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

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Northern Flicker
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

Investment101 wrote: Tue Aug 09, 2022 11:40 pm So to change over to brokerage account, just click the link in the email and it will switch from the mutual fund only account to Vanguard Brokerage Account right? Anything else like check back later if they transferred everything over ok or additional steps? I will need to set up ACH transfer and settings like “reinvest dividends” right? Or will all those settings transfer over too?
Never click on a link to a financial or sensitive account in an email no matter how legit you believe it is. As a matter of habit, login to your Vanguard account in a secure manner and direct the change.

Confirm reinvestment declarations, beneficiary declarations, and if a taxable account, tax lot preferences for sales of shares.

In a taxable account, take a screen shot of and/or identify cost basis data on a statement before the change, and make sure it is correct after the change.
VanGar+Goyle
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Re: New fee for Vanguard mutual accounts

Post by VanGar+Goyle »

Cheez-It Guy wrote: Tue Aug 09, 2022 6:13 pm But you've been on this forum for 15 years.
You talking to me??
Some BH posts have too much context and quoting, but this seems to have too little.
I do not know who you is.

Please do not make me read 15 years of this forum for penance.
rkhusky
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

abuss368 wrote: Tue Aug 09, 2022 8:51 pm What do you do with all the monthly statements? Do you print or download or don’t bother as 7 years are online.
I use the custom report function for brokerage accounts to make my own annual report in pdf format, organized by fund. Upside is that it still includes the Vanguard ship logo. Downside is that it is twice as long as necessary because it includes the redundant settlement fund transfers, like the transaction history does.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Munir wrote: Tue Aug 09, 2022 10:13 pm
Cheez-It Guy wrote: Tue Aug 09, 2022 7:17 pm
Munir wrote: Tue Aug 09, 2022 6:49 pm
Cheez-It Guy wrote: Tue Aug 09, 2022 6:13 pm But you've been on this forum for 15 years.
I don't understand your comment. What does the fact that I've been on this forum for 15 years have anything to do with the subject at hand?
Of course it doesn't mean anything conclusive, but there have been many dozens of threads on Vanguard platform migration, so it's a little surprising for a seasoned forum member and Vanguard customer to not know about this.
I never said that I didn't know anything about the subject of platform migration so please get your facts straight. It has been brought up for discussion in the past, as have been many other subjects of finance that I have no interest in. Only in the past few months has the subject of fines (or penalties) been discussed. Anyway, all this irrelevant to your insinuation that I should have known about this and therefore should not question what Vanguard is saying today about it . My question, which remains unanswered, is why doesn't Vanguard accept my request to merge the old platform with the new one since I have accounts in both and supposedly they are trying to accomplish that for all their customers? Apparently only Vanguard can answer this question so let's drop it. It seems that you are fixated on criticizing me personally on unrelated events to what I am asking about. How can I be more clear? I am sure our audience are fatigued by this discussion and I am withdrawing from it.
Since you're withdrawing, I guess I'll take the last word. I'm not sure why you feel personally attacked or victimized or whatever. We're simply having what should be an unemotional discussion on an anonymous message board. Some of my responses are about the general tenor of the arguments multiple people are making, but you specifically said this -- "I was never informed by Vanguard in the past, nor urged, to change to a brokerage system - nor are they urging me now." That's what triggered my response in question. To me, this is somewhat akin to pleading ignorance to commonly-known information. I mean, was your one relationship with Vanguard going to be the sole exception to their desire to move people off the old platform just because you didn't receive or note whatever communication? That hasn't been a secret on Vanguard's website, in their communications, or on Bogleheads.org. That was my only point.

You have a very valid question about merging of accounts, and I would say it's correct that only Vanguard can answer this for you, which is unfortunate given the possible current state of their phone support. When I migrated my accounts like 7 years ago, identically-registered accounts with the same tax treatment were automatically merged. I had a net reduction of one account, which I appreciated. I wish you success in accomplishing your goal. It's quite reasonable.
UpperNwGuy
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Re: New fee for Vanguard mutual accounts

Post by UpperNwGuy »

Investment101 wrote: Tue Aug 09, 2022 11:40 pm I read that some people don’t like Vanguard did this and few have switch over to fidelity, I am just buying and hold for long term and not buying/selling often like ETF, this new account shouldn’t affect me right? Or should I switch since Vanguard has changed. (From mutual fund only to pushing you toward ETF and make as much money as possible)
Most bogleheads who own ETFs do not engage in "buying/selling often." We buy and hold. There is nothing about the ETF concept that requires anyone to buy and sell frequently.
rkhusky
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

squirrel1963 wrote: Tue Aug 09, 2022 8:24 pm I converted to brokerage many years ago. It's so much better because:

You can buy anything you want, for instance individual treasury bonds.

You can convert many (most?) mutual funds to the ETF equivalent without impact on the cost basis and usuay ER is lower.
Neither of those is of interest to many. And the brokerage accounts provide less functionality in other areas than the mutual fund accounts. So, for many, no upside, with minor annoying downsides (no annual statement, no reinvestment of dividends in other funds, no auto exchange between funds, chance for errors on conversion). Others have/had more major issues involving beneficiaries, trusts, compliance.
Last edited by rkhusky on Wed Aug 10, 2022 6:51 am, edited 2 times in total.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

VanGar+Goyle wrote: Wed Aug 10, 2022 2:21 am
Cheez-It Guy wrote: Tue Aug 09, 2022 6:13 pm But you've been on this forum for 15 years.
You talking to me??
Some BH posts have too much context and quoting, but this seems to have too little.
I do not know who you is.

