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Vanguard Displays its Administrative Prowess (?)
Old 03-18-2014, 06:17 PM   #1
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Vanguard Displays its Administrative Prowess (?)

While Vanguard is widely known and applauded for its low cost funds, I rarely hear anyone proclaiming excellence for their administrative and customer service. I certainly have rarely experienced much above mediocre and occasionally just plain inept.
The latest experience just reinforces how mediocre they support their client interface. I called yesterday to determine how to see the specifics of the lots on a mutual fund I wanted to trim back on for adjusting my asset allocation. To do that I wanted to know what my capital gains costs would be for various levels of sales. First call, the rep could not really tell me how to find the lots only there were two categories Covered and Not Covered shares--referring to those positions which Vanguard has to report to IRS actual cost for each share. Needing more info than that, I asked to find out how could sell a specific lot. The entire concept of selling a specific lot was obviously not something she was familiar. Finally she said she would need me to talk to someone else. She put me on a hold, and left. After 5 minutes, I assumed she or the system decided no answer was easier. Even though she knew who had called, no effort to reconnect was made.

I did my own research on the transaction history to find my lots and then sold the number of shares desired. However, if you have not previously elected a cost preference--ave. cost, spec ID, or FIFO, you get a serious of dialogue boxes that pop-up demanding you choose one. No problem, oh wait, Vanguard claims they have no lot info prior to the period when the IRS requires them to report. This is patently untrue, since their transaction history file has every activity back at least 10 years.
All that tells me is they did not want to do the programming to make the data available directly to their client when doing a transaction.
When I completed the sell order, I got a dialogue box pop up that says to have the proper lot assigned to the sale I MUST call them before close of market 24 hours later. The story gets even "better" here.
So, I call and tell the rep I want to assign a lot to the sale made yesterday.
I provide him the specifics of the lot (got it from their transaction data)but again the Vanguard rep fumbles the ball, and finally says he needs to connect me to a person in a dept that handles that matter. He puts me on Hold but does come back this time after 3-4 minutes on silent hold (not sure why V is now using, but you have no idea if you are still connected or not). He repeats again for the recorded line what I previously told him and indicates he's done. I asked how do I know if the proper lot was assigned, and he reluctantly tells me that someone will send me a written confirmation in about a week.
Seriously, I could have done the same transaction on my Fidelity account in less than a minute, directly without ANY follow-up call. Fidelity provides for any position all the lots at any time with a click on the position's action column where you can create a buy/sell order, ask for research, see lot, and change cost choice.
NO rep required.
There is another thread where a new client is struggling with the Vanguard UI, and this experience provides further perspective of just how shallow V's website really is.
Vanguard as a provider is fine for holding low cost funds but those who are looking for more options, with easier access, I would encourage you look at Fido, Schwab, TR Price--all offer you more. Now that I can get a broad selection of V's best indexes as ETF's there is even less reason to deal with their mediocre client interface.
Just sayin!!
NWsteve
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Old 03-18-2014, 06:34 PM   #2
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I have to say my experience is similar.

I sold most of my Mom's Vanguard GNMA fund last year. I'd like to be able to use specific lot identification. Now since most of the last 20 years has been in dividend reinvestment I appreciate this would be really difficult. Still there have been a number of times where I made large $20,000 purchase and I'd like specific that I holding those purchase with the lowest cost. It doesn't seem possible with Vanguard. Fortunately Vanguard GNMA has been $10 +/- $1.25 for almost all of the last 20 years, so tax saving are probably less than $100 using average cost as opposed to lot identification.

In contrast Schwab has been doing a good job with online lot identification for more than a decade, and several years ago rolled out their tax optimizer which does a terrific job.
I more than happy to pay a few more basis points in return for superior service.
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Old 03-18-2014, 06:42 PM   #3
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I wouldn't argue their service is bare bones but "you get what you pay for" as they say. Vanguards customer service is commensurate with the fees they charge maybe?
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Old 03-18-2014, 06:48 PM   #4
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Originally Posted by clifp View Post
In contrast Schwab has been doing a good job with online lot identification for more than a decade, and several years ago rolled out their tax optimizer which does a terrific job.
I more than happy to pay a few more basis points in return for superior service.
And you do not even have to pay more BPs. If you buy Schwab's house ETFs you pay no commissions and they are competitive with or cheaper than heir VG equivalent.
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Old 03-18-2014, 06:51 PM   #5
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Anybody used social media to publicly raise the issue? From one members ACA issues, large service providers don't want customer's issues in public domain. Just a thought.

