Vanguard : transition account or wait

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Nyc10036
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Vanguard : transition account or wait

Post by Nyc10036 »

Vanguard seems to want to transition people over to their platform.

I don't need a brokerage system as I have 3 mutual funds with them.
I don't see the need for the new platform for me.

Should I wait until they force me over?
100factorial
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Re: Vanguard : transition account or wait

Post by 100factorial »

My understanding is that you currently hold title to your mutual fund shares. They cannot force you to transfer title to them, sign a brokerage account agreement including an arbitration clause, and become their creditor, subject to insolvency risk (only partially mitigated by SIPC insurance). The brokerage account is an investment vehicle subject to different regulatory oversight and legal considerations than directly holding title yourself.
tibbitts
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Re: Vanguard : transition account or wait

Post by tibbitts »

I'm waiting. The mutual fund platform does what I want for now and I'm not sure everything I do (for example paying dividends from one fund directly to another) works on the brokerage platform.
nalor511
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Re: Vanguard : transition account or wait

Post by nalor511 »

I converted to brokerage, converted (half, wish I'd done them all) to ETF, then transferred out to Fidelity and Schwab. Vanguard was great for 17+years, now suddenly they can't answer emails (with a real answer)
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nisiprius
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Re: Vanguard : transition account or wait

Post by nisiprius »

I transitioned, I think in 2019?

As with OS upgrades, the reason is once you have decided that it seems inevitable, and keeping in mind the possibility of glitches that you may need to call Vanguard about,

1) you may want to do it at a time of your own choosing, not when you are busy or distracted or frantic with other things;

2) you don't want it to happen when there's some huge crunch of lots of accounts all transitioning at the same time,

3) you don't want to drag your feet so long that the ordinary front-line rep is no longer familiar with the details of the "old platform" or the transition process.

You want to have time to review carefully how the new account "looks." And you want to be in a situation where if you feel you need to call Vanguard a few times, you have the time to do it.

Ours went reasonably smoothly, but as an example of a "glitch," the date of our monthly automatic RMD changed from first-of-the-month to fifteenth-of-the-month, and I did call Vanguard to find out what that was (I think that in a financial account all unexpected and unexplained changes need to be explained and should not be assumed to be harmless). I made the call, Vanguard picked up pretty quickly, and quickly gave me the answer "yes, that's what happens; no, on the new platform you don't get to pick the date of month for automatic RMD's any more."
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sycamore
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Re: Vanguard : transition account or wait

Post by sycamore »

For someone in your situation, I think you should wait. Transitioning means you sign and accept a new legal agreement with them (brokerage agreement). They can't "force" you to sign it but they may subtly or not so subtly encourage you to do so by: adding new features to the new platform and not to the old; or prioritizing fixes for the new platform and not for the old; or only training new employees on the new platform, leaving longer wait time for help with the old platform. That's pure speculation of course; who knows what Vanguard might actually do or when they might do it.

I transitioned and was happy to do so as I already had a mix of mutual funds and ETFs. I didn't lose any valuable features by doing so (others had different experiences). The best thing about transitioning is it's now easy to transfer assets from my Vanguard brokerage account to another brokerage to earn a transfer bonus :)
grok87
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Re: Vanguard : transition account or wait

Post by grok87 »

100factorial wrote: Fri Sep 24, 2021 11:37 pm My understanding is that you currently hold title to your mutual fund shares. They cannot force you to transfer title to them, sign a brokerage account agreement including an arbitration clause, and become their creditor, subject to insolvency risk (only partially mitigated by SIPC insurance). The brokerage account is an investment vehicle subject to different regulatory oversight and legal considerations than directly holding title yourself.
interesting.
so the message i got was something to the effect of "all accounts will be transitioned in 2022". i'm paraphrasing. but perhaps this is a lie?
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Re: Vanguard : transition account or wait

Post by jebmke »

I transitioned a couple of my individual accounts. Our joint account has not been transitioned. There are some pluses and minuses either way but on balance, probably positive for transitioning. Tax reporting is a bit simpler. I also noticed the other day that the cost basis export feature only works with brokerage accounts so it would appear that VG is de-featuring MF accounts over time. I seem to recall there was a difference in how the foreign taxes were reported between the two accounts which made it slightly simpler for brokerage tax reporting. But again, the differences are minor. I'll probably transition our other accounts when I run out of useful things to do with my time in the coming months. I said that a year ago and here I am. :beer
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mhc
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Re: Vanguard : transition account or wait

Post by mhc »

I transitioned a few years ago. I only hold mutual funds. In general, it was zero impact on me except for 2 items.

1. Pro - consolidated 1099, makes tax time a little easier

2. Con - back door Roth process is slightly more complex

Neither of the 2 items is very major.
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rob
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Re: Vanguard : transition account or wait

Post by rob »

If your ever going to work in a position where your employer must monitor brokerage activity.... then it might be a poor move.

