brokerage account

Learn about your VBA transition

To continue our mission of giving all investors the best chance of investment success, clients with mutual fund accounts on our legacy investment platform are being asked to transition to a Vanguard Brokerage Account.

Why transition to a Vanguard Brokerage Account?

More flexibility in your account

You can hold Vanguard mutual funds and ETFs, stocks, bonds, and CDs, as well as ETFs and funds from other companies—all in the same account.

If you sell a stock or bond, you can reinvest the proceeds in Vanguard funds on the same day.

Protection for Vanguard fund holdings

All securities, including Vanguard mutual funds, are covered up to SIPC limits, which protects its members for up to $500,000. This includes $250,000 for claims for cash.

To obtain information about SIPC, including an explanatory SIPC brochure, please contact SIPC at sipc.org or 202-371-8300.

The service you rely on is moving with you

As always, you won’t pay commissions to buy or sell Vanguard mutual funds and ETFs in a Vanguard Brokerage Account.

There is no cost and no tax implications associated with the transition.

We're bringing over what you need

Your investments won’t change. Your mutual fund transaction history, tax forms, personal performance information, and other data will carry over to your brokerage account.

In most cases, services you’ve established on your mutual fund-only account will be carried over.

What's the difference?

ACCOUNT NUMBER

Legacy investment platform

Separate numbers for each mutual fund holding in the account

Brokerage account platform

A single 8-digit number for each account

INVESTMENT OPTIONS

Legacy investment platform

Only Vanguard mutual funds

Brokerage account platform

Both Vanguard and non-Vanguard mutual funds and exchange-traded funds (ETFs), stocks, bonds, and certificates of deposits (CDs)

SIPC COVERAGE

Legacy investment platform

Mutual funds aren't covered

Brokerage account platform

Securities, including Vanguard mutual funds, and most other publicly traded securities are covered up to SIPC limits

MOBILE APP

Legacy investment platform

Mutual funds accounts aren’t covered

Brokerage account platform

Access to all functionality available in the app

TAX FORMS

Legacy investment platform

A separate tax form for each mutual fund holding

Brokerage account platform

One consolidated tax form for each brokerage account (For the tax year of your move, you'll receive separate tax forms for your mutual fund accounts and brokerage accounts. Starting the first full tax year after you move, you'll receive a single tax form for each brokerage account.)

ELECTRONIC BANK TRANSFERS

Legacy investment platform

Available

Brokerage account platform

Available

AUTOMATED INVESTMENT/WITHDRAWAL PLAN

Legacy investment platform

Available

Brokerage account platform

Available for Vanguard mutual funds

DIRECT DEPOSIT

Legacy investment platform

Available

Brokerage account platform

Available

ACCOUNT STRUCTURE

Legacy investment platform

Vanguard mutual fund accounts are held directly with The Vanguard Group, Inc., the funds' transfer agent

Brokerage account platform

Securities in your Vanguard Brokerage Account, including Vanguard mutual funds, are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation

  Legacy investment platform Brokerage account platform

Account number

Separate numbers for each mutual fund holding in the account

A single 8-digit number for each account

Investment options

Only Vanguard mutual funds

Both Vanguard and non-Vanguard mutual funds and exchange-traded funds (ETFs), stocks, bonds, certificates of deposits (CDs), and most other publicly traded securities.

SIPC coverage

Mutual fund accounts aren't covered 

 

Securities, including Vanguard mutual funds, and most other publicly traded securities are covered up to SIPC limits

Mobile app

No ability to trade in the app

Access to all functionality available in the app

Tax forms

A separate tax form for each mutual fund holding

One consolidated tax form for each brokerage account (For the tax year of your move, you'll receive separate tax forms for your mutual fund accounts and brokerage accounts. Starting the first full tax year after you move, you'll receive a single tax form for each brokerage account.)

Electronic bank transfers

Available

Available

Automated investment/withdrawal plan

Available

Available for Vanguard mutual funds

Direct deposit

Available

Available

Account structure

Vanguard mutual fund accounts are held directly with The Vanguard Group, Inc., the funds' transfer agent

Securities in your Vanguard Brokerage Account, including Vanguard mutual funds, are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation

Frequently asked questions

Yes. Transitioning your accounts is free, and in most cases, you can complete the transition online. During your account transition, you may be prompted to sign up for e-delivery. You can qualify to have future account service fees waived on your brokerage account by enrolling in e-delivery. Learn more about e-delivery.

