Author Topic: Question About VTSMX & VTSAX  (Read 6306 times)

nexus

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Question About VTSMX & VTSAX
« on: October 24, 2016, 05:00:20 PM »
Hey, thanks for taking a moment to provide your input/experience.

I own over $10k worth of shares of VTSMX through periodic investments. I understand that VTSAX is the same as VTSMX with slightly lower fees and a $10k initial buy-in vs the $3k initial buy-in of VTSMX. Since hitting the 10k mark with VTSMX, I've been able to purchase VTSAX now in any increment at/above $100, which is awesome.

My question: Will Vanguard eventually convert my $10k+ worth shares of VTSMX to VTSAX? If so, when does this happen? Do they just do it on a certain date every year? (ie Jan 1st, YYYY)

Let me know if I'm misinformed/looking at this wrong. Many thanks!
« Last Edit: October 24, 2016, 05:25:14 PM by nexus »

StudentEngineer

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Re: Question About VTSMX & VTSAX
« Reply #1 on: October 24, 2016, 05:11:57 PM »
Posting to see what others say, curious about this as well.

nereo

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Re: Question About VTSMX & VTSAX
« Reply #2 on: October 24, 2016, 05:14:46 PM »

My question: Will Vanguard eventually convert my $10k+ worth shares of VTSMX to VTSAX? If so, when does this happen? Do they just do it on a certain date every year? (ie Jan 1st, YYYY)


They used to do it automatically, but now you need to call and request that they convert them.  It's a non-taxable event, btw.
Also, once you have VTSAX you can purchase shares in VTSAX in any dollar amount - it's not like you have to invest another $10k.

Dusty Dog Ranch

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Re: Question About VTSMX & VTSAX
« Reply #3 on: October 24, 2016, 06:34:14 PM »
When I checked my Vanguard account online today, it asked me if I wanted to convert to Admiral shares. I was just over the 10k amount.

cincystache

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Re: Question About VTSMX & VTSAX
« Reply #4 on: October 24, 2016, 08:01:12 PM »
When I crossed the 10k amount there was a button that said something like "convert to lower cost admiral shares" right next to my holding when I logged in to vanguard.

RetirementDreaming

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Re: Question About VTSMX & VTSAX
« Reply #5 on: October 24, 2016, 08:41:53 PM »
Same for me. There was a button with the option above the account balance.

Nothlit

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Re: Question About VTSMX & VTSAX
« Reply #6 on: October 24, 2016, 09:59:57 PM »
Wondering how to convert to Admiral Shares?

They don't say exactly how frequent their eligibility reviews are. I'd guess maybe monthly or quarterly, but I have no firsthand knowledge. If you are impatient, there's no harm in going ahead and initiating the conversion yourself.

nexus

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Re: Question About VTSMX & VTSAX
« Reply #7 on: October 25, 2016, 10:26:38 AM »
Thanks for the info. I have a brokerage account through Wells Fargo that I buy my Vanguard funds through. I'll double check my account for any such options and if I can't find them I'll either call WF or Vanguard to see if/when it is going to happen.

nereo

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Re: Question About VTSMX & VTSAX
« Reply #8 on: October 25, 2016, 10:42:24 AM »
Thanks for the info. I have a brokerage account through Wells Fargo that I buy my Vanguard funds through. I'll double check my account for any such options and if I can't find them I'll either call WF or Vanguard to see if/when it is going to happen.

Curious - why would you have a brokerage through WF to hold Vanguard index funds?  Why not skip the middle-man entirely (WF in this case)? Are you paying extra in fees to WF?

nexus

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Re: Question About VTSMX & VTSAX
« Reply #9 on: October 25, 2016, 11:40:02 AM »
So far it has been for the sake of simplicity. It's nice to have my checking, savings, line of credit, IRA (to rollover 401ks is/when I switch jobs), and taxable brokerage account all in the same place.

