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01-06-2009, 12:39 PM
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#1
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Full time employment: Posting here.
Join Date: Aug 2005
Location: Far NW 'burbs of Chicago
Posts: 898
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Vanguard Changes
Just got a letter saying that Vanguard Brokerage Services will "... assume the duties and responsibilities of our clearing agent, Pershing LLC."
Can someone explain exactly what that means, in English?
It may make them more efficient, but it may also raise the chances for some type of fraud or embezzlement. I like the idea of different people looking at what happens to my money, not just one.
Your thoughts?
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01-06-2009, 12:49 PM
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#2
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Give me a museum and I'll fill it. (Picasso)
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Join Date: Aug 2006
Posts: 12,483
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Sounds like it means Vanguard is now self-clearing. They're not the only ones who do that. Pershing has gotten a little big for their britches. I have had numerous problems in dealing with them over the years.
Obviously, VG thinks they can handle the clearing for less price and/or less hassle than dealing with Pershing..........
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
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01-06-2009, 01:09 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Posts: 2,032
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FD is right. You may have noticed that Vanguard's ticket charges were a little higher than the other discount brokers. They were clearing everything through Pershing which as FD said has gotten a little full of themselves lately.
Pershing has to be one of the most difficult brokers to deal with, Vanguard will probably do a much better job (and make more money) self clearing. It doesn't mean much to you other than the fees might go down a little and the statements might look a little different.
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01-06-2009, 01:48 PM
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#4
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Moderator Emeritus
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
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Same bad experience with Pershing.
That must be a major hit from Pershing's point of view.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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01-06-2009, 01:51 PM
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#5
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Give me a museum and I'll fill it. (Picasso)
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Location: North Oregon Coast
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Maybe it will mean VBS will finally start being competitive with Schwab, Fidelity and others when it comes to buying and selling stocks and ETFs now. The relatively high brokerage fees charged by VBS were the one stain on an otherwise rock-bottom fee organization.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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01-06-2009, 02:07 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Posts: 2,032
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 Quote:
Originally Posted by Rich_in_Tampa
Same bad experience with Pershing.
That must be a major hit from Pershing's point of view.
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Not really Rich, it's like a hospital getting rid of it's medicare patients.
Vanguard was at the bottom of the Pershing fee schedule on most things. That part of their business is very low margin and I'm sure both companies were happy to part ways.
Pershing is under new leadership and they have been dumping a lot of their low margin business.
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01-06-2009, 02:10 PM
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#7
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Give me a museum and I'll fill it. (Picasso)
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Quote:
Originally Posted by ziggy29
Maybe it will mean VBS will finally start being competitive with Schwab, Fidelity and others when it comes to buying and selling stocks and ETFs now. The relatively high brokerage fees charged by VBS were the one stain on an otherwise rock-bottom fee organization.
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I doubt it. Vanguard has to make money somewhere. It's not like their fund managers work for half of what the managed fund guys do......... 
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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01-06-2009, 02:11 PM
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#8
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Full time employment: Posting here.
Join Date: Aug 2005
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It sounds like no one else thinks there is any additional risk by having everything inside Vanguard.
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01-06-2009, 02:14 PM
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#9
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Give me a museum and I'll fill it. (Picasso)
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Quote:
Originally Posted by Gearhead Jim
It sounds like no one else thinks there is any additional risk by having everything inside Vanguard.
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Not at all. It would be very difficult for them to get involved in a Madoff scheme, they would have to disallow online access to their accountholders, not issue statements, etc.......... 
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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01-06-2009, 02:51 PM
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#10
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Full time employment: Posting here.
Join Date: Aug 2005
Location: Far NW 'burbs of Chicago
Posts: 898
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I was thinking more like that British institution in Hong Kong that went under a few years ago because of unauthorized trading by a very junior person.
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01-06-2009, 03:05 PM
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#11
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Give me a museum and I'll fill it. (Picasso)
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Join Date: May 2005
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Quote:
Originally Posted by Gearhead Jim
I was thinking more like that British institution in Hong Kong that went under a few years ago because of unauthorized trading by a very junior person.
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It was an investment bank and he was using the bank's money..
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01-06-2009, 03:59 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Posts: 2,032
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Quote:
Originally Posted by Gearhead Jim
I was thinking more like that British institution in Hong Kong that went under a few years ago because of unauthorized trading by a very junior person.
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They aren't going to have any discretionary accounts.
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01-06-2009, 04:44 PM
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#13
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Recycles dryer sheets
Join Date: Dec 2008
Posts: 299
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Quote:
Originally Posted by Rich_in_Tampa
Same bad experience with Pershing.
That must be a major hit from Pershing's point of view.
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By broker standard, VBS is very small. IIRC VBS has 600,000 accounts. Fidelity by comparison has 11 million accounts.
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01-06-2009, 05:19 PM
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#14
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Recycles dryer sheets
Join Date: Oct 2008
Posts: 295
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Ditto Financebuff..VG never did strive to be a Major individual Stock Broker dealer like a Schwab, Fido, etc.. inhouse Mf's and even Non -ntf funds for $25-$35 is worth to me , but for buying individual stocks , I go elsewhere..
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01-06-2009, 05:27 PM
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#15
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Full time employment: Posting here.
Join Date: Mar 2008
Posts: 654
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Like most of you guys.
I'm hoping that this will make vanguard a better brokerage and that they can be more competitive with other business's. Here's hoping I can soon buy in the seconary treasury bond market free of charge inside my IRA.
Steve
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