There are still some things I don't think you can do on the "new" platform.
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UpperNwGuy
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Re: Vanguard : transition account or wait

Post by UpperNwGuy »

After being a member of this forum for four years and reading about this issue in many different threads, the primary objection that most folk have to transitioning from a mutual fund account to a brokerage account is the loss of the ability to automatically reinvest dividends from one mutual fund into a different mutual fund. It all boils down to that one issue. People also complain about the format of the monthly statements, but all the information that they identify as missing from the brokerage statements is readily available online.
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goingup
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Re: Vanguard : transition account or wait

Post by goingup »

I'm planning on moving over to brokerage in January 2022. I've been a hold-out because some features on the old platform were useful to us in accumulation. Two useful old-platform features are being able to direct dividends from one from to another. I also liked using the auto-exchange (monthly, quarterly, etc.) from money-market fund to other funds.

We don't need those features anymore and Vanguard is very keen for everyone to migrate so we'll finally do it. Thought it would be good to do it at the beginning of the year, which I assume will mean only one set of tax documents will be issued.
fortunefavored
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Re: Vanguard : transition account or wait

Post by fortunefavored »

I'll be migrating next year too - so I can convert my funds to ETFs and I can leave Vanguard's increasingly terrible IT and customer service.

So that's a checkmark in the "Pro" for switching to the brokerage platform, I guess?
100factorial
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Re: Vanguard : transition account or wait

Post by 100factorial »

grok87 wrote: Sat Sep 25, 2021 7:25 am
100factorial wrote: Fri Sep 24, 2021 11:37 pm My understanding is that you currently hold title to your mutual fund shares. They cannot force you to transfer title to them, sign a brokerage account agreement including an arbitration clause, and become their creditor, subject to insolvency risk (only partially mitigated by SIPC insurance). The brokerage account is an investment vehicle subject to different regulatory oversight and legal considerations than directly holding title yourself.
interesting.
so the message i got was something to the effect of "all accounts will be transitioned in 2022". i'm paraphrasing. but perhaps this is a lie?
I'm hearing and wondering the same. I guess time will tell. Meanwhile, considering insolvency risk exposure and financial industry compliance restrictions I'm in no rush to "upgrade" to the new "platform".
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Cheez-It Guy
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Re: Vanguard : transition account or wait

Post by Cheez-It Guy »

goingup wrote: Sat Sep 25, 2021 10:58 am I also liked using the auto-exchange (monthly, quarterly, etc.) from money-market fund to other funds.
Automatic exchange to or from the Vanguard Federal Money Market Fund (VMFXX, AKA Settlement Fund) is totally possible on the new brokerage platform.
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Cheez-It Guy
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Re: Vanguard : transition account or wait

Post by Cheez-It Guy »

May be good to peruse this thread as well, OP:

viewtopic.php?t=328977

Most of the reasons against converting you will hear aired are either based on individual customer preferences which may not be at all applicable to you, or to concern about extreme edge cases / unlikely outcomes (things that sound scary, but which are also extremely improbable). I think the nisiprius post above is pretty spot-on (as usual). Consider your own use case, and if you don't find informed and personally-compelling reasons against converting, what's the utility of bucking against the direction your asset manager and broker would obviously prefer you to go?
CedarWaxWing
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Re: Vanguard : transition account or wait

Post by CedarWaxWing »

100factorial wrote: Fri Sep 24, 2021 11:37 pm My understanding is that you currently hold title to your mutual fund shares. They cannot force you to transfer title to them, sign a brokerage account agreement including an arbitration clause, and become their creditor, subject to insolvency risk (only partially mitigated by SIPC insurance). The brokerage account is an investment vehicle subject to different regulatory oversight and legal considerations than directly holding title yourself.
What is the source of this "understanding" please, especially in regards to "insolvency risk"...

How is the risk of a brokerage account more than the non brokerage account?
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Re: Vanguard : transition account or wait

Post by JohnFiscal »

I am dragging my heels for the moment (well, for the past several years).

I am retired (2018) and all of my "retirement" funds were then at Vanguard. I was happy with the set up and was reluctant to change...based on two points specifically:

1- I didn't want to have to spend my time and energy learning some other "new" system (I have enough of that already).

2 - Also, I have a custom program to extract my account info from the csv files that can be downloaded from Vanguard and pop those into my Excel ledgers. Was a lot of work to program. It "should" be simple enough to adjust for the new csv format but it's not a project I relish.

I did transition my wife's Roth account to the new platform just to test the waters. This was a small portion of our retirement funds at Vanguard. I hadn't yet started to rewrite my code for the Excel functions.

With our recent move to Canada and my Permanent Resident (tax) status in Canada Vanguard is no longer terribly friendly (long story told elsewhere). I opened new accounts at Fidelity (more expat friendly). I have to say I find the website a bit of a nightmare for me. It's a brokerage platform. Just like Vanguard's new platform. I hate it, it is overwhelmingly complicated for my simple needs (granted, as I have more time to spare to get comfortable with it it may become okay, right now with emigration/immigration I have too many other issues to work with). I was very happy with the "mutual fund" paradigm I used at Vanguard, Gabelli, Janus, Longleaf, Fairholme, etc, I don't need (nor want) the GUI complexity presented to me by the "brokerage" paradigm. Sigh, but I have to suck it up anyway.

