I think Vanguard Just Called Me Difficult and Expensive

[easysurfer]

Got another email from Vanguard (VG) today asking me to switch over my mutual fund only type accounts to their brokerage.

The tone of the email I found was both a bit insulting and comical.

I must have been in denial reading headlines here and there about how bad Vanguard is as I've always thought I'd knock off before my relationship with VG. Then I go to youtube and see again folks asking, "What the heck happened to VG?"

But now has me thinking, most players don't wear the uniform of one team the entire career.

 

[freedomatlast]

Got another email from Vanguard (VG) today asking me to switch over my mutual fund only type accounts to their brokerage.

Me too. They say it's cheaper for them that way. Ok, let's share the savings, however no financial incentive is offered.

 

[RunningBum]

Will you share the contents of the email (any personal info removed, of course)? I'd like to see how insulting they are to you. Of course I'd rather see them cut costs by getting everyone off the old mutual fund system, but its not for me to tell you to move. I'm just curious.

 

[easysurfer]

Me too. They say it's cheaper for them that way. Ok, let's share the savings, however no financial incentive is offered.

The comical part is after saying how much of a pain we are to them, they then say thank you for being in the Vanguard community.

 

[RunningBum]

Me too. They say it's cheaper for them that way. Ok, let's share the savings, however no financial incentive is offered.

My initial reaction on reading this was, why should you get an incentive to move when I didn't get one a few years ago when I moved? But I made my own choice back then, and if it's going to save money to get everyone off of it, I wouldn't mind if they gave you a small incentive now. The problem is, unless everyone goes, it doesn't help, and I think some might play the wait game for a larger incentive.

 

[easysurfer]

Will you share the contents of the email (any personal info removed, of course)? I'd like to see how insulting they are to you. Of course I'd rather see them cut costs by getting everyone off the old mutual fund system, but its not for me to tell you to move. I'm just curious.

Here's the 1st half of the email. The rest (not screen grabbed) continues to talk about the benefits of moving, then says "Thank you for belonging to the Vanguard community of investors."

 

[GenXguy]

I did this years ago by choice because I wanted to use ETFs at the time. It seemed like a big nothing-burger.

 

[Gumby]

I must admit that I was skeptical the first few times they asked. I thought there must be some ulterior motive. I fact, I may have asked here "What's in it for them?" But I couldn't figure out what that motive could be other than cutting costs, which seemed reasonable to me, so I eventually gave in and switched. It has not affected my life, as far as I can tell.

 

[RunningBum]

Here's the 1st half of the email. The rest (not screen grabbed) continues to talk about the benefits of moving, then says "Thank you for belonging to the Vanguard community of investors."

Hmm. Not sure I see anything comical or insulting, but there is a bit of a threat that you might have trouble accessing your account if you stay on that platform, and that wouldn't sit well with me. It may imply that they'll have random outages just to make it more painful for you, or maybe it's just that they'll keep fewer and less-skilled workers maintaining that platform so unintentional longer outages may happen.

 

[easysurfer]

I'm just content with the same old, I guess. When going out to eat, order a good pub burger and fries on the side and I'm happy. No need to switch things around. Yet, I have friends who don't like the idea of just the same routine.

 

[RunningBum]

I'm just content with the same old, I guess. When going out to eat, order a good pub burger and fries on the side and I'm happy. No need to switch things around. Yet, I have friends who don't like the idea of just the same routine.

I get that. In my experience, this is pretty much like eating the same burger and fries, just in a different room of the pub. But they're telling you to pick up your plate and drink and go move to another room right now, and why should you have to do that?

 

[Piper20]

With the mutual fund side you could automatically move your RMD to another fund. Still can’t do that on the brokerage side. [emoji35]

 

[youbet]

I haven't been on a "mutual fund-only investment platform" for decades. I think the last time was when I was with IDS, a predecessor to Ameriprise. Other than being attached to the "same old," why are you resistant to this change easysurfer? It seems like such a minor change.

 

[RunningBum]

With the mutual fund side you could automatically move your RMD to another fund. Still can’t do that on the brokerage side. [emoji35]

I think the 1099s might come later too. Might be the same burger, but with different ketchup and mustard.

IIRC mutual fund side people couldn't import 1099s through their tax problems, but brokerage accounts can. So the differences aren't all bad.

 

[easysurfer]

I get that. In my experience, this is pretty much like eating the same burger and fries, just in a different room of the pub. But they're telling you to pick up your plate and drink and go move to another room right now, and why should you have to do that?

Yes. Very well said.

Vanguard used to be about the little guy. But the move or else doesn't seem like about the little guy at all.

I watched this video from Clark Howard about VG. Video is about 8 months old but I'm just now seeing what the fuss is about.

 

[pb4uski]

I did this years ago by choice because I wanted to use ETFs at the time. It seemed like a big nothing-burger.

+1

 

[punkinhead]

I got the same mail. I have a half dozen accounts with vanguard and a couple years ago I'd get a prompt to convert every time I logged on. The system never told me which account it was converting. I must have gone through the conversion process a dozen times, never knowing which account was being converted. I converted more times than I have accounts. Even though I got the mail I can't figure out which account isn't converted or how I would go about it. Vanguard's website is maddening.

