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Is it safer to use multiple fund companies?
Old 04-30-2012, 11:02 AM   #1
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Is it safer to use multiple fund companies?

This question seems to come up regularly. In short, the answer is No - you're just as safe with one reputable firm.

I thought this post asks the right questions. The answers come from a Vanguard representative.

Is It Safer to Use Multiple Fund Companies?
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Old 04-30-2012, 03:42 PM   #2
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Thanks for posting this. I'll keep it in case of late night jitters.
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Old 04-30-2012, 03:59 PM   #3
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The answers are encouraging, but only to a certain point. It still appears that if Vanguard is the victim or perpetrator of a fraud, and goes broke; there may be no one with both the money and the obligation to compensate the investors.

Slightly more likely, I suspect, is the possibility of someone getting hold of your account information and draining your account before you catch it. In that case, holding your investments in more than one firm could provide a measure of protection.
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Old 04-30-2012, 04:09 PM   #4
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One of the problems with the answers is that they still assume that major fraud is not taking place... I bet that people who asked Bernie Madoff and MF Global got the same answers...

We know that the investors in Bernie did not get their money back... I have read that is the same with MF Global, but I am not sure that they will never get it back... I just have not been keeping up with it...
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Old 04-30-2012, 07:43 PM   #5
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Well yes, my biggest accounts are in Vanguard, Fidelity and T. Rowe Price.
The chances that all three will be mismanaged with the same crooks is
almost impossible. Of course they can behave the same in a bad market.

I used to be a MF junkie and some of my funds have changed names, got swallowed by others, added expenses, or have dissolved. I've never completely loss principal( I hope ), but some have not performed well thru the years.
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Old 05-02-2012, 10:55 AM   #6
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Quote:
Originally Posted by walkinwood View Post
This question seems to come up regularly. In short, the answer is No - you're just as safe with one reputable firm.

I thought this post asks the right questions. The answers come from a Vanguard representative.

Is It Safer to Use Multiple Fund Companies?
What did you expect a Vanguard rep to say: "No, I would spread my money around to several fund companies"?
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