Please do not make me read 15 years of this forum for penance.
LOL. No, it was intended for Munir. I purposely didn't want a super-long post with a bunch of nested quotes. When I started typing that, the post I was responding to was the previous post, but someone else slipped in there on me. I would have edited and used carets (^) to point to the post I was responding to, but I have noticed that this forum doesn't use or interpret carets in the same manner to which I am accustomed. I've known it to mean that the number of carets used refers to the number of posts above yours is the post to which you intend to refer. That is, one caret for a single post (previous post), two carets for two posts, and so on. But for sure I have seem moderators / admins and others use a bunch of carets to refer to the previous post. So I didn't want to create confusion. And by not wanting to create confusion any relying on context, I apparently inadvertently created confusion. Sorry about that!
jebmke
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

rkhusky wrote: Wed Aug 10, 2022 6:44 am
squirrel1963 wrote: Tue Aug 09, 2022 8:24 pm I converted to brokerage many years ago. It's so much better because:

You can buy anything you want, for instance individual treasury bonds.

You can convert many (most?) mutual funds to the ETF equivalent without impact on the cost basis and usuay ER is lower.
Neither of those is of interest to many. And the brokerage accounts provide less functionality in other areas than the mutual fund accounts. So, for many, no upside, with minor annoying downsides (no annual statement, no reinvestment of dividends in other funds, no auto exchange between funds, chance for errors on conversion). Others have/had more major issues involving beneficiaries, trusts, compliance.
That will change as they start shutting down functionality in the MF platform to reduce its footprint.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

Investment101 wrote: Tue Aug 09, 2022 11:40 pm So to change over to brokerage account, just click the link in the email and it will switch from the mutual fund only account to Vanguard Brokerage Account right? Anything else like check back later if they transferred everything over ok or additional steps? I will need to set up ACH transfer and settings like “reinvest dividends” right? Or will all those settings transfer over too?

I read that some people don’t like Vanguard did this and few have switch over to fidelity, I am just buying and hold for long term and not buying/selling often like ETF, this new account shouldn’t affect me right? Or should I switch since Vanguard has changed. (From mutual fund only to pushing you toward ETF and make as much money as possible)
Again, this is confusing "platform" with "investment choice."

They are not pushing you to ETFs. They want to turn off the PDP-11 running the platform that is designed to hold mutual funds only.

They are perfectly happy to have you hold their mutual fund investment vehicles on the brokerage platform. Unless you

- work in a financial industry and have reporting requirements
- like to automatically bounce dividends from fund A to fund B
- have an affinity for certain reports / statement formats

There is no practical difference between the two. If your employer doesn't need to see your financial transactions and you either reinvest dividends into the same fund or take them as cash, this is just a lot of worrying about nothing.

Vanguard hasn't offered this platform to new people for around 10 years. This isn't some new move to grab cash. They've spent a decade asking people to transition. Apparently, all the people who were willing to go have done so. Now, they need to try stronger measures.
mkc
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Re: New fee for Vanguard mutual accounts

Post by mkc »

Investment101 wrote: Tue Aug 09, 2022 11:40 pm So to change over to brokerage account, just click the link in the email and it will switch from the mutual fund only account to Vanguard Brokerage Account right? Anything else like check back later if they transferred everything over ok or additional steps?
If you have anyone with Full Agent authority on an account (such as your spouse for your IRA), you will have to submit new, notarized forms for the transitioned account.

And check ALL accounts after you transition any of them. Full agent access on several of ours, including an existing brokerage account that obviously didn't change, got messed up.
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Riprap
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Re: New fee for Vanguard mutual accounts

Post by Riprap »

How do you even know which platform you're on? I've been with Vanguard for 20+ years with multiple accounts. I've never been asked by Vanguard to change.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

For those who have missed or ignored the topic of Vanguard Brokerage accounts and the subtle differences versus mutual fund accounts over the years, you may find a review of the below thread will allay some of your fears or suspicions of the unknown:

viewtopic.php?t=328977

SmileyFace might also link a similar thread created around the same time, but to me it seems based on a flawed premise, especially at this stage. It's obvious where this is headed and it will become increasingly painful to remain on the old platform even if they can't "force" you off it.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Riprap wrote: Wed Aug 10, 2022 8:28 am How do you even know which platform you're on? I've been with Vanguard for 20+ years with multiple accounts. I've never been asked by Vanguard to change.
Do the descriptions of your accounts upon login contain the word "Brokerage" and have an exactly 8-digit numeric account number with no dashes? If not, you're probably still on the old mutual fund platform.
fRedr
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Re: New fee for Vanguard mutual accounts

Post by fRedr »

I notice the summary prospectus for the mutual funds I've checked still reference $10,000 as being the amount to waive the $20 annual fee. For example, Vanguard Total Stock Market (Admiral): https://personal.vanguard.com/us/faces/ ... ducts=true

Wouldn't they have to update the prospectus for the funds before imposing a new fee?
jebmke
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

mkc wrote: Wed Aug 10, 2022 8:18 am
Investment101 wrote: Tue Aug 09, 2022 11:40 pm So to change over to brokerage account, just click the link in the email and it will switch from the mutual fund only account to Vanguard Brokerage Account right? Anything else like check back later if they transferred everything over ok or additional steps?
If you have anyone with Full Agent authority on an account (such as your spouse for your IRA), you will have to submit new, notarized forms for the transitioned account.

