New fee for Vanguard mutual [and brokerage accounts - July 2023 updates]

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
solarcub
Posts: 251
Joined: Sat Feb 08, 2020 9:09 pm

Re: New fee for Vanguard mutual accounts

Post by solarcub »

Joyful wrote: Mon Aug 08, 2022 12:22 pm Hi - Why don't you go ahead and make the switch to brokerage account(s)?
I did years ago.
I tried to, and the conversion failed, said something about dividends. We have an account where dividends from Wellington were going into Total Stock Market, so I changed everything to "reinvest", and tried again. Still failed, same message. Tried a couple weeks later, same thing. I guess I'll have to call them, which I'm not looking forward to.
User avatar
starboi
Posts: 605
Joined: Fri Apr 23, 2021 11:33 am

Re: New fee for Vanguard mutual accounts

Post by starboi »

I guess this is how they are gonna fund the losses from the Target Date capital gains lawsuit.
User avatar
beyou
Posts: 6866
Joined: Sat Feb 27, 2010 2:57 pm
Location: If you can make it there

Re: New fee for Vanguard mutual accounts

Post by beyou »

exodusNH wrote: Mon Aug 08, 2022 1:13 pm
lakpr wrote: Mon Aug 08, 2022 1:03 pm I work in the financial industry, so any Brokerage account will have to be reported for compliance reasons for both myself and my wife. We have maintained the MF platform so far with Vanguard, thus avoiding reporting of our financial picture to my company. When Vanguard started pushing the Brokerage platform two years ago, we declined for this reason.
You might want to call and ask if it can be waived. I believe I've seen posts here indicating that Vanguard will still open mutual fund only accounts for that specific re

As alex_686 has said many time, Vanguard will likely have a long way to go before shutting down that platform, as they can't force people to move. They could only do it by essentially cashing everyone out. They can't cash out the small guys and leave the $1M ones untouched.
I had a new fund-only acct opened after such ability was removed on the site (had to mail in a form). This was due to same issue reported above, my job was in the industry. Now that I recently retired, no problem moving to the new platform, took a few minutes of my time and Vanguard did the rest.
MadHungarian
Posts: 410
Joined: Tue Jan 02, 2018 3:53 pm

Re: New fee for Vanguard mutual accounts

Post by MadHungarian »

Cheez-It Guy wrote: Mon Aug 08, 2022 11:39 am Good. Long overdue.
Of course, the next thing that will happen is that the rush to change account types to avoid the fees will further overwhelm their systems and call centers. And this is why you don't wait until the last minute to act on an obviously telegraphed move.
Well i haven't received that email yet, but the Vanguard's conversion reminders to me are getting more intrusive, so no doubt they'll be sending me the 'fee' email before long. (Mind you, the fee might be worth it to me, to avoid the brokerage account annoyances!)

But i agree that it's probably not wise to wait until the big rush, so i may actually break down and actually do the conversion, bleah.
lakpr
Posts: 11517
Joined: Fri Mar 18, 2011 9:59 am

Re: New fee for Vanguard mutual accounts

Post by lakpr »

Monster99 wrote: Mon Aug 08, 2022 3:39 pm Dodge and Cox is MF only but they are higher in fees ~0.5%, plus they are prone to throwing substantial amounts of capital gains at year end...
Thanks Monster99!

Not sold on Dodge & Cox. I had, since the morning, browsing the T Rowe Price site, and while the fees are slightly higher, they have the basic ingredients for the 2-fund portfolio (POMIX: Total Stock Market Index, PBDIX: QM US Core Bond Index). The differential in expense ratios, compared to Vanguard, is about 0.2%. On our combined taxable account balances of around $230k, it's $460 extra per year.

I think I will bite the $20*2 = $40 per year fee at Vanguard, since moving to T Rowe Price is much costlier.

NOT HAPPY AT ALL, however.
PersonalFinanceJam
Posts: 685
Joined: Tue Aug 24, 2021 8:32 am

Re: New fee for Vanguard mutual accounts

Post by PersonalFinanceJam »

jeffyscott wrote: Mon Aug 08, 2022 4:27 pm
Cheez-It Guy wrote: Mon Aug 08, 2022 11:39 am Good. Long overdue.

Of course, the next thing that will happen is that the rush to change account types to avoid the fees will further overwhelm their systems and call centers. And this is why you don't wait until the last minute to act on an obviously telegraphed move.
Ah, yes, cheering on Vanguard for imposing new fees and doing so with less than 60 days notice. Though there's been no notification at all here. Maybe like taking away secure messaging, Vanguard is only testing this new fee on some customers?

