Another Vanguard Rant

[kgtest]

They hold deposit up to 7 days .

And I QUOTE!

This order can't be accepted because of a recent deposit into your account. Money added to your account by electronic bank transfer is subject to a seven calendar day hold and may not be immediately available to trade. Vanguard Brokerage Services may restrict your ability to use recently added funds towards brokerage trades for this hold period.


This is on a UMGA account I funded last Friday. All funds cleared, and Vanguard shows it in the settlement. So what gives! Let me use my money dangit!

This might be specific to UMGA account types not sure... We will see if it happens the NEXT time I fund this account. IF so, I might try a faster option if you know what I mean.



I want to buy my son into YouTube GOOGL sheeewhiz!

 

[Sunset]

Don't know.
I know when I tranfer in money (using Vanguard to pull the money in). It's available to trade after I log out and log back in.

This is a regular taxable account where I'm adding money to an existing account that already has stocks in it worth more than the amount of $$ I'm transferring in.

It's like free use of the money.

I'm not allowed to withdraw the money for a hold period of X days. Guess that is to stop:
Get $ from Bank A, Send all $ to Bank B, and earn interest for few days in 2 locations.

 

[ivinsfan]

I suspect the detail is somewhere in the UMGA issue. I think you are correct. Now I will say when we connected and transferred money from our personal bank account to Vanguard we also got a similar message but IIRC the actual time frame to trade was maybe 3 days?


These details have gotten more cumbersome over the years..10 years ago a friends ex husband made the ex (after the divorce) a joint owner on an Everbank account (they remained very friendly). When he died and his brother wanted the money Everbank locked it down for over 14 months... CYA in action.

 

[Texas Proud]

Is this account new? From what I read it appears to be...


I can see where they might hold on a new account... I do not see it being a UGTM as an issue...

 

[DrRoy]

My transfers from Chase to Fidelity are available the next day.

 

[catii]

Hmm, very interesting, as DW transferred $200K into Vanguard just this morning. Just asked her if she knew about the delay, & the smoke pouring from her ears answered that question!

 

[mebden]

They hold deposit up to 7 days .

And I QUOTE!

This order can't be accepted because of a recent deposit into your account. Money added to your account by electronic bank transfer is subject to a seven calendar day hold and may not be immediately available to trade. Vanguard Brokerage Services may restrict your ability to use recently added funds towards brokerage trades for this hold period.


This is on a UMGA account I funded last Friday. All funds cleared, and Vanguard shows it in the settlement. So what gives! Let me use my money dangit!

This might be specific to UMGA account types not sure... We will see if it happens the NEXT time I fund this account. IF so, I might try a faster option if you know what I mean.



I want to buy my son into YouTube GOOGL sheeewhiz!

Hey KG, I feel your pain I just added money from my outside checking account which is already linked to my Roth401K plan with Schwab, and they are holding my deposit for 6 days to clear to before I can buy certain funds I never had this issue with TD Ameritrade. I'm really starting to hate there takeover of TD Ameritrade

 

[perinova]

And yes,
More than a week ago I set up a new bank on my Vanguard account. I am still not able to use this bank to transfer dividends out...
Supposedly they they verifying my bank. (but I already confirmed the small $1 amount they use verify teh account number is correct )

 

[target2019]

Hey KG, I feel your pain I just added money from my outside checking account which is already linked to my Roth401K plan with Schwab, and they are holding my deposit for 6 days to clear to before I can buy certain funds I never had this issue with TD Ameritrade. I'm really starting to hate there takeover of TD Ameritrade

Was Vanguard involved in some way? I'm confused.

I've deposited very large rollover checks to Schwab, and those seem to be available for trades immediately.

Banks have rules that are annoying, that's for sure.

 

[BooBoo]

I just added a new bank last week and the same thing happened to me. After verifying deposits, I still need to wait a 7 - 10 days to be able to make a withdrawal.

 

[Gumby]

My money has always showed as being available for trading on the day I transfer it from my bank account to Vanguard. But then, I'm never in any particular hurry to do things, so it wouldn't matter anyway.

 

[ivinsfan]

My money has always showed as being available for trading on the day I transfer it from my bank account to Vanguard. But then, I'm never in any particular hurry to do things, so it wouldn't matter anyway.

We made another transfer yesterday, maybe it will be faster this time. But Vanguard itself says if you need to use the money same day, you have to do a wire transfer.

 

[Route246]

We made another transfer yesterday, maybe it will be faster this time. But Vanguard itself says if you need to use the money same day, you have to do a wire transfer.

I've never paid attention but I have a margin account with substantial marginable holdings and funds have always been available as soon as they show up at Vanguard. I don't usually do anything when I transfer but I suspect if I tried to use the funds I might pay a day or two of margin.

This may have to do with the settlement terms of your settlement account. If it is a money market account it actually has to go through a settlement process as I understand things. If you have a bank account or other cash account (not money market) you may have funds available immediately if not sooner.