And check ALL accounts after you transition any of them. Full agent access on several of ours, including an existing brokerage account that obviously didn't change, got messed up.
I seem to recall someone posting that they made the transition by calling a VG rep and all the account characteristics survived the transition. All of them should be checked either way, including cost basis election, beneficiaries, dividend reinvestment election.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
chemocean
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Re: New fee for Vanguard mutual accounts

Post by chemocean »

Finally converted all accounts to brokerage platform at Vanguard to avoid the $20 fee.

Since I am now in the Brokerage account, might as well switch to ETFs (the ETFs and MF track the same benchmark about the same for my five MFs and have the same performance over both near time and out years, slight lower ERs with ETFs, no capital gains with ETF (although my large cap index MF hasn't had a capital gains distributions in years). Now learning the ins and outs of ETF trading (when: time of day versus spread, etc.). I have the ETF book around the house somewhere.

Since I will soon have all my tax advantaged accounts in ETFs, might as well look and Schwab, E*Trade and Fidelity to see the quality of their customer service and if I can get a transfer bonus. I have small accounts at Fidelity and Schwab, so can investigate there webpage and processes. Have an appointment with one of the above mentioned to discuss operational processes and estate planning procedures at a local office. My one taxable Vanguard MF has sizeable unrealized capital gains with no ETF share class, so might have to pay the transfer fee on that account if I can't get it waived.
retiringwhen
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Re: New fee for Vanguard mutual accounts

Post by retiringwhen »

jebmke wrote: Wed Aug 10, 2022 9:26 am I seem to recall someone posting that they made the transition by calling a VG rep and all the account characteristics survived the transition. All of them should be checked either way, including cost basis election, beneficiaries, dividend reinvestment election.
When we transitioned, the account settings took a day or two to get updated, but there was no additional effort required. I understand there are cases where the transition is partial or fails (don't know the cause). So, yes I would also suggest a review of all the key profile elements regardless.
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galawdawg
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Re: New fee for Vanguard mutual accounts

Post by galawdawg »

chemocean wrote: Wed Aug 10, 2022 9:35 am My one taxable Vanguard MF has sizeable unrealized capital gains with no ETF share class, so might have to pay the transfer fee on that account if I can't get it waived.
Is that MF currently held at VG? If so, you won't pay a penny to transfer it "in-kind" to Schwab, Fidelity or E*TRADE. In fact, depending on your portfolio size, they may pay you to transfer it! Two caveats to be aware of. First, be sure that you can hold that particular MF at Schwab, Fidelity or E*TRADE. Second, you may be assessed a transaction fee if you decide to purchase more shares of that MF at Schwab, Fidelity or E*TRADE. But if you just want to hold it and/or sell it, no transaction fees.
jebmke
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

chemocean wrote: Wed Aug 10, 2022 9:35 am Finally converted all accounts to brokerage platform at Vanguard to avoid the $20 fee.

Since I am now in the Brokerage account, might as well switch to ETFs (the ETFs and MF track the same benchmark about the same for my five MFs and have the same performance over both near time and out years, slight lower ERs with ETFs, no capital gains with ETF (although my large cap index MF hasn't had a capital gains distributions in years). Now learning the ins and outs of ETF trading (when: time of day versus spread, etc.). I have the ETF book around the house somewhere.

Since I will soon have all my tax advantaged accounts in ETFs, might as well look and Schwab, E*Trade and Fidelity to see the quality of their customer service and if I can get a transfer bonus. I have small accounts at Fidelity and Schwab, so can investigate there webpage and processes. Have an appointment with one of the above mentioned to discuss operational processes and estate planning procedures at a local office. My one taxable Vanguard MF has sizeable unrealized capital gains with no ETF share class, so might have to pay the transfer fee on that account if I can't get it waived.
it is worth asking if they honor durable POAs written by your estate attorney. That seems to be an issue with Vanguard. If the accounts are registered solely in your name, I'd assume that their process when you croak isn't much different than anyone else. Typically they will freeze the account until a personal rep is authorized; state requirements will vary on how that proceeds. In Virginia, for example, you need to get the court to approve the personal rep (at least that was how it worked with two estates my wife was involved with).
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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galawdawg
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Re: New fee for Vanguard mutual accounts

Post by galawdawg »

jebmke wrote: Wed Aug 10, 2022 9:43 am it is worth asking if they honor durable POAs written by your estate attorney. That seems to be an issue with Vanguard.
Schwab does...here is the form they need along with your non-Schwab Durable Power of Attorney...https://www.schwab.com/resource/attorne ... ey-in-fact
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

galawdawg wrote: Wed Aug 10, 2022 9:40 am
chemocean wrote: Wed Aug 10, 2022 9:35 am My one taxable Vanguard MF has sizeable unrealized capital gains with no ETF share class, so might have to pay the transfer fee on that account if I can't get it waived.
Is that MF currently held at VG? If so, you won't pay a penny to transfer it "in-kind" to Schwab, Fidelity or E*TRADE. In fact, depending on your portfolio size, they may pay you to transfer it! Two caveats to be aware of. First, be sure that you can hold that particular MF at Schwab, Fidelity or E*TRADE. Second, you may be assessed a transaction fee if you decide to purchase more shares of that MF at Schwab, Fidelity or E*TRADE. But if you just want to hold it and/or sell it, no transaction fees.
E-trade actually doesn't have transaction fees for Vanguard mutual funds. But you may not be able to purchase more, if it is admiral shares of a managed fund (at any of those three and, perhaps, at any other brokerage).
jebmke
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

galawdawg wrote: Wed Aug 10, 2022 9:49 am
jebmke wrote: Wed Aug 10, 2022 9:43 am it is worth asking if they honor durable POAs written by your estate attorney. That seems to be an issue with Vanguard.
Schwab does...here is the form they need along with your non-Schwab Durable Power of Attorney...https://www.schwab.com/resource/attorne ... ey-in-fact
From a practical standpoint, is this materially different than authorizing the holder of your POA account agency (VG)? I haven't been through the process but both seem to require a form/step with the broker.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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galawdawg
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Re: New fee for Vanguard mutual accounts