At this point I am reluctant to transition the Vanguard platform. I will likely be shifting around one-half of our Vanguard assets to Fidelity over the next year and I just don't need the aggravation of the new Vanguard platform. But I imagine that it will come about regardless, either on their schedule or mine. Heck, maybe I should just transition everything over to Fidelity sooner, then I won't have to deal with Vanguard.
100factorial
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Re: Vanguard : transition account or wait

Post by 100factorial »

CedarWaxWing wrote: Sat Sep 25, 2021 11:40 am
100factorial wrote: Fri Sep 24, 2021 11:37 pm My understanding is that you currently hold title to your mutual fund shares. They cannot force you to transfer title to them, sign a brokerage account agreement including an arbitration clause, and become their creditor, subject to insolvency risk (only partially mitigated by SIPC insurance). The brokerage account is an investment vehicle subject to different regulatory oversight and legal considerations than directly holding title yourself.
What is the source of this "understanding" please, especially in regards to "insolvency risk"...

How is the risk of a brokerage account more than the non brokerage account?

See for example

https://www.sipc.org/for-investors/investor-faqs


"For example, if the fund of customer property consists of 90% of what should have been held by the brokerage firm for customers, then all customers receive 90% of their 'net equity' claims from this fund."

"In many liquidations, the fund of customer property is not sufficient to satisfy fully every customer’s 'net equity' claim. In that case, SIPC advances its funds – up to $500,000 per customer (but not more than $250,000 for cash claims) – to make up any shortfall."
Mike Scott
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Re: Vanguard : transition account or wait

Post by Mike Scott »

When you transition your account at Vanguard, you get the same kind of account you might be planning to open somewhere else to transfer your accounts because you are unhappy with the change in Vanguard accounts... the "old" account format was fine and so is the "new" one.
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Re: Vanguard : transition account or wait

Post by Steelersfan »

I held out for the longest time but finally transitioned this year. It was painless and I'm glad I did it.

It's best to transition in January so you'll only get tax forms from one platform, but other times are OK too.
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Re: Vanguard : transition account or wait

Post by hotscot »

i just transferred my solo 401K and my tIRA from Wells Fargo to Vanguard?

I've no idea what this transition account is?
Is it something I need to know about?
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Re: Vanguard : transition account or wait

Post by Mike Scott »

hotscot wrote: Sat Sep 25, 2021 1:36 pm i just transferred my solo 401K and my tIRA from Wells Fargo to Vanguard?

I've no idea what this transition account is?
Is it something I need to know about?
No; all new accounts are the "new" account.
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iceport
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Re: Vanguard : transition account or wait

Post by iceport »

goingup wrote: Sat Sep 25, 2021 10:58 am Thought it would be good to do it at the beginning of the year, which I assume will mean only one set of tax documents will be issued.
Good idea!!!

That's my thought as well. I got a panicked call from a sibling this year because two sets of tax documents were furnished by Vanguard. We eventually figured out that it was because she had transitioned her taxable account and forgot about it.

Vanguard sends out one set of tax documents covering the period on the old platform, and a second set of tax documents covering the period on the new platform. I figure transitioning in the first or second week of January will result in only 1 set of tax documents for the year.

OP, that may or may not be important to you.
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Re: Vanguard : transition account or wait

Post by Cheez-It Guy »

iceport wrote: Sat Sep 25, 2021 1:42 pm
goingup wrote: Sat Sep 25, 2021 10:58 am Thought it would be good to do it at the beginning of the year, which I assume will mean only one set of tax documents will be issued.
Good idea!!!

That's my thought as well. I got a panicked call from a sibling this year because two sets of tax documents were furnished by Vanguard. We eventually figured out that it was because she had transitioned her taxable account and forgot about it.
Glad it worked out, but no need for panic if the FAQ is read spelling out exactly this scenario.
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iceport
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Re: Vanguard : transition account or wait

Post by iceport »

Cheez-It Guy wrote: Sat Sep 25, 2021 1:49 pm
iceport wrote: Sat Sep 25, 2021 1:42 pm
goingup wrote: Sat Sep 25, 2021 10:58 am Thought it would be good to do it at the beginning of the year, which I assume will mean only one set of tax documents will be issued.
Good idea!!!

That's my thought as well. I got a panicked call from a sibling this year because two sets of tax documents were furnished by Vanguard. We eventually figured out that it was because she had transitioned her taxable account and forgot about it.
Glad it worked out, but no need for panic if the FAQ is read spelling out exactly this scenario.
In this case, she didn't even remember making the transition!

But regarding reading the FAQs, I doubt many people do that. Even here on this forum, where there is a supposed awareness of such resources, folks keep talking about "double checking" their cost basis elections.

That's flat-out bogus advice.

Some folks need to change their cost basis elections *before* the transition, and some folks will need to change their cost basis elections *after* the transition. But in fact, the vast majority will need to change cost basis elections in conjunction with the transition.

Yet all I ever see is advice to "double check" elections after the fact.

