Vanguard Brokerage Account Confusion

Been advised by Vanguard to change to Brokerage account to avoid fees so I did. What exactly is a brokerage account. I would like to just continue to have my funds in Target Retirement Fund. Do I need to transfer funds to that account or is it restored automatically? What happens to money left in the “settlement” account?

I converted to their brokerage accounts last year. A brokerage allows you to buy stocks and ETFs. It also allows you to buy target date funds and other mutual funds that Vanguard offers. The conversion is done automatically. You initiate the brokerage conversion at Vanguard and they do the rest. The settlement account does not change exactly. Vanguard may shift the money into another money market fund ( they have at least 3 different money markets, probably more if I check). Settlement funds are used to pay for purchases of mutual funds, stocks, ETFs, treasury securities, CDs.

I think Vanguard pushed for the brokerage conversions as a cost saving measure.

You still have the same funds… really no change except now you can also buy and sell stocks.

IMHO, this was brought about by the arrival of ETFs (Exchange Traded Funds) which trade as stocks.

You might want to Google “Mutual Funds vs ETFs” to get an idea of the difference and if one is any better than the other for you.

I just did the conversion recently after being prodded for several years and finally got a letter telling me that if I did not transfer my one mutual fund to the brokerage platform I would have to pay $20 a year. What the letter did not say is that the $20 was for getting paper statements. Not just for staying on the old platform. A little confusing. Their letter said it would be fast, easy, and quick. IT WAS NOT ANY OF THESE! The page at Vanguard did not work. I had to call the number for help. After an hour on hold and twenty minutes with a rep, it was done. I have had my dividends and capital gains sent to my bank since opening the account. It was not clear anywhere as to if my funds would be automatically sent to my bank or if I had to specify that somewhere. After another call, this time to the regular customer service number, not the one for conversion help, I got through fairly quickly. The rep could not answer that question and had to transfer me to another rep, and after several minutes more, I got my confirmation of funds distribution.