Author Topic: Vanguard funds @ VG v. IB or M1  (Read 612 times)

catccc

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Vanguard funds @ VG v. IB or M1
« on: August 23, 2021, 01:20:32 PM »
Are there any advantages to holding Vanguard funds or ETFs at Vanguard v. another brokerage like IB or M1?  I am thinking no, but I thought I'd check in here while I continue to evaluate the pros/cons of moving to IB or M1 to access low rate margin loans as an alternative to an emergency fund.

nalor511

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Re: Vanguard funds @ VG v. IB or M1
« Reply #1 on: August 23, 2021, 04:19:30 PM »
Are there any advantages to holding Vanguard funds or ETFs at Vanguard v. another brokerage like IB or M1?  I am thinking no, but I thought I'd check in here while I continue to evaluate the pros/cons of moving to IB or M1 to access low rate margin loans as an alternative to an emergency fund.

No benefit to holding at VG.

less4success

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Re: Vanguard funds @ VG v. IB or M1
« Reply #2 on: August 23, 2021, 06:02:34 PM »
Some brokerage accounts only let you buy Vanguard ETFs and not mutual funds.

Downsides to IB that Iíve noticed: very confusing interface, requires a Java app just to show cost basis, obnoxious upsell emails that are hard to opt out of, and many more.

Downsides to M1 Iíve read about (I donít have an account there yet): no limit orders on ETFs, can only execute orders at two specific times each day (or one time if you donít pay for M1 Plus).

General downsides to other brokerages: sometimes there are fees for mutual funds or youíre limited to ETFs only.

Radagast

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Re: Vanguard funds @ VG v. IB or M1
« Reply #3 on: August 23, 2021, 09:35:30 PM »
No benefit really. The non-VG brokerages have signup bonuses which could be worth:
https://www.doctorofcredit.com/best-brokerage-bonuses-earn-up-to-3500/

no limit orders on ETFs, can only execute orders at two specific times each day (or one time if you donít pay for M1 Plus).
Now that would be dumb.

MustacheAndaHalf

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Re: Vanguard funds @ VG v. IB or M1
« Reply #4 on: August 25, 2021, 08:11:36 AM »
Are there any advantages to holding Vanguard funds or ETFs at Vanguard v. another brokerage like IB or M1?
When transferring assets, mutual funds and ETFs are very different.  ETF ownership is easy to transfer, and can be sold like stocks.  Mutual funds, however, are run by the company that created them.  Vanguard mutual funds can only be purchased and redeemed with Vanguard's help - not on an exchange.  So IBKR or M1 have to go to Vanguard to do any purchase or sale of Vanguard mutual funds.

Looking on IBKR and M1 websites, it looks like IBKR charges $15 and M1 charges $20 to do any mutual fund purchase or sale.
https://www.interactivebrokers.com/en/index.php?f=1590&p=funds1
https://www.m1finance.com/legal/disclosures/misc-fees/

If you're willing to convert your mutual funds to ETFs, then it might make sense to transfer ETFs to IBKR or M1.  But if you want to stick to Vanguard mutual funds, it's better to do so at Vanguard.

catccc

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Re: Vanguard funds @ VG v. IB or M1
« Reply #5 on: August 25, 2021, 11:54:05 AM »
All great information, thank you!  I don't think there is any disadvantage to owning the ETF equivalent of the fund, and there may even be an advantage due to lower expense ratio, is that correct?  I did find it annoying to have to buy whole shares of VTI rather than just a $ amount of VTSAX at VG, but I think M1 resolves this by allowing fractional share purchases.

brellis1vt

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Re: Vanguard funds @ VG v. IB or M1
« Reply #6 on: August 25, 2021, 03:29:26 PM »
I currently have an M1 account and the only advantages I have seen is automatic reallocation when you put new money in, buying fractional shares, and buying a portfolio (pie) instead of having to buy each part individually.  It's still a bit clunky though.

catccc

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Re: Vanguard funds @ VG v. IB or M1
« Reply #7 on: August 25, 2021, 04:12:08 PM »
I currently have an M1 account and the only advantages I have seen is automatic reallocation when you put new money in, buying fractional shares, and buying a portfolio (pie) instead of having to buy each part individually.  It's still a bit clunky though.

Cool, I've read about the automatic reallocation, that is handy.  I just do it when I remember which isn't often enough.  Do you use their margin loan option as an emergency fund, or do you hold a separate emergency fund?

brellis1vt

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Re: Vanguard funds @ VG v. IB or M1
« Reply #8 on: August 25, 2021, 09:33:10 PM »
I still have a separate cash account for that (which I haven't really needed).  I know it would be smarter to put that money to work but it gives me comfort knowing it's there.  When I logged in it doesn't appear to be difficult to sign up for it but if you contact them they will probablywalk you through everything (at least they did for me.)

PDXTabs

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Re: Vanguard funds @ VG v. IB or M1
« Reply #9 on: August 31, 2021, 05:42:06 PM »
To the best of my knowledge Vanguard makes it very easy to transfer shares of ETFs to another Vanguard account (eg, your child). M1 does not. IDK about IB.