Vanguard Notice About Fund Only Platform

[cbo111]

I made the switch mid-year in 2019. No big deal, except I got two sets of 1099s to file. It was a bit confusing but my PAS advisor cleared it up for me.

 

[MRG]

It's interesting to me seeing people wanting to stay on a code base that's being deprecated! I want to be on the latest, greatest, code set where the development and support staff have the best tools and security features to keep the bad guys out and solve any issues. As software ages there's less and less subject matter experts over time. I want to be where they are too.

 

[foxfirev5]

I find it amusing that DW and I were prodded into submission and made the switch last year. However my 90 year old DM has received nothing regarding this issue. I log onto her account and receive all her mail so I'm sure she has not gotten an offer.

 

[deserat]

Obviously they don't obliterate Prime MM when you make the big transition. So lucky me, every time any money goes into or out of my VMFXX ("Federal MM Fund", = settlement MM) account, I have to log into Vanguard and manually transfer that money to or from Prime MM if I want the slightly better interest rate it provides. It's just so annoying.

I asked them (VG) point blank about that settlement account - and they sent me gobbledy-gook. I have gone over to Bogleheads to ask why I should/should not do this. There is quite the argument over there as well about the transition.

I've realized it is a lot easier to put money into VG than it is to take out, at least when you go to their site. That's a good thing for the most part, but if you have too jiggle the handle all the time to get what you want (as above, move $$ around to what you want), it merely introduces a higher risk of mistakes.

I'm sitting tight right now - mutual funds/etc and brokerage accounts (both types). I just don't see the benefit to me to transferring it all over to brokerage accounts (unless I already have). I'm not interested in day-trading with them.

Lastly, I'm interested to see how VG changes due to Jack Bogle's death. It sure seems they are sliding on a few of his ideas/principles in some areas.

 

[Onward]

I'm interested to see how VG changes due to Jack Bogle's death. It sure seems they are sliding on a few of his ideas/principles in some areas.

Sadly, that's been happening for years.

 

[RetiredAt55.5]

We are also clinging to the past, and will transition on the 5th of never. Okay, I get it, they will force it on us at some time.

Nope, they can't automatically force you onto the new platform, since you HAVE to accept their brokerage agreements, a legal requirement. I lost track, but it's been at least 6 years since they rolled out the new system.

I think they're hoping that at some point there won't be many left in the old system, at which point they might give you an ultimatum to convert or have your accounts closed. I'm not sure though, if they can legally do that either. That could have all sorts of tax ramifications.

This is a dilemma for them. I think they were expecting everyone would willingly convert in a timely manner.

 

[Gumby]

All I want from them is a straight answer to this question - Why do you, Vanguard, want me to do this? I've seen their stuff about how much more convenient, better etc this will be for me. But I am enough of a cynical SOB to know that there is no such thing as a free lunch in the investing business. If they want it, there must be something in it for them. That's what I want to know. I may not mind and probably will do it anyway, but not until they tell it to me straight.

 

[MRG]

Nope, they can't automatically force you onto the new platform, since you HAVE to accept their brokerage agreements, a legal requirement. I lost track, but it's been at least 6 years since they rolled out the new system.

I think they're hoping that at some point there won't be many left in the old system, at which point they might give you an ultimatum to convert or have your accounts closed. I'm not sure though, if they can legally do that either. That could have all sorts of tax ramifications.

This is a dilemma for them. I think they were expecting everyone would willingly convert in a timely manner.

They may need you to sign the new TOS but at a point they will stop supporting the old. Happens all the time and they don't need your permission. They simply don't or can't support the old system past X date.

Vanguard and many other investment firms stop support of systems all the time. My career saw two large systems of record quicesed. When Vanguard moved from a third party system in the late 1980s did they ask you for permission? No, they took the funds in house to the 1980s era system you want to stay on. [emoji56]

 

[LOL!]

Waiting will give me time to decide if I really want 4 Vanguard brokerage accounts...with 4 additional money funds. Maybe I'm wrong about that?

We have a mix of old and new. The settlement accounts have $0.00 in them, so we set the interface to not show accounts with $0.00 in them and thus don't see them.

 

[Onward]

Why do you, Vanguard, want me to do this?

If you could get a straight answer from them, I believe they would say, "Mutual funds as a product are slowly dying. Investors are showing a growing preference for exchange-traded products, especially outside of company retirement plans. A mutual-fund-only account is becoming archaic, and will be much more archaic ten years from now. We're just keeping up with the times. The change from mutual-fund to brokerage account only expands the range of securities available to you, with no added costs."

 

[meierlde]

All I want from them is a straight answer to this question - Why do you, Vanguard, want me to do this? I've seen their stuff about how much more convenient, better etc this will be for me. But I am enough of a cynical SOB to know that there is no such thing as a free lunch in the investing business. If they want it, there must be something in it for them. That's what I want to know. I may not mind and probably will do it anyway, but not until they tell it to me straight.

Once upon a time vanguard outsourced their brokerage business to another partner (pershing llc) a number of years ago vanguard brought the business inhouse and in the year of the transition you got 2 1099s for the brokerage account. Start with you must have a brokerage account to buy anyones etfs, including vanguards. from vanguard.

The change in the settlement account from prime to federal is a result of the post 2008 rules where a prime money fund is not regarded as safe enough for a settlement account, since it invests in more than treasury and possibly agency securities.

