements. And yes, I do use the transaction history report as a workaround, but still maintain that the YTD statement was a useful tool. I just called Vanguard to inquire about the option to receive YTD history. It did take a few minutes for the crew member to track it down as he wasn't aware of the feature, but he changed my statement options to include YTD transactions. It sounds like a general setting, so perhaps I'll see the results of this change as early as September quarter-end.

Thanks also to @retiringwhen for the guidance on directing dividends to another fund. Just made that change as well.
retiringwhen wrote: Wed Jun 26, 2024 10:23 pm
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

pawtucket wrote: Wed Jul 03, 2024 9:23 am
Makefile wrote: Thu Jun 27, 2024 4:16 pm
retiringwhen wrote: Thu Jun 27, 2024 3:56 pm 5.) YTD report is supported, albeit by an alternative scheme using the Transaction history report. I personally use the download Center and get the data in a .csv file, much more useful. that worked for MF accounts, and it works everyday for my brokerage accounts. Transaction reports have been working well since at least 2018 and I use them every year to create and end of year report for archival purposes.
There are reports elsewhere that, by phone, you can have Vanguard set some flag on your brokerage account that will cause the December statement to have the whole year's worth of transaction-level detail for your mutual funds, giving parity on this issue with the mutual fund accounts.
I'm the person who originally brought up the YTD statements. And yes, I do use the transaction history report as a workaround, but still maintain that the YTD statement was a useful tool. I just called Vanguard to inquire about the option to receive YTD history. It did take a few minutes for the crew member to track it down as he wasn't aware of the feature, but he changed my statement options to include YTD transactions. It sounds like a general setting, so perhaps I'll see the results of this change as early as September quarter-end.

Thanks also to @retiringwhen for the guidance on directing dividends to another fund. Just made that change as well.
retiringwhen wrote: Wed Jun 26, 2024 10:23 pm
That is good to know. When I get everything transitioned later this month, I'll ask them to switch our Household account to cumulative for December.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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Re: Vanguard is threatening forced transition within 30 days.

Post by tibbitts »

SimpleGift wrote: Tue Jul 02, 2024 10:36 pm
AQ wrote: Tue Jul 02, 2024 9:53 pm Do you or someone else mind sharing how to contact the Transition Team? I probably prefer a hand-holding process... Thanks!
We reached out by phone to our Flagship representative, who put us in touch with a Transition Team person. Whether this access is a perk just restricted to Flagship status at Vanguard ($1 to $5 million in household assets), I can't say.
As far as I can tell from threads here, virtually no Flagship accounts have a designated representative, so the fact that you still do is somewhat extraordinary. Basically it seems that you need $5M at Vanguard now to qualify for perks, including a dedicated rep.
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Re: Vanguard is threatening forced transition within 30 days.

Post by Oicuryy »

alex_686 wrote: Wed Jul 03, 2024 6:57 am
Oicuryy wrote: Tue Jul 02, 2024 11:54 pm
XB70 wrote: Tue Jul 02, 2024 6:18 pm (6) Omnibus ownership of Vanguard funds in brokerage vs. legacy accounts is refuted by my rep's supervisor. True? I would welcome something definitive on this, albeit vehemently claimed by some posters here to be a red herring.
This line from Vanguard's web site contradicts what the rep said.
Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and are not protected by SIPC. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC.
Ron
How does that snippet prove one thing or another?

Assets held in a brokerage account are protected by SIPC if held in a omnibus account or direct registration. Under either format assets are held by the brokerage. Maybe not “held held”, but the brokerage is responsible for statements and reporting and that what counts.
The Vanguard Group, Inc. is the transfer agent for Vanguard mutual funds.