How has adding new fees ever been "obviously telegraphed"? All that they have ever "telegraphed" is that the account "may lose some features and functionality".
I rarely agree with Cheez-It Guy but on this I must. I understand none of us knew when or what form some of these measures would take but I find it hard to argue that it wasn't clear Vanguard wanted customers to move or there wouldn't be repercussions for staying put. The feature being lost in this case is free access to a dead end platform.
User avatar
jeffyscott
Posts: 13438
Joined: Tue Feb 27, 2007 8:12 am

Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

galawdawg wrote: Mon Aug 08, 2022 12:43 pmAnd for those on the MF platform, if you are going to switch anyway...why not consider switching to a brokerage with competent and responsive 24/7 customer service (including via chat and secure message), dedicated personal representatives (generally with just $250k), basic investing costs as low as (or lower than) Vanguard, and a wider array of products and services, including banking. Plus, while Fidelity requires a $1 million transfer to pay a bonus, others (such as Schwab) will pay a transfer bonus for much smaller portfolios. :beer
This will likely accelerate our plans to do just that. And probably results in yet another $1000 in bonus money from Schwab for our trouble.
User avatar
Doom&Gloom
Posts: 5398
Joined: Thu May 08, 2014 3:36 pm

Re: New fee for Vanguard mutual accounts

Post by Doom&Gloom »

PersonalFinanceJam wrote: Mon Aug 08, 2022 5:17 pm
jeffyscott wrote: Mon Aug 08, 2022 4:27 pm
Cheez-It Guy wrote: Mon Aug 08, 2022 11:39 am Good. Long overdue.

Of course, the next thing that will happen is that the rush to change account types to avoid the fees will further overwhelm their systems and call centers. And this is why you don't wait until the last minute to act on an obviously telegraphed move.
Ah, yes, cheering on Vanguard for imposing new fees and doing so with less than 60 days notice. Though there's been no notification at all here. Maybe like taking away secure messaging, Vanguard is only testing this new fee on some customers?

How has adding new fees ever been "obviously telegraphed"? All that they have ever "telegraphed" is that the account "may lose some features and functionality".
I rarely agree with Cheez-It Guy but on this I must. I understand none of us knew when or what form some of these measures would take but I find it hard to argue that it wasn't clear Vanguard wanted customers to move or there wouldn't be repercussions for staying put. The feature being lost in this case is free access to a dead end platform.
Yep. If it came as a surprise, somebody was not paying attention. There will almost certainly be other measures to come.
Kookaburra
Posts: 2045
Joined: Thu Apr 02, 2020 11:14 pm

Re: New fee for Vanguard mutual accounts

Post by Kookaburra »

Does this fee apply to vanguard 401(k) plans administered by Ascensus?
User avatar
Cheez-It Guy
Posts: 4004
Joined: Sun Mar 03, 2019 3:20 pm

Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

jeffyscott wrote: Mon Aug 08, 2022 4:27 pm
Cheez-It Guy wrote: Mon Aug 08, 2022 11:39 am Good. Long overdue.

Of course, the next thing that will happen is that the rush to change account types to avoid the fees will further overwhelm their systems and call centers. And this is why you don't wait until the last minute to act on an obviously telegraphed move.
Ah, yes, cheering on Vanguard for imposing new fees and doing so with less than 60 days notice. Though there's been no notification at all here. Maybe like taking away secure messaging, Vanguard is only testing this new fee on some customers?

How has adding new fees ever been "obviously telegraphed"? All that they have ever "telegraphed" is that the account "may lose some features and functionality".
By obviously telegraphed, I meant Vanguard's repeatedly hinted and stated desire to retire the mutual-fund only platform for literally years -- nearly a decade -- so that they can dedicate limited support resources to a single platform going forward. Asking nicely and gently reminding people clearly wasn't getting it done at high enough levels. Many folks thought they could just stay on a doomed platform because they wanted to or for whatever nit-picky reasons they had. I'm certainly willing to concede that there are unanswered questions and people for whom this will be quite problematic (those who can't use a brokerage account for employment reasons or don't want to submit to monitoring), and I truly don't rejoice or cheer that so many are perturbed by this. But don't act surprised and indignant. The corporate history of Vanguard is quite transparent with regard to ruthless cost-cutting. If the old platform is increasing their costs (which it is), they have to find a way to "motivate" the stragglers. You can frame it as imposition of new fees and not be technically wrong, but it's with a goal of spurring a specific reasonable action, and in the vast majority of cases, they DO give you an easy way to avoid the fees -- just transition your account. Or leave. Either way, they won't really care.

Since I plan to stay for now and have been on the brokerage platform for many years, I welcome the progress this action will drive toward the needed outcome.
User avatar
Nate79
Posts: 9354
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: New fee for Vanguard mutual accounts

Post by Nate79 »

Well it seems this step has already pushed many to change in this thread. Well done Vanguard.
User avatar
Cheez-It Guy
Posts: 4004
Joined: Sun Mar 03, 2019 3:20 pm

Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Oh, man. I hate it when I get Post # 50.
sycamore
Posts: 6309
Joined: Tue May 08, 2018 12:06 pm

Re: New fee for Vanguard mutual accounts

Post by sycamore »

Kookaburra wrote: Mon Aug 08, 2022 5:39 pm Does this fee apply to vanguard 401(k) plans administered by Ascensus?
Look at https://investor.vanguard.com/client-be ... count-fees for 401k accounts (are the same plans administered by Ascensus).
It indicates the answer is yes ($20 per fund) but there is a fee waiver condition.

