Losing faith in Vanguard

[GrayHare]

All the brokerages make mistakes (who doesn't?) but IMO the real test is how they correct them. Similar to another poster's report, TRP made a goof that cost me thousands in taxes, and though they admitted their error TRP refused to cover the cost.

 

[Lsbcal]

The squeaky wheel gets progress . Vanguard called me today and they expedited it through their system and everything will be fixed by tomorrow and I will get the gains for the days out of the market . They admitted it was a computer error . I am still leery and may move some to Fidelity .Besides complaining to them I did write on their facebook page and that is when they did something to move it along.

I find it very convenient to have most assets at one firm. So I'd tolerate quite a bit before complicating things. But then again, having another firm as a resource could have some pluses. Would be interested to hear a followup someday if you decide to do this.

Using their FB page was a stroke of genius. I've never visited any firms FB site. Will have to try it out.

 

[43210]

For me, the one place that did NOT fix their error (at a cost of thousands to me) was FIDELITY.

Moving from Vanguard to Fidelity is absolutely nuts.

 

[Brat]

Vanguard: I set up DH & my RMDs early on to be executed just before Christmas. I received the notice that DH's executed but not mine, however it did tell me that they sold the proper amount of the fund to pay my RMD. I called to ask about my RMD, the CSR told me that it was in process. Day later no notice so I called again. CSR said the equivalent of OOPS, consulted with the supervisor and it happened before I hung up. That was unsettling.

We were Fidelity clients, maybe I should pay them a visit.

The observation of others about executing RMDs early in the year got me thinking as I am investing our RMDs in our non-retirement account.

 

[bloom2708]

Stuff happens. It will be fixed. Nothing hurt. With any organization you may have blips. No reason to abandon Vanguard for a for profit firm.

You could have the same thing happen at Fidelity or Schwab.

You could move to Edward Jones or Raymond James. Then this error wouldn't feel like such a big deal.

 

[Chuckanut]

Gotta say I was a little surprised when I heard all the ballyhoo about how some major financial institutions were issuing bonuses in the wake of the big tax cut ... and raising their minimum hourly wage to $15. Geez, a shelf stocker at Aldi makes $11 in my area. .

Local Chic-Fil-A starts people at $13 an hour. And no Sunday work. That sign has been up for months. Obviously, they still have positions to fill.

Sometimes employers think that the law of supply and demand does not apply to workers. Surprise!

Price is a function of Supply and Demand. Not cost, not the CEO's profit goal for the year, not the employees need for more money so she can buy a boat, not some politician's views on the way things should be.

Back on topic. Overall I am happy with Vanguard. The real test of a company's service is how they handle the problems that inevitably will occur when dealing with companies full of fallible humans.

 

[meierlde]

If I draw out RMD's at the beginning of 2018 and put it in an investment that generates cap gains, won't they be short term gains if needed for spending? I think short term gains are taxed at ordinary income levels. In our case we will want those RMD's for spending. So I guess this depends on one's income spending streams.

But if you are intending to spend the money within the year a money market or short term fund / bank account might make more sense where all the returns are ordinary income. (much less to zero risk of loosing principal)

 

[Done]

DH just took a distribution at Fidelity, and did it online. But our "joint" checking account was rejected for ACH deposit and had to get the check mailed. Yuck.

To avoid a problem, he can have IRA distributions go to a Fidelity brokerage or cash account, then transfer to an external account.

 

[grasshopper]

I have been with VG for 35 years, with never a problem.

For a laugh I posted my broken VG coffee mug on FB and they sent me a new one. Social media gotta love it.

 

[audreyh1]

DH just took a distribution at Fidelity, and did it online. But our "joint" checking account was rejected for ACH deposit and had to get the check mailed. Yuck.

Hmmmm - I guess your checking account wasn’t pre-linked at Fidelity then. I have several external accounts linked at Fidelity making ACH transfers very easy. I also have a Fidelity cash management account that would be good for initially receiving a distribution and funds can be sent from there to a variety of external accounts.

 

[Moemg]

The mistake has been corrected .My correct RMD is safely in my money market . I am glad I spoke up and did not accept Vanguard's run around .

 

[littleb]

I have 90% of our retirement accounts at Fidelity except a couple of accounts that are still at Vanguard. Eventually the accounts at Vanguard will be moved to Fidelity. Our banking and equity accounts are with Schwab. I had many accounts with Vanguard but have slowly moved them to Fidelity and Schwab due to customer service issues.

In my experience, Fidelity gives excellent customer service compared to Vanguard. If the rep does not know the answer they put you on hold and find someone who can help you. They also return calls. The same thing with Schwab.

Fidelity's website and tools are excellent once you learn how to use them. Vanguard's website seems outdated, basic and tired.

 

[pb4uski]

The mistake has been corrected .My correct RMD is safely in my money market . I am glad I spoke up and did not accept Vanguard's run around .

I have found that with a lot of these vendors that you only get what you reasonably, assertively and persistently insist on.

 

[MRG]

I have found that with a lot of these vendors that you only get what you reasonably, assertively and persistently insist on.

+1

 

[Scout]

I just moved the rest of our money from Vanguard to Fidelity. I got tired of Vanguard's cumbersome procedures and clunky website. I can find my way around Fidelity's website easily. I had Fido do all the paperwork for the transfer and they gave me $2,500 for moving the money over.

If Vanguard ever fixes its website and streamlines their procedures I will be back in a heartbeat.

Fidelity will pay you to transfer your money over to them?

