Author Topic: Dumb Question: Vanguard Brokerage Account vs Non-Brokerage Account  (Read 19523 times)

lcerrito

  • 5 O'Clock Shadow
  • *
  • Posts: 28
I have a dumb question... I've been investing with Vanguard for several years now (Target Date Roth IRA and taxable VFINX), and when I rolled over my previous employers 401k into a regular Vanguard IRA, it created a Brokerage Account. I also noticed that below the names of my Roth and VFINX, it says "Upgrade" and this appears to lead to the making of a Brokerage account.

So my dumb question is: What is the difference between what I have now and a Brokerage account? Is it just letting me diversify under the same account? Are there additional fees to do so?

Thanks for your help and patience with this newbie question. Also, if anyone knows of a way to rename the accounts, let me know. :) Seeing my name three times is not exactly helpful in figuring out which account is which.

GrowingTheGreen

  • Bristles
  • ***
  • Posts: 356
    • Growing The Green
Re: Dumb Question: Vanguard Brokerage Account vs Non-Brokerage Account
« Reply #1 on: January 10, 2016, 12:01:54 PM »
I'm a little perplexed, probably because I can't see what your screen looks like. Here's my best guess:

Vanguard groups accounts into retirement and non-retirement accounts. Your IRAs should be in a retirement account and your taxable should be in a non-retirement account. I believe their brokerage account is an account that you would use to buy non-mutual fund shares--like an ETF or individual stock. Did you roll your 401k into an ETF? If so, that could've caused the creation of a brokerage account.

This sort of thing is probably worth a call to Vanguard.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 2742
Re: Dumb Question: Vanguard Brokerage Account vs Non-Brokerage Account
« Reply #2 on: January 10, 2016, 12:50:12 PM »
The "upgrade" button in your Vanguard account groups the mutual funds and ETFs into one place.  Nothing is sold, no fees are charged, but your screen looks different.  It's more compact.  Vanguard has pages explaining it and answering questions here:
https://investor.vanguard.com/info/account-upgrade

When you buy Vanguard mutual funds or ETFs with Vanguard, it costs $0.  If you sell non-Vanguard ETFs, there is a cost that varies depending on how much money you have at Vanguard, but ranges from $2-$7/trade.  See the fees chart here:
https://personal.vanguard.com/us/whatweoffer/stocksbondscds/feescommissions

lcerrito

  • 5 O'Clock Shadow
  • *
  • Posts: 28
Re: Dumb Question: Vanguard Brokerage Account vs Non-Brokerage Account
« Reply #3 on: January 10, 2016, 04:29:17 PM »
Thank you!!! That makes sense. I had trouble finding info on their site.

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 5288
  • Age: 35
  • Location: Seattle, WA
    • My blog
Re: Dumb Question: Vanguard Brokerage Account vs Non-Brokerage Account
« Reply #4 on: January 10, 2016, 05:30:06 PM »
Previously Vanguard separated mutual funds from brokerage (ETFs and individual stocks) for each account type. Now they have a unified account system for new accounts and they're trying to get people to "upgrade" their split accounts to the new merged format. I recently did this because the website wouldn't let me convert money from a new-style merged traditional IRA to an old-style split Roth IRA. The account listing is a bit more compact now, nothing else is really different.