So, apparently, not many folks read the literature from Vanguard on this.
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Cheez-It Guy
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Re: Vanguard : transition account or wait

Post by Cheez-It Guy »

I guess it's fair to say not many people read the literature on almost anything. Including me.
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Re: Vanguard : transition account or wait

Post by beyou »

mhc wrote: Sat Sep 25, 2021 10:21 am 2. Con - back door Roth process is slightly more complex
How so ?
I have only done this on the old platform so far.
It was as easy as any transfer from one fund to another.
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Nyc10036
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Re: Vanguard : transition account or wait

Post by Nyc10036 »

JohnFiscal wrote: Sat Sep 25, 2021 11:56 am I opened new accounts at Fidelity (more expat friendly). I have to say I find the website a bit of a nightmare for me. It's a brokerage platform. Just like Vanguard's new platform. I hate it, it is overwhelmingly complicated for my simple needs (granted, as I have more time to spare to get comfortable with it it may become okay, right now with emigration/immigration I have too many other issues to work with). I was very happy with the "mutual fund" paradigm I used at Vanguard, Gabelli, Janus, Longleaf, Fairholme, etc, I don't need (nor want) the GUI complexity presented to me by the "brokerage" paradigm. Sigh, but I have to suck it up anyway.

At this point I am reluctant to transition the Vanguard platform. I will likely be shifting around one-half of our Vanguard assets to Fidelity over the next year and I just don't need the aggravation of the new Vanguard platform. But I imagine that it will come about regardless, either on their schedule or mine. Heck, maybe I should just transition everything over to Fidelity sooner, then I won't have to deal with Vanguard.
It was a bit of a culture shock when I opened an account with Fidelity and encountered their brokerage platform.
Like you, I was used to Vanguard, T. Rowe Price, Janus, etc.
I am used to it now, but I find it not as user friendly for my purposes.

.
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Re: Vanguard : transition account or wait

Post by UpperNwGuy »

Nyc10036 wrote: Sat Sep 25, 2021 3:56 pm
JohnFiscal wrote: Sat Sep 25, 2021 11:56 am I opened new accounts at Fidelity (more expat friendly). I have to say I find the website a bit of a nightmare for me. It's a brokerage platform. Just like Vanguard's new platform. I hate it, it is overwhelmingly complicated for my simple needs (granted, as I have more time to spare to get comfortable with it it may become okay, right now with emigration/immigration I have too many other issues to work with). I was very happy with the "mutual fund" paradigm I used at Vanguard, Gabelli, Janus, Longleaf, Fairholme, etc, I don't need (nor want) the GUI complexity presented to me by the "brokerage" paradigm. Sigh, but I have to suck it up anyway.

At this point I am reluctant to transition the Vanguard platform. I will likely be shifting around one-half of our Vanguard assets to Fidelity over the next year and I just don't need the aggravation of the new Vanguard platform. But I imagine that it will come about regardless, either on their schedule or mine. Heck, maybe I should just transition everything over to Fidelity sooner, then I won't have to deal with Vanguard.
It was a bit of a culture shock when I opened an account with Fidelity and encountered their brokerage platform.
Like you, I was used to Vanguard, T. Rowe Price, Janus, etc.
I am used to it now, but I find it not as user friendly for my purposes.
What did you find to be difficult about the Fidelity brokerage platform? I find it to be easy to use. I prefer Schwab's brokerage platform, but Fidelity is almost as easy to use.
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Re: Vanguard : transition account or wait

Post by SmileyFace »

I did my best to summarize the pros and cons here:

viewtopic.php?t=328989
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Re: Vanguard : transition account or wait

Post by FrugalInvestor »

I had to transition because they wouldn't allow me to title my taxable account in the name of our trust unless I did. I wouldn't have transitioned if I could have avoided it since all I own are Vanguard mutual funds, and very few of those. Managing my Vanguard accounts is less streamlined now which degrades my ability to accomplish my top priority of simplification.

Our HSAs are at Fidelity and I also find their platform way too complicated and busy for my simple needs. I won't be utilizing any of the "sportsbooks" that are now legal in our state either.

I'm an investor, not a trader or a gambler - and I don't want to be tempted to be a trader or a gambler.

As Jack said here, "the more you trade the less you make".......
https://www.youtube.com/watch?v=SVGpP1YVFW8

And here's a very interesting article on why Jack felt that ETFs were primarily built as a marketing tool and promote trading rather than investing......
https://newmoneyreview.com/index.php/20 ... was-right/
Last edited by FrugalInvestor on Sat Sep 25, 2021 4:33 pm, edited 2 times in total.
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Cheez-It Guy
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Re: Vanguard : transition account or wait

Post by Cheez-It Guy »

FrugalInvestor wrote: Sat Sep 25, 2021 4:07 pm I had to transition because they wouldn't allow me to title my taxable account in the name of our trust unless I did. I wouldn't have transitioned if I could have avoided it since all I own are Vanguard mutual funds, and very few of those. Managing my Vanguard accounts is less streamlined now which degrades my ability to accomplish my top priority of simplification.
So even if it wasn't your ideal, wouldn't it now be more streamlined to put them all on the same platform rather than continuing to split? In my case, I reduced my number of accounts by combining an old taxable brokerage with a taxable mutual fund only account into a single new brokerage account.
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Re: Vanguard : transition account or wait

Post by FrugalInvestor »

