Please,please help with transition to Vanguard brokerage questions

[Digger1000]

I got an email saying I need to transition to brokerage or I will incur fees. I have a mutual fund and a small inherited ira. I called them and I am more confused than ever, even after being transffered to an account specialist.

My questions after I transition are:
1. Will there be any fees going forward yearly or otherwise
2. Will there be a charge to take money out(I live on this money)
3. Will there be a charge for receiving my quarterly dividends(I live on this money)
4. Any charges on the inherited ira
5. Are there any charges period within the brokeage account.
6. Are there any tax implications when I transition to this brokage account
7. Can I keep my mutual fund

What else should I be aware of.

 

[pb4uski]

I assume that this is Vanguard? If so, IME unless you trade a lot there are no fees or commissions.

I haven't heard anything about incurring fees if you keep the mutual fund account but from what you said that is what they wrote.

I'm frustrated with Vanguard's decaying customer service and am moving to other brokerages.... Schwab and Fidelity.

 

[RunningBum]

1-5. I can't say with certainty there are no charges as there may be some special cases, but I haven't heard of anyone making the transition and start seeing new charges that they didn't see before.

6. Definitely No
7. Definitely Yes.

At tax time, you will get two sets of statements. One is for your account under the old account type up to the transition date, the other for the brokerage account after. Pretty sure the latter one comes later. So don't file your taxes until you get both statements.

 

[Alan]

Being in a country and timezone far, far away I rarely call them but have found them to be very good at written responses so would send them a message from your account exactly as you have posted here and they should provide answers point by point.

 

[VanWinkle]

I have had a brokerage account for years with Vanguard. I have never paid a fee other than the normal expense ratios for the funds I hold. The transition to a brokerage account is very simple according to a friend of mine who just completed the change for the same reason you are stating. You must take your statements electronically to remain completely free. I also take money out and receive dividends-no charge.

 

[Phroig]

$20 brokerage account fee, waived if your Vanguard assets exceed $1M, or if you sign up for e-delivery of all statements/documents.

 

[jebmke]

I have had a brokerage account for years with Vanguard. I have never paid a fee other than the normal expense ratios for the funds I hold. The transition to a brokerage account is very simple according to a friend of mine who just completed the change for the same reason you are stating. You must take your statements electronically to remain completely free. I also take money out and receive dividends-no charge.

Same. Although for some there are some features of the MF account platform that are preferred, for many the difference is minimal. I prefer the tax reporting for brokerage accounts.

VG will continue to de-feature the MF platform; it is a rational business move.

 

[njhowie]

I have seen some posts elsewhere about this topic recently.

Being extremely biased towards Fidelity, I suggest instead of simply moving to Vanguard brokerage account and having unanswered questions/concerns, you do a full account transfer to Fidelity, where they do not charge anything for the items you mention. I'm not sure if Fidelity would take the Vanguard mutual fund(s) you currently hold, but that's a simple question they could easily answer for you.

I believe there are many benefits which Fidelity offers over Vanguard and would provide a better level of service. If you live in/near any metro area, you likely have a Fidelity office near you, which you could visit if necessary to speak to someone in person, or to simply have a contact you would personally know.

 

[Digger1000]

Thanx for all the help.

 

[MRG]

Same. Although for some there are some features of the MF account platform that are preferred, for many the difference is minimal. I prefer the tax reporting for brokerage accounts.



VG will continue to de-feature the MF platform; it is a rational business move.

+1
That code base has served it purpose well for decades, it's difficult to find people who have the required skills because they've retired. Things like security become increasingly difficult and more expensive to maintain.

 

[Sojourner]

I believe there are many benefits which Fidelity offers over Vanguard and would provide a better level of service. If you live in/near any metro area, you likely have a Fidelity office near you, which you could visit if necessary to speak to someone in person, or to simply have a contact you would personally know.

+1

Longtime Vanguard account holder here, but I would not recommend them over Fidelity to anyone wanting to set up a new brokerage account these days. IMHO, Vanguard's lack of support for 2FA authenticator apps and restricting ACATS transfers is reason enough to look elsewhere.

 

[TheWizard]

I transitioned to a brokerage account a few years ago and it was pretty much a non-event: nothing changed for the Vanguard mutual funds I owned.

Since then, I decided to start using ETFs, with limit orders for purchases. You need a brokerage account to do that...

 

[tulak]

The Vanguard rep I talked to earlier this week said Vanguard will start charging $20 per MF for non-brokerage accounts if you have less than a million dollars in MF accounts (brokerage accounts are excluded from this calculation).

Idk if this is true. I have one MF account that I haven’t converted where I’d be charged the fee, but I haven’t heard anything from Vanguard yet. The Vanguard rep said the fees will happen later this year.

 

[statsman]

I just received an email documenting the change in Vanguard. $20 annual fee *per* fund account

No mention of a waiver for selecting e-delivery of all statements/documents or for having $1M+ in fund assets.

