Vanguard Notice About Fund Only Platform

[Bongleur]

On the 15th of... March? The day ETFs were selling at a discount to NAV -- I wanted to buy one, and I had a brokerage account as well as the Fund account. They would not let me buy, because I had no money in the brokerage settlement account.

They made me do a separate transaction to sell from the Fund account and transfer to the brokerage account -- and it took DAYS for the money to get there.

Sucks.

 

[Bongleur]

I've opened up a two extra accounts...
[*]1 Rollover IRA
[*]1 Inherited IRA
[*]1 Brokerage (inheritance, not tax-deferred)
[*]1 Brokerage (majority of taxable accounts)
[*]1 Brokerage (annual expenses and new house fund where sales of equities with LTCGs resulting in 0% taxes go)
[/LIST]

How do you set up SEPARATE accounts for the same SS or EIN number? How can you have several copies of the same fund or ETF?

 

[Palmtree]

I've stubbornly held out also but it seems like they are doing the full court push on me lately. Lots of email reminders to switch and pop-ups whenever I log in to Vanguard.com. I'd like to wait till Jan/2021 to make the switch. Just to avoid two sets of 1099s.

 

[MRG]

How do you set up SEPARATE accounts for the same SS or EIN number? How can you have several copies of the same fund or ETF?

I'm not who you asked but if I understand the question.
You can have multiple accounts with the same SSN. The SSN is an attribute of the account not It's ownership. The full legal registration is what determines account ownership not SSN. The same applies to ownership of funds within different accounts. I own several different funds in both taxable and non-taxable accounts, no problem.

That's also the reason why you will get two set of tax documents when you upgrade from a fund account to a brokerage. The account charged not SSN.

 

[Jeb-NY]

On the 15th of... March? The day ETFs were selling at a discount to NAV -- I wanted to buy one, and I had a brokerage account as well as the Fund account. They would not let me buy, because I had no money in the brokerage settlement account.

They made me do a separate transaction to sell from the Fund account and transfer to the brokerage account -- and it took DAYS for the money to get there.

Sucks.

If you're an active trader you need to leave money in the settlement account.

 

[jazz4cash]

I switched no big deal. If I didn’t trust them on something like this, I would take my funds elsewhere. I thought they explained that it was cheaper in the long run to be on a single modern platform. Having to maintain the legacy platform is increasing cost for all of us. I think there was a time when the crew went along with the Captain without so much skepticism.

 

[Texas Proud]

How do you set up SEPARATE accounts for the same SS or EIN number? How can you have several copies of the same fund or ETF?

I am not the one you asked, but I have many accounts at Vanguard... most are styled different, (IRA, ROTH, etc.) but I do have 2 that are regular IRAs...


There is no restriction on opening up more than one account.. heck, I wished I would have opened another taxable account to move my mom's MFs into as they did NOT keep the basis separate but just put them in the pool... so now I have to keep track of my basis... another reason to leave Vanguard...

 

[HI Bill]

How do you set up SEPARATE accounts for the same SS or EIN number? How can you have several copies of the same fund or ETF?

You just go to My Accounts, Open an Account. You can open as many accounts with the same SS or EIN as you want. Unfortunately, you can't name them, so you may end up with several brokerage accounts identified as:

Name - Brokerage - Account #

Each account can hold the same assets (ETFs or MFs) as the others, or can hold different assets. I hold VTI, VOO, VEA, and VUG in multiple accounts, for instance.

 

[HI Bill]

I am not the one you asked, but I have many accounts at Vanguard... most are styled different, (IRA, ROTH, etc.) but I do have 2 that are regular IRAs...


There is no restriction on opening up more than one account.. heck, I wished I would have opened another taxable account to move my mom's MFs into as they did NOT keep the basis separate but just put them in the pool... so now I have to keep track of my basis... another reason to leave Vanguard...

I opened up a new account for inherited, non-IRA rollover, and another for FIRE expenses. Since the accounts have holdings that are different ages, the cost basis is different for each, which gives me flexibility in withdrawing funds to match my tax situation for the year.

 

[Texas Proud]

I opened up a new account for inherited, non-IRA rollover, and another for FIRE expenses. Since the accounts have holdings that are different ages, the cost basis is different for each, which gives me flexibility in withdrawing funds to match my tax situation for the year.

Yea, that is my problem... I thought that Vanguard would keep track of the step up in basis for me so I could sell whichever shares I wanted.... but NOOOO...


And they refuse to reverse the transfer from my old account into a new account even though I brought it up to them few days after transfer from the estate....