The only fees I pay are the commission fee every time I buy more of VTSAX. Does Vanguard charge you every time to buy more fund from them? If so, how much is it?

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Re: Question About VTSMX & VTSAX
« Reply #10 on: October 25, 2016, 11:59:15 AM »
Thanks for the info. I have a brokerage account through Wells Fargo that I buy my Vanguard funds through. I'll double check my account for any such options and if I can't find them I'll either call WF or Vanguard to see if/when it is going to happen.

To the best of my knowledge you cannot buy Admiral shares of Vanguard funds from anywhere other than Vanguard. https://encrypted.google.com/search?safe=off&output=search&sclient=psy-ab&q=buy+admiral+shares+outside+vanguard&btnG=&oq=&gs_l=&pbx=1#q=buy+admiral+shares+outside+vanguard+site:www.bogleheads.org&safe=off

So far it has been for the sake of simplicity. It's nice to have my checking, savings, line of credit, IRA (to rollover 401ks is/when I switch jobs), and taxable brokerage account all in the same place.

The only fees I pay are the commission fee every time I buy more of VTSAX. Does Vanguard charge you every time to buy more fund from them? If so, how much is it?

No they do not. For the love of god STOP buying Vanguard funds at WF.


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Re: Question About VTSMX & VTSAX
« Reply #11 on: October 25, 2016, 12:10:45 PM »
So far it has been for the sake of simplicity. It's nice to have my checking, savings, line of credit, IRA (to rollover 401ks is/when I switch jobs), and taxable brokerage account all in the same place.

Yeah, but not when that "same place" is Wells Fargo!

The only fees I pay are the commission fee every time I buy more of VTSAX. Does Vanguard charge you every time to buy more fund from them? If so, how much is it?

Vanguard charges $0. You are paying fees pointlessly.

Frugalman19

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Re: Question About VTSMX & VTSAX
« Reply #12 on: October 25, 2016, 12:20:54 PM »
Thanks for the info. I have a brokerage account through Wells Fargo that I buy my Vanguard funds through. I'll double check my account for any such options and if I can't find them I'll either call WF or Vanguard to see if/when it is going to happen.

To the best of my knowledge you cannot buy Admiral shares of Vanguard funds from anywhere other than Vanguard. https://encrypted.google.com/search?safe=off&output=search&sclient=psy-ab&q=buy+admiral+shares+outside+vanguard&btnG=&oq=&gs_l=&pbx=1#q=buy+admiral+shares+outside+vanguard+site:www.bogleheads.org&safe=off

So far it has been for the sake of simplicity. It's nice to have my checking, savings, line of credit, IRA (to rollover 401ks is/when I switch jobs), and taxable brokerage account all in the same place.

The only fees I pay are the commission fee every time I buy more of VTSAX. Does Vanguard charge you every time to buy more fund from them? If so, how much is it?

No they do not. For the love of god STOP buying Vanguard funds at WF.

I have Admiral shares of Vanguard index funds in my LPL brokerage account. No fees for additional purchases.

nereo

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Re: Question About VTSMX & VTSAX
« Reply #13 on: October 25, 2016, 12:38:55 PM »
The only fees I pay are the commission fee every time I buy more of VTSAX. Does Vanguard charge you every time to buy more fund from them? If so, how much is it?

There are no fees.  Vanguard allows you to purchase as little as $10 worth of VTSAX at a time.  There's no fees when you sell, either, only the annual yield of 0.05%.

FWIW, Vanguard also offers all the services you offered (checking, money market account/savings account, IRA, taxable brokerage accounts), and I'd bet dollars-to-donuts they charge far less for all of them.

nexus

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Re: Question About VTSMX & VTSAX
« Reply #14 on: October 25, 2016, 12:47:12 PM »
This thread has been far more informative than I would have imagined. Thanks!!

Looks like I need to open an account with Vanguard and then seen if I can perform some sort of transfer in kind from WF to Vanguard to get my assets over there instead. No point in paying them to do the same thing you guys are doing for free. If I want to see everything in one place, I'll just use Mint.