I know this for a fact when I had E-Trade and my E-Trade bank account was my settlement account. The E-Trade broker (on a recorded line) told me if I switch to a money market settlement account I would be subject to settlement delays and margin expenses if I used the funds before they settled.

 

[Route246]

I just added a new bank last week and the same thing happened to me. After verifying deposits, I still need to wait a 7 - 10 days to be able to make a withdrawal.

Is this the same waiting period if you sell a stock or fund? It may be in some sort of settlement escrow. Not sure, though.

 

[Texas Proud]

I just added a new bank last week and the same thing happened to me. After verifying deposits, I still need to wait a 7 - 10 days to be able to make a withdrawal.

A withdrawal is always going to be delayed... unless you have plenty of money sitting around... no way are you going to be able to take out new money from an account...

 

[Koolau]

When in doubt, call them. I've had pretty good luck getting through most times of the day. Maybe they can't answer my question or they get it wrong, but at least they answer the phone in a timely manner for the most part - or offer a call back. Give it a shot. You might get lucky.

 

[mathjak107]

When in doubt, call them. I've had pretty good luck getting through most times of the day. Maybe they can't answer my question or they get it wrong, but at least they answer the phone in a timely manner for the most part - or offer a call back. Give it a shot. You might get lucky.

one of the nice things about fidelity is when the rep can’t answer the question is they owns it .

they either say i am getting so and so on the phone with us , or they say i will have them call you back .

when i had a question for the rep at vanguard and they didn’t know , they blindly just passed me around like a game of hot potato.

finally i was passed to a line with a recording to hold for the next available representative..

well for laughs i hung on and one hour and 15 minutes later no one ever picked up .


just the worst customer experience i ever had from a brokerage

 

[Koolau]

one of the nice things about fidelity is when the rep can’t answer the question is they owns it .

they either say i am getting so and so on the phone with us , or they say i will have them call you back .

when i had a question for the rep at vanguard and they didn’t know , they blindly just passed me around like a game of hot potato.

finally i was passed to a line with a recording to hold for the next available representative..

well for laughs i hung on and one hour and 15 minutes later no one ever picked up .


just the worst customer experience i ever had from a brokerage

Yeah, V has upset me a few times, but long wait times just are not part of my experience. Obviously, YMMV.

 

[mathjak107]

for those at vanguard with joint accounts , if you had beneficiaries listed odds are pretty good those beneficiaries are gone .

yep , vanguard got into the trust business and one day i logged in and in things to do , it said add beneficiaries…i knew i had them listed but when i looked they were gone .

so i called .

they dropped all beneficiaries and told me i would be better served with a trust which they could help me do or i could split the account in to two single accounts and add them .

i don’t need a trust ..i need beneficiaries….

i pulled out all our money …my fidelity rep didn’t believe they would do that .

my sons best friends parents had recently gone out to celebrate their 40th anniversary when a drunk slammed in to them killing them both.

look at what happened in israel .so if vanguard thinks a simultaneous death can’t happen they are nuts



i wrote vanguard and got the following response

Thank you for your email regarding Transfer on Death (TOD).

Vanguard has decided that, in most cases, a TOD plan offers minimal
benefits on joint accounts. Beneficiaries on joint accounts are used to
cover the rare possibility that all the joint account owners will die
simultaneously. Such provisions are beyond the scope of Vanguard's TOD
plan.

I have reviewed this with our management, specifically surrounding the
possibility of simultaneous death of joint owners. While the TOD plan could
allow for the transfer of ownership rights in the unlikely event of
simultaneous death, it may not do so in a tax-efficient manner and may
limit the heirs' options.

Other estate-planning tools, like wills or trusts, allow investors to
utilize strategies that the TOD plan does not have room for, and they could
increase the amounts that heirs actually receive. Additionally, relying on
TOD plans increases the possibility of heirs being responsible for final
expenses, debts and taxes without adequate resources left in the estate to
cover such costs.

As you may know, a Vanguard TOD plan overrides the terms of a client's
trust, will, or other estate planning documents. However, community
property laws outline rules for ownership rights, and these laws remain
intact. This makes it more likely for assets to be transferred to an
inappropriate party and for disputes among beneficiaries. Since our TOD
plan is a Pennsylvania contract, it is interpreted under Pennsylvania law.
The laws of your state of residence may include more favorable provisions.

If you want to ensure that your assets will transfer to listed
beneficiaries for a joint account, we encourage you to contact an estate
planning professional. The estate planning professional will be able to
advise you on what steps you can take to ensure that the assets in your
joint account are transferred to the appropriate beneficiaries.

 

[Humbooster]

for those at vanguard with joint accounts , if you had beneficiaries listed odds are pretty good those beneficiaries are gone .

yep , vanguard got into the trust business and one day i logged in and in things to do , it said add beneficiaries…i knew i had them listed but when i looked they were gone .

so i called .

they dropped all beneficiaries and told me i would be better served with a trust which they could help me do or i could split the account in to two single accounts and add them .

i don’t need a trust ..i need beneficiaries….

i pulled out all our money …my fidelity rep didn’t believe they would do that .

my sons best friends parents had recently gone out to celebrate their 40th anniversary when a drunk slammed in to them killing them both.

look at what happened in israel .so if vanguard thinks a simultaneous death can’t happen they are nuts



i wrote vanguard and got the following response

Thank you for your email regarding Transfer on Death (TOD).

