Vanguard request to 'upgrade'

[Tailgate]

Received notice from Vanguard via email.. partial contents say

We recently notified you that we're simplifying our account structure to better serve you, and we need your help.

What you can expect
With the new structure, you'll be able to hold your Vanguard mutual funds in the same account as your Vanguard exchange-traded funds (ETFs), stocks, bonds, certificates of deposit (CDs), and funds and ETFs from other companies. You'll have greater investment flexibility and help us streamline our operations.

Please act by December 19, 2014
This change won't cost you a thing, but we need your permission to move your Vanguard mutual funds, including your money market settlement fund, into brokerage accounts. If you don't already have a brokerage account, our online process will guide you through opening one and requesting a transfer of your mutual fund assets into it. Then you can enjoy these features:



Accounts that can hold any type of asset.

A simpler online process for buying and selling investments.

Proceeds from stock sales immediately available to buy Vanguard funds—no more four-day wait.

One annual tax statement, starting in the tax year after you move to the new account structure.

I'm not quite sure about this. What is Vanguard trying to accomplish with this move? Is it a good move for investors?

 

[pb4uski]

As I understand it, this will just consolidate the holdings in your mutual fund and brokerage accounts (if you have a brokerage account) into one brokerage account. I think it makes a lot of sense and am looking forward to doing the consolidation as dealing with two accounts is a small PITA.

 

[2B]

I haven't received this email. Could it be a Phishing attempt? How does the email say you should authorize this change?

If it's legitimate, I don't see what difference it would make to me.

 

[NW-Bound]

They are just catching up with other brokerages.

Disclosure: I have accounts with Vanguard, Schwab, Scottrade, and Merrill Edge.

 

[Tailgate]

I haven't received this email. Could it be a Phishing attempt? How does the email say you should authorize this change?

If it's legitimate, I don't see what difference it would make to me.

The change is authorized by logging onto your account at the Vanguard site..it's legit.

 

[2017ish]

Not a scam/phish.

It has been rolling out for a very long time. See Boglehead threads discussing it ad nauseam.

 

[teejayevans]

I did conversion, not really a big change, I wanted to do it before year end


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[RE2Boys]

Double check that it won't cost you anything. I'm at a competing brokerage and they would consolidate the mutual funds with the brokerage for no one time fee but then I'd be on the hook for a $40 annual fee. Just starting the process of moving more accounts to Vanguard.

 

[redduck]

I may be the one to thank for the consolidation of the mutual funds with the brokerage account. Seems like I would call Vanguard every 2-3 months because I was confused re: the difference between the mutual funds and the brokerage account. I mainly wanted to know what the mutual fund account was called and how could I get funds from the mutual fund account (it wasn't called that, it's just a descriptive phrase) into the brokerage account and why couldn't I just buy an ETF and have it mixed in with the mutual funds?

According to Vanguard's website, the consolidation is totally free.

 

[nash031]

I did it about a month ago. Simplified my overall view and made my taxable accounts all pretty much rolled into one. Not sure why they hadn't done it sooner... individual stocks, Vanguard funds, and non-Vanguard mutual funds all together now, simplifying that whole "bucket."

 

[pb4uski]

I talked with my account rep today. He said that with the new account form that you can't have your cash dividends transferred directly to your bank account like I do now. They would go into the MM and then I would have to manually do a sale of the MM and transfer the proceeds to my bank account. Also, that I would have to set up all my bank accounts again. I kiddingly asked him if this was all part of their new customer inconvenience program. I'll probably wait until next year to do it.

 

[easysurfer]

... Also, that I would have to set up all my bank accounts again. I kiddingly asked him if this was all part of their new customer inconvenience program. I'll probably wait until next year to do it.

"The customer inconvenience program" How did your rep respond when you asked that?

I thought about complying and making the "upgrade" last night. But I only use mutual funds and you mention of having to set up all the bank accounts again makes me think I'll pass and hold onto the trusty old way of doing things.

 

[target2019]

My initial reading of the conversion to brokerage notice was that it wasn't optional. I haven't received any further communication from VG about this since I received the general statement about it back in September 2014.

 

[easysurfer]

My initial reading of the conversion to brokerage notice was that it wasn't optional. I haven't received any further communication from VG about this since I received the general statement about it back in September 2014.

I think it's a case of VG really really wanting you to convert but need your permission before doing so. Otherwise, I'd think they just do the convert and tell us later. The improved (depending on your perspective ) version.

I may go ahead and just convert just to get that out of the way.

 

[ChicagoGal]

I received the notice a few months ago and converted. Completely painless, as I already had both a mutual fund account and a brokerage account (to consolidate and hold the bits and pieces of individual stocks I had accumulated while trying to figure out the best time to sell them).