DTCC says this about their Direct Registration System.
DRS provides investors with an alternative to holding their securities in certificate or “street” form. Under DRS, investors can elect to have their securities registered directly on the issuer’s records in book-entry form. With DRS, the investor does not receive a physical certificate, instead receiving periodic account statements (at least yearly) from the transfer agent or issuer evidencing holdings. Dividend/interest payments, proxy materials, annual reports, etc., are mailed from the issuer or its transfer agent directly to the investor.
https://www.dtcc.com/settlement-and-ass ... ion-system

Does VBS offer that or something equivalent to that as a way to hold Vanguard mutual funds?

Even though The Vanguard Group, Inc. owns Vanguard Marketing Corporation, they are separate legal entities. SIPC says "SIPC steps in when a brokerage firm fails financially, and assets are missing from customer accounts." Holding shares at the transfer agent avoids the risk that they will be missing from customer accounts at the brokerage.

Ron
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Re: Vanguard is threatening forced transition within 30 days.

Post by alex_686 »

Oicuryy wrote: Wed Jul 03, 2024 10:14 am
alex_686 wrote: Wed Jul 03, 2024 6:57 am
Oicuryy wrote: Tue Jul 02, 2024 11:54 pm
XB70 wrote: Tue Jul 02, 2024 6:18 pm (6) Omnibus ownership of Vanguard funds in brokerage vs. legacy accounts is refuted by my rep's supervisor. True? I would welcome something definitive on this, albeit vehemently claimed by some posters here to be a red herring.
This line from Vanguard's web site contradicts what the rep said.
Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and are not protected by SIPC. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC.
Ron
How does that snippet prove one thing or another?

Assets held in a brokerage account are protected by SIPC if held in a omnibus account or direct registration. Under either format assets are held by the brokerage. Maybe not “held held”, but the brokerage is responsible for statements and reporting and that what counts.
The Vanguard Group, Inc. is the transfer agent for Vanguard mutual funds.

DTCC says this about their Direct Registration System.
DRS provides investors with an alternative to holding their securities in certificate or “street” form. Under DRS, investors can elect to have their securities registered directly on the issuer’s records in book-entry form. With DRS, the investor does not receive a physical certificate, instead receiving periodic account statements (at least yearly) from the transfer agent or issuer evidencing holdings. Dividend/interest payments, proxy materials, annual reports, etc., are mailed from the issuer or its transfer agent directly to the investor.
https://www.dtcc.com/settlement-and-ass ... ion-system

Does VBS offer that or something equivalent to that as a way to hold Vanguard mutual funds?

Even though The Vanguard Group, Inc. owns Vanguard Marketing Corporation, they are separate legal entities. SIPC says "SIPC steps in when a brokerage firm fails financially, and assets are missing from customer accounts." Holding shares at the transfer agent avoids the risk that they will be missing from customer accounts at the brokerage.

Ron
I don’t think DRS is for retail clients but it had been a few years sincecI have had to deal with this.

I was referring to the network level - but it looks like have overhauled this a bit since I last worked with this.

https://dtcclearning.com/products-and-s ... els-2.html

I would think the VBS would only offer a single way to handle registration. All brokers that I know only offer a single method per fund. Networking is a complex fussy system.

I know there is much hand wringing over this but they are functional the same. While I can think of many operational impacts I can’t think of any case where the registration method had any impact.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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Re: Vanguard is threatening forced transition within 30 days.

Post by Oicuryy »

Thank you for posting that link. Level 3 looks like what Vanguard wants to accomplish by offloading retail customers onto brokers. Level 4 says shareholders can deal with either the firm or the fund. Are those of you with VBS accounts able to deal directly with Vanguard mutual funds?

I might not be so worried about it if Vanguard had not made such a big deal about SIPC protection. They have convinced me that there is a real risk of VBS not having the shares they are supposed to have.

Ron
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Re: Vanguard is threatening forced transition within 30 days.

Post by alex_686 »

Oicuryy wrote: Wed Jul 03, 2024 12:15 pm Level 4 says shareholders can deal with either the firm or the fund. Are those of you with VBS accounts able to deal directly with Vanguard mutual funds?
Eh, I wouldn’t read much into that.

