Recent required Vanguard transition

Rjonst

My wife and I "had" 2 separate funds at Vanguard/ We were recently contacted by Vanguard that we HAD to change our fund balances to a Brokerage account " or else". After working our way thru the required pages, wound up with a "settlement fund" account with the combined value of both our funds in one lump. Does this mean we no longer have our initial funds and have to purchase them again from the settlement account? Was this move in our favor or what? / thanks

msf

I believe Vanguard was merely "persuading" you (with threats?) to convert your account from the mutual fund platform to the brokerage platform. Vanguard has been sending me email every couple of weeks for months now asking me to convert. Here's some of the content:

Please log on to vanguard.com and complete a 3-step transition to our new investment platform.

We'll continue to support clients on this old platform until it's retired from use in 2022 or earlier ...

When you switch, we'll carry over all of your current mutual funds, so you can continue investing just like you always have.

Not having converted my accounts, I can't say for sure what the process is supposed to look like. From what you've described and the letter above, it sounds like you're in an intermediate phase. Vanguard should restore your original funds automatically, along with their original purchase dates and cost basis. This should not take more than a day. If it does, I would contact Vanguard.

At the end of the day, you should wind up where you started, except that the funds will be held in a brokerage account instead of in a mutual fund platform account. If either of your funds pays monthly dividends, check to make sure that they get paid and credited correctly for August.

Vanguard has not handled this transition smoothly. Their email keeps reassuring me that "There will be [only] a few very minor changes." Yet upon pressing Vanguard, they admitted that they'll wipe out the power of attorney (POA) I had granted on my accounts, whether I convert the accounts or they do.

Ben

If Vanguard did not have the well-managed funds in which I have invested for many years, I would have moved my money elsewhere. Their customer service has gone steadily downhill. There is a disconnect between how the actual fund managers behave (very well indeed) and how Vanguard treats customers (not well at all).

carew388

ben +1 Vanguard has great funds(for me) but the website is clunky and buying and selling funds is tedious. E-trade features Vanguard fund purchases with no transaction fee, but who knows if that will continue after the Morgan Stanley merger. If Schwab sold Vanguard funds with no transaction fee, I'd close my Vanguard account and transfer everything to Schwab!

Derf

@carew388: +1
(Vanguard has great funds(for me) but the website is clunky and buying and selling funds is tedious.)
Nice summation on the subject of Vanguard.
Stay Safe, Derf

fundly

Wellstrade ( Wells Fargo) sent me a letter last month discontinuing the free 100 yearly trades of TF funds ,promised ,when I opened the account 13 years ago. So that kept me in their fold even with all the shenanagans going on, which never affected me. Now all TF fund buys and sells will be $35. Their platform of NTF funds is small compared to the other big guys. So now they get the finger and my account which is very, very large is going to Firstrade in which ALL trades and ALL 11,000 funds are traded FREE. This includes all Vanguard funds including Admiral class. I hope someone at Wellstrade sees this. The customer service is ok if you get a USA based CSR.. The site is easy to work and trade on. The company and management stinks as most know, by now. This is not a time that a brokerage should be reneging on its promises with all the competition out there. But from Wells Fargo not unexpected. Good riddance to Wellstrade!!

Mona

fundly said:

Wellstrade ( Wells Fargo) sent me a letter last month discontinuing the free 100 yearly trades of TF funds ,promised ,when I opened the account 13 years ago. So that kept me in their fold even with all the shenanagans going on, which never affected me. Now all TF fund buys and sells will be $35. Their platform of NTF funds is small compared to the other big guys. So now they get the finger and my account which is very, very large is going to Firstrade in which ALL trades and ALL 11,000 funds are traded FREE. This includes all Vanguard funds including Admiral class. I hope someone at Wellstrade sees this. The customer service is ok if you get a USA based CSR.. The site is easy to work and trade on. The company and management stinks as most know, by now. This is not a time that a brokerage should be reneging on its promises with all the competition out there. But from Wells Fargo not unexpected. Good riddance to Wellstrade!!

I thought you could only get Admiral Class shares at Vanguard.

msf

Wellstrade has one of the highest closeout fee around, $95. So it's a good thing that Firstrade covers those fees up to $200. I got so fed up with Wellstrade that, free trades and all, I left them years ago.

Remember Scottrade? Or before that Scudder Retirement Plus? Like Wellstrade, for a number of years they let you trade all funds without fees. I expect Firstrade to drop this feature also at some point, though that could be a decade or more off.

OTOH, I expect Vanguard Flagship level ($1M+) to keep free mutual fund trades around indefinitely. Vanguard has deeper pockets and its program is different. To qualify, customers must invest a large amount of money in Vanguard funds. That gives Vanguard a revenue stream that Firstrade doesn't get when you invest through them in third party funds.

Vanguard has not only maintained this perk, but has increased its value over time. Originally you received 8 free trades per year, counting not only TF fund trades but equity trades. Vanguard raised the number to 25. Then early this year it eliminated commissions on equity trades, ensuring that all 25 free trades were applied to your TF fund transactions.

There's a lot I'll criticize Vanguard for, and I have, but investing in funds (not stocks, not ETFs) on its brokerage platform is not one of them. The platform is bare bones, but simple to use for this basic task. Now if you want to talk customer service, trading tools, etc., that's a whole 'nother kettle of fish.

wxman123

fundly said:

Wellstrade ( Wells Fargo) sent me a letter last month discontinuing the free 100 yearly trades of TF funds ,promised ,when I opened the account 13 years ago. So that kept me in their fold even with all the shenanagans going on, which never affected me. Now all TF fund buys and sells will be $35. Their platform of NTF funds is small compared to the other big guys. So now they get the finger and my account which is very, very large is going to Firstrade in which ALL trades and ALL 11,000 funds are traded FREE. This includes all Vanguard funds including Admiral class. I hope someone at Wellstrade sees this. The customer service is ok if you get a USA based CSR.. The site is easy to work and trade on. The company and management stinks as most know, by now. This is not a time that a brokerage should be reneging on its promises with all the competition out there. But from Wells Fargo not unexpected. Good riddance to Wellstrade!!

Big fan of firstrade. Website is simple but it works fine. Also, once in a while you can snag institutional shares of mutual funds at low minimums and NTF.

fundly

@mona. All funds including all Admiral class Vanguard funds are available at Firstrade NTF. When researching be aware that without an account open , the fund count is smaller. All funds are listed in the research function if you have an account open. I can't remember exactly but about 500 Vanguard funds are available .I decided to go with Firstrade because they do not convert Admiral shares to investor shares in the funds that require a 50K minimum. Vanguard does this after discussing this with multiple CSR's .I was able to buy Admiral funds at Wellstrade with less than 50K (about 2/3 of this amount) and wish to still hold them ,but cringe at paying the higher ER.