Post by galawdawg »

jeffyscott wrote: Wed Aug 10, 2022 9:51 am E-trade actually doesn't have transaction fees for Vanguard mutual funds.
I stand corrected! :thumbsup
TedSwippet
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Re: New fee for Vanguard mutual accounts

Post by TedSwippet »

exodusNH wrote: Wed Aug 10, 2022 7:03 am They are perfectly happy to have you hold their mutual fund investment vehicles on the brokerage platform. Unless you

- work in a financial industry and have reporting requirements
- like to automatically bounce dividends from fund A to fund B
- have an affinity for certain reports / statement formats
... or maybe

- are a US nonresident, or perhaps a US nonresident alien.

I have asked repeatedly to transition my mutual fund only account to brokerage, and the answer from Vanguard has always been, no. It is actually annoying because most Vanguard ETFs are treated relatively sanely by UK tax rules, but their mutual funds less so.

On the upside, at least Vanguard has not (yet) started to charge me additional fees for failing to do something they won't actually let me do. Shrug.
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galawdawg
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Re: New fee for Vanguard mutual accounts

Post by galawdawg »

jebmke wrote: Wed Aug 10, 2022 9:54 am
galawdawg wrote: Wed Aug 10, 2022 9:49 am
jebmke wrote: Wed Aug 10, 2022 9:43 am it is worth asking if they honor durable POAs written by your estate attorney. That seems to be an issue with Vanguard.
Schwab does...here is the form they need along with your non-Schwab Durable Power of Attorney...https://www.schwab.com/resource/attorne ... ey-in-fact
From a practical standpoint, is this materially different than authorizing the holder of your POA account agency (VG)? I haven't been through the process but both seem to require a form/step with the broker.
I know that in the past, Vanguard did not accept any power of attorney that was not completed by the customer on a form that Vanguard supplied. Vanguard requires/required their customer and the agent to both complete the Vanguard form and the customer's signature must be notarized. That was/is the case even if the Vanguard customer already had a valid DPOA.

Schwab only requires the customer's valid DPOA and a form completed and signed by the agent. The customer is not required to complete a Schwab form or have it notarized...Schwab will accept their valid DPOA.

I hope that answers your question as I understood it.
jebmke
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

galawdawg wrote: Wed Aug 10, 2022 10:04 am
jebmke wrote: Wed Aug 10, 2022 9:54 am
galawdawg wrote: Wed Aug 10, 2022 9:49 am
jebmke wrote: Wed Aug 10, 2022 9:43 am it is worth asking if they honor durable POAs written by your estate attorney. That seems to be an issue with Vanguard.
Schwab does...here is the form they need along with your non-Schwab Durable Power of Attorney...https://www.schwab.com/resource/attorne ... ey-in-fact
From a practical standpoint, is this materially different than authorizing the holder of your POA account agency (VG)? I haven't been through the process but both seem to require a form/step with the broker.
I know that in the past, Vanguard did not accept any power of attorney that was not completed by the customer on a form that Vanguard supplied. Vanguard requires/required their customer and the agent to both complete the Vanguard form and the customer's signature must be notarized. That was/is the case even if the Vanguard customer already had a valid DPOA.

Schwab only requires the customer's valid DPOA and a form completed and signed by the agent. The customer is not required to complete a Schwab form or have it notarized...Schwab will accept their valid DPOA.

I hope that answers your question as I understood it.
Thanks. Schwab seems to be little easier.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
tibbitts
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Re: New fee for Vanguard mutual accounts

Post by tibbitts »

Northern Flicker wrote: Wed Aug 10, 2022 1:19 am
tibbitts wrote: Wed Aug 10, 2022 12:46 am
Investment101 wrote: Tue Aug 09, 2022 11:40 pm So to change over to brokerage account, just click the link in the email and it will switch from the mutual fund only account to Vanguard Brokerage Account right? Anything else like check back later if they transferred everything over ok or additional steps? I will need to set up ACH transfer and settings like “reinvest dividends” right? Or will all those settings transfer over too?

I read that some people don’t like Vanguard did this and few have switch over to fidelity, I am just buying and hold for long term and not buying/selling often like ETF, this new account shouldn’t affect me right? Or should I switch since Vanguard has changed. (From mutual fund only to pushing you toward ETF and make as much money as possible)
Part of the problem is that some settings can't transfer over. For example if you have dividends from Fund A directed to Fund B (as many of us do), that can't be done on the brokerage platform as far as I know.
Mostly correct. The combined platform can direct distributions from Fund A to Fund A or to VMFXX (the settlement fund Federal MMF).

On the other hand, it waives minimum balance requirements for VMFXX, and you have the option to hold ETFs in the same account.
I'm not aware of a minimum balance requirement ever being enforced for a money market fund in a mutual fund account. I have multiple money market funds open with balances in the $1 range for decades. There is a minimum balance to open the account.

Do other brokerages have the ability to distribute from A to B, or is there something inherent in the brokerage platform that would require intervention from regulators to fix?