One can have a level 4 networking even if Vanguard shuts down its customer support line. Level 4 gives you this theoretical ability however it isn’t a requirement.

Like a iceberg, most if the difference is operational, thus below the waterline, invisible to the customer. Most of the different is who calculates shares owned, dividend reinvestment, income calculations.

25 years ago one could call up the fund sponsor directly to fiddle around with dividend distributions. However this was mostly a theoretical ability. You would need the fund and account details and prove you were actually who you were. It was easier for your broker to do this.

You are not going to get a answer by trying to read tea leaves or anything like that. There isn’t going to be anything obviously different between the two types.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jeffyscott »

sycamore wrote: Tue Jul 02, 2024 10:18 pm
rkhusky wrote: Tue Jul 02, 2024 10:05 pm We transitioned 4 accounts by clicking the button and had no issues and I imagine that is the experience of the vast majority of people with simple brokerage and IRA accounts.

I will be glad when Vanguard finally puts the old platform out of its misery and we can be done with all the kvetching and wasted CSR time for which we all pay.
I have a feeling the old platform will be around a while -- there are certain customers who can't transition for various reasons. Like certain non-retail customers. Or so I read in a couple of threads.

And the website will continue to have problems, e.g. regarding things that happen with either a mutual fund only account or a brokerage account, which is to say a great majority of the web site functionality.

But, yes, it will be nice to eventually have fewer discussions about platform this and platform that, and more about fun stuff like US vs International, the long delayed return of small cap value outperformance, or even why did my fund suddenly drop in value? :)
You do know that you don't have to read the discussion, right?

And there's an unsubscribe option at the bottom of each topic. I'm exercising that choice right after this post, myself. I only checked in on this because I was curious to hear if anyone would actually have accounts unilaterally moved by Vanguard.
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Re: Vanguard is threatening forced transition within 30 days.

Post by lazynovice »

Dottie57 wrote: Tue Jul 02, 2024 6:43 pm
Gaston wrote: Sat Jun 15, 2024 3:15 am
Big Dog wrote: Sat Jun 15, 2024 12:11 am 1099's aren't legally due until the end of Jan
I didn’t know this. I’ve never received a 1099 from Fidelity before mid-February.
This. Am always waiting.
1099-Div and 1099-Misc aren’t due until Feb 15 o the first business day thereafter.
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Re: Vanguard is threatening forced transition within 30 days.

Post by exodusNH »

Oicuryy wrote: Wed Jul 03, 2024 12:15 pm
Thank you for posting that link. Level 3 looks like what Vanguard wants to accomplish by offloading retail customers onto brokers. Level 4 says shareholders can deal with either the firm or the fund. Are those of you with VBS accounts able to deal directly with Vanguard mutual funds?

I might not be so worried about it if Vanguard had not made such a big deal about SIPC protection. They have convinced me that there is a real risk of VBS not having the shares they are supposed to have.

Ron
No.

It is nothing to worry about. You are working yourself into a tizzy for what is an infinitesimal issue. You're hundreds of more times likely to get into an accident this week than having any sort of problem related to direct registration vs street name.

Every single one of Vanguard's customers who has opened an account there in the past decade has had a brokerage account. There have not been any issues. Nor will there be.
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Re: Vanguard is threatening forced transition within 30 days.

Post by AQ »

Forgive my ignorance. I've been very surprised about this much discussion on SPIC insurance for VG. I thought that won't be no issue for any major brokerage firms, and in any case SPIC's limit is quite small for many people in this forum. I rarely hear suggestions of spreading your assets over many brokerages to increase your SPIC coverage unlike for people with large cash amounts deposited in multiple banks for FDIC insurance. Nor did I hear similar concerns with Fidelity / Schwab or other brokerage. I admit I didn't read carefully about these debates and it's difficult for me to follow. Should I really need to be concerned about my security safety held with a brokerage, or this concern is specifically for Vanguard only? I wanted to dismiss this as a no-issue until I noticed VG advertises its SPIC insurance coverage for its brokerage, and make it more important than I previously assumed. Confused.. :?

