Vanguard "Growing Pains?"

[Midpack]

I like to think the financial institution our portfolio is with is on top of things. Two strikes yesterday.

I did Voice Verification and they sent out a physical letter to confirm. Trouble is they sent it to my name, and my sisters address - WTH? It's a good thing it wasn't anything confidential or I'd be really . The letter said if I had any questions to call my Flagship representative Frank C. I called but got rolled over, so I sent a message on their VERY CLUNKY proprietary system.

This morning I got a message from Frank, saying he's been reassigned and can't help me, so I should call in. If he's been reassigned, why was my message routed to him?

So I call in this morning and ask about the address. In addition to our accounts, my name is also on a trust account my deceased Dad set up that has had a zero balance since last November. The rep tells me my sisters address is on the trust account (no problem), and that account is showing as primary for me (problem) - an inactive account with a zero balance that I asked them to close months ago? We certainly never asked them to make it a primary account, in fact I changed our home address two months ago and have received mail at our actual new address. Out of the blue a dead account became our primary account and address? But the phone rep assures me he's changed to show the correct address shows on all accounts now.

Again I've asked the trust account to be closed, but I know from previous experience Vanguard won't close dead accounts - they seem to wait a long time. I consolidated IRA accounts and those dead accounts showed for what seemed like at least a year.

So I ask why my message went to my (unknown to me) now former Flagship rep. He tells me Frank has "moved on" and they are going through some "growing pains." He says my account will be linked to "another rep by the end of the month, maybe sooner." But if I call or message in the next week or two, it may go to my former rep who won't respond.

Surprising to me. I am fine with very limited service from Vanguard and the low fees associated with it, but I expect them to keep addresses, reps and our money straight.

I've kinda thought about splitting our accounts across Vanguard and Fidelity for years, but never acted. Thinking seriously about it today...

[/rant]

[Another Reader]

Vanguard has never been good at account changes of any kind. A few years ago, they "lost" a transfer from an outside institution of a six figure IRA. It left the originating institution, who reported that it had been transferred, then it disappeared. I called Vanguard every few days and was told the money was not there.

Finally, after six weeks, it appeared. It turned out Vanguard's computer system had no way to acknowledge the transfer until it had passed some holding period. I was very unhappy and let them know. No response. Just business as usual with these people.

I still have money with Vanguard because it is difficult to replicate some of their products but they will never be my primary account custodian.

[easysurfer]

Overall, I'm happy with my experience with Vanguard. When I FIRE'd and had my 401K from megacorp moved to my VG IRA, things went smoothly.

But maybe that is because I've avoided the free (still sales in my opinion) this is your Flagship representative offers. My only interactions in the past were me saying "Don't call me, I'll call you".

[braumeister]

It was ridiculous (and easily avoidable) things like this that eventually made me leave Vanguard. I still hold some of their ETFs, but in Fidelity and Schwab accounts. IMHO they really have no excuse for such poor customer service and I got tired of dealing with it and excusing them on account of their low fees. Much happier now dealing with F and S.

[Rianne]

We have a living trust designation in VG portfolio. Whenever I call with questions regarding beneficiaries or changes, I'm transferred to the specific department. Typically our rep in Flagship will not answer questions regarding our trust specifically or CD questions. We haven't had issues with poor service. We've been with them for 30+ years.

[SnowballCamper]

Thanks for sharing. I was just ruminating about the $45 USAA brokerage fee to buy Vanguard mutual funds, and considering a switch to Vanguard. Probably not now.

[gwraigty]

Quote:

Originally Posted by Midpack I've kinda thought about splitting our accounts across Vanguard and Fidelity but never acted. Thinking seriously about it today...

You may recall my response to your question about my extreme dissatisfaction with Vanguard in post #22 of Need Vanguard Educated, Please.

I was delighted to learn recently that the VBO portion of the Vanguard 401k is being transferred to TD Ameritrade SDBA. Unfortunately, the 50% that has to stay in the regular 401k side is staying with Vanguard. TDA SDBA is already set up with online access and are just awaiting the transfer of assets by Vanguard, scheduled for this Friday.

Still, there was a snafu when inquiring about getting trading authority. TDA said it wasn't allowed by the plan. I did a quick Google search and found the PDF form that Vanguard would have had to fill out to set up the SDBA with TD Ameritrade. One of the options involves whether or not to grant limited trading authority. At that point, it appeared that Vanguard probably was the source in not allowing it on the new TDA SDBA.