Image
User avatar
asset_chaos
Posts: 2628
Joined: Tue Feb 27, 2007 5:13 pm
Location: Melbourne

Re: New fee for Vanguard mutual accounts

Post by asset_chaos »

This thread prompted me to logon and look at downgrading. I did not get email or a banner threatening fees if I didn't convert. I suppose that's yet to come. My Roth and a trust have upgrade buttons. My personal account and spouse's Roth do not have upgrade buttons. A search takes me to a page to initiate conversion which tells me that the accounts without upgrade buttons are not eligible for conversion. No reason is given why some accounts are eligible and others are not, and there's no reason that's obvious to me. As both the trust and the personal account have active the deprecated feature of dividend redirection, eligibility is not obviously related to an account using one of the features that are lost in the conversion to brokerage only. Sigh, I suppose I'll ask about the issue the next time they send a nudge email asking me to convert. In the meantime, maybe I'll meet them part way and push the button for the Roth account.
Regards, | | Guy
Lionel Hutz
Posts: 379
Joined: Sat Jan 30, 2021 12:18 pm

Re: New fee for Vanguard mutual accounts

Post by Lionel Hutz »

Zanmar wrote: Mon Aug 08, 2022 12:28 pm Does that mean there is a $20 fee on the money market settlement fund in each brokerage account?
No, the brokerage accounts are the new platform so no impact there. It's the old 'mutual fund only' accounts aka the dead platform where this new fee structure is being imposed.
Vikingfan
Posts: 23
Joined: Thu Nov 15, 2018 8:01 am

Re: New fee for Vanguard mutual accounts

Post by Vikingfan »

Transition to a brokerage account. What is so difficult?
Zanmar
Posts: 187
Joined: Wed Mar 16, 2022 8:10 pm

Re: New fee for Vanguard mutual accounts

Post by Zanmar »

Lionel Hutz wrote: Mon Aug 08, 2022 7:23 pm
Zanmar wrote: Mon Aug 08, 2022 12:28 pm Does that mean there is a $20 fee on the money market settlement fund in each brokerage account?
No, the brokerage accounts are the new platform so no impact there. It's the old 'mutual fund only' accounts aka the dead platform where this new fee structure is being imposed.
Okay great, thank you.
criticalmass
Posts: 2839
Joined: Wed Feb 12, 2014 9:58 pm

Re: New fee for Vanguard mutual accounts

Post by criticalmass »

asset_chaos wrote: Mon Aug 08, 2022 7:21 pm This thread prompted me to logon and look at downgrading. I did not get email or a banner threatening fees if I didn't convert. I suppose that's yet to come. My Roth and a trust have upgrade buttons. My personal account and spouse's Roth do not have upgrade buttons. A search takes me to a page to initiate conversion which tells me that the accounts without upgrade buttons are not eligible for conversion. No reason is given why some accounts are eligible and others are not, and there's no reason that's obvious to me. As both the trust and the personal account have active the deprecated feature of dividend redirection, eligibility is not obviously related to an account using one of the features that are lost in the conversion to brokerage only. Sigh, I suppose I'll ask about the issue the next time they send a nudge email asking me to convert. In the meantime, maybe I'll meet them part way and push the button for the Roth account.
Do you have "Direct Deposit Enabled" for the accounts without the upgrade option, even if you are not actively direct depositing? That is one reason that prevents the ability to "upgrade" to brokerage.

I also did not receive the fee warning email, so far.
User avatar
Brianmcg321
Posts: 1874
Joined: Mon Jul 15, 2019 8:23 am

Re: New fee for Vanguard mutual accounts

Post by Brianmcg321 »

Mike Scott wrote: Mon Aug 08, 2022 12:19 pm Transitioning your account is less effort than typing into this discussion. Just do it.
Exactly. I don't understand the issues with this.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
User avatar
Munir
Posts: 3200
Joined: Mon Feb 26, 2007 3:39 pm
Location: Oregon

Re: New fee for Vanguard mutual accounts

Post by Munir »

Vikingfan wrote: Mon Aug 08, 2022 7:41 pm Transition to a brokerage account. What is so difficult?
I don't find any icon on my Vanguard page that says transition (or upgrade) to a brokerage account. Where is it?
Last edited by Munir on Mon Aug 08, 2022 9:06 pm, edited 1 time in total.
quietseas
Posts: 901
Joined: Fri Dec 27, 2013 3:43 pm

Re: New fee for Vanguard mutual accounts

Post by quietseas »

Brianmcg321 wrote: Mon Aug 08, 2022 8:28 pm
Mike Scott wrote: Mon Aug 08, 2022 12:19 pm Transitioning your account is less effort than typing into this discussion. Just do it.
Exactly. I don't understand the issues with this.
Some people who work in the financial services industry don't want to report their investment assets to their employer, as required under FINRA regulations. The work-around is to hold mutual funds outside a brokerage account which are not reportable.

