Vanguard lowers Admiral req's

[kramer]

I went to my account and it looks like I can only enter this information in for brokerage accounts. Is there anyway to record it for mutual funds?

No, I don't think so. For more authoritative details, see my post about this on the Bogleheads board:

Bogleheads :: View topic - Vangd Cost Basis Acctg w/External Mutual Funds

Actually, it is worst than FIFO, it appears they use average cost when you sell (I just refreshed my memory from my boglehead post), at least for external mutual funds. It is a really, really bad system and not at all obvious to the casual observer. Supposedly, they will fix it in the next couple of years.

Also, if you use Average cost for a single sale, you are locked into that system forever for that holding. It is the worst possible way to sell a mutual fund you have held over a long period of time and could cost your typical retiree a lot of money.

Kramer

 

[foxfirev5]

Thanks for the info. It didn't sink in until I realized my DW had 2 eligible accounts. It makes me feel like I've made some money today!

 

[Alan]

Just got around to reading this thread as I've been away for a few weeks.

Thanks for the tip. I just converted 2 funds. I wonder how long it would have taken VG to have told me they were eligible?

 

[CCdaCE]

How are automatic investments supposed to work. I assume if you are buying investor shares now, does the auto-invest change to Admiral? Anyone already know?

-CC

 

[Alan]

How are automatic investments supposed to work. I assume if you are buying investor shares now, does the auto-invest change to Admiral? Anyone already know?

-CC

I have done conversions in the past and am pretty sure that it is automatic in that you have to do nothing - the monthly bank payments start going into the new Admiral fund you just converted to.

 

[FIREd]

Just got around to reading this thread as I've been away for a few weeks.

Thanks for the tip. I just converted 2 funds. I wonder how long it would have taken VG to have told me they were eligible?

Automatic conversions to Admiral Shares happen once a quarter IIRC. So it could have taken them up to 3 months to make the conversion on your behalf I guess.

 

[Alan]

Automatic conversions to Admiral Shares happen once a quarter IIRC. So it could have taken them up to 3 months to make the conversion on your behalf I guess.

In that case - double thanks to OP for alerting me

 

[Texas Proud]

Just as an FYI.... the fix to my 25 accounts was worse than I had expected...

They decided that I needed a ROTH 1 and a ROTH 2... so the one account that I could not convert was moved to my ROTH 2 view...

I called and said this is NOT what I want and they need to get it fixed... had to send me to a specialist who said they would... left me his contact info so if the 'fix' goes bad I can give him a call and we can try again...


This was after trying to send a secure email to them (which did NOT go through because I got a phone call in the middle and got logged out after I came back and spend 15 minutes typing the details etc. of their error)... then called and got into phone entry heck.... just to let you know.... IF you get mad and hit the 0 key three time quickly they will put you through to a person

 

[Lancelot]

No, I don't think so. For more authoritative details, see my post about this on the Bogleheads board:

Bogleheads :: View topic - Vangd Cost Basis Acctg w/External Mutual Funds

Actually, it is worst than FIFO, it appears they use average cost when you sell (I just refreshed my memory from my boglehead post), at least for external mutual funds. It is a really, really bad system and not at all obvious to the casual observer. Supposedly, they will fix it in the next couple of years.

Also, if you use Average cost for a single sale, you are locked into that system forever for that holding. It is the worst possible way to sell a mutual fund you have held over a long period of time and could cost your typical retiree a lot of money.

Kramer

OK, here is a good system-San Mig Light at Lucky Dog bar is only 40 pisos / bottle. Let Vanguard top that

 

[mickeyd]

I converted 3 accounts from investor to Admiral on Friday. saved about $800 annually by doing 5 minutes of "work."

The VG website had already identified which "investor" funds of mine were convertible to Admiral shares. It could not have been an easier effort.

 

[teejayevans]

I converted 3 accounts from investor to Admiral on Friday. saved about $800 annually by doing 5 minutes of "work."

The VG website had already identified which "investor" funds of mine were convertible to Admiral shares. It could not have been an easier effort.

Not to complain , but they could have just had 1 button to convert all accounts, instead of having to do each 1. I tried selecting multiple accounts and it wouldn't let me do that either.
TJ

 

[hogtied]

Called Scottrade today to ask what was going to happen to my Vanguard index funds that held over $10,000. I was surprised to hear their response; that Scottrade does not have a dealers license to broker the Admiral funds. Guess I'll have to liquidate and buy the ETF.

 

[tgotch]

Called Scottrade today to ask what was going to happen to my Vanguard index funds that held over $10,000. I was surprised to hear their response; that Scottrade does not have a dealers license to broker the Admiral funds. Guess I'll have to liquidate and buy the ETF.

Same thing with Schwab...My Schwab rep told me this is only available through Vanguard.

 

[mickeyd]

Not to complain , but they could have just had 1 button to convert all accounts, instead of having to do each 1. I tried selecting multiple accounts and it wouldn't let me do that either.
TJ

Aww, the extra work was good for me.

 

[Lusitan]

Aww, the extra work was good for me.

Yeah, it made me feel like I was saving MORE money ...

Thanks for the tip!

 

[easysurfer]

I only had two accounts to convert over (total bond index, total stock index) so doing them one at a time was easy

 

[Telly]

We have been getting letters from Vanguard telling us that they are going to automatically convert any qualifying fund from Investor Shares to Admiral Shares, unless we call them by October 27 to opt-out.

A few of ours are just above the threshold, we were not going to convert those, as a drop in the market would kick them back to Investor Shares. Didn't think it made sense for them to bounce around. But it seems they want to go ahead and do it. So if they convert them, then the market drops, and those funds accounts stay below long enough for whatever their overhang time is, then get converted back to Investor, then market goes up, and the funds qualify for Admiral again, I wonder if they stay at Investor till we request a upgrade, or if they automatically do it again.

It seems they could spend $$ bouncing them back and forth, and sending notifications each time. I would expect that someone at Vanguard has thought this all through. They must have some kind of algorithm to limit their costs.

 

[Onward]

we were not going to convert those, as a drop in the market would kick them back to Investor Shares

As far as I know, VG won't demote you from Admiral to Investor shares if the drop in acct value is due to a drop in share price. They will demote you if the drop in acct value is due to withdrawals.

Check with them to be sure, though.

 

[Texas Proud]

As far as I know, VG won't demote you from Admiral to Investor shares if the drop in acct value is due to a drop in share price. They will demote you if the drop in acct value is due to withdrawals.

Check with them to be sure, though.

Just to add to this... it is true... I converted one account that just made it when it was $100,000... just before the crash... it drop 50%... but they never did anything to move it back... it is still under $100K... but now the threshold is lower so it doesn't matter....

 

[Telly]

OK thanks. I had just assumed that VG would demote back to Investor Shares if the account value dropped low enough due to market conditions. Now that that's cleared up, I'll just let them convert the just above the threshold accounts.