Similarly in my Fidelity brokerage account I can't seem to do a Roth conversion from A to B, only from A to A. Is that a Fidelity problem or again a regulatory or compliance issue?
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

TedSwippet wrote: Wed Aug 10, 2022 10:02 am
exodusNH wrote: Wed Aug 10, 2022 7:03 am They are perfectly happy to have you hold their mutual fund investment vehicles on the brokerage platform. Unless you

- work in a financial industry and have reporting requirements
- like to automatically bounce dividends from fund A to fund B
- have an affinity for certain reports / statement formats
... or maybe

- are a US nonresident, or perhaps a US nonresident alien.

I have asked repeatedly to transition my mutual fund only account to brokerage, and the answer from Vanguard has always been, no. It is actually annoying because most Vanguard ETFs are treated relatively sanely by UK tax rules, but their mutual funds less so.

On the upside, at least Vanguard has not (yet) started to charge me additional fees for failing to do something they won't actually let me do. Shrug.
That's a good point. It may have to do with Vanguard not wanting to deal with non-US residents, regardless of citizenship status. Kind of a "don't ask / don't tell" situation.

Moving to the brokerage platform changes your ownership from direct registration to street name. (This is one of the reasons they can't force you off it it.) This has no practical implications for the vast majority of people, but for a case like yours, I can see where it might cause a problem.
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retiredjg
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

fRedr wrote: Wed Aug 10, 2022 9:25 am I notice the summary prospectus for the mutual funds I've checked still reference $10,000 as being the amount to waive the $20 annual fee. For example, Vanguard Total Stock Market (Admiral): https://personal.vanguard.com/us/faces/ ... ducts=true

Wouldn't they have to update the prospectus for the funds before imposing a new fee?
That is a completely different fee and has nothing to do with this new fee being discussed for people who have stayed on the old mutual fund platform. (Don't worry - several people are getting these confused.)
scrabbler1
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Re: New fee for Vanguard mutual accounts

Post by scrabbler1 »

lakpr wrote: Mon Aug 08, 2022 1:03 pm Are there any other firms that offer a "Mutual Fund" only platform? Otherwise I think we will switch over to Schwab (they have an office within 5 miles from my home).
Fidelity has mutual fund accounts. I have had one for more than 30 years. It is very handy not having to deal with that annoying cash account when I transfer money to or from my local bank account. That includes monthly distributions which work like a paycheck with direct deposit.

But Fidelity has become increasingly lazy when it comes to allowing mutual fund account owners to use all of Fidelity's website features. Over the years, I have discovered several bugs in the website which don't allow me to do certain routine tasks because I have a mutual fund account. Fidelity won't fix their system bugs if they apply only to mutual fund account owners. I can still get the tasks done, but I have to go through a rep, either through online chat or on the phone. I have mentioned this to various Fidelity staff over the years, compiling a rather lengthy list, but they won't budge. I get the "we're sorry, but thank you for being a long-time Fidelity client. Or switch to a brokerage account."

I hope Fidelity doesn't start trying to charge me to keep this account. I do have over $1M with them, so that should be good with getting a fee waived.
retiringwhen
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Re: New fee for Vanguard mutual accounts

Post by retiringwhen »

scrabbler1 wrote: Wed Aug 10, 2022 10:26 am
lakpr wrote: Mon Aug 08, 2022 1:03 pm Are there any other firms that offer a "Mutual Fund" only platform? Otherwise I think we will switch over to Schwab (they have an office within 5 miles from my home).
Fidelity has mutual fund accounts. I have had one for more than 30 years. It is very handy not having to deal with that annoying cash account when I transfer money to or from my local bank account. That includes monthly distributions which work like a paycheck with direct deposit.

But Fidelity has become increasingly lazy when it comes to allowing mutual fund account owners to use all of Fidelity's website features. Over the years, I have discovered several bugs in the website which don't allow me to do certain routine tasks because I have a mutual fund account. Fidelity won't fix their system bugs if they apply only to mutual fund account owners. I can still get the tasks done, but I have to go through a rep, either through online chat or on the phone. I have mentioned this to various Fidelity staff over the years, compiling a rather lengthy list, but they won't budge. I get the "we're sorry, but thank you for being a long-time Fidelity client. Or switch to a brokerage account."

I hope Fidelity doesn't start trying to charge me to keep this account. I do have over $1M with them, so that should be good with getting a fee waived.
This is strong evidence in support of the thesis that Mutual Fund only platforms are on their way out. Fidelity basically told you the same thing that Vanguard has been saying. If you want quality service, upgrade to our current product. Things move slow in the Fund industry but it is pretty clear to me that direct fund company investing is a dinosaur that has absolutely no future except extinction. The industry may have to wait for the last recalcitrant investor to die, but they aren't going make it comfortable.

My suggestion to anyone still on the Vanguard Mutual Fund platform is to decide which brokerage platform they want to embrace. Staying is only going to get harder and less comfortable.
linberl
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Re: New fee for Vanguard mutual accounts

Post by linberl »

I got the email today and went ahead and did it finally. But when I did it, it asked me to decide to either reinvest of send to MMF for each account. When it was a mutual fund service, I was able to send directly to my bank (dividends) by each fund within each account. I would often change whether I wanted the dividends from a particular fund reinvested or to my bank checking account based on what was happening with my personal expenses. Can I no long direct individual fund dividends automatically? Does I have to do it on an account basis??? Not sure I will be happy with Vanguard if that is the case...... Also I had completed all the process for power of attorney and for distributions on the mutual fund side - are they valid now on the brokerage side or do I have to do something else?
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Re: New fee for Vanguard mutual accounts

Post by ruralavalon »

mkc wrote: Wed Aug 10, 2022 8:18 am
Investment101 wrote: Tue Aug 09, 2022 11:40 pm So to change over to brokerage account, just click the link in the email and it will switch from the mutual fund only account to Vanguard Brokerage Account right? Anything else like check back later if they transferred everything over ok or additional steps?
If you have anyone with Full Agent authority on an account (such as your spouse for your IRA), you will have to submit new, notarized forms for the transitioned account.