I guess my question is: for those making SPIC a big issue, what is your advice on what we should do? now that we have to move out from VG legacy mutual fund platform, should we avoid VG brokerage if our assets exceed SPIC limit, and move assets to other safer brokerages?
Last edited by AQ on Wed Jul 03, 2024 5:12 pm, edited 1 time in total.
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Re: Vanguard is threatening forced transition within 30 days.

Post by David Jay »

AQ wrote: Wed Jul 03, 2024 5:02 pm Forgive my ignorance. I've been very surprised about this much discussion on SPIC insurance for VG. I thought that won't be no issue for any major brokerage firms, and in any case SPIC's limit is quite small for many people in this forum. I rarely hear suggestions of spreading your assets over many brokerages to increase your SPIC coverage unlike for people with large cash amounts deposited in multiple banks for FDIC insurance. Nor did I hear similar concerns with Fidelity / Schwab or other brokerage. I admit I didn't read carefully about these debates and it's difficult for me to follow. Should I really need to be concerned about my security safety held with a brokerage, or this concern is specifically for Vanguard only? I wanted to dismiss this as a no-issue until I noticed VG advertises its SPIC insurance coverage for its brokerage, and make it more important than I previously assumed. Confused.. :?
No need to be concerned. This is just a point of contention for those who don't want to transition from their mutual-fund-only accounts.
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Re: Vanguard is threatening forced transition within 30 days.

Post by alex_686 »

AQ wrote: Wed Jul 03, 2024 5:02 pm Forgive my ignorance. I've been very surprised about this much discussion on SPIC insurance for VG. I thought that won't be no issue for any major brokerage firms, and in any case SPIC's limit is quite small for many people in this forum. I rarely hear suggestions of spreading your assets over many brokerages to increase your SPIC coverage unlike for people with large cash amounts deposited in multiple banks for FDIC insurance. Nor did I hear similar concerns with Fidelity / Schwab or other brokerage. I admit I didn't read carefully about these debates and it's difficult for me to follow. Should I really need to be concerned about my security safety held with a brokerage, or this concern is specifically for Vanguard only? I wanted to dismiss this as a no-issue until I noticed VG advertises its SPIC insurance coverage for its brokerage, and make it more important than I previously assumed. Confused.. :?
Vanguard marketed this as a benefit to transition from the mutual fund platform to the brokerage platform.

As you have suggested the value of this benefit is questionable. You are moving from one super safe system to a different super safe system. The differences and risks between the two are very small, very technical, and super nuanced. Boggleheads like making mountains out of molehills.

Having worked with marketers I can see why they added this. It looks good on the copy. People have many irrationally fears when it comes to brokerages.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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Re: Vanguard is threatening forced transition within 30 days.

Post by anagram »

alex_686 wrote: Wed Jul 03, 2024 5:16 pm
AQ wrote: Wed Jul 03, 2024 5:02 pm Forgive my ignorance. I've been very surprised about this much discussion on SPIC insurance for VG. I thought that won't be no issue for any major brokerage firms, and in any case SPIC's limit is quite small for many people in this forum. I rarely hear suggestions of spreading your assets over many brokerages to increase your SPIC coverage unlike for people with large cash amounts deposited in multiple banks for FDIC insurance. Nor did I hear similar concerns with Fidelity / Schwab or other brokerage. I admit I didn't read carefully about these debates and it's difficult for me to follow. Should I really need to be concerned about my security safety held with a brokerage, or this concern is specifically for Vanguard only? I wanted to dismiss this as a no-issue until I noticed VG advertises its SPIC insurance coverage for its brokerage, and make it more important than I previously assumed. Confused.. :?
Vanguard marketed this as a benefit to transition from the mutual fund platform to the brokerage platform.