A minimal invasion of privacy and just comes with the territory when working in a regulated industry, and I'd guess anyone concerned about this would really disklike the Tier 5 investigation and polygraph that comes with many national security jobs.
User avatar
Cheez-It Guy
Posts: 4004
Joined: Sun Mar 03, 2019 3:20 pm

Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

It's my feeling that the discussion about people in the financial industry -- while valid and obviously of concern to those affected -- is a red herring in the overall discussion. I really wonder what kind of percentage of the likely millions of account holders who still have not transitioned are so affected? I think others used the legitimate issue some have as a way to justify inaction until action was forced.
User avatar
arcticpineapplecorp.
Posts: 15014
Joined: Tue Mar 06, 2012 8:22 pm

Re: New fee for Vanguard mutual accounts

Post by arcticpineapplecorp. »

guess i'll be making the switch now too.

however, it's important to understand that it's not enough to switch to brokerage, you also have to have edelivery of all docs to avoid the fee...even if you're in brokerage. My mom set up a brokerage with Vanguard a few years ago, but now she'll also have to do edocs which she's not crazy about. We'll have to work it out...or go elsewhere.
If you’re the primary account owner, you can eliminate the fee on brokerage accounts by signing up for e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates. In addition, Vanguard Brokerage Services does not charge the fee to clients who have an organization or a trust account registered under an employee identification number (EIN) or brokerage accounts enrolled in an advisory program serviced by an affiliate of Vanguard.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
alex_686
Posts: 13286
Joined: Mon Feb 09, 2015 1:39 pm

Re: New fee for Vanguard mutual accounts

Post by alex_686 »

quietseas wrote: Mon Aug 08, 2022 8:38 pm
Brianmcg321 wrote: Mon Aug 08, 2022 8:28 pm
Mike Scott wrote: Mon Aug 08, 2022 12:19 pm Transitioning your account is less effort than typing into this discussion. Just do it.
Exactly. I don't understand the issues with this.
Some people who work in the financial services industry don't want to report their investment assets to their employer, as required under FINRA regulations. The work-around is to hold mutual funds outside a brokerage account which are not reportable.

A minimal invasion of privacy and just comes with the territory when working in a regulated industry, and I'd guess anyone concerned about this would really disklike the Tier 5 investigation and polygraph that comes with many national security jobs.
I will very modestly take the other side. I have been subjected to this regime. You are limited to a narrow list of approved brokers that your employer has network links to. Because I did options my network links kept on breaking so I had to submit everything by hand. There is a chance that the white-listed brokers would not network in your preferred mutual funds. In all more of a annoyance than anything else.

But it was irksome for a few. I knew of a married couple who had extreme difficulties because they worked at different investment banks, were privileged to insider information (so additional controls), and their employers had different white listed brokers.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
solarcub
Posts: 251
Joined: Sat Feb 08, 2020 9:09 pm

Re: New fee for Vanguard mutual accounts

Post by solarcub »

Vikingfan wrote: Mon Aug 08, 2022 7:41 pm Transition to a brokerage account. What is so difficult?
I was able to transition some, but not all, of my accounts. I will have to call to transition the last one, apparently. And even the ones that did convert, failed the first time I tried. So it has been a minor annoyance to me so far, I don't know yet how big an annoyance it will end up being for the last one.

And, it's for absolutely no gain, for my purposes. I don't care about the new features, and I would rather be able to put dividends from one fund into another automatically. Not a big deal, but anyway, that makes it a net downgrade for me.
Gradient Descent
Posts: 141
Joined: Fri Jul 01, 2022 8:25 pm

Re: New fee for Vanguard mutual accounts

Post by Gradient Descent »

arcticpineapplecorp. wrote: Mon Aug 08, 2022 9:20 pm guess i'll be making the switch now too.

however, it's important to understand that it's not enough to switch to brokerage, you also have to have edelivery of all docs to avoid the fee...even if you're in brokerage. My mom set up a brokerage with Vanguard a few years ago, but now she'll also have to do edocs which she's not crazy about. We'll have to work it out...or go elsewhere.
If you’re the primary account owner, you can eliminate the fee on brokerage accounts by signing up for e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates. In addition, Vanguard Brokerage Services does not charge the fee to clients who have an organization or a trust account registered under an employee identification number (EIN) or brokerage accounts enrolled in an advisory program serviced by an affiliate of Vanguard.
Sounds good to me. I don’t want to have to subsidize other people’s postage and tree cutting through my expense ratios. :D
billaster
Posts: 2882
Joined: Wed Apr 27, 2022 2:21 pm