 

[BigMoneyJim]

The problem for me isn't the "new system", it's that they're trying very hard to force me to open a brokerage account with them.

I've worked for two different financial institutions in the past 5 years that aren't Vanguard, and because I was an IT person with potential access to potentially sensitive stuff, I couldn't have brokerage accounts with other firms. But they allow you to keep fund-only accounts with funds from that provider. (This is SEC stuff, not the company just being proprietary.)

I'm currently retired, but if I felt the need to go back to work it would most likely be one of these two other financial institutions where I'd again be prohibited from maintaining outside brokerage accounts.

I've had most of my money at Vanguard for almost 30 years, and I had intended to roll two more non-VG 401(k)s into a VG IRA between jobs, but even then I couldn't open a new non-brokerage account, so Vanguard has about half as much of my money as they could have.

So now I'm going to go ahead and switch...so I can buy ETFs and then transfer them in-kind out of Vanguard and close my accounts.

Because I don't want to be forced in 2022 or whatnot if I'm working again to have VG put a check in a mail and take me out of the market for a couple of weeks while I get compliant.

I only recently realized that once I switched to a brokerage I could avoid the out-of-market-because-check-in-mail scenario I've always dreaded. Because as far as I can tell, ETFs can be transferred between institutions in-kind.

Congrats, Vanguard: you played yourself!

Edit: Huh, I opted out of the "transition your account" emails a couple of years ago, and the old email's "transition" link doesn't work. And VG hasn't hounded me on the site to "upgrade" in a while. I can't even find an option *anywhere* to transition my rollover IRAs. People talk about an "upgrade" button on the balances and holdings page, but I have no such thing.

 

[Bongleur]

You just go to My Accounts, Open an Account. You can open as many accounts with the same SS or EIN as you want. Unfortunately, you can't name them, so you may end up with several brokerage accounts identified as:

Name - Brokerage - Account #

Each account can hold the same assets (ETFs or MFs) as the others, or can hold different assets. I hold VTI, VOO, VEA, and VUG in multiple accounts, for instance.

Sounds like a nightmare for keeping track of what might be wash sales, since the income is to the same person.

 

[Bongleur]

If you're an active trader you need to leave money in the settlement account.

Not a trader. Just wanted to buy the ETF instead of the Fund, so I had to create a Brokerage account. Then discovered I could not buy the ETF by paying for it with cash or a sale of something from the Fund side -- the money had to clear & THEN days later be put into the Brokerage side settlement fund. PIA.

 

[pb4uski]

On the 15th of... March? The day ETFs were selling at a discount to NAV -- I wanted to buy one, and I had a brokerage account as well as the Fund account. They would not let me buy, because I had no money in the brokerage settlement account.

They made me do a separate transaction to sell from the Fund account and transfer to the brokerage account -- and it took DAYS for the money to get there.

Sucks.

WADR, your problem or naivete and not theirs. You expected to be able to buy with no money? Lack of proper planning on your part... not on them.

 

[Bongleur]

WADR, your problem or naivete and not theirs. You expected to be able to buy with no money? Lack of proper planning on your part... not on them.

[MOD EDIT] I can buy Fund A and pay for it by selling Fund B simultaneously. The problem is separation of the Fund and Brokerage elements.

 

[Gumby]

MOD NOTE -- If we must disagree, let us not be disagreeable about it.

 

[pb4uski]

[MOD EDIT] I can buy Fund A and pay for it by selling Fund B simultaneously. The problem is separation of the Fund and Brokerage elements.

You would run into the same issue if you had two brokerage accounts with any of the major brokerages... say a joint account and an individual account... the account that you want to transact in has to have enough cash available for the offered trade. Just the way it works.

 

[FDC319]

[MOD EDIT] I can buy Fund A and pay for it by selling Fund B simultaneously. The problem is separation of the Fund and Brokerage elements.

You can do that in the brokerage platform just the same as you can at other brokerages. Same fund family and exchange.

 

[pb4uski]

FDC319, you're right if he had Fund A in a brokerage account he could have sold Fund A and then purchased ETF B... no problemo.

I think the problem that he ran into was that he had Fund A in a fund account and wanted to buy ETF B in his brokerage account and they wouldn't let him do it because he didn't have enought money for the purchase in his brokerage account until he sold Fund A in the fund account and transferred the proceeds to his brokerage account.

 

[Cobra9777]

...the money had to clear & THEN days later be put into the Brokerage side settlement fund...