As you have suggested the value of this benefit is questionable. You are moving from one super safe system to a different super safe system. The differences and risks between the two are very small, very technical, and super nuanced. Boggleheads like making mountains out of molehills.

Having worked with marketers I can see why they added this. It looks good on the copy. People have many irrationally fears when it comes to brokerages.
I don't think that SPIC or FDIC should be used for "marketing".

Maybe the Boggleheads are making mountains out of molehills, not sure what the Bogleheads are doing.
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Re: Vanguard is threatening forced transition within 30 days.

Post by Feldman »

Is anyone in this thread actually open to having their mind changed by presentation of facts or experience?
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

Feldman wrote: Thu Jul 04, 2024 1:36 pm Is anyone in this thread actually open to having their mind changed by presentation of facts or experience?
Sure; I look for posts that might trigger a concern with respect to how I currently use a brokerage account or something that catches my attention because it might affect me in the future. For example, I am particularly alert to specific descriptions of transaction errors or online security concerns.

edit: reporting errors that are corrected concern me less; I've seen some horrendous ones at other brokers with tax clients I serve.

Recently, someone posted somewhere that POA holders could not transfer money from a Fidelity account to the accountholder's bank online; the assertion was that it required a phone transaction or in-person. I'm not a Fidelity customer but I made note in case I were ever to decide to leave VG.

Unfortunately, the threads are riddled with whining and grievances so it makes it difficult to comb through that flow to pick out the nuggets.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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Re: Vanguard is threatening forced transition within 30 days.

Post by rkhusky »

Feldman wrote: Thu Jul 04, 2024 1:36 pm Is anyone in this thread actually open to having their mind changed by presentation of facts or experience?
I would be open to statistically relevant facts. Anecdotal reports from a biased source are not worth much for decision making. Anecdotes can be used for creating a list of things to watch out for at any brokerage.
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Re: Vanguard is threatening forced transition within 30 days.

Post by Northern Flicker »

HawkeyePierce wrote: I wouldn't consider the points around street ownership to be "excellent". FTX and Madoff were _not_ brokers! (Not in the legal SEC sense anyways) Their legal structures have zero resemblance to Vanguard's, comparing Vanguard to FTX or Madoff is nonsense. I would go so far as to call it FUD.

There are trillions of dollars in assets held in street name with zero problem. This isn't some newfangled approach by Vanguard.

Even when the Fed and Treasury let Lehman go under, not a single dime in assets held by Lehman on behalf of customers in brokerage accounts was lost. Those assets aren't on the broker's balance sheet, they are yours.
I agree with your conclusion that assets are safe held in a Vanguard brokerage account, but disagree with your reasoning. First, B. Madoff was a broker, regulated by FINRA, and covered by SIPC. That's why Madoff's victims were able to file SIPC claims to cover some of their losses:

https://www.investmentnews.com/industry-news/archive/why-is-sipc-covering-madoff-investors-23191

There also was an asset management arm that did not actually buy a lot of the securities reported on account statements, which is a difference, and why SIPC coverage was not clear cut.

While something similar to what happened at Madoff's firm theoretically could happen at a large organization like Vanguard, Fidelity, or Schwab, it would take a very large, grand conspiracy of a very large number of employees of the brokerage and of auditors over an extended period to make it happen. New hires at the brokerage and auditing firm would have to agree to be part of the conspiracy. Madoff's brokerage firm was very small (a handful of family members), and had an individual serving as an auditor

Vanguard and Fidelity (and presumably many other large brokerages) carry extended insurance beyond the SIPC limits. That ultimately is the backstop that makes the assets safe, though the other considerations described above make it extremely unlikely that SIPC coverage or the extended insurance coverage ever would be needed.

Lastly, the transparency of investing in assets that track a 3rd party index also provides some protection against what happened in Madoff's firm. If the brokerage says your index fund returned 5% last quarter, and the index lost 5%, you know you have a problem.
Last edited by Northern Flicker on Thu Jul 04, 2024 3:57 pm, edited 1 time in total.
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Re: Vanguard is threatening forced transition within 30 days.