Yes. You'll retain access to all the same mutual funds you have today, and your current holdings will move to your Vanguard Brokerage Account.

Plus, you'll have new investment options available if you ever want to take advantage of them, including stocks, bonds, certificates of deposit (CDs), and non-Vanguard mutual funds and exchange-traded funds (ETFs).

You'll also see a new money market fund in your account that will serve as your settlement fund (Vanguard Federal Money Market Fund).1 This fund is used to pay for and receive proceeds from trades if you buy and sell securities in your account.

No. There are no tax implications when transitioning your investments to a Vanguard Brokerage Account. Instead of receiving multiple tax forms, you'll receive one consolidated tax form.

However, for the tax year of your transition, you'll receive two separate tax forms—one for the old platform and one for the new. Each year after that, you'll receive one consolidated tax form.

A brokerage account allows investors to buy, sell, and hold investments such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), and certificates of deposit (CDs). Brokerage accounts are held with a registered broker-dealer—in this case, Vanguard Marketing Corporation. In addition, margin accounts and options trading are available for approved investors.

Your brokerage account comes with a settlement fund (also known in the brokerage industry as a “sweep account”) that is used to pay for investments and hold assets from investment sales and other transactions. Money from bank transfers is held in the settlement fund until you use it to pay for investments, such as mutual funds, exchange-traded funds (ETFs), or individual stocks and bonds.

To write checks with a Vanguard Brokerage Account, you'll need to complete our Checkwriting Service Form. We’ll do our best to honor any outstanding checks written on a Vanguard mutual fund from your previous account that are presented for payment within 45 days after your Vanguard funds have been transferred into your brokerage account. For details, see the Vanguard Brokerage Account agreement. Access the Banking section of your Profile & Account Settings page to get started. (Login required).

The cost basis of your fund investments, including your calculation method, will be the same once transitioned to your identically registered Vanguard Brokerage Account. However, there are a few important considerations, depending on the calculation method you’ve elected for sales of fund shares acquired on or after January 1, 2012.
 
If you’re currently using the average cost method (AvgCost): When you consent to move your mutual fund assets, you’ll need to instruct Vanguard to temporarily switch your cost basis method to first in, first out (FIFO). This switch will preserve your flexibility to choose a different cost basis method for these shares in the future. Once the fund assets are in your brokerage account, they’ll be defaulted back to AvgCost.
 
If you’re currently using the FIFO or specific identification (SpecID) method: When you consent to move your assets, you’ll need to instruct Vanguard to continue to apply the FIFO or SpecID election to any sales of your fund investments after they’re transferred to your brokerage account. This will ensure that your cost basis method doesn’t default to AvgCost.

For all your brokerage holdings, you’ll have two options:


  • Reinvest them in additional shares of the distributing holding.
  • Distribute them in cash to your settlement fund.

Once your Vanguard mutual funds are in your brokerage account, you’ll also have the option of distributions paid on the funds being sent by electronic transfer to your bank.

If dividends or capital gains are paid on the date your funds transfer into your brokerage account, they’ll be distributed by the method you’ve chosen, unless you originally elected to have them paid to another Vanguard mutual fund. In that case, they’ll be reinvested in the funds that paid them.
 
In the future, these dividends and capital gains on your Vanguard mutual funds will be paid to your settlement fund,
unless you elect to have them reinvested or electronically transferred to your bank.

All investing is subject to risk, including the possible loss of the money you invest. 

For more information about Vanguard mutual funds or ETFs, obtain a mutual fund or ETF prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the  prospectus; read and consider it carefully before investing.

You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.

1You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor is not required to reimburse the Fund for losses, and you should not expect that the sponsor will provide financial support to the Fund at any time, including during periods of market stress.

Options are a leveraged investment and are not suitable for every investor. Options involve risk, including the possibility that you could lose more money than you invest. Before buying or selling options, you must receive a copy of Characteristics and Risks of Standardized Options issued by OCC. A copy of this booklet is available at theocc.com. It may also be obtained from your broker, any exchange on which options are traded, or by contacting OCC at 125 S. Franklin Street, Suite 1200, Chicago, IL 60606 (888-678-4667 or 888-OPTIONS). The booklet contains information on options issued by OCC. It is intended for educational purposes. No statement in the booklet should be construed as a recommendation to buy or sell a security or to provide investment advice. For further assistance, please call The Options Industry Council (OIC) helpline at 888-OPTIONS or visit optionseducation.org for more information. The OIC can provide you with balanced options education and tools to assist you with your options questions and trading.