The next day, TDA sent a survey request about our experience so far. My husband told me to fill it out. I wrote that it makes no sense that Vanguard gave me limited trading authority, but it's being denied now at TDA. A few days later, TDA sent an apology message (and left a voicemail with same), said they'd looked into it further, and it was allowed. They sent the form for limited trading authority on plan participant accounts. There's a space for someone from Vanguard to sign, so not sure how long it's going to take. Hopefully TDA will notify us when it's done, but I'm not counting on it. According to the form, I'll be allowed online access, unlike at Vanguard.

I don't judge a company as much by whether or not they make mistakes (unless they're constantly messing things up), as much as if they're willing to correct them efficiently. We had our joint brokerage and Roth IRA accounts with TDA years ago. We transferred the accounts out between Fidelity and Schwab for cost reasons at the time, not customer service issues.

I'd rate Fidelity and Schwab almost equal in costs and customer service. Fidelity has a slight edge in allowing MMFs as a core settlement, plus the 2% cash back Fidelity Visa. You can just move a small amount of assets over to see how you like them first.

[gwraigty]

Quote:

Originally Posted by Another Reader Vanguard has never been good at account changes of any kind. A few years ago, they "lost" a transfer from an outside institution of a six figure IRA. It left the originating institution, who reported that it had been transferred, then it disappeared. I called Vanguard every few days and was told the money was not there. Finally, after six weeks, it appeared. It turned out Vanguard's computer system had no way to acknowledge the transfer until it had passed some holding period. I was very unhappy and let them know. No response. Just business as usual with these people. I still have money with Vanguard because it is difficult to replicate some of their products but they will never be my primary account custodian.

It's awful that happened to you! I have no loyalty to a product or a firm. IMO, no mutual fund or ETF is so sacred that there isn't a "close-enough" product available at another firm, even if you're aiming for NTF/commission-free.

[Alan]

Wrong address is a pet peeve of mine, particularly with financial institutions who should do better. Many organizations never seem to have "normalized" databases where information is held is one location and not replicated everywhere it is needed.

In January last year I was contacted by our HSBC Bank in the USA to say that my Debit Card had been used in a small town in Arizona so a hold had been placed on the card. Perfect, that is exactly what should happen as we live in England. The person on the phone told me he would cancel the cards and send out new ones but I would need to sign for it as we lived overseas. A couple of weeks passed and no card but I was again contacted over an attempted fraudulent use of a debit card. Someone had attempted to use the new card without authorizing it by using it first time with its PIN. (It is a contactless card and I had asked for the new card to have the same PIN as the cancelled one, otherwise I suppose the occupants of our old place would also have received a PIN in a separate letter).

When he told me the address it had been sent to I pointed out that address was from 2016 and we had moved house twice since then, in 2016, and again in 2017, and I updated my address each time. I told him that I was looking at my account details online and the address was correct. He said that the department that actually makes and sends out the cards does not have access to account details so he would now make sure their records are updated.

[REWahoo]

Quote:

Originally Posted by SnowballCamper Thanks for sharing. I was just ruminating about the $45 USAA brokerage fee to buy Vanguard mutual funds, and considering a switch to Vanguard. Probably not now.

FWIW, after tiring of paying the high fees at USAA Investment Co and the uncertainty of what lies ahead after they sold to Victory Capital, DW and I moved her two IRA's and my small Roth to Vanguard. All three transferred without a hitch.

[Midpack]

Thanks for the replies. I was afraid my thread might be read as whining by all, evidently not.

[gwraigty]

Quote:

Originally Posted by Midpack Thanks for the replies. I was afraid my thread might be read as whining by all, evidently not.

Not at all.

It's important to hear of these issues. It might help others make an informed decision on whether to stay, or go, or avoid altogether if not already entangled with them in some way.

[HarveyS]

I recall getting a letter from VG saying they were doing away with individual Flagship reps, opting instead for a "pool" of reps to assist. I didn't pay too much attention to it. Maybe that is part of the "growing pains"?
Overall I am happy with VG, which holds about 1/3 of my assets. My experience with the Flagship reps has been from OK to fantastic. Unfortunately (for me, at least), the fantastic rep was recognized for her performance and promoted very quickly.
Wrong address issues are unacceptable.

[nwsteve]

Quote:

Originally Posted by braumeister It was ridiculous (and easily avoidable) things like this that eventually made me leave Vanguard. I still hold some of their ETFs, but in Fidelity and Schwab accounts. IMHO they really have no excuse for such poor customer service and I got tired of dealing with it and excusing them on account of their low fees. Much happier now dealing with F and S.