Cheez-It Guy wrote: Sat Sep 25, 2021 4:22 pm
FrugalInvestor wrote: Sat Sep 25, 2021 4:07 pm I had to transition because they wouldn't allow me to title my taxable account in the name of our trust unless I did. I wouldn't have transitioned if I could have avoided it since all I own are Vanguard mutual funds, and very few of those. Managing my Vanguard accounts is less streamlined now which degrades my ability to accomplish my top priority of simplification.
So even if it wasn't your ideal, wouldn't it now be more streamlined to put them all on the same platform rather than continuing to split? In my case, I reduced my number of accounts by combining an old taxable brokerage with a taxable mutual fund only account into a single new brokerage account.
I honestly don't know if they're on the same 'platform' or not. I do see all of my accounts on the same screen but my ability to transfer conveniently from certain account(s) to others has been hindered. For instance I've had to change and have my dividends go straight to checking rather than to a Vanguard money market fund. They're spent on living expenses anyway so it doesn't really matter but I feel that my bookeeping and oversight was better when I could follow and confirm all the transactions on the Vanguard platform.
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Cheez-It Guy
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Re: Vanguard : transition account or wait

Post by Cheez-It Guy »

FrugalInvestor wrote: Sat Sep 25, 2021 4:32 pm
Cheez-It Guy wrote: Sat Sep 25, 2021 4:22 pm
FrugalInvestor wrote: Sat Sep 25, 2021 4:07 pm I had to transition because they wouldn't allow me to title my taxable account in the name of our trust unless I did. I wouldn't have transitioned if I could have avoided it since all I own are Vanguard mutual funds, and very few of those. Managing my Vanguard accounts is less streamlined now which degrades my ability to accomplish my top priority of simplification.
So even if it wasn't your ideal, wouldn't it now be more streamlined to put them all on the same platform rather than continuing to split? In my case, I reduced my number of accounts by combining an old taxable brokerage with a taxable mutual fund only account into a single new brokerage account.
I honestly don't know if they're on the same 'platform' or not. I do see all of my accounts on the same screen but my ability to transfer conveniently from certain account(s) to others has been hindered. For instance I've had to change and have my dividends go straight to checking rather than to a Vanguard money market fund. They're spent on living expenses anyway so it doesn't really matter but I feel that my bookeeping and oversight was better when I could follow and confirm all the transactions on the Vanguard platform.
I think I made an incorrect assumption that you transitioned only your taxable account and left all other account types on the mutual-fund only platform. Paying dividends to a money market fund is easily doable, as long as you can be satisfied with Vanguard Federal Money Market Fund (VMFXX). At current interest rates, all Vanguard money market funds seem essentially the same.
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Re: Vanguard : transition account or wait

Post by House Blend »

iceport wrote: Sat Sep 25, 2021 1:42 pm
goingup wrote: Sat Sep 25, 2021 10:58 am Thought it would be good to do it at the beginning of the year, which I assume will mean only one set of tax documents will be issued.
Good idea!!!

That's my thought as well. I got a panicked call from a sibling this year because two sets of tax documents were furnished by Vanguard. We eventually figured out that it was because she had transitioned her taxable account and forgot about it.

Vanguard sends out one set of tax documents covering the period on the old platform, and a second set of tax documents covering the period on the new platform. I figure transitioning in the first or second week of January will result in only 1 set of tax documents for the year.
While I do think that January is a good time for doing your transition, you will get a 2nd set of tax documents if your taxable account includes any bond funds that accrue dividends (which is the case for most, but not all, Vanguard bond mutual funds).

In that case, the accrued dividends will be distributed at the time of transition, and will be reported on a separate 1099 for the old account.
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Re: Vanguard : transition account or wait

Post by sycamore »

House Blend wrote: Sat Sep 25, 2021 5:11 pm While I do think that January is a good time for doing your transition, you will get a 2nd set of tax documents if your taxable account includes any bond funds that accrue dividends (which is the case for most, but not all, Vanguard bond mutual funds).

In that case, the accrued dividends will be distributed at the time of transition, and will be reported on a separate 1099 for the old account.
+1

And not to be nitpicky, but in regard to the underlined above -- it's the bond funds that declare dividends daily. Check the prospectus to find out.
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Re: Vanguard : transition account or wait

Post by FrugalInvestor »

Cheez-It Guy wrote: Sat Sep 25, 2021 4:47 pm
FrugalInvestor wrote: Sat Sep 25, 2021 4:32 pm
Cheez-It Guy wrote: Sat Sep 25, 2021 4:22 pm
FrugalInvestor wrote: Sat Sep 25, 2021 4:07 pm I had to transition because they wouldn't allow me to title my taxable account in the name of our trust unless I did. I wouldn't have transitioned if I could have avoided it since all I own are Vanguard mutual funds, and very few of those. Managing my Vanguard accounts is less streamlined now which degrades my ability to accomplish my top priority of simplification.
So even if it wasn't your ideal, wouldn't it now be more streamlined to put them all on the same platform rather than continuing to split? In my case, I reduced my number of accounts by combining an old taxable brokerage with a taxable mutual fund only account into a single new brokerage account.
I honestly don't know if they're on the same 'platform' or not. I do see all of my accounts on the same screen but my ability to transfer conveniently from certain account(s) to others has been hindered. For instance I've had to change and have my dividends go straight to checking rather than to a Vanguard money market fund. They're spent on living expenses anyway so it doesn't really matter but I feel that my bookeeping and oversight was better when I could follow and confirm all the transactions on the Vanguard platform.
I think I made an incorrect assumption that you transitioned only your taxable account and left all other account types on the mutual-fund only platform. Paying dividends to a money market fund is easily doable, as long as you can be satisfied with Vanguard Federal Money Market Fund (VMFXX). At current interest rates, all Vanguard money market funds seem essentially the same.
There was a reason I didn't want to do that and I don't exactly recall why that was now. I just had to re-think how I handled our (temporary) excess cash. It works okay for us now, but I don't like it as well as well as I did.
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Re: Vanguard : transition account or wait

Post by criticalmass »

Nyc10036 wrote: Fri Sep 24, 2021 10:22 pm Vanguard seems to want to transition people over to their platform.