Re: New fee for Vanguard mutual accounts

Post by billaster »

arcticpineapplecorp. wrote: Mon Aug 08, 2022 9:20 pm guess i'll be making the switch now too.

however, it's important to understand that it's not enough to switch to brokerage, you also have to have edelivery of all docs to avoid the fee...even if you're in brokerage. My mom set up a brokerage with Vanguard a few years ago, but now she'll also have to do edocs which she's not crazy about. We'll have to work it out...or go elsewhere.
You don't think your mother's peace of mind getting paper docs is worth 20 bucks a year?
tibbitts
Posts: 23589
Joined: Tue Feb 27, 2007 5:50 pm

Re: New fee for Vanguard mutual accounts

Post by tibbitts »

Brianmcg321 wrote: Mon Aug 08, 2022 8:28 pm
Mike Scott wrote: Mon Aug 08, 2022 12:19 pm Transitioning your account is less effort than typing into this discussion. Just do it.
Exactly. I don't understand the issues with this.
There are two issues:

1. For someone who doesn't want to invest in ETFs, Vanguard only supplies a subset of functionality to brokerage accounts vs. mutual fund accounts.

2. Numerous reports of automated upgrades failing, and numerous reports of the difficulty of contacting Vanguard to have problems resolved.
MadHungarian
Posts: 410
Joined: Tue Jan 02, 2018 3:53 pm

Re: New fee for Vanguard mutual accounts

Post by MadHungarian »

Vikingfan wrote: Mon Aug 08, 2022 7:41 pm Transition to a brokerage account. What is so difficult?
It's been discussed enough times. No need to go into it yet again.
User avatar
asset_chaos
Posts: 2628
Joined: Tue Feb 27, 2007 5:13 pm
Location: Melbourne

Re: New fee for Vanguard mutual accounts

Post by asset_chaos »

criticalmass wrote: Mon Aug 08, 2022 8:25 pm
asset_chaos wrote: Mon Aug 08, 2022 7:21 pm This thread prompted me to logon and look at downgrading. I did not get email or a banner threatening fees if I didn't convert. I suppose that's yet to come. My Roth and a trust have upgrade buttons. My personal account and spouse's Roth do not have upgrade buttons. A search takes me to a page to initiate conversion which tells me that the accounts without upgrade buttons are not eligible for conversion. No reason is given why some accounts are eligible and others are not, and there's no reason that's obvious to me. As both the trust and the personal account have active the deprecated feature of dividend redirection, eligibility is not obviously related to an account using one of the features that are lost in the conversion to brokerage only. Sigh, I suppose I'll ask about the issue the next time they send a nudge email asking me to convert. In the meantime, maybe I'll meet them part way and push the button for the Roth account.
Do you have "Direct Deposit Enabled" for the accounts without the upgrade option, even if you are not actively direct depositing? That is one reason that prevents the ability to "upgrade" to brokerage.

I also did not receive the fee warning email, so far.
Thank you. I hadn't thought to check that. My personal account did/does have direct deposit enabled because long ago I had paychecks sent there. I don't think the spouse's Roth ever had direct deposit, but I'll have to check.
Regards, | | Guy
passive101
Posts: 629
Joined: Tue May 05, 2020 2:47 pm

Re: New fee for Vanguard mutual accounts

Post by passive101 »

ruud wrote: Mon Aug 08, 2022 3:50 pm
passive101 wrote: Mon Aug 08, 2022 3:40 pm Will this effect Roth IRAs? I have VTWAX & VSIAX in mine
Is your Roth IRA on the mutual-fund-only or on the brokerage platform? (Does it have a settlement fund?)
It lists a Settlement fund for my Roth and traditional, but there is currently no money in the settlement funds.
User avatar
Donnie Baseball Fan
Posts: 76
Joined: Fri Aug 28, 2009 1:32 am

Re: New fee for Vanguard mutual accounts

Post by Donnie Baseball Fan »

Could someone please explain the differences between MF-only and brokerage accounts? What will it mean to me to switch with a Roth, a 403b, and taxable accounts?
User avatar
retiredjg
Posts: 53989
Joined: Thu Jan 10, 2008 11:56 am

Re: New fee for Vanguard mutual accounts

Post by retiredjg »

Donnie Baseball Fan wrote: Tue Aug 09, 2022 4:43 am Could someone please explain the differences between MF-only and brokerage accounts? What will it mean to me to switch with a Roth, a 403b, and taxable accounts?
At Vanguard, there are two "platforms". On the old platform, you can only buy Vanguard mutual funds. ETFs (even Vanguard's ETFs) and mutual funds from other fund families are not available.

On the newer platform, the brokerage platform, you can buy anything they sell - including ETFs and mutual funds from other fund families.