Post by sycamore »

jeffyscott wrote: Wed Jul 03, 2024 12:38 pm
sycamore wrote: Tue Jul 02, 2024 10:18 pm
rkhusky wrote: Tue Jul 02, 2024 10:05 pm We transitioned 4 accounts by clicking the button and had no issues and I imagine that is the experience of the vast majority of people with simple brokerage and IRA accounts.

I will be glad when Vanguard finally puts the old platform out of its misery and we can be done with all the kvetching and wasted CSR time for which we all pay.
I have a feeling the old platform will be around a while -- there are certain customers who can't transition for various reasons. Like certain non-retail customers. Or so I read in a couple of threads.

And the website will continue to have problems, e.g. regarding things that happen with either a mutual fund only account or a brokerage account, which is to say a great majority of the web site functionality.

But, yes, it will be nice to eventually have fewer discussions about platform this and platform that, and more about fun stuff like US vs International, the long delayed return of small cap value outperformance, or even why did my fund suddenly drop in value? :)
You do know that you don't have to read the discussion, right?
Yes, I do.
jeffyscott wrote: Wed Jul 03, 2024 12:38 pm ...I only checked in on this because I was curious to hear if anyone would actually have accounts unilaterally moved by Vanguard.
Me, too.
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Re: Vanguard is threatening forced transition within 30 days.

Post by alex_686 »

Northern Flicker wrote: Thu Jul 04, 2024 3:41 pm Lastly, the transparency of investing in assets that track a 3rd party index also provides some protection against what happened in Madoff's firm. If the brokerage says your index fund returned 5% last quarter, and the index lost 5%, you know you have a problem.
So you are a bit off. Lets say Madoff Securities, which wasn’t enrolled in SIPC, said it purchased a security that tracked a 3rd party index, generated a statement that your security went up by 5% just like the index. How is that safer?

I mean, the statement is fraudulent. Period. Heck, and much easier to fake index returns than options trading.

Which, is as you say, SIPC coverage was far from clear cut. 1) fraudulent transactions 2) at a firm outside of SIPC coverage. Either should disqualify claims.

I understand why people got confused. Madoff Securities Investment wasn’t some small firm. It was at the top of the game when it came to market making and brokerage. Lots of firms would hire the firm for execution of trades even if the trades settled at a different firm. i.e. the prime broker.
Last edited by alex_686 on Thu Jul 04, 2024 4:27 pm, edited 2 times in total.
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jeffyscott
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Re: Vanguard is threatening forced transition within 30 days.

Post by jeffyscott »

sycamore wrote: Thu Jul 04, 2024 3:56 pm
jeffyscott wrote: Wed Jul 03, 2024 12:38 pm ...I only checked in on this because I was curious to hear if anyone would actually have accounts unilaterally moved by Vanguard.
Me, too.
:sharebeer

And now I just learned something new, even if I am not subscribed I still get notified if someone quotes me.
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Re: Vanguard is threatening forced transition within 30 days.

Post by Northern Flicker »

alex_686 wrote: Thu Jul 04, 2024 4:16 pm
Northern Flicker wrote: Thu Jul 04, 2024 3:41 pm Lastly, the transparency of investing in assets that track a 3rd party index also provides some protection against what happened in Madoff's firm. If the brokerage says your index fund returned 5% last quarter, and the index lost 5%, you know you have a problem.
So you are a bit off. Lets say Madoff Securities, which wasn’t enrolled in SIPC, said it purchased a security that tracked a 3rd party index, generated a statement that your security went up by 5% just like the index. How is that safer?
Where did I say it was safer, or even as safe? I said it would provide some protection. It would have enabled Madoff's customers to know that the juicy returns they thought they were getting reliably quarter after quarter were fiction much earlier in the process. There would not have been a culture of people telling friends and family "Just give your money to Bernie. You'll do fine." That is all. How much that would have helped them is unclear. If the broker says you are holding an index ETF, sends statements consistent with that, but never invests your money and uses it for the benefit of other obligations or personal benefit, you still are hosed without a backstop.
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XB70
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Re: Vanguard is threatening forced transition within 30 days.