Since we have never used a brokerage service nor expect to, I am not sure what we do here.

This becomes active after September 30, 2022.

 

[tulak]

I just received an email documenting the change in Vanguard. $20 annual fee *per* fund account

No mention of a waiver for selecting e-delivery of all statements/documents or for having $1M+ in fund assets.

Since we have never used a brokerage service nor expect to, I am not sure what we do here.

This becomes active after September 30, 2022.

I received the same e-mail this morning. I didn’t see any references to an exception, but I would call Vanguard to see if you’re exempt.

The writing is on the wall though. It’s probably better to convert your accounts to brokerage, even if you only hold mutual funds.

I did this for all of my accounts except one. The ones that I did were easy. I was able to convert (transition) the accounts online. There is one account that I have to send in paperwork to convert, which I’ll probably do in the next few weeks.

It’s a bummer that I can’t easily move this account to Fidelity instead, but I’d have to liquidate the mutual fund first, which I don’t want to do. I’d prefer to convert the fund to ETF and then move to Fidelity, but if I do that, it’s a two-step process.

 

[Phroig]

I just received an email documenting the change in Vanguard. $20 annual fee *per* fund account

No mention of a waiver for selecting e-delivery of all statements/documents or for having $1M+ in fund assets.

Since we have never used a brokerage service nor expect to, I am not sure what we do here.

This becomes active after September 30, 2022.

We haven't received the email, but see https://investor.vanguard.com/client-benefits/account-fees. Vanguard has two types of accounts: brokerage and mutual fund. The brokerage account charges an annual fee of $20 for the account. The mutual fund account will charge a fee of $20 for each fund.

It seems like both account types will waive fees if your "qualifying" (not sure if this is different from what it used to be) Vanguard assets exceed $1M. Also, the brokerage account fee (but not the mutual fund account fee) is waived if you sign up for e-delivery.
If/when we get the email, I'm not sure what we'll do either. One aspect of the mutual fund account I like is getting an annual statement which lists all activity for the year.

 

[Gumby]

I just received an email documenting the change in Vanguard. $20 annual fee *per* fund account

No mention of a waiver for selecting e-delivery of all statements/documents or for having $1M+ in fund assets.

Since we have never used a brokerage service nor expect to, I am not sure what we do here.

This becomes active after September 30, 2022.

I got the same notice, but my interpretation is that they will start charging a $20 fee if you do NOT switch to a brokerage account, so I did. It was painless.

P.S. You can always log on to your Vanguard account, pull up a history of all transactions for whatever time period you like and print it out if you want.

 

[steelyman]

I got the same notice, but my interpretation is that they will start charging a $20 fee if you do NOT switch to a brokerage account, so I did. It was painless.

The only WTF for me was getting multiple statements (tax) in the year in converted to brokerage.

 

[jollystomper]

The transition went so smoothly for us I cannot even remember the steps we did .

Yes the dual tax reports were received for the year we converted. But since I use tax software all it meant was an additional 1099 data entry step, which took all of 47 seconds .

People mention Fidelity. It took a lot more to transition my Fidelity IRA MF account to an IRA brokerage account. I had to manually open a new account and call them to move all of the assets from the old account into the new account. Right now there does not seem to be an easy way to delete the old, empty, IRA account. I am sure if I called and pushed it could be done, but that is not something worth spend my time on at the moment .

 

[Time2]

I switched several years ago, and my wife has never been notified, we have the same amount of accounts.


Or is this just taxable accounts?

 

[tulak]

I did this for all of my accounts except one. The ones that I did were easy. I was able to convert (transition) the accounts online. There is one account that I have to send in paperwork to convert, which I’ll probably do in the next few weeks.

Vanguard has updated their website to support online conversion of this account. That's a relief. Earlier this week I was prompted to fill out a form and mail it in.

I'm happy they made this change and slightly puzzled as to why it took them so long. The conversion of this account is in progress, so that's one less thing I need to worry about.

 

[easysurfer]

I'm one of the holdouts .

After switching over, do you get new account numbers for the mutual funds or do they remain the same?

 

[TheWizard]

I'm one of the holdouts .

After switching over, do you get new account numbers for the mutual funds or do they remain the same?

I have no idea and it didn't matter to me.
My login details are what matter most of the time and there was no change to them.
As mentioned previously, changing to their brokerage platform was pretty much a non-event initially...

 

[N02L84ER]

I'm one of the holdouts .

After switching over, do you get new account numbers for the mutual funds or do they remain the same?

I converted last year and mine are new account numbers.

 

[Buckeye]

$20 brokerage account fee, waived if your Vanguard assets exceed $1M, or if you sign up for e-delivery of all statements/documents.

Vanguard just sent out an email letting me know that if I didn't have e-delivery, I would incur a fee. I have e-delivery and I still got the email.