Vanguard is trying to transition all their customers to this newer brokerage platform. This has been going on for years. Some people do not want to switch. So Vanguard is starting some new fees on the old platform as an incentive to get more people to switch.
User avatar
arcticpineapplecorp.
Posts: 15014
Joined: Tue Mar 06, 2012 8:22 pm

Re: New fee for Vanguard mutual accounts

Post by arcticpineapplecorp. »

billaster wrote: Mon Aug 08, 2022 11:42 pm You don't think your mother's peace of mind getting paper docs is worth 20 bucks a year?
not when she has Trad IRA, Roth IRA and taxable accounts. That's $60 a year. With the amount of money she has in there right now that's another 0.06% on top of her expense ratios. Guess on her IRAs that would put her target date fund expense back to where it was before they lowered it to 0.08%. :oops:
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
iljets10
Posts: 58
Joined: Sat Oct 05, 2019 9:56 pm

Re: New fee for Vanguard mutual accounts

Post by iljets10 »

quietseas wrote: Mon Aug 08, 2022 8:38 pm
Brianmcg321 wrote: Mon Aug 08, 2022 8:28 pm
Mike Scott wrote: Mon Aug 08, 2022 12:19 pm Transitioning your account is less effort than typing into this discussion. Just do it.
Exactly. I don't understand the issues with this.
Some people who work in the financial services industry don't want to report their investment assets to their employer, as required under FINRA regulations. The work-around is to hold mutual funds outside a brokerage account which are not reportable.

A minimal invasion of privacy and just comes with the territory when working in a regulated industry, and I'd guess anyone concerned about this would really disklike the Tier 5 investigation and polygraph that comes with many national security jobs.
The piece you’re forgetting is that many of us work at broker dealers who have prescribed lists of brokers we can use. At none of the 3 places I’ve worked has Vanguard been on the approved list. If I get this email, I’m going to have to leave Vanguard for another broker.
lakpr
Posts: 11517
Joined: Fri Mar 18, 2011 9:59 am

Re: New fee for Vanguard mutual accounts

Post by lakpr »

iljets10 wrote: Tue Aug 09, 2022 7:28 am The piece you’re forgetting is that many of us work at broker dealers who have prescribed lists of brokers we can use. At none of the 3 places I’ve worked has Vanguard been on the approved list. If I get this email, I’m going to have to leave Vanguard for another broker.
See my post above. I work in the financial industry too, and my conclusion is that it is better to swallow the fee for now, instead of leaving.
criticalmass
Posts: 2839
Joined: Wed Feb 12, 2014 9:58 pm

Re: New fee for Vanguard mutual accounts

Post by criticalmass »

quietseas wrote: Mon Aug 08, 2022 8:38 pm
Brianmcg321 wrote: Mon Aug 08, 2022 8:28 pm
Mike Scott wrote: Mon Aug 08, 2022 12:19 pm Transitioning your account is less effort than typing into this discussion. Just do it.
Exactly. I don't understand the issues with this.
Some people who work in the financial services industry don't want to report their investment assets to their employer, as required under FINRA regulations. The work-around is to hold mutual funds outside a brokerage account which are not reportable.

A minimal invasion of privacy and just comes with the territory when working in a regulated industry, and I'd guess anyone concerned about this would really disklike the Tier 5 investigation and polygraph that comes with many national security jobs.
I’m struggling to understand how national security polygraphs are related to Vanguard amounts and fees. What is the relevance?

For workers in the financial service industry who are subject to FINRA brokerage restrictions, either Vanguard Brokerage is approved or not. If not, converting from mutual fund platform to Vanguard Brokerage is not an option. Like or dislike of privacy is not relevant.
The only options for those affected are to pay the new fees or leave Vanguard. Vanguard earns a lot of business from folks who use a mutual fund only platform for this reason, and that will be going away if the mutual fund platform goes away.
User avatar
Wiggums
Posts: 7027
Joined: Thu Jan 31, 2019 7:02 am

Re: New fee for Vanguard mutual accounts

Post by Wiggums »

Joyful wrote: Mon Aug 08, 2022 12:22 pm Hi - Why don't you go ahead and make the switch to brokerage account(s)?
I did years ago.
+100

Nice to see VG moving on this. Vanguard simply needs to eliminate the mutual fund platform. From a technology standpoint, it is costly to maintain two platforms In addition to all the layers of third-party tools. It takes away IT resources from supporting the brokerage platform. Vanguard will remove mutual fund platform features next. I’m confident in saying that Schwab and Fidelity are not maintaining a MF only platform.
"I started with nothing and I still have most of it left."
jebmke
Posts: 25271
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: New fee for Vanguard mutual accounts

Post by jebmke »

Wiggums wrote: Tue Aug 09, 2022 7:51 am
Joyful wrote: Mon Aug 08, 2022 12:22 pm Hi - Why don't you go ahead and make the switch to brokerage account(s)?
I did years ago.
+100

Nice to see VG moving on this. Vanguard simply needs to eliminate the mutual fund platform. From a technology standpoint, it is costly to maintain two platforms In addition to all the layers of third-party tools. It takes away IT resources from supporting the brokerage platform. Vanguard will remove mutual fund platform features next. I’m confident in saying that Schwab and Fidelity are not maintaining a MF only platform.
They have already removed some features but I suspect they will remove more. I have one more account to transition and just need to arrange time to do it. I prefer the tax reporting on brokerage accounts anyway so I might as well get on with it.