And I agree, much better to have all in one! When I opened my Vanguard accounts in May, I couldn't really understand why I had to have them separate in the first place.

 

[Willers]

Also, that I would have to set up all my bank accounts again. I kiddingly asked him if this was all part of their new customer inconvenience program. I'll probably wait until next year to do it.

I did the conversion and my bank info came over automatically. In fact, my account came over twice since our bank added an "optional" digit to our account which it added to the 2nd account setup. I guess I'll delete one.




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[grasshopper]

Question how did the conversion affect Quicken if you did it. I still haven't been asked and already have brokerage and MF accounts along with retirement accounts.

 

[Willers]

I only use quicken updates for prices so I'm not sure about transactional links.


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[FUEGO]

I hope we can opt out of any consolidation. Since DW still works for a FINRA regulated entity, we can't have a brokerage account at Vanguard (because it's not one of the approved custodians with our compliance department). We have extensive MF holdings at VG but will be out of compliance if they are held in a brokerage account at VG. DW will probably quit working soon anyway, so maybe this won't impact us.

 

[braumeister]

... part of their new customer inconvenience program.

This is exactly the kind of thing that sent the majority of my portfolio over to Fidelity about seven or eight years ago. I've never been anything but happy with their customer service. I keep one account at Vanguard with a couple of funds in it, but that's it.

 

[easysurfer]

I hope we can opt out of any consolidation. Since DW still works for a FINRA regulated entity, we can't have a brokerage account at Vanguard (because it's not one of the approved custodians with our compliance department). We have extensive MF holdings at VG but will be out of compliance if they are held in a brokerage account at VG. DW will probably quit working soon anyway, so maybe this won't impact us.

More details described on VG's pdf file. From page 7:

When do I need to act?

While you’re not required to move your assets at this
time, we’re asking you to act now so that you can join
the thousands who are enjoying the benefi ts of the
new account structure.

http://www.vanguard.com/pdf/faqbroch_122014.pdf

I'm holding off until I have to act

 

[calmloki]

We swapped - no worse or better than any other company revision. We ended up with our two accounts (hers and mine, with each other as beneficiary) proper on the registration details, but with my account shown as "hers and mine" in the account list, and with her account shown as "mine and hers and mine". We are assured they will get it corrected in 3-4 days. About as fun as when the bank changes it's software and all the autopayments I have set up have to be re-entered. Or when the garbage company changes it's software and I have to re-register for all the places and set up payments again.

Somehow I suspect there is a push by companies to make all these great changes right at year end. For our convenience of course.

 

[pb4uski]

I hope we can opt out of any consolidation. Since DW still works for a FINRA regulated entity, we can't have a brokerage account at Vanguard (because it's not one of the approved custodians with our compliance department). We have extensive MF holdings at VG but will be out of compliance if they are held in a brokerage account at VG. DW will probably quit working soon anyway, so maybe this won't impact us.

From the discussion I had with my rep, it is optional for existing accounts but at some point in the near future new accounts will be set up as brokerage accounts. The rep said that it may take as long as a decade to do the conversions so it didn't sound to me like they will be pushing it very hard.

We have 6 different accounts at VG (his, hers and ours taxable, his and hers Roth and his tiRA) and only my tIRA has both a mutual fund and brokerage account so perhaps I'll convert that one and leave the rest.

 

[pb4uski]

This is exactly the kind of thing that sent the majority of my portfolio over to Fidelity about seven or eight years ago. I've never been anything but happy with their customer service. I keep one account at Vanguard with a couple of funds in it, but that's it.

I was just kidding with the guy... its my stock line with CSRs when their company is doing something stupid that inconveniences me. I have actually had good experience with them over a 25 year relationship.

 

[calmloki]

We swapped - no worse or better than any other company revision. We ended up with our two accounts (hers and mine, with each other as beneficiary) proper on the registration details, but with my account shown as "hers and mine" in the account list, and with her account shown as "mine and hers and mine". We are assured they will get it corrected in 3-4 days. About as fun as when the bank changes it's software and all the autopayments I have set up have to be re-entered. Or when the garbage company changes it's software and I have to re-register for all the places and set up payments again.

Somehow I suspect there is a push by companies to make all these great changes right at year end. For our convenience of course.

HEY! I"M RETIRED! So this morning Fidelity left a message to the effect that our Fidelity Amex has been compromised, but no worries - they are sending a new card which should arrive about Christmas time. On 1/6/2015 our old card numbers are no good and we need to just use the new card. Swell. So now I get to discover which bills are set to pull from the old Fidelity Amex. Kaiser insurance, Ebay, Amazon Prime, some garbage companies, ... uh uhh? what else... All I have is time, right?