 

[deserat]

All I want from them is a straight answer to this question - Why do you, Vanguard, want me to do this? I've seen their stuff about how much more convenient, better etc this will be for me. But I am enough of a cynical SOB to know that there is no such thing as a free lunch in the investing business. If they want it, there must be something in it for them. That's what I want to know. I may not mind and probably will do it anyway, but not until they tell it to me straight.

+1000x - exactly - just tell me straight up - don't try to sell it to me. That makes me nervous as I then need to go find out what it is you aren't telling me. It's like your parents telling you the medicine is good for you even though it tastes like crap. I don't need the sugar coating.....

 

[target2019]

And I sit here, deprecated...

 

[racy]

Come gather 'round, people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
If your time to you is worth savin'
And you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'

The Times They Are A-Changin' .... Bob Dylan

 

[youbet]

All I want from them is a straight answer to this question - Why do you, Vanguard, want me to do this? I've seen their stuff about how much more convenient, better etc this will be for me. But I am enough of a cynical SOB to know that there is no such thing as a free lunch in the investing business. If they want it, there must be something in it for them. That's what I want to know. I may not mind and probably will do it anyway, but not until they tell it to me straight.

I voluntarily chose to hold my Vanguard funds (and some funds from other fund companies) in my Schwab brokerage accounts. For example, I've had a postion in VTSAX for many years. I could have held it at Vanguard (the fund company, not the brokerage house) but I preferred to consolidate at Schwab brokerage and only deal with one company and one web site.

That's really all you'll be doing when you move to the Vanguard brokerage account. You can hold your Vanguard funds there. You can hold other companies funds there. If you want to own an individual stock, CEF, ETF, bond or whatever, you can hold those there too. If you continue to only want to own Vanguard MF's, no problem.

The motivator for Vanguard no one seems to be mentioning is that they were losing some customers when the customers discovered that there were some products other than Vanguard MF's they might want to own and they want their holdings consolidated at one place.

 

[Midpack]

I moved all our VMMXX to online savings when interest cratered. Might as well make something on cash.

 

[target2019]

Come gather 'round, people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
If your time to you is worth savin'
And you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'

The Times They Are A-Changin' .... Bob Dylan

The Alamo - The Green Leaves of Summer
Dimitri Tiomkin
A time to be reapin', a time to be sowin'.
The green leaves of Summer are callin' me home.
'Twas so good to be young then, in a season of plenty,
When the catfish were jumpin' as high as the sky.
A time just for plantin', a time just for ploughin'.
A time to be courtin' a girl of your own.
'Twas so good to be young then, to be close to the earth,
And to stand by your wife at the moment of birth.

 

[RetiredAt55.5]

The motivator for Vanguard no one seems to be mentioning is that they were losing some customers when the customers discovered that there were some products other than Vanguard MF's they might want to own and they want their holdings consolidated at one place.

That's not accurate though - Vanguard has offered ETFs and separate brokerage accounts for years.

The move to a consolidated account is a much more recent "feature".

 

[Cobra9777]

DW still has a small IRA at Fidelity in the old style, mutual-fund-only account. There's never been any request to move it or convert to a brokerage account.

That account holds our only Fidelity mutual fund. Everything else we own is Vanguard and iShares ETFs, all housed at Fidelity. I suppose I should move it to her other IRA at some point and convert to an ETF. That MF is actively managed with a high ER. But it's performed well over the decades and it's a small part of our overall portfolio, so I just don't pay much attention to it.

 

[easysurfer]

Come gather 'round, people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
If your time to you is worth savin'
And you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'

The Times They Are A-Changin' .... Bob Dylan

Yea- Hold on hold out, keep a hold on still
If you don't see what your love is worth
No one ever will
You've done your time on the bottom line
And it ain't no thrill
There's got to be something more
Keep a hold on still
You know what it is you're waiting for
Now you just hold on
Hold on hold out, hold on


From "Hold On Hold Out" .... Jackson Browne

 

[GTFan]

Started out converting IRA accounts to brokerage with no issues, then took the plunge and did the joint taxable account (big one for us) again with no issues. YMMV.

 

[Jeb-NY]

Switched all mine a couple of years ago when I wanted to set up a CD ladder in my 401K and couldn't figure out why I couldn't make it work. Completely painless, you don't have to keep money in the settlement account. My only glitch was I thought I got an extra 1099 the first year, since I switched mid year, I had one for the old account and one for the new. To my eyes they were the same account but on paper they were two different accounts. Open new, move everything over, close the old. No pain but more flexability. I don't think it has anything to do with phasing out mutual funds, just allows you to do new things in the same account.

 

[JeKa]

+1

 

[ArmchairMillionaire23]

I just got another email from Vanguard asking to make the transition away from Mutual Funds only to the "new and improved" investment platform.

At least now there is a year of 2022 or sooner to retire the old platform.

I'm still loitering and lingering until the deadline comes closer as funds area all I need. Index investing and rebalance once a year. Don't need the fancy stuff .

I swapped over to the new platform last year. My only problem was that this year I was told to wait to file my taxes as I was to receive two sets of IRS forms. One set for my "old" accounts and one set for my brokerage accounts which would be late due to some reason or another.
Due to a death in my wife's family last year we were waiting for some estate tax forms anyway so it didn't really bother me all that much that I had to wait until the end of March to file our taxes but I would have been more upset if Vanguard was the only reason.

 

[pb4uski]

....When I roll over my 401(k), I'll open another IRA account so that I can separately track the basis of the employer match for those funds. ...

Why? At least in my case I never got taxed on employer match so there is no basis... no different than pre-tax contributions to me.