Can one member of a joint account make the transition or does it require both to approve the transition of a joint account?
Stay hydrated; don't sweat the small stuff
User avatar
jeffyscott
Posts: 13438
Joined: Tue Feb 27, 2007 8:12 am

Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

iljets10 wrote: Tue Aug 09, 2022 7:28 amIf I get this email, I’m going to have to leave Vanguard for another broker.
But we don't even know if getting charged the new fees is contingent on getting an email about it. Vanguard has already changed the web page regarding fees. They have not bothered to inform those of us who will potentially be charged these fees that this change is coming, except for a random few that got an email.

Vanguard isn't owned by shareholders. It's owned by the people who invest in our funds.
https://corporate.vanguard.com/content/ ... index.html
:mrgreen: :mrgreen: :mrgreen:

They should have prioritized informing us "owners" of this change at the earliest possible date. Instead they went about changing web pages, indicating that this has been in the works for probably months. Why not give your long term customers as much notice of this as possible?
sycamore
Posts: 6309
Joined: Tue May 08, 2018 12:06 pm

Re: New fee for Vanguard mutual accounts

Post by sycamore »

Wiggums wrote: Tue Aug 09, 2022 7:51 amI’m confident in saying that Schwab and Fidelity are not maintaining a MF only platform.
Fidelity at least is maintaining their MF only platform.

Perhaps your confidence is misplaced :)
User avatar
jeffyscott
Posts: 13438
Joined: Tue Feb 27, 2007 8:12 am

Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

sycamore wrote: Tue Aug 09, 2022 8:43 am
Wiggums wrote: Tue Aug 09, 2022 7:51 amI’m confident in saying that Schwab and Fidelity are not maintaining a MF only platform.
Fidelity at least is maintaining their MF only platform.

Perhaps your confidence is misplaced :)
Schwab never had one, they began as a brokerage and have always remained that. Vanguard and Fidelity are mutual fund companies that decided to move into the brokerage business. Most mutual fund companies have not become brokerages.

Aside from pre-existing brokerages that decided to create a few of their own funds, is there is any other mutual fund company that does not allow one to buy their funds directly?
User avatar
Kenkat
Posts: 9539
Joined: Thu Mar 01, 2007 10:18 am
Location: Cincinnati, OH

Re: New fee for Vanguard mutual accounts

Post by Kenkat »

I got the email this morning so I went online to complete the transfer. I was able to successfully get my rollover IRA account transferred but got an error on the joint taxable account transfer with a message to call. The message was related to a direct deposit setup I had with the US Treasury for tax refunds.

I went through the automated system to get routed - the magic words to get to the right spot were “Account Transition”. When I previously had said “Brokerage Account Transition” it thought I wanted to do a transfer. Anyway, once I got through this process, about 30 seconds, someone answered immediately. He walked me through deactivating the direct deposit but he was still unable to complete the transition so he opened a ticket for me for further investigation.

My guess is that there are a large number of transactions being processed and System A has not yet told System B that everything is now good. I will give it a couple of days and try again at some point.
User avatar
ruralavalon
Posts: 26297
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: New fee for Vanguard mutual accounts

Post by ruralavalon »

solarcub wrote: Mon Aug 08, 2022 4:34 pm
Joyful wrote: Mon Aug 08, 2022 12:22 pm Hi - Why don't you go ahead and make the switch to brokerage account(s)?
I did years ago.
I tried to, and the conversion failed, said something about dividends. We have an account where dividends from Wellington were going into Total Stock Market, so I changed everything to "reinvest", and tried again. Still failed, same message. Tried a couple weeks later, same thing. I guess I'll have to call them, which I'm not looking forward to.
After putting of the switch for years, I changed platforms long ago with no problems.

The brokerage platform does not permit automatic reinvestment of the dividends from one fund into purchases of a different fund :( , a feature of the mutual fund platform which I do miss.