Thanks for the face punches. You're going to save me money.

nereo

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Re: Question About VTSMX & VTSAX
« Reply #15 on: October 25, 2016, 12:58:18 PM »

Looks like I need to open an account with Vanguard and then seen if I can perform some sort of transfer in kind from WF to Vanguard to get my assets over there instead. No point in paying them to do the same thing you guys are doing for free. If I want to see everything in one place, I'll just use Mint.


You can.  Once you open an account with Vanguard (or even while you are in the process of opening an account) call Vanguard's "Concierge Service" and they can walk you through all the steps necessary.  They can generate the paperwork for you, and basically all you need to do is print it, sign it (usually with a medalian signature Guarantee), and mail it to them.
The process should take 15-30 minutes of your time.

DailyGrindFree

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Re: Question About VTSMX & VTSAX
« Reply #16 on: October 25, 2016, 06:45:31 PM »
Thanks for all the info. This was very informative for me too.

FiguringItOut

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Re: Question About VTSMX & VTSAX
« Reply #17 on: October 26, 2016, 10:05:11 AM »
Hey, thanks for taking a moment to provide your input/experience.

I own over $10k worth of shares of VTSMX through periodic investments. I understand that VTSAX is the same as VTSMX with slightly lower fees and a $10k initial buy-in vs the $3k initial buy-in of VTSMX. Since hitting the 10k mark with VTSMX, I've been able to purchase VTSAX now in any increment at/above $100, which is awesome.

My question: Will Vanguard eventually convert my $10k+ worth shares of VTSMX to VTSAX? If so, when does this happen? Do they just do it on a certain date every year? (ie Jan 1st, YYYY)

Let me know if I'm misinformed/looking at this wrong. Many thanks!

Mine converted automatically about 3 or 4 months ago.

I got an email from Vanguard notifying me that the account reached $10K threshold and they will be converting my shares from regular to admiral.  The next time I logged into Vanguard, about 1.5 weeks later, I had admiral shares.


nexus

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Re: Question About VTSMX & VTSAX
« Reply #18 on: October 26, 2016, 01:08:12 PM »
Quick update:

I created an account with Vanguard and have already begun the process online to transfer my assets from WF Advisors to Vanguard. I just need to go home, print the documents they emailed to me, then mail them in. Once they're received, it should take either 5-7 or 7-10 business days for everything to transfer over.

I'll provide an update here or in my journal if I run into any issues or fees from WFA for discontinuing a service with them. I highly doubt it'll happen, but you never know.

nereo

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Re: Question About VTSMX & VTSAX
« Reply #19 on: October 26, 2016, 01:10:55 PM »
Quick update:

I created an account with Vanguard and have already begun the process online to transfer my assets from WF Advisors to Vanguard. I just need to go home, print the documents they emailed to me, then mail them in. Once they're received, it should take either 5-7 or 7-10 business days for everything to transfer over.

I'll provide an update here or in my journal if I run into any issues or fees from WFA for discontinuing a service with them. I highly doubt it'll happen, but you never know.

Just a heads up - Vanguard can be slow with transfers.  It's my one real criticism with them.  During this time expect to have no real updates on your online banking profile.  It will get done, but I've had transfers take 3 weeks (~15 business days).  If you are ever worried you can call and they'll give you more detail - I really wish they were faster and gave better information about the status of transfers online. 

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Re: Question About VTSMX & VTSAX
« Reply #20 on: October 29, 2016, 01:06:40 PM »
I recently transferred accounts from Charles Schwab to Vanguard.. Once everything was in place, the actual transfer took about a week. Schwab charged me $50 per account I transferred though so don't be surprised if WF does too.

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Re: Question About VTSMX & VTSAX
« Reply #21 on: October 29, 2016, 05:16:32 PM »
1. they will update it, but they only do this a few times a year so it isn't automatic the same day.
2. you can do it on the website.
3. you can call in.