Vanguard has decided that, in most cases, a TOD plan offers minimal
benefits on joint accounts. Beneficiaries on joint accounts are used to
cover the rare possibility that all the joint account owners will die
simultaneously. Such provisions are beyond the scope of Vanguard's TOD
plan.

I have reviewed this with our management, specifically surrounding the
possibility of simultaneous death of joint owners. While the TOD plan could
allow for the transfer of ownership rights in the unlikely event of
simultaneous death, it may not do so in a tax-efficient manner and may
limit the heirs' options.

Other estate-planning tools, like wills or trusts, allow investors to
utilize strategies that the TOD plan does not have room for, and they could
increase the amounts that heirs actually receive. Additionally, relying on
TOD plans increases the possibility of heirs being responsible for final
expenses, debts and taxes without adequate resources left in the estate to
cover such costs.

As you may know, a Vanguard TOD plan overrides the terms of a client's
trust, will, or other estate planning documents. However, community
property laws outline rules for ownership rights, and these laws remain
intact. This makes it more likely for assets to be transferred to an
inappropriate party and for disputes among beneficiaries. Since our TOD
plan is a Pennsylvania contract, it is interpreted under Pennsylvania law.
The laws of your state of residence may include more favorable provisions.

If you want to ensure that your assets will transfer to listed
beneficiaries for a joint account, we encourage you to contact an estate
planning professional. The estate planning professional will be able to
advise you on what steps you can take to ensure that the assets in your
joint account are transferred to the appropriate beneficiaries.

Thanks for posting this, I had no idea that this happened. This will impact a lot of people. I need to think about this and what to do about it.

 

[mathjak107]

Thanks for posting this, I had no idea that this happened. This will impact a lot of people. I need to think about this and what to do about it.

i had nothing to think about . done with vanguard

 

[24601NoMore]

Thanks for posting this, I had no idea that this happened. This will impact a lot of people. I need to think about this and what to do about it.

All other Vanguard issues (no 24x7 phone center, long hold times, unknowledgeable CSRs) aside, this (unable to have TOD Beneficiaries on a Joint Account) is perhaps the most egregious.

We'd ideally like to just have everything on TOD/POD and avoid a Trust. But it seems the only way to have clear inheritance of joint assets at VG without having to go through Probate is a Trust.

Very frustrating. Some of our VG funds in joint taxable aren't available elsewhere, or have high transaction costs. So we either have to cover inheritance of those assets in our Will and put our beneficiaries through probate, or have to incur Cap Gains to sell and move the assets elsewhere.

This has to be the single stupidest decision VG has ever made. I've also gone round and round with them on it, and their reasoning IMHO is weak at best as every other brokerage company seems to be able to offer TOD/POD on joint accounts.

 

[Sunset]

All other Vanguard issues (no 24x7 phone center, long hold times, unknowledgeable CSRs) aside, this (unable to have TOD Beneficiaries on a Joint Account) is perhaps the most egregious.

We'd ideally like to just have everything on TOD/POD and avoid a Trust. But it seems the only way to have clear inheritance of joint assets at VG without having to go through Probate is a Trust.

Very frustrating. Some of our VG funds in joint taxable aren't available elsewhere, or have high transaction costs. So we either have to cover inheritance of those assets in our Will and put our beneficiaries through probate, or have to incur Cap Gains to sell and move the assets elsewhere.

This has to be the single stupidest decision VG has ever made. I've also gone round and round with them on it, and their reasoning IMHO is weak at best as every other brokerage company seems to be able to offer TOD/POD on joint accounts.

I don't see why you would have to sell and incur capital gains.
For most things moving to another brokerage can be done "IN KIND" and means no capital gains as no selling.

Otherwise, Why not stay at Vanguard and move the investments to individually owned accounts. Split them up based on actual ownership.

 

[24601NoMore]

I don't see why you would have to sell and incur capital gains.
For most things moving to another brokerage can be done "IN KIND" and means no capital gains as no selling.
Otherwise (as have had experience with rare unique investments in a brokerage). You could stay at Vanguard and move the investments to individually owned accounts.

Because those funds are not available at the other brokerages where we have accounts (Schwab & FIDO). Or, for those funds that are available, high trading fees (e.g. $75 @ FIDO) that make holding those funds outside of Vanguard unattractive.

We're still debating the whole Trust vs. POD/TOD thing. Revocable Living Trust sure would make things easier, especially since we could everything dump into one bucket and distribute evenly among the families from there. Because constantly updating beneficiaries and trying to make it equal/fair among everyone when we move assets around can be a real PITA. And if we do a RLT, the VG joint beneficiary thing becomes moot. But it still irks me that VG is the only brokerage that I'm aware of that does this..

 

[ivinsfan]

I wonder if more institutions will follow Vanguard in this regard, there has to be a reason they are doing this...