Why not just go ahead and transfer to the new platform? In my opinion this is a truly minor drawback of the new brokerage platform.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
ruud
Posts: 765
Joined: Sat Mar 03, 2007 12:28 pm
Location: san francisco bay area

Re: New fee for Vanguard mutual accounts

Post by ruud »

passive101 wrote: Tue Aug 09, 2022 3:57 am
ruud wrote: Mon Aug 08, 2022 3:50 pm
passive101 wrote: Mon Aug 08, 2022 3:40 pm Will this effect Roth IRAs? I have VTWAX & VSIAX in mine
Is your Roth IRA on the mutual-fund-only or on the brokerage platform? (Does it have a settlement fund?)
It lists a Settlement fund for my Roth and traditional, but there is currently no money in the settlement funds.
Then you already have a brokerage account and the new fee does not apply to you (even you just use it to hold mutual funds).
.
User avatar
bertilak
Posts: 10711
Joined: Tue Aug 02, 2011 5:23 pm
Location: East of the Pecos, West of the Mississippi

Re: New fee for Vanguard mutual accounts

Post by bertilak »

They want you off and have made no secret of that.

I sat grant their wish! They have made that easy to do.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
User avatar
rob
Posts: 5236
Joined: Mon Feb 19, 2007 5:49 pm
Location: Here

Re: New fee for Vanguard mutual accounts

Post by rob »

PersonalFinanceJam wrote: Mon Aug 08, 2022 5:17 pm I rarely agree with Cheez-It Guy but on this I must. I understand none of us knew when or what form some of these measures would take but I find it hard to argue that it wasn't clear Vanguard wanted customers to move or there wouldn't be repercussions for staying put. The feature being lost in this case is free access to a dead end platform.
Not a surprise however....
- The main feature been "lost" (charged for is a better phrase now but agree at some point it will mean lost) here is far more than nothing.... Tradable accounts must be monitored by various employers where as mutual fund only accounts have been exempt from that requirement in my experience & roles (not sure if that is 100% the case). This is a huge impact. To counter the next obvious response - There are all sorts of features Vanguard supports that are only used by a small group - I don't want to pay for features around auto withdraw, RMD's, dividend reinvesting and on and on but accept that a lot of people will want these features and it should be part of a platform.
- Additionally, this moves from owning the funds to street name (that PR speak/lie about additional insurance hand waves around this one) and I think most people gloss over that here.
- Sure, there are also a number of mechanical features like dividend reinvest but they are annoyances for the most part.

All the glib just swap it's easy ignore these points and assume it's just resistance to change or modern tech phobias that keep people on the "old" platform... There are VERY valid reasons why a Vanguard brokerage is a big step backwards for some people. Vanguard could easily have addressed (and should have) the last point but the first two are structural issues they cannot "solve" in the "new" platform. Setting up the "new" one as a brokerage structure (rather than a brokerage window) suits their moves that I really disagree with - like PAS, traders of ETF's and hooks with "advisors" like Amex etc.

I've seen different rules for when the fees apply in this thread discussion (typical Vanguard recently in not having clear communications). Not sure if this applies to Flagship?.... Are things like 401K/403B different like they were in the past?
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
User avatar
rob
Posts: 5236
Joined: Mon Feb 19, 2007 5:49 pm
Location: Here

Re: New fee for Vanguard mutual accounts

Post by rob »

bertilak wrote: Tue Aug 09, 2022 9:57 am They want you off and have made no secret of that.

I sat grant their wish! They have made that easy to do.
How is it "easy"?? Most of my taxable funds are NOT swappable to ETF's..... They carry vast cap gains, so selling them is not an option. As my prev reply, a brokerage acct creates other potential issues with employment.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
User avatar
bertilak
Posts: 10711
Joined: Tue Aug 02, 2011 5:23 pm
Location: East of the Pecos, West of the Mississippi

Re: New fee for Vanguard mutual accounts

Post by bertilak »

rob wrote: Tue Aug 09, 2022 10:02 am
bertilak wrote: Tue Aug 09, 2022 9:57 am They want you off and have made no secret of that.

I sat grant their wish! They have made that easy to do.
How is it "easy"?? Most of my taxable funds are NOT swappable to ETF's..... They carry vast cap gains, so selling them is not an option. As my prev reply, a brokerage acct creates other potential issues with employment.
OK, sorry. I see there ARE some complications for some people. I suspect it is not widespread. I said "easy" because they give you a link to click on to do the job.
Last edited by bertilak on Tue Aug 09, 2022 10:07 am, edited 1 time in total.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
jebmke
Posts: 25271
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: New fee for Vanguard mutual accounts

Post by jebmke »

rob wrote: Tue Aug 09, 2022 10:02 am
bertilak wrote: Tue Aug 09, 2022 9:57 am They want you off and have made no secret of that.

I sat grant their wish! They have made that easy to do.
How is it "easy"?? Most of my taxable funds are NOT swappable to ETF's..... They carry vast cap gains, so selling them is not an option. As my prev reply, a brokerage acct creates other potential issues with employment.
I think he meant they want you off the MF platform so they can phase it out, not off to another brokerage; but I could be wrong.

If I were them I'd want to shut down the old platform too. I've been in situations working with two (or more) platforms running and it is expensive and fraught with control issues.
Stay hydrated; don't sweat the small stuff
Post Reply