I don't need a brokerage system as I have 3 mutual funds with them.
I don't see the need for the new platform for me.

Should I wait until they force me over?
Whose platform would you be transitioning from (to Vanguard)? If you are using Fidelity or Schwab's platform, you may not find Vanguard's user experience to be an improvement. I use Vanguard too, but Fidelity's platform is easier to use in most cases.
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Re: Vanguard : transition account or wait

Post by nisiprius »

100factorial wrote: Sat Sep 25, 2021 11:58 am
CedarWaxWing wrote: Sat Sep 25, 2021 11:40 am
100factorial wrote: Fri Sep 24, 2021 11:37 pm My understanding is that you currently hold title to your mutual fund shares. They cannot force you to transfer title to them, sign a brokerage account agreement including an arbitration clause, and become their creditor, subject to insolvency risk (only partially mitigated by SIPC insurance). The brokerage account is an investment vehicle subject to different regulatory oversight and legal considerations than directly holding title yourself.
What is the source of this "understanding" please, especially in regards to "insolvency risk"...

How is the risk of a brokerage account more than the non brokerage account?

See for example

https://www.sipc.org/for-investors/investor-faqs


"For example, if the fund of customer property consists of 90% of what should have been held by the brokerage firm for customers, then all customers receive 90% of their 'net equity' claims from this fund."

"In many liquidations, the fund of customer property is not sufficient to satisfy fully every customer’s 'net equity' claim. In that case, SIPC advances its funds – up to $500,000 per customer (but not more than $250,000 for cash claims) – to make up any shortfall."
Without a brokerage, you hold the stock or the mutual fund yourself. People forget that it is possible to hold a stock without a brokerage, because it is rare now, but it is.

When a stock or mutual fund is in a brokerage, the brokerage is in between you and what belongs to you. You are no longer the actual owner. You are the "beneficial owner." The brokerage is the actual owner. If ten clients each order the broker to buy a hundred shares of Apple, the broker buys a thousand shares of Apple. The brokerage owns the shares. And the brokerage does bookkeeping to keep track of the fact that a hundred of those shares are "yours," the statement shows that "you" own the hundred shares, when the thousand shares pay dividends they pay a tenth of that amount to you, etc.

The 1970s were a bad time for brokerages. Not only were they going under, but they weren't keeping up with the "back office" operations. They sometimes lost track of shares of stock. There was relatively little security, and incidents in which missing stock certificates at the brokerage were eventually found somewhere else where they shouldn't have been. So the SIPC was created.

So holding the security in a brokerage, "in street name," adds a small layer of risk. And the SIPC adds an amount of protection that counteracts that risk.
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Re: Vanguard : transition account or wait

Post by JohnFiscal »

SmileyFace wrote: Sat Sep 25, 2021 3:59 pm I did my best to summarize the pros and cons here:

viewtopic.php?t=328989
And you did an awesome job of it. Thanks
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Re: Vanguard : transition account or wait

Post by Go Blue 99 »

beyou wrote: Sat Sep 25, 2021 3:55 pm
mhc wrote: Sat Sep 25, 2021 10:21 am 2. Con - back door Roth process is slightly more complex
How so ?
I have only done this on the old platform so far.
It was as easy as any transfer from one fund to another.
I'm also curious what they mean by "slightly more complex". I'm on the new platform, and don't recall anything different when I did my Backdoor roth in 2020.
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Re: Vanguard : transition account or wait

Post by beyou »

Go Blue 99 wrote: Sun Sep 26, 2021 7:55 am
beyou wrote: Sat Sep 25, 2021 3:55 pm
mhc wrote: Sat Sep 25, 2021 10:21 am 2. Con - back door Roth process is slightly more complex
How so ?
I have only done this on the old platform so far.
It was as easy as any transfer from one fund to another.
I'm also curious what they mean by "slightly more complex". I'm on the new platform, and don't recall anything different when I did my Backdoor roth in 2020.
After my post I found that Vanguard posted instructions how to do the roth converion on their site. While it does not look at all complicated, it does appear different and maybe a bit more steps. That said, it is a stated workflow now vs before you just had to know what to do (but was easy to figure out since it was same process as transferring between funds in same or differing types of accts).

https://investor.vanguard.com/ira/how-t ... o-roth-ira

The only thing unclear which maybe someone can confirm.
They offer full or partial conversion. If one does full, does the Traditional IRA get closed or left open ? Over the years I have done many non deductible contributions to TIRA, and then concerted to Roth. Even after full conversion I would likely fund more to TIRA. When I retire, will again fund TIRA from 401k. Wife if she still works may continue funding TIRA post conversions. My assumption is Vanguard will leave the TIRA open with zero balance rather than have us open new TIRA later.
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Re: Vanguard : transition account or wait