And check ALL accounts after you transition any of them. Full agent access on several of ours, including an existing brokerage account that obviously didn't change, got messed up.
I was able to continue Full Agent Authorization on all of our accounts without submitting new forms, simply by requesting a continuation at the time I switched to the new brokerage platform.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: New fee for Vanguard mutual accounts

Post by retired@50 »

linberl wrote: Wed Aug 10, 2022 10:50 am ... Can I no long direct individual fund dividends automatically?
With a brokerage account at Vanguard you can direct dividends (by each holding) in one of the following 3 ways.
1. to the settlement account
2. to re-invest in the same fund that created the dividend
3. to your linked bank account.

At one point or another, I've used each of these 3 options.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
linberl
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Re: New fee for Vanguard mutual accounts

Post by linberl »

I have beneficiaries set for my various MF holdings, and one is a trust, some are split %. I was hoping that would all just transfer over but when I just looked, there is now just one brokerage account # with a place for beneficiary name and backup. Am I going to have to redo all my beneficiary info, and is it going to continue to allow me to set a trust with backup as well as split % beneficiaries? I also can't figure out whether i have to redo my partner's power of attorney in case of incapacity.
Weathering
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Re: New fee for Vanguard mutual accounts

Post by Weathering »

I received the email from vanguard today stating the $20 fee (no name or account information was in the email). However, I just reviewed all my accounts (self, spouse, joint trust, separate trust, UTMA1, UTMA2), and the only one that doesn't say "Brokerage" next to it is my two 529 accounts.

I'm not even sure how to change vanguard 529 plan accounts to brokerage accounts. Does anyone else have this issue or have previously converted a 529 plan from MF to the brokerage platform?
Last edited by Weathering on Wed Aug 10, 2022 11:52 am, edited 1 time in total.
Random Poster
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Re: New fee for Vanguard mutual accounts

Post by Random Poster »

I haven’t received the email (and may never receive it because I have holdings well above the $1M cutoff anyway), but my mother did.

As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.

I’m getting increasingly fed up with their non-customer service (lack of tax forms, increasing fees, bad website, no true “year to date” statements, etc), and I’m even more irritated that Vanguard has the gall to charge people for the alleged privilege of using Vanguard’s platform, especially when said platform was the only one that existed when the customer (err, “owner”) opened their account at Vanguard in the first place.

Vanguard can go jump off a high ledge for all I care at this point. I’m tired of supporting them and giving their executives money that they clearly don’t deserve, but I’ve got so much in capital gains in their funds that getting out of them would cost me too much. Aren’t they lucky?
Most experiences are better imagined.
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

Random Poster wrote: Wed Aug 10, 2022 11:52 am I haven’t received the email (and may never receive it because I have holdings well above the $1M cutoff anyway), but my mother did.

As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.

I’m getting increasingly fed up with their non-customer service (lack of tax forms, increasing fees, bad website, no true “year to date” statements, etc), and I’m even more irritated that Vanguard has the gall to charge people for the alleged privilege of using Vanguard’s platform, especially when said platform was the only one that existed when the customer (err, “owner”) opened their account at Vanguard in the first place.

Vanguard can go jump off a high ledge for all I care at this point. I’m tired of supporting them and giving their executives money that they clearly don’t deserve, but I’ve got so much in capital gains in their funds that getting out of them would cost me too much. Aren’t they lucky?
They can't maintain the systems forever. It doesn't mean you have to be happy about it.

At your investment level, Schwab will be happy to pay you a transfer bonus and offer free trades on Vanguard's funds, at least on the ones that can be transferred.

If you think you want to go that route AND you have Vanguard mutual funds that are eligible for conversion to the ETF share class, first go to a Vanguard brokerage account, convert the funds, then transfer out.
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retiredjg
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

I got the email yesterday. Considering my options and not sure what I will do at this point. Several possible options (including picking the so-called "upgrade").

Interesting tidbit....I checked the eTrade fund screener and they sell all the mutual funds I'm interested in with no transaction fee - although some are Investor shares rather than Admiral shares.
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Re: New fee for Vanguard mutual accounts

Post by Random Poster »

exodusNH wrote: Wed Aug 10, 2022 12:03 pm

They can't maintain the systems forever. It doesn't mean you have to be happy about it.

At your investment level, Schwab will be happy to pay you a transfer bonus and offer free trades on Vanguard's funds, at least on the ones that can be transferred.

If you think you want to go that route AND you have Vanguard mutual funds that are eligible for conversion to the ETF share class, first go to a Vanguard brokerage account, convert the funds, then transfer out.
Quite frankly, I don’t want the transfer bonus (well, I do want the money, but I don’t want it because it will mess up my ACA subsidy).