 

[43210]

Fidelity will pay you to transfer your money over to them?

No, it appears Fidelity has stopped doing brokerage bonuses.

 

[friar1610]

I've never had a problem with VG (yet). But I'm curious...if I ever were to get pi$$ed off at VG and wanted to move my taxable assets to Fido, how would I do it w/o incurring large CG taxes? The only thing I can think of is to convert my VG index funds to the corresponding VG ETFs. Then transfer the VG ETFs to Fido Brokerage. But would Fido start bugging me to convert to their ETFs at some point?

 

[jim584672]

I've never had a problem with VG (yet). But I'm curious...if I ever were to get pi$$ed off at VG and wanted to move my taxable assets to Fido, how would I do it w/o incurring large CG taxes? The only thing I can think of is to convert my VG index funds to the corresponding VG ETFs. Then transfer the VG ETFs to Fido Brokerage. But would Fido start bugging me to convert to their ETFs at some point?

I think you can transfer everything in kind. Check with Fidelity/Vanguard.

 

[braumeister]

But would Fido start bugging me to convert to their ETFs at some point?

No. I've had several Vanguard ETFs in my FIDO accounts. Not a problem.

But you would have to pay a standard transaction fee (usually $4.95) to buy/sell them in a FIDO account, where you wouldn't have that fee when trading FIDO fund/ETFs.

 

[audreyh1]

I've never had a problem with VG (yet). But I'm curious...if I ever were to get pi$$ed off at VG and wanted to move my taxable assets to Fido, how would I do it w/o incurring large CG taxes? The only thing I can think of is to convert my VG index funds to the corresponding VG ETFs. Then transfer the VG ETFs to Fido Brokerage. But would Fido start bugging me to convert to their ETFs at some point?

You might have to convert Admiral shares to the Investor shares before transferring in kind. That should not be a taxable event. Vanguard Investor shares can be held at Fidelity.

Or you can convert to ETFs.

No, I don't think Fidelity will bug you to "convert" to their ETFs and there isn't a non-taxable conversion process to another Fund Family anyway. You'll pay a $5 commission when you sell Vanguard ETFs at Fidelity. You pay no commission to sell Vanguard mutual funds, but you do pay a high commission to buy.

 

[MRG]

You might have to convert Admiral shares to the Investor shares before transferring in kind. That should not be a taxable event. Vanguard Investor shares can be held at Fidelity.

Or you can convert to ETFs.

No, I don't think Fidelity will bug you to "convert" to their ETFs and there isn't a non-taxable conversion process to another Fund Family anyway. You'll pay a $5 commission when you sell Vanguard ETFs at Fidelity. You pay no commission to sell Vanguard mutual funds, but you do pay a high commission to buy.

+1

They don't care. It's a standard business arrangement. Many fund companies hold house accounts of other companies product.

Folks who care about data recovery might want to consider who is the system of record for their investments.

 

[Lsbcal]

You might have to convert Admiral shares to the Investor shares before transferring in kind. That should not be a taxable event. Vanguard Investor shares can be held at Fidelity.

Or you can convert to ETFs.

No, I don't think Fidelity will bug you to "convert" to their ETFs and there isn't a non-taxable conversion process to another Fund Family anyway. You'll pay a $5 commission when you sell Vanguard ETFs at Fidelity. You pay no commission to sell Vanguard mutual funds, but you do pay a high commission to buy.

This would be something I'd not like (red). Kind of surprised at this. What is the commision if you recall?

I find VG funds to be pretty good selections for us, particularly the bond choices. And I can always select other fund families (no commision I think) but somehow VG always wins out. Oh well, it would take a lot of VG problems for me to switch since there is a lot of setup associated with moving.

I think minor problems at VG are to be expected and tolerable.

 

[Moemg]

I have found that with a lot of these vendors that you only get what you reasonably, assertively and persistently insist on.

I am great at that having spent many years in New Jersey .

 

[friar1610]

Thanks to those who responded to my question. As I noted, I haven't had any problems with VG's admin or service, so I'll just stick with them for now.

Interestingly, late in Dec, after the tax bill passed, I initiated a several-step process to make a contribution of appreciated funds to a charity. I half expected, due to the fact that I started it so late, that they wouldn't get it done by the end of 2017. But they did - good for them!

 

[splitwdw]

This would be something I'd not like (red). Kind of surprised at this. What is the commision if you recall?

I find VG funds to be pretty good selections for us, particularly the bond choices. And I can always select other fund families (no commision I think) but somehow VG always wins out. Oh well, it would take a lot of VG problems for me to switch since there is a lot of setup associated with moving.

I think minor problems at VG are to be expected and tolerable.

I transferred everything at Vanguard, "in kind". Most of that account was individual stocks except for Wellesley. No cost to transfer Vanguard Wellesley to Fidelity but there is a $75 commission to buy additional shares, no fee to reinvest your dividends and cap gains. I had a very small 401k from another company that I had moved as cash and invested that money in Wellesley. That's how I ended up paying the $75 fee at Fidelity. Don't know about selling. I kept Wellesley when I transferred my account from Vanguard to Fidelity because there was no equivalent @ Fidelity. My Fido rep advised me of the fee before I moved my account. She did not try to sell me a different fund.
The Fidelity office that I use has been great. I called one day last summer and my rep wasn't in the office so I left her a voice mail. Someone else from the office called me back to let me know she was out and was there anything they could help me with. I don't know if other Fidelity offices (or Vanguard) operate this way. I have nothing but praise for them.