Post by Cheez-It Guy »

beyou wrote: Sun Sep 26, 2021 8:26 am
Go Blue 99 wrote: Sun Sep 26, 2021 7:55 am
beyou wrote: Sat Sep 25, 2021 3:55 pm
mhc wrote: Sat Sep 25, 2021 10:21 am 2. Con - back door Roth process is slightly more complex
How so ?
I have only done this on the old platform so far.
It was as easy as any transfer from one fund to another.
I'm also curious what they mean by "slightly more complex". I'm on the new platform, and don't recall anything different when I did my Backdoor roth in 2020.
After my post I found that Vanguard posted instructions how to do the roth converion on their site. While it does not look at all complicated, it does appear different and maybe a bit more steps. That said, it is a stated workflow now vs before you just had to know what to do (but was easy to figure out since it was same process as transferring between funds in same or differing types of accts).

https://investor.vanguard.com/ira/how-t ... o-roth-ira

The only thing unclear which maybe someone can confirm.
They offer full or partial conversion. If one does full, does the Traditional IRA get closed or left open ? Over the years I have done many non deductible contributions to TIRA, and then concerted to Roth. Even after full conversion I would likely fund more to TIRA. When I retire, will again fund TIRA from 401k. Wife if she still works may continue funding TIRA post conversions. My assumption is Vanguard will leave the TIRA open with zero balance rather than have us open new TIRA later.
I can confirm the TIRA stays open with a zero balance. It can be hidden from the default view until needed again the next year. This is my current process.
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Re: Vanguard : transition account or wait

Post by mariezzz »

Some people in other threads have mentioned that they have jobs in financial industry and due to regulatory compliance, there are terms that would prohibit them from transitioning to a brokerage account (or having one would add a lot of reporting for them).
So unless Vanguard wants to lose such customers (and many of the others who have not yet transitioned may look at moving their money to other companies if forced to transition), they're going to have to keep the old platform - and at the very least, Vanguard will ensure that it's secure - because if they don't meet minimally acceptable industry standards, they could face other problems.

I doubt Vanguard is going to do away with the old accounts altogether (or at least, not for years).

Vanguard can stop adding new features to the old platform - although as some have mentioned, if you don't need the brokerage features and don't have very complicated transactional/account needs, you may feel that the platform isn't very user-friendly, and may not miss any 'new' features at all.

Well worth reading the first post if not the whole (long) thread here:
SmileyFace wrote: Sat Sep 25, 2021 3:59 pm I did my best to summarize the pros and cons here:
viewtopic.php?t=328989
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Re: Vanguard : transition account or wait

Post by Nyc10036 »

criticalmass wrote: Sat Sep 25, 2021 6:07 pm
Nyc10036 wrote: Fri Sep 24, 2021 10:22 pm Vanguard seems to want to transition people over to their platform.

I don't need a brokerage system as I have 3 mutual funds with them.
I don't see the need for the new platform for me.

Should I wait until they force me over?
Whose platform would you be transitioning from (to Vanguard)? If you are using Fidelity or Schwab's platform, you may not find Vanguard's user experience to be an improvement. I use Vanguard too, but Fidelity's platform is easier to use in most cases.
I would be transitioning from Vanguard's old system to Vanguard's new system.
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Re: Vanguard : transition account or wait

Post by criticalmass »

Nyc10036 wrote: Sun Sep 26, 2021 2:03 pm
criticalmass wrote: Sat Sep 25, 2021 6:07 pm
Nyc10036 wrote: Fri Sep 24, 2021 10:22 pm Vanguard seems to want to transition people over to their platform.

I don't need a brokerage system as I have 3 mutual funds with them.
I don't see the need for the new platform for me.

Should I wait until they force me over?
Whose platform would you be transitioning from (to Vanguard)? If you are using Fidelity or Schwab's platform, you may not find Vanguard's user experience to be an improvement. I use Vanguard too, but Fidelity's platform is easier to use in most cases.
I would be transitioning from Vanguard's old system to Vanguard's new system.
Ah ok, I had read that you were looking to transition to Vanguard's platform. If you are already at Vanguard, I would do nothing. If they need to 'upgrade' you, it will be automatic and mandatory. They have been slowly introducing portions of a new system and new (newer) user interface for a while. It hasn't been significantly different than the old system, although portions are a bit cleaned up on the website. They have been working on a new app dubbed "beacon," that is still in beta. You can use it now, and they say it is fully secured.
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Re: Vanguard : transition account or wait

Post by Nyc10036 »

criticalmass wrote: Sun Sep 26, 2021 2:12 pm
Nyc10036 wrote: Sun Sep 26, 2021 2:03 pm
criticalmass wrote: Sat Sep 25, 2021 6:07 pm
Nyc10036 wrote: Fri Sep 24, 2021 10:22 pm Vanguard seems to want to transition people over to their platform.

I don't need a brokerage system as I have 3 mutual funds with them.
I don't see the need for the new platform for me.