I just tried to transition my mother’s account. When I hit the “transition now” button, I get a “sorry, something went wrong, try again later” message. Brilliant move on Vanguard’s part. :oops:

So I did the transition (or, at least I think I did) by manually hitting the “upgrade” button for each of her accounts,

Well done Vanguard. Threaten to charge people for not transitioning, and then make it difficult to do so. What overpriced consultant came up with that great idea?
Most experiences are better imagined.
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

Random Poster wrote: Wed Aug 10, 2022 12:56 pm
exodusNH wrote: Wed Aug 10, 2022 12:03 pm

They can't maintain the systems forever. It doesn't mean you have to be happy about it.

At your investment level, Schwab will be happy to pay you a transfer bonus and offer free trades on Vanguard's funds, at least on the ones that can be transferred.

If you think you want to go that route AND you have Vanguard mutual funds that are eligible for conversion to the ETF share class, first go to a Vanguard brokerage account, convert the funds, then transfer out.
Quite frankly, I don’t want the transfer bonus (well, I do want the money, but I don’t want it because it will mess up my ACA subsidy).

I just tried to transition my mother’s account. When I hit the “transition now” button, I get a “sorry, something went wrong, try again later” message. Brilliant move on Vanguard’s part. :oops:

So I did the transition (or, at least I think I did) by manually hitting the “upgrade” button for each of her accounts,

Well done Vanguard. Threaten to charge people for not transitioning, and then make it difficult to do so. What overpriced consultant came up with that great idea?
Given Vanguard's frugality, it's likely that both the consultant who suggested it and the ones who implemented it were both underpaid. Have you ever tried selling more than a handful of tax lots? It's terrible.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Random Poster wrote: Wed Aug 10, 2022 11:52 am As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.
Their position on this is perfectly sane.

You have a choice now.
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Re: New fee for Vanguard mutual accounts

Post by marcopolo »

Random Poster wrote: Wed Aug 10, 2022 12:56 pm
exodusNH wrote: Wed Aug 10, 2022 12:03 pm

They can't maintain the systems forever. It doesn't mean you have to be happy about it.

At your investment level, Schwab will be happy to pay you a transfer bonus and offer free trades on Vanguard's funds, at least on the ones that can be transferred.

If you think you want to go that route AND you have Vanguard mutual funds that are eligible for conversion to the ETF share class, first go to a Vanguard brokerage account, convert the funds, then transfer out.
Quite frankly, I don’t want the transfer bonus (well, I do want the money, but I don’t want it because it will mess up my ACA subsidy).

I just tried to transition my mother’s account. When I hit the “transition now” button, I get a “sorry, something went wrong, try again later” message. Brilliant move on Vanguard’s part. :oops:

So I did the transition (or, at least I think I did) by manually hitting the “upgrade” button for each of her accounts,

Well done Vanguard. Threaten to charge people for not transitioning, and then make it difficult to do so. What overpriced consultant came up with that great idea?
There is no cliff for the ACA this year.
At most you would give up 8.5% of your transfer bonus due to loss of ACA tax credits.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

Cheez-It Guy wrote: Wed Aug 10, 2022 1:38 pm
Random Poster wrote: Wed Aug 10, 2022 11:52 am As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.
Their position on this is perfectly sane.

You have a choice now.
I've done the same thing dozens of times with legacy business systems. Some (most) were clean cuts, not transitions. The users had not choice as to if or when the cut was made. It is a rational decision. Based on another thread it appears that Fidelity is going down the same path.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
retiringwhen
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Re: New fee for Vanguard mutual accounts

Post by retiringwhen »

Cheez-It Guy wrote: Wed Aug 10, 2022 1:38 pm
Random Poster wrote: Wed Aug 10, 2022 11:52 am As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.
Their position on this is perfectly sane.

You have a choice now.
Vanguard will lower their costs if you upgrade or if you leave. They win double if you keep your funds and hold them at a different brokerage. Vanguard is completely sane in their actions. I am guessing that $20/fund-account is likely less then the actual marginal costs of your mutual fund platform account, that number will only go up as more customers leave the platform.

Vanguard's entire business model is based upon a fundamental need to drive costs out of the business. A choice by you to stay on the mutual fund platform has marginally higher costs.

If you want to screw Vanguard, sell all your Vanguard funds, move to a different brokerage and buy their funds instead. That is the only way that Vanguard loses.
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Re: New fee for Vanguard mutual accounts

Post by quietseas »

Random Poster wrote: Wed Aug 10, 2022 11:52 am I haven’t received the email (and may never receive it because I have holdings well above the $1M cutoff anyway), but my mother did.

As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.

I’m getting increasingly fed up with their non-customer service (lack of tax forms, increasing fees, bad website, no true “year to date” statements, etc), and I’m even more irritated that Vanguard has the gall to charge people for the alleged privilege of using Vanguard’s platform, especially when said platform was the only one that existed when the customer (err, “owner”) opened their account at Vanguard in the first place.

Vanguard can go jump off a high ledge for all I care at this point. I’m tired of supporting them and giving their executives money that they clearly don’t deserve, but I’ve got so much in capital gains in their funds that getting out of them would cost me too much. Aren’t they lucky?
I'd recommend thinking of Vanguard as two separate businesses, an asset manager (funds, ETFs) and an asset administrator (brokerage, call center, statements, 1099s). You can choose to use them as a an asset manager but not as a brokerage. Their customer service issues are with the brokerage. Their funds are low cost. It is a mental shift but maybe an analogy would be taking your Ford to a non-dealer, independent mechanic because you get better service.
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Re: New fee for Vanguard mutual accounts

Post by sport »

exodusNH wrote: Wed Aug 10, 2022 12:03 pm
Random Poster wrote: Wed Aug 10, 2022 11:52 am I haven’t received the email (and may never receive it because I have holdings well above the $1M cutoff anyway), but my mother did.

