New Vanguard Account Structure

[LOL!]

It has been reported and I have found true that the "upgrade" will mess up one's instructions on what to do with automatically reinvesting distributions.

I think the upgrade resets things to the "account default" whatever that was for you. If you had different funds to do different things from the "account default", then you may be in a for a surprise.

So double check after you upgrade what the settings are for each and every one of your investments in the new account structure. I certainly had to reset mine back to what I wanted and had previously.

For me, I had brokerage accounts at Vanguard for ETFs, but my default was not to reinvest any ETF distributions back into the ETFs. When my mutual funds got "upgraded" and placed in the existing brokerage accounts, they lost my choice to have distributions automatically reinvested, so I had to reset those. Perhaps this would not be a problem for folks with no previously existing brokerage account.

 

[Cooked]

A few of the differences that I have noticed. First, the settlement account (MMF) does not allow paper checks. Second, the settlement account is a sweep account. It can be a bit more difficult to figure out where the sweep came from. For example if you have dividends go into the sweep account they get aggregated quickly and it is difficult to figure out where it came from . And finally, transfers between old style and upgraded accounts if not allowed. I had opened up a new ROTH to do a rollover and found that I could not roll over until the Traditional IRA was upgraded first.

 

[pb4uski]

All good intelligence... thank you !

 

[wanaberetiree]

Many of us did that in the last year. Simplicity is a good thing.

Does anyone know how/if it affects Quicken downloads/links ?

 

[target2019]

I feel left out. Have no upgrade button. I remember seeing something in the past, but did not proceed. Our accounts are very simple , buy and hold variety. Now, if they offered a toaster...

 

[SecretlyFI]

One thing I experienced when I upgraded last year is it resulted in an additional 1099 tax statement that I was not anticipating. In the spring, I went through my usual checklist of documents and when I had everything (I thought), I filed the return.

Didn't know there would be separate 1099's for before & after the upgrade. A new one was released a week or two later and I had to file amended federal and state returns. That was annoying and I wished, if they had to be separate statements, that they were released together so this could have been avoided.

 

[Hermit]

I feel left out. Have no upgrade button. I remember seeing something in the past, but did not proceed. Our accounts are very simple , buy and hold variety. Now, if they offered a toaster...

Didn't banks stop doing that in the middle of the last century?

 

[prototype]

I feel left out. Have no upgrade button. I remember seeing something in the past, but did not proceed. Our accounts are very simple , buy and hold variety. Now, if they offered a toaster...

Same here, I just logged into Vanguard now and don't see any "upgrade button" anywhere, anyplace for any of my funds in either of my T-IRA account or Regular. Account. All my funds are at admiral level and most are index funds with Vanguard ETF equivalents (e.g. VFIAX and VOO).

I'm so very confused.

 

[gauss]

Since you can't go back, I would instead consider opening a new brokerage account separate from the mutual fund account. I would try to title the new account so that it is not identical to the MF account to avoid an involuntary "upgrade" in the process.

This way, if you really like the brokerage account you can keep it and move the old assets to it and close the MF account.

If on the other hand, the brokerage account is not all that it was cracked up to be, you haven't forever lost your MF account.

I have a VG brokerage account from about a decade ago but it has been inactive and empty for some time.

BTW - I just noticed that I have been presented the Upgrade link too on vanguard.com. Thanks for the heads up on this!

-gauss

 

[Markola]

Same here, I just logged into Vanguard now and don't see any "upgrade button" anywhere, anyplace for any of my funds in either of my T-IRA account or Regular. Account. All my funds are at admiral level and most are index funds with Vanguard ETF equivalents (e.g. VFIAX and VOO).

I'm so very confused.

For your T-IRA, do you have one account or two, i.e. a brokerage account and a second one? If one, then you are already upgraded, as Another Reader above said would happen automatically soon.

 

[target2019]

Didn't banks stop doing that in the middle of the last century?

Wouldn't know what to with toaster, now that you mention it.
Maybe a pair of suspenders?

 

[target2019]

Same here, I just logged into Vanguard now and don't see any "upgrade button" anywhere, anyplace for any of my funds in either of my T-IRA account or Regular. Account. All my funds are at admiral level and most are index funds with Vanguard ETF equivalents (e.g. VFIAX and VOO).

I'm so very confused.

This Vanguard page explains things, and it may lead to the option for you to upgrade.
https://investor.vanguard.com/info/account-upgrade

 

[prototype]

This Vanguard page explains things, and it may lead to the option for you to upgrade.
https://investor.vanguard.com/info/account-upgrade

Thank you for the link, I just went there and saw the START button. Got some reading to do before I select it (if I decide to select it). It looks like they are looking for "my permission" before they start messing around with things.

For your T-IRA, do you have one account or two, i.e. a brokerage account and a second one? If one, then you are already upgraded, as Another Reader above said would happen automatically soon.

Just the same old Investor Side Account (and acct#) I've had for a bunch of years before they even started the "two sides of the house".

I don't understand how they can start moving people's money around without permission.

 

[target2019]

I don't understand how they can start moving people's money around without permission.

They can't move things without your permission.

 

[Sunset]

We did it last year.
I like having everything in 1 place, it does break out the different accounts by the type for me.
Regular Account, 401k Roth, 401K IRA, etc. but now I just log in 1 place and see it all.
It adds the amounts from each together to show 1 final Total.

 

[Sunset]

They can't move things without your permission.

Right, that's why you have to click on the upgrade button.

 

[sengsational]

That link says a benefit is $2 or even free trades, which I already have, so I must have this kind of account already. I had deferred variable annuity already, and this summer, transferred part of my Roth over to get $2 trades. All of it shows on one page.

 

[GrayHare]

A few of the differences that I have noticed. First, the settlement account (MMF) does not allow paper checks.

Do you mean VG will not supply a checkbook linked to the account, or that VG won't send a withdrawal in the form of a check, or both?

 

[target2019]

Right, that's why you have to click on the upgrade button.

Yes, that is explained in the link I provided.

 

[UpAnchor]

Didn't banks stop doing that in the middle of the last century?

Next poll: Were you and/or your spouse alive during the middle of the last century?

 

[Cooked]

Do you mean VG will not supply a checkbook linked to the account, or that VG won't send a withdrawal in the form of a check, or both?

They will not allow you to write a check against the settlement account.

 

[grasshopper]

They will not allow you to write a check against the settlement account.

Unless you have a VanguardAdvantage account.

 

[pb4uski]

One thing I experienced when I upgraded last year is it resulted in an additional 1099 tax statement that I was not anticipating. In the spring, I went through my usual checklist of documents and when I had everything (I thought), I filed the return.

Didn't know there would be separate 1099's for before & after the upgrade. A new one was released a week or two later and I had to file amended federal and state returns. That was annoying and I wished, if they had to be separate statements, that they were released together so this could have been avoided.

Good intelligence. I was thinking of waiting until just after the new year to convert and think I will just wait until then.

 

[target2019]

Good intelligence. I was thinking of waiting until just after the new year to convert and think I will just wait until then.

I had that thought yesterday. Why didn't Vanguard think of having an option for year-end conversion, so that in present and next year you'd have one set of 1099s, and a clean break from the past?

I still don't want more MMF sweep funds, though.

 

[gauss]

They can't move things without your permission.

True -- But at some point (ie 10 years down the line), I suspect that they may unilaterally close the accounts of those who continue to hold out.

-gauss