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Old 03-18-2014, 06:52 PM   #6
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I've seen other posts similar to this about Vanguard's lack of service, but I have not experienced it personally. However I think the difference is that I have enough invested with them to be designated a "Flagship" account, so I have a dedicated account rep. When my rep is not available, I go into a pool of the more senior reps. And I have access to their concierge service if I can't get what I need from my dedicated rep. Everyone has been very thorough and professional. And my CFP has been quite impressive as well.

It would not surprise me though if I had a similar experience had I not been assigned to the Flagship account team.
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Old 03-18-2014, 06:59 PM   #7
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I've seen other posts similar to this about Vanguard's lack of service, but I have not experienced it personally. However I think the difference is that I have enough invested with them to be designated a "Flagship" account, so I have a dedicated account rep. When my rep is not available, I go into a pool of the more senior reps. And I have access to their concierge service if I can't get what I need from my dedicated rep. Everyone has been very thorough and professional. And my CFP has been quite impressive as well.

It would not surprise me though if I had a similar experience had I not been assigned to the Flagship account team.
+1 I have always had nothing but the most expert, professional, and courteous customer service from Vanguard, on the rare times when I need it. Maybe I'm lucky.
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Old 03-18-2014, 07:11 PM   #8
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Let me go with a few of the problems that I can see in the OP....


First, there is no way Vanguard or Fidelity can know what you used for basis on any sales you made prior to them having to keep track of basis.... IOW, they have the data of your buys and sells, but since you never matched a sell to a buy previously, they just do not know....

Second, if you did NOT use specific ID on sales prior (non covered).... then you were using avg cost... once you start to use avg cost, you are required by the IRS to continue to use avg cost.... so there is no specific ID available for any of those shares... if Fido is showing them, then they are doing it wrong...


Third, I have gone in to sell shares and it is very easy to see the covered and non covered shares... they even have all those small monthly buys on the bond funds.... I can choose which ones I want to sell... easy peasy... took me two minutes....


If you had not set up your account back when they asked you to do so is not a fault of theirs... not having track of basis for non covered shares is not a fault of theirs.... I think they could get into more trouble if they did have them listed as they are not tax advisers....


If all you want to do is own the ETFs, then you are correct that it really does not matter where you buy them from as long as you are not paying too much for transaction fees...


BTW, I did not like FIDOs website for my 401(k) and moved the money when I left the company... so, to each their own....
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Old 03-18-2014, 08:34 PM   #9
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I sort of agree with everybody that's written on this blog. Fidelity has some service advantages but they don't have Vanguard's low costs. Overall, I have more money with Vanguard, spend more time on their site and can't complain about the quality of their staff but am unhappy with all the "rules" that minimize the help they can give me. If I had to choose, Vanguard would have my vote......since I don't have to Fidelity will continue to have a small part of my business.
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Old 06-09-2014, 01:52 PM   #10
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I've been a Flagship customer for probably 20 years (and have steered friends and family to Vanguard including other Flagship customers) so I am a big fan of Vanguard, but I concede that sometimes their bureaucracy and inability to think outside the box frustrate me.

First example was a couple years ago where I wanted to realize some gains for tax purposes and their stupid trading restrictions precluded me from selling and buying the same fund on the same day in the same taxable account and have it net settle. They have no capacity to realize that there isn't any money leaving or coming but because technically the sale occurred first then their trading restrictions kept me from buying back the same fund.

Second example was today, where DS has recently left a job and his 401k has less than the $1,000 minimum needed to open an IRA but DS has a taxable account with VG that has a couple $k in it. I suggested that they accept a transfer of his 401k monies and then he would have the difference transferred from his taxable account but that wasn't possible because it would had to be one transaction. So I asked the rep, well if someone sent you two checks that totaled $1,000 and wanted to start an IRA that would be ok wouldn't it? The rep said yes, that would be ok. Then I asked him what the difference was between that them accepting the rollover and transferring the difference from DS' taxable account the same day and was told that would not be acceptable. But you already have the money in house!!!

A couple other issues with them over the years - nothing big in the whole scheme of things and certainly the positives outweigh the negatives, but their lack of creativity and ability to look at substance rather than form is sometimes frustrating.
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Old 06-09-2014, 04:28 PM   #11
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I don't count on them to track my basis. It is my tax return, not theirs. That said, I took the opportunity in the last down tick in '08-09 to aggressively TLH which left me with single lots in all my equity accounts. I use average cost for bonds since there really isn't much value in tracking lots for bond funds.

I have had discussions with them on IRA tax matters but in each case I make sure I have my rep put me through to their IRA specialists.
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