As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.

I’m getting increasingly fed up with their non-customer service (lack of tax forms, increasing fees, bad website, no true “year to date” statements, etc), and I’m even more irritated that Vanguard has the gall to charge people for the alleged privilege of using Vanguard’s platform, especially when said platform was the only one that existed when the customer (err, “owner”) opened their account at Vanguard in the first place.

Vanguard can go jump off a high ledge for all I care at this point. I’m tired of supporting them and giving their executives money that they clearly don’t deserve, but I’ve got so much in capital gains in their funds that getting out of them would cost me too much. Aren’t they lucky?
They can't maintain the systems forever. It doesn't mean you have to be happy about it.
While they don't have to maintain the old system, they also don't have to eliminate functionality that people use. I find distributions directed to another account very useful for my needs. The brokerage platform does not offer this. Changing to the brokerage platform will cause some significant inconvenience for me.
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

exodusNH wrote: Wed Aug 10, 2022 12:03 pm
Random Poster wrote: Wed Aug 10, 2022 11:52 am I haven’t received the email (and may never receive it because I have holdings well above the $1M cutoff anyway), but my mother did.

As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.

I’m getting increasingly fed up with their non-customer service (lack of tax forms, increasing fees, bad website, no true “year to date” statements, etc), and I’m even more irritated that Vanguard has the gall to charge people for the alleged privilege of using Vanguard’s platform, especially when said platform was the only one that existed when the customer (err, “owner”) opened their account at Vanguard in the first place.

Vanguard can go jump off a high ledge for all I care at this point. I’m tired of supporting them and giving their executives money that they clearly don’t deserve, but I’ve got so much in capital gains in their funds that getting out of them would cost me too much. Aren’t they lucky?
They can't maintain the systems forever. It doesn't mean you have to be happy about it.

At your investment level, Schwab will be happy to pay you a transfer bonus and offer free trades on Vanguard's funds, at least on the ones that can be transferred.

If you think you want to go that route AND you have Vanguard mutual funds that are eligible for conversion to the ETF share class, first go to a Vanguard brokerage account, convert the funds, then transfer out.
There's, most likely, not even a need to convert anything, nearly all (if not all) Vanguard mutual funds can be transferred in-kind. It's only buying more that may be an issue.
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

sport wrote: Wed Aug 10, 2022 2:05 pm
exodusNH wrote: Wed Aug 10, 2022 12:03 pm
Random Poster wrote: Wed Aug 10, 2022 11:52 am I haven’t received the email (and may never receive it because I have holdings well above the $1M cutoff anyway), but my mother did.

As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.

I’m getting increasingly fed up with their non-customer service (lack of tax forms, increasing fees, bad website, no true “year to date” statements, etc), and I’m even more irritated that Vanguard has the gall to charge people for the alleged privilege of using Vanguard’s platform, especially when said platform was the only one that existed when the customer (err, “owner”) opened their account at Vanguard in the first place.

Vanguard can go jump off a high ledge for all I care at this point. I’m tired of supporting them and giving their executives money that they clearly don’t deserve, but I’ve got so much in capital gains in their funds that getting out of them would cost me too much. Aren’t they lucky?
They can't maintain the systems forever. It doesn't mean you have to be happy about it.
While they don't have to maintain the old system, they also don't have to eliminate functionality that people use. I find distributions directed to another account very useful for my needs. The brokerage platform does not offer this. Changing to the brokerage platform will cause some significant inconvenience for me.
It's a cost / benefit analysis. If only 2% of customers use it, it's probably not worth the effort. It sucks for those people, for sure, but makes business sense.

A famous Microsoft programmer and author, Raymond Chen, sum it up like this: every feature starts 100 points in the hole. You only have so much time to dedicate to building a product. The lesser used features have to go to the bottom of the list.
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

jeffyscott wrote: Wed Aug 10, 2022 2:06 pm
exodusNH wrote: Wed Aug 10, 2022 12:03 pm
Random Poster wrote: Wed Aug 10, 2022 11:52 am I haven’t received the email (and may never receive it because I have holdings well above the $1M cutoff anyway), but my mother did.

As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.

I’m getting increasingly fed up with their non-customer service (lack of tax forms, increasing fees, bad website, no true “year to date” statements, etc), and I’m even more irritated that Vanguard has the gall to charge people for the alleged privilege of using Vanguard’s platform, especially when said platform was the only one that existed when the customer (err, “owner”) opened their account at Vanguard in the first place.

Vanguard can go jump off a high ledge for all I care at this point. I’m tired of supporting them and giving their executives money that they clearly don’t deserve, but I’ve got so much in capital gains in their funds that getting out of them would cost me too much. Aren’t they lucky?
They can't maintain the systems forever. It doesn't mean you have to be happy about it.

At your investment level, Schwab will be happy to pay you a transfer bonus and offer free trades on Vanguard's funds, at least on the ones that can be transferred.

If you think you want to go that route AND you have Vanguard mutual funds that are eligible for conversion to the ETF share class, first go to a Vanguard brokerage account, convert the funds, then transfer out.
There's, most likely, not even a need to convert anything, nearly all (if not all) Vanguard mutual funds can be transferred in-kind. It's only buying more that may be an issue.
Absolutely true. Going the ETF route now makes future moves easier. That way you don't need to bounce them back to Vanguard.
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