Should I wait until they force me over?
Whose platform would you be transitioning from (to Vanguard)? If you are using Fidelity or Schwab's platform, you may not find Vanguard's user experience to be an improvement. I use Vanguard too, but Fidelity's platform is easier to use in most cases.
I would be transitioning from Vanguard's old system to Vanguard's new system.
Ah ok, I had read that you were looking to transition to Vanguard's platform. If you are already at Vanguard, I would do nothing. If they need to 'upgrade' you, it will be automatic and mandatory. They have been slowly introducing portions of a new system and new (newer) user interface for a while. It hasn't been significantly different than the old system, although portions are a bit cleaned up on the website. They have been working on a new app dubbed "beacon," that is still in beta. You can use it now, and they say it is fully secured.
To be honest, I like the old system.
If I wanted the new system, I have it with Fidelity, and I haven't been impressed. LOL.


.
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Re: Vanguard : transition account or wait

Post by mhc »

beyou wrote: Sun Sep 26, 2021 8:26 am
Go Blue 99 wrote: Sun Sep 26, 2021 7:55 am
beyou wrote: Sat Sep 25, 2021 3:55 pm
mhc wrote: Sat Sep 25, 2021 10:21 am 2. Con - back door Roth process is slightly more complex
How so ?
I have only done this on the old platform so far.
It was as easy as any transfer from one fund to another.
I'm also curious what they mean by "slightly more complex". I'm on the new platform, and don't recall anything different when I did my Backdoor roth in 2020.
After my post I found that Vanguard posted instructions how to do the roth converion on their site. While it does not look at all complicated, it does appear different and maybe a bit more steps. That said, it is a stated workflow now vs before you just had to know what to do (but was easy to figure out since it was same process as transferring between funds in same or differing types of accts).

https://investor.vanguard.com/ira/how-t ... o-roth-ira

The only thing unclear which maybe someone can confirm.
They offer full or partial conversion. If one does full, does the Traditional IRA get closed or left open ? Over the years I have done many non deductible contributions to TIRA, and then concerted to Roth. Even after full conversion I would likely fund more to TIRA. When I retire, will again fund TIRA from 401k. Wife if she still works may continue funding TIRA post conversions. My assumption is Vanguard will leave the TIRA open with zero balance rather than have us open new TIRA later.
Old Process
1. IRA contribution to money market fund
2. Wait a few days
3. Convert 100% of IRA money market fund to desired fund in Roth

New Process (pulling from memory)
1. IRA contribution to money market fund
2. Wait a few days
3. Convert 100% of IRA money market fund to Roth settlement fund
4. By desired fund in Roth from Roth settlement fund
5. A few pennies left over in settlement fund that I can't invest into the fund
52% TSM, 23% TISM, 24.5% TBM, 0.5% cash
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Re: Vanguard : transition account or wait

Post by beyou »

mhc wrote: Sun Sep 26, 2021 2:38 pm
beyou wrote: Sun Sep 26, 2021 8:26 am
Go Blue 99 wrote: Sun Sep 26, 2021 7:55 am
beyou wrote: Sat Sep 25, 2021 3:55 pm
mhc wrote: Sat Sep 25, 2021 10:21 am 2. Con - back door Roth process is slightly more complex
How so ?
I have only done this on the old platform so far.
It was as easy as any transfer from one fund to another.
I'm also curious what they mean by "slightly more complex". I'm on the new platform, and don't recall anything different when I did my Backdoor roth in 2020.
After my post I found that Vanguard posted instructions how to do the roth converion on their site. While it does not look at all complicated, it does appear different and maybe a bit more steps. That said, it is a stated workflow now vs before you just had to know what to do (but was easy to figure out since it was same process as transferring between funds in same or differing types of accts).

https://investor.vanguard.com/ira/how-t ... o-roth-ira

The only thing unclear which maybe someone can confirm.
They offer full or partial conversion. If one does full, does the Traditional IRA get closed or left open ? Over the years I have done many non deductible contributions to TIRA, and then concerted to Roth. Even after full conversion I would likely fund more to TIRA. When I retire, will again fund TIRA from 401k. Wife if she still works may continue funding TIRA post conversions. My assumption is Vanguard will leave the TIRA open with zero balance rather than have us open new TIRA later.
Old Process
1. IRA contribution to money market fund
2. Wait a few days
3. Convert 100% of IRA money market fund to desired fund in Roth

New Process (pulling from memory)
1. IRA contribution to money market fund
2. Wait a few days
3. Convert 100% of IRA money market fund to Roth settlement fund
4. By desired fund in Roth from Roth settlement fund
5. A few pennies left over in settlement fund that I can't invest into the fund
Step 1 is not the only way to do this, I have put money any fund I want in the TIRA, then transferred to the same exact fund in the Roth IRA.
No time out of the market, not even for a few days. At least this was possible with the fund only accounts, not sure about new brokerage accounts.
Also step 3 is leaving out the details that differ. "Convert" method is very different on the UI for old vs new platform. Just look at the link I posted above and see Vanguard's own instructions, these are not the same. Not sure if better or worse, but I was quite happy with the old platform and can't see how they could make it better. Total Stock in TIRA -> Total Stock in Roth in just as simple as Total Stock in TIRA -> Total Bond in TIRA.
Just another fund transfer with some extra questions about tax issues, but the process starts the same either way.

I may stay with the old system until they make it worth my while to move. I have no issues with the old system.
I do have some issues with the new system, some of which will be resolved when I retire (legal requirements relating to use of broker vs fund platforms). But the differences we all experience are not pulling me strongly in either direction, so why rock the boat if happy with what you have ?
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