Post by XB70 »

alex_686 wrote: Wed Jul 03, 2024 8:42 am
XB70 wrote: Tue Jul 02, 2024 6:18 pm (6) Omnibus ownership of Vanguard funds in brokerage vs. legacy accounts is refuted by my rep's supervisor. True? I would welcome something definitive on this, albeit vehemently claimed by some posters here to be a red herring.
I am curious - what did the supervisor say? Did they directly reference the network level and the registration level?

If so I would both be surprised and delighted. As I mentioned before this knowledge tends to be way out of most customer reps knowledge base.
No, the supervisor didn't reference "the network level" nor "the registration level." Perhaps a careful explanation of those, would be indicated; I would welcome it in this context, so that when I next speak with this person, I know how to question him. Maybe if I understood this stuff, I could be directed up to the next level so that I could try to get a definitive answer. Thanks in advance.
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XB70
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Re: Vanguard is threatening forced transition within 30 days.

Post by XB70 »

pawtucket wrote: Wed Jul 03, 2024 9:23 am
Makefile wrote: Thu Jun 27, 2024 4:16 pm
retiringwhen wrote: Thu Jun 27, 2024 3:56 pm 5.) YTD report is supported, albeit by an alternative scheme using the Transaction history report. I personally use the download Center and get the data in a .csv file, much more useful. that worked for MF accounts, and it works everyday for my brokerage accounts. Transaction reports have been working well since at least 2018 and I use them every year to create and end of year report for archival purposes.
There are reports elsewhere that, by phone, you can have Vanguard set some flag on your brokerage account that will cause the December statement to have the whole year's worth of transaction-level detail for your mutual funds, giving parity on this issue with the mutual fund accounts.
I'm the person who originally brought up the YTD statements. And yes, I do use the transaction history report as a workaround, but still maintain that the YTD statement was a useful tool. I just called Vanguard to inquire about the option to receive YTD history. It did take a few minutes for the crew member to track it down as he wasn't aware of the feature, but he changed my statement options to include YTD transactions. It sounds like a general setting, so perhaps I'll see the results of this change as early as September quarter-end.

Thanks also to @retiringwhen for the guidance on directing dividends to another fund. Just made that change as well.
retiringwhen wrote: Wed Jun 26, 2024 10:23 pm
I hope that you can report if the change, configuration change, profile setting, whatever it is was, in fact, gets you back to what you had before. Let us know, please.
alex_686
Posts: 13657
Joined: Mon Feb 09, 2015 1:39 pm

Re: Vanguard is threatening forced transition within 30 days.

Post by alex_686 »

XB70 wrote: Tue Jul 09, 2024 3:47 pm
alex_686 wrote: Wed Jul 03, 2024 8:42 am
XB70 wrote: Tue Jul 02, 2024 6:18 pm (6) Omnibus ownership of Vanguard funds in brokerage vs. legacy accounts is refuted by my rep's supervisor. True? I would welcome something definitive on this, albeit vehemently claimed by some posters here to be a red herring.
I am curious - what did the supervisor say? Did they directly reference the network level and the registration level?

If so I would both be surprised and delighted. As I mentioned before this knowledge tends to be way out of most customer reps knowledge base.
No, the supervisor didn't reference "the network level" nor "the registration level." Perhaps a careful explanation of those, would be indicated; I would welcome it in this context, so that when I next speak with this person, I know how to question him. Maybe if I understood this stuff, I could be directed up to the next level so that I could try to get a definitive answer. Thanks in advance.
You will want to reread my prior posts. I even provided a link to DTCC which explained the difference between the 2 network levels.