 

[Graybeard]

I switched from the mutual fund platform to the brokerage years ago and only hold a couple of mutual funds along with CDs and T bills. At the time I switched I was dissatisfied because I lost the year end summary on the December statement but it's no big deal today.

I think, though I am not positive, that you can't buy CDs or treasuries unless you're on the brokerage platform so today I'm happy to be on the brokerage platform.

I never have gotten "an attitude" when talking with someone at VG, they are always pleasant and helpful. I don't call that often but when I do the service is great and I can get a call back if I don't want to wait on hold. Maybe I am treated better being a Flagship level account but I doubt that.

 

[jazz4cash]

I don’t understand why this has to be so tough. Simply adjust the fees on the old platform to reflect the added cost in a transparent manner. Many will react and the ones that don’t will see significant increases. A few will never change voluntarily so just cancel them via some sort of shareholder vote. Clark hits on the real issue. They are tone deaf but continue to reap AUM. He struck a nerve with me re the comments on their app which I just loaded a few weeks ago. It would be funny if it wasn’t so pathetic.

 

[Sunset]

Seems like there are problems with all the brokerages...

• I had to phone Vanguard to open and IRA account that later I would put money into. Couldn't do it online.
• Fidelity won't let me open any account unless I phone them. My Freeze was off.
• TD Ameritrade is becoming Schwab.
• Schwab is a pain to buy treasuries (at auction upon), compared to Vanguard which gives me a list of the ones at auction
• Merrill is also a pain to buy treasuries at auction, mixed in with all the re-sale ones. No price entry by user.

 

[Midpack]

I don’t understand why this has to be so tough. Simply adjust the fees on the old platform to reflect the added cost in a transparent manner. Many will react and the ones that don’t will see significant increases. A few will never change voluntarily so just cancel them via some sort of shareholder vote. Clark hits on the real issue. They are tone deaf but continue to reap AUM. He struck a nerve with me re the comments on their app which I just loaded a few weeks ago. It would be funny if it wasn’t so pathetic.

+1. Hopefully Vanguard course corrects the customer service issue before there’s a net outflow. While I’ve had a few infrequent seemingly easily avoidable customer service issues, ultimately I’ve never had a problem with any transaction I’ve wanted to make.

And I agree if mutual fund only account customers choices are actually costing more than brokerage account customers, after all this time just charge them a fee to make up the difference. Only fair to those of us who switched long ago when asked. No reason why some should subsidize others if that’s the case. Switching didn’t change anything for us that I know of.

 

[NW-Bound]

I opened accounts at Vanguard some years ago to test the water, with the intention of moving money over from other brokerages later. Back then, due to the many posts from UncleMick "Psstt..... Wellesley...." I was going to make this MF my major holding, something that I would never have to monitor.

The service level from Vanguard did not impress me, so I never moved more money into these Vanguard accounts. Besides, I decided to stay an active investor.

A couple of years ago I got these emails about moving money from MF accounts to brokerage accounts. I did not spend the time to figure out what the big deal was, but if it did not cost me anything, well, I would do it because I was a nice guy.

I still don't know what the deal is, or how it saves them money. The gist is, I just do not care enough to find out.

 

[FLSUnFIRE]

I've not had any bad interactions with Vanguard and still a happy customer. Not crazy about the newer interfaces and the brokerage accounts (multiple due to conversion) is a slight pain. That said, given financial regulations, I think Vanguard needs to get people to chose to convert (they cannot open the brokerage unilaterally so they are stuck with the hold outs); putting yourself in Vanguard's shoes, they've done plenty of asking and easy prodding, how would you get the small minority that won't make the change and are becoming very expensive members/owners to maintain to do so? Personally, I would not object to them attempting to raise maintenance fees on the MF accounts to cover those costs among the holdouts which would put the cost on them and not the other members and also raise the pain threshold until they convert.


If they don't modernize their system, people gripe, they try to modernize, people gripe! People want 4-star service without 4-star prices. Schwab and Fido may be great now with some cheap options but the competition of Vanguard is one of the reasons they have and maintain those cheap options and unlike Vanguard, they ultimately serve their shareholders and NOT the fund holders. Eventually, IMO, they will try to monetize and/or disincentivize unprofitable customers if they are unable to convert them to profitable customers.

 

[Koolau]

Got another email from Vanguard (VG) today asking me to switch over my mutual fund only type accounts to their brokerage.

The tone of the email I found was both a bit insulting and comical.

I must have been in denial reading headlines here and there about how bad Vanguard is as I've always thought I'd knock off before my relationship with VG. Then I go to youtube and see again folks asking, "What the heck happened to VG?"

But now has me thinking, most players don't wear the uniform of one team the entire career.

I got the same email. I didn't get that vibe at all. I think they may be a bit sheepish about the fact that their old system is dying and can't be supported. Easier to cajole us into switching than to say switch or get lost.

I actually thought I'd switched everything, but maybe not. I need to go in and see what account they're talking about.

Here's part of their note:

"However, you may not be aware that it's becoming increasingly difficult—and costly—to support your experience..."

I suspect your issue is that they made it "personal" by including "you" and "your" instead of saying simply "our system is dying - get out now."

 

[racy]

Decades ago, I chose to invest with Vanguard because they had a reputation for low costs, which benefits investors. When they asked me to help by switching to a brokerage account, I was glad to do my part. It was painless.