Not sure about Vanguard, but at Fidelity, I would have transferred the mutual fund shares to the brokerage account and then sold them. At that point (or maybe end-of-day), the proceeds from sale are immediately available for investment in the ETF. It's not available for withdrawal for a few days, but it is immediately available for investment.

Does Vanguard not use the concept of "cash available for investment"? Do you really have to wait for it to be available for withdrawal in order to purchase another security?

 

[FDC319]

Does Vanguard not use the concept of "cash available for investment"? Do you really have to wait for it to be available for withdrawal in order to purchase another security?

I have both. They are almost identical in this aspect.



Vanguard:

Fidelity:

 

[Cobra9777]

I have both. They are almost identical in this aspect...

That's what I thought. So the problem is that Bongleur didn't transfer the MF shares first and then sell. Kinda surprised that no one at Vanguard advised him/her to do that, based on the situation and desired outcome.

I posted earlier in this thread that we still have an old MF-only account at Fidelity that I've been intending to move. So I just called Fidelity and asked the rep, "What's the best way to move this money to a regular brokerage account so I can buy an ETF with no delay?" He said, "Transfer the MF shares in kind to the brokerage account, then sell, the proceeds will be immediately available for trade into whatever ETF you want."

 

[BigMoneyJim]

Huh, I opted out of the "transition your account" emails a couple of years ago, and the old email's "transition" link doesn't work. And VG hasn't hounded me on the site to "upgrade" in a while. I can't even find an option *anywhere* to transition my rollover IRAs. People talk about an "upgrade" button on the balances and holdings page, but I have no such thing.

In case anyone is in a situation similar to me where you want to move to the new system now (and doesn't have a recent "transition" button), I just opened a brokerage account by clicking on stuff about stocks & ETFs, and after the brokerage account was open my fund-only-account IRAs then had "upgrade" links on the balances page.

 

[deserat]

Ahh, Vanguard - just got off the phone with them today. I had an employer IRA that had contracted with Vanguard to manage their employee retirement accounts. I also have a personal SEP IRA with Vanguard. I no longer work for said employer and in the process of consolidating my financial matters before I pull the plug for good (yes - really retire!!!) I wanted to rollover said employer IRA to my SEP IRA.

That took a 30-45 minute phone call with two VG reps because there is a 'wall' between the financial support personnel. I also had to sign a document and send it via snail mail to VG so they could then cut a check and internally mail it to the other VG side. I currently live overseas, so this is taking some time and the funds are in 'limbo.'

Today I get an email that says the funds will be deposited into the MMF? huh? The settlement account is in the MMF. My SEP IRA is not invested in the MMF. I log in and see they've opened a MMF in my SEP IRA. I waited several hours to call them (I'm six hours ahead).

Here's their explanation: because you did not 'explicitly state' you wanted those employer IRA funds to go to the fund you have in your SEP IRA, we had to place it in the MMF.

I was not happy and let them know it. In the 30-45 minutes phone call and in the documentation I signed, it did not state that I had to explicitly state I wanted those funds to go into the current fund chosen for the SEP IRA. I would assume they would put the funds in what is there now as a default unless I specified otherwise (I only have one fund in the SEP IRA - a Target Retirement fund).

So, I now have to wait another day, exchange the funds from that MMF to the other fund I have and that will happen the next day.

Now I need to go over to the "I'm not happy with USAA thread" and complain there as they are doing silly stuff, too....

Wow, I can see how all of your time as a retiree could be taken up with these issues and them complaining about them on a board... ;-)

 

[BigMoneyJim]

Some of the "settlement fund" thing may be some new-ish rules that I can't now remember, but that doesn't erase the fact that all easy, well-documented Vanguard actions lead you to having more money in one of their brokerage accounts.

My first transition from fund-only to brokerage completed today, and in the process they deleted the linked bank account I spent the last several days setting up.

Getting money *out* of Vanguard is proving very difficult for me. With two different credit unions, they'll happily take money out and put it in Vanguard but want some notarized document from my institution before they can put funds back there. The bank they just deleted was another brokerage account I have that I *think* I was actually going to be able to EFT out of Vanguard to. Something I need now that I'm living off my retirement funds.

In fact the whole reason I'm enabling the brokerage account now is so that I can buy ETFs which can be transferred in-kind to another firm where getting hold of my money isn't nearly as hard. (And I don't currently have restrictions on multiple brokerages.)

For what it's worth, I'm unable so far to link my Fidelity accounts to my bank accounts, too. But the firm I'm consolidating to happily moves money from *and to* my credit union checking account from which I pay all my bills.