+1
It was due to a series of similar administrative screw-ups that finally drove me to consolidate all our accounts at Fidelity. Whatever else you want to say about Fidelity, at least their administrative processes are predictable and reliable.
Just recently, Fidelity has added a "lock-down" feature for accounts that prevent funds being moved. The "lockdown" is easily turned off for a needed transaction (eg funds to outside CD purchase) and turned back on. We are leaving for a trip to Egypt soon and I plan to have our accounts locked during our absence. Betcha, it will be awhile before Vanguard even thinks about such a feature.

[deserat]

Quote:

Originally Posted by REWahoo FWIW, after tiring of paying the high fees at USAA Investment Co and the uncertainty of what lies ahead after they sold to Victory Capital, DW and I moved her two IRA's and my small Roth to Vanguard. All three transferred without a hitch.

Oh yes - it seems that almost every interaction I have with USAA now just sours me on them....I have severely curtailed my banking with them and may just drop it altogether. The USAA investment co went bye-bye with me many years ago. The insurance is also drving me nuts. Spent three hours on the chat line phone with about 5 different reps to do this move back to Germany - sheesh, you'd think they'd have this figured out as they service the military. The level of service has severely dropped off in the last decade or so.

Haven't had too many issues with VG, although the clunkiness and antiquation of some of their systems has been troublesome. We'll see how long I last with them. I've had Fido before, we shall see.

TSP can be very antiquated as well. I'm trying to decide if I will roll out of their system when I finally 'retire' or just stay with them due to their low rates....they don't make it possible to back-door Roth yet and I will be doing that a *LOT* over the next few years.

[SnowballCamper]

TSP just updated the withdrawal options to be much more flexible. For me, you can’t beat the no transaction cost to rebalance though.

[RunningBum]

Not whiny at all. Using the wrong address and wrong primary is serious. Do they not take account security seriously? What if your sister had moved? There wouldn't be a change of address for you, so now a stranger would be getting your VG mail. And when they made that account your primary, why didn't they send notice to your "old" address and primary account about the change.

Re: the flagship advisor, I thought I recently got a notice that they were doing away with personally assigned flagship reps and now we'd just be using one out of a pool. In some ways that's not bad since any time I call mine is rarely available, but if VG does call me I recognize the name and realize it's legit, and not some kind of marketing call.

I've had a few glitches, nothing quite bad enough to make me move, but getting me closer. This would've put me over the edge. I could convert most of my holdings to ETFs with the same expense ratio, or get similar or better with someone else. Maybe keep a couple holdings I can't get elsewhere with VG. Or not.

[braumeister]

Quote:

Originally Posted by deserat Oh yes - it seems that almost every interaction I have with USAA now just sours me on them....I have severely curtailed my banking with them and may just drop it altogether.

+1
I've been happy with USAA insurance for many decades, and I've used their bank as my primary account for more than 20 years. Yet they have been frustrating me for several years now and I'm getting tired of it. Last week I spent half an hour on the phone with two different reps and still didn't get my very simple issue straightened out. I'm beginning to transition things away from them, mainly to my FIDO cash management account.

[The Cosmic Avenger]

Quote:

Originally Posted by braumeister +1 I've been happy with USAA insurance for many decades, and I've used their bank as my primary account for more than 20 years. Yet they have been frustrating me for several years now and I'm getting tired of it. Last week I spent half an hour on the phone with two different reps and still didn't get my very simple issue straightened out. I'm beginning to transition things away from them, mainly to my FIDO cash management account.

Same here. They locked my daughter's account, and said she had to send a photocopy of her passport to unlock it!!!



Called back a few minutes later (after I calmed down), and the new rep was...rather shocked that someone had asked me to do that. Ridiculous, and this has been happening a lot over the last few years. They're really going downhill fast. I'm moving EVERYTHING out of USAA, including insurance, if I can find equivalent coverage at anywhere near the same price.

[NW-Bound]

Quote:

Originally Posted by Alan ... When he told me the address it had been sent to I pointed out that address was from 2016 and we had moved house twice since then, in 2016, and again in 2017, and I updated my address each time. I told him that I was looking at my account details online and the address was correct. He said that the department that actually makes and sends out the cards does not have access to account details so he would now make sure their records are updated.

Totally amazing. Whoever moves would be affected by this huge error. How do they not know until now?