Vanguard for Everything?

[LChaim]

My wife and I will be working for a few more years. We currently have several 401K's, 403B's with prior companies where we worked. We are considering rolling these over to Vanguard IRA's. We also have mutual funds with several different compnaies that we may move to Vanguard.

How do folks feel about investing all financial assets with one company?

 

[ziggy29]

If you are only going to hold Vanguard mutual funds, I have no problem with putting all of your investment accounts with Vanguard. If you want other mutual funds you may be better off putting some of them into a broker like Schwab or Fidelity which has a lot of no-load mutual funds in their "supermarket."

And also, I would tend to look elsewhere if I were going to be trading individual stocks, since Vanguard's commissions on brokerage are on the high side.

 

[WM]

DH and I have our money split between Vanguard and T. Rowe Price, primarily because we were a little nervous having everything with one company. It's hard to imagine ever having a problem, though.

When we helped DH's mom sort out her finances a few years ago, we put everything in Vanguard for simplicity and she's very pleased with that. I still help her with her finances and I have to say, it's nice having it all in one place from a management perspective.

 

[audreyh1]

I have no problem doing that with one of the larger discount brokerages or low-fee mutual fund companies.

Audrey

 

[easysurfer]

I have no problem with Vanguard as I expect Vanguard to be around much longer than I will.

Now, if Vanguard had a major shift in philosophy towards their clients, I would have to reconsider.

 

[GoodSense]

We have most of our assets in Vanguard. I feel pretty safe with them. I guess it's OK to split them between VG and Fidelity if you need the diversification to feel secure. I think 3 is the maximum number of places I can keep track mentally, so I am limiting it to 3.

 

[Poundkey]

I'm comfortable with having it all at VG. No complaints other than the new look of their online statements.

 

[Midpack]

Other than my 401k (Schwab by Megacorp choice, but not bad), everything we have is with Vanguard. All our holdings are Vanguard funds as well, except one. I sleep like a baby still (may be due to comparable intelligence)...

 

[roger r]

I have things split up. I imagine Vangard will always be just fine, but lets say something really crazy and unlikley happens. Like a computer hacker gets into their mainframe or a plane crashes into their headquarters. Yeah, it's probably OK with just one. But it's really no big hassle to go with two.

 

[LOL!]

Vanguard is a great reputable company, but I would not want to put all my assets in one basket. I have an accounts with several low- or no-cost outfits. I like the idea that if the internet is cut into Valley Forge or my account is hacked, that I can use another one of my accounts. You probably wouldn't travel overseas with a single credit card, so you don't want a single vendor for your investments either.

Another thing is that Vanguard has trading restrictions which can be easily overcome by transactions at another vendor. For example, sell Vanguard Total Market on Monday, but buy it back on Thursday at WellsFargo (both transactions are no commission).

It's also basically about redundancy and backups. Since it costs me nothing to use the other accounts (WellsFargo is actually less expensive than Vanguard) and costs nothing in convenience (all accounts look connected because of the internet), I see no reason to go to a single vendor.

If I had to go to a single vendor, it would be WellsFargo. Sorry Vanguard, but you have been out-Vanguarded by WF.

 

[clifp]

I think it is worthwhile to consolidate accounts (and Vanguard is fine arguable the best choice) until you hit the million dollar in asset levels. Schwab, Vanguard, Fidelity and maybe even WellsFargo provide superior service, reduced fees for clients with million in assets or more.

The reduced fees and such are very nice, but what is even better is being able to get somebody on the phone is a couple minutes that has 5,10 and even 20 years of experience instead of recent college grad is even more valuable.

 

[nwsteve]

The reduced fees and such are very nice, but what is even better is being able to get somebody on the phone is a couple minutes that has 5,10 and even 20 years of experience instead of recent college grad is even more valuable.

I have accounts split between Fido and Vanguard--premium level for both. For quality of rep I have to