All eggs in the Vanguard Basket

[FreeBear]

That's a good point. My brokerage account got locked for several months. I could trade but withdrawal 0! It was the target of a TOD and the state of PA held it until the estate cleared their painfully slow, paper based tax system.

That was a real PIA. In my case it was just the account, but I could see how it could be the broker/fund co.

Glad the problem cleared up. Could have been a big issue if this account was needed for a big withdrawal. It's another reason why I keep lots of cash as well as multiple accounts. Just never know...

 

[HadEnuff]

all of my eggs are in Vanguard. If I wanted to spread my eggs around, what are my choices that would provide similar investment options (indexed funds) at comparable expense?

 

[Gill]

This has been discussed at length of the Bogleheads forum and the overwhelming opinion of some very knowledgable people are that there is no risk whatsoever in having everything with Vanguard

I spent my career in the bank trust business and totally agree with this. Accordingly, I have everything with Vanguard except for a Treasury Direct account.
Bruce


Sent from my iPad using Early Retirement Forum

 

[PatrickA5]

All of our retirement accounts are at Vanguard. We have one outside bank and no other brokerage accounts. All of our retirement funds are in one Life Strategy Fund.

Over the last several years, we consolidated many accounts at many different places into just two. We did this for simplicity in the event I'm no longer around to handle all of the finances.

 

[fritz]

All of our retirement accounts are at Vanguard. We have one outside bank and no other brokerage accounts. All of our retirement funds are in one Life Strategy Fund.

Over the last several years, we consolidated many accounts at many different places into just two. We did this for simplicity in the event I'm no longer around to handle all of the finances.

+1 All our accounts are at Vanguard. We keep cash at an online bank and one local bank. We also did this for simplicity in the event I'm no longer around to handle the finances. In our 7th year of retirement (retired at 58/57).

 

[Whisper66]

Wow, the number of folks who have experienced some sort of lock-out from their accounts is a little concerning. Maybe I will stick with two separate vendors in case one decides to hold my $ ransom for months. Thanks again for the inputs.

+1 - I've now been totally convinced to keep at least 2 accounts to avoid problems with temporary lock-outs. Never heard of those happening before this thread.

 

[papadad111]

all of my eggs are in Vanguard. If I wanted to spread my eggs around, what are my choices that would provide similar investment options (indexed funds) at comparable expense?

Given ETF options for many vanguard funds, there are many options especially if you're talking index funds vs proprietary stuff. The ETFs are just as cheap expense wise. Any brokerage works. Schwab. Interactive. Scottrade. TD, etc Etc.

 

[ernow]

I love the idea of having it all consolidated for simplicity's sake but my main concern about having about 97% of my assets at Vanguard or any other place has been that they can apparently shut me down with a freeze if they want to from reading other posts here and on bogleheads.

I do keep a year's worth expenses at a local bank so I could get through a period of trouble if needed. And from a couple of posts, looks like you can still transfer out under a freeze if needed which makes me feel better about that.

 

[MRG]

I love the idea of having it all consolidated for simplicity's sake but my main concern about having about 97% of my assets at Vanguard or any other place has been that they can apparently shut me down with a freeze if they want to from reading other posts here and on bogleheads.

I do keep a year's worth expenses at a local bank so I could get through a period of trouble if needed. And from a couple of posts, looks like you can still transfer out under a freeze if needed which makes me feel better about that.

I could not transfer 1 cent out when the state of PA locked our brokerage account. Took about 6-8 months before they would allow us to have access. Even if I could have done a transfer to a different brokerage the state would have locked the new one.

 

[hlfo718]

I think more concerning is the custodians that actually house the assets and records. When you invest you are not sending the money to Vanguard directly but rather the custodian(s). I know Vanguard uses State Street, Bank of NY, and Brown Brothers.

If someone or group is able to wipe out the records at these custodians, then we will be screwed.

 

[Markola]

All of our retirement funds are in one Life Strategy Fund.

A virtual fist bump to a man after my own heart. My investing ideal would be to eventually have 100% of retirement assets in the right Vanguard Life Strategy Fund. In reality, however, I might like to leave half in the federal TSP since, in some states like mine, if we had an accident and suffered a liability exposure, lawyers and judges can come after IRA assets and garnish distributions more readily than they can come after 401K/403B/TSP type (ERISA) employer-held assets and distributions. Simplicity aside and password security aside, but considering liability instead, it is worth studying your own state's protection of IRA assets, or lack thereof.

 

[DrRoy]

For years I had about half my non-401K $ at Merrill, and the other half at Fidelity. Last year Merrill gave me some inconveniences, Fidelity offered a modest bonus to transfer funds in, and now all my non-401K is at Fidelity.

 

[fritz]

A virtual fist bump to a man after my own heart. My investing ideal would be to eventually have 100% of retirement assets in the right Vanguard Life Strategy Fund. In reality, however, I might like to leave half in the federal TSP since, in some states like mine, if we had an accident and suffered a liability exposure, lawyers and judges can come after IRA assets and garnish distributions more readily than they can come after 401K/403B/TSP type (ERISA) employer-held assets and distributions. Simplicity aside and password security aside, but considering liability instead, it is worth studying your own state's protection of IRA assets, or lack thereof.

All states (as shown on the attached link) offer some creditor protection for IRAs. A few states allow (full or partial) creditor access to ROTH IRAs. There are Special Statutory Provisions listed by state where applicable.

http://www.thetaxadviser.com/content/dam/tta/issues/2014/jan/stateirachart.pdf

Edit: this link somewhat conflicts by state (some are "No" for IRAs), but appears to be similar.

http://moranknobel.com/news/State_Laws_Protecting_IRAs.pdf

Should give one enough info as to creditor protection by state. If yours is one of the few "Lucky You" (No or Conditional)- probably will need to investigate further.

 

[Kabekew]

There are only 3 companies that have a fraud gaurentee(cyber-hack), Vanguard, Fidelity, and Schwab. The others make no mention...

Also E-trade: https://us.etrade.com/e/t/home/accountfeatures?gxml=brk_insurance.html

I have everything spread out through multiple brokerage accounts because SIPC insurance for each only covers up to $500K.

 

[GrayHare]

In my experience, if you want to avoid the senseless account lockout problem, you want to avoid E-Trade.

 

[Gearhead Jim]

I would never put everything in one brokerage. You never know if a massive fraud is happening somewhere. At least two different firms would be my suggestion.

Agree. You just never know...

We do it the easy way- our equity funds are mostly at Vanguard and our fixed income is mostly in CD's spread around different banks/Cu's.

 

[grasshopper]

I have everything at Vanguard, but have 100k stashed with an online bank.