Here is the link again.

https://dtcclearning.com/products-and-s ... els-2.html

The question is: Are the shares being held in a omnibus account or Level 3 (what you called "Street Name"). Or are the shares being held with direct registration or Level 4.

You will need to ask this question for each and every fund. I has been a long long time since I have every seen any statement give any indication on what level a fund was held and that was because we held the client's physical shares in our vault. There are no required difference in discourses one way or the other. I have never seen a enterprise system flag which way a account was registered unless one working with the custodial subsystems which tend to be highly restricted.

This is a very nuanced question.

However, as has been suggested by others, the is no practical difference between the 2. I work in risk management. At good chunk of that is spent with counterparty risk. This is way, way off the radar. It may come up once a year as a issue for our diester recovery exercise where we assume operations have been shut down due to volcano, terrorist action, or pandemic. (yes, that was in the playbook prior to 2019).

Seriously, what is your use case where this would make a difference?

On that, I do want to encourage any curiosity people have on how these things work. Curiosity is good.

The broker can switch between these two methods at any time. They don't have to inform you of the change.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Hogan773
Posts: 895
Joined: Thu May 07, 2015 11:14 am

Re: Vanguard is threatening forced transition within 30 days.

Post by Hogan773 »

anagram wrote: Thu Jun 20, 2024 5:00 pm
celia wrote: Sun Jun 16, 2024 2:41 am ...and it's not "hostile".

OP, Look at the new features you will get instead of what you think are negative draw-backs.

New features I've seen:
* can hold more kinds of assets
* more ways to query your accounts (takes a while to get the hang of it, though)
* at least 20 years of past history can be seen
* can set more things on "automatic" (taking RMDs, pulling/pushing money from an outside account on a regular basis)
* if over 70.5, you can enter data for a QCD and the check will be mailed to you without you needing to call in
* I don't have any employer plans but I think they can now show up as part of your portfolio
It is hostile. Most of the replies are from people who think Vanguard will lower ERs as a result of the forced transition. I doubt this will happen. I also doubt Vanguard will move all current users of the mutual fund platform. What about investment advisors? What about 401k plans? What about those who cannot for professional reasons use a brokerage?

All the new features are not relevant to those who hold only Vangard mutual funds like the OP.
VG has become very pushy on this

There are some people who work for other broker dealers who literally are not allowed to hold brokerage accounts at other firms, so if VG can't find a way to keep their accounts as mutual fund accounts, those people will leave VG. Not by choice, by necessity
jebmke
Posts: 27396
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

Hogan773 wrote: Thu Jul 11, 2024 5:45 pm
anagram wrote: Thu Jun 20, 2024 5:00 pm
celia wrote: Sun Jun 16, 2024 2:41 am ...and it's not "hostile".

OP, Look at the new features you will get instead of what you think are negative draw-backs.

New features I've seen:
* can hold more kinds of assets
* more ways to query your accounts (takes a while to get the hang of it, though)
* at least 20 years of past history can be seen
* can set more things on "automatic" (taking RMDs, pulling/pushing money from an outside account on a regular basis)
* if over 70.5, you can enter data for a QCD and the check will be mailed to you without you needing to call in
* I don't have any employer plans but I think they can now show up as part of your portfolio
It is hostile. Most of the replies are from people who think Vanguard will lower ERs as a result of the forced transition. I doubt this will happen. I also doubt Vanguard will move all current users of the mutual fund platform. What about investment advisors? What about 401k plans? What about those who cannot for professional reasons use a brokerage?

All the new features are not relevant to those who hold only Vangard mutual funds like the OP.
VG has become very pushy on this

There are some people who work for other broker dealers who literally are not allowed to hold brokerage accounts at other firms, so if VG can't find a way to keep their accounts as mutual fund accounts, those people will leave VG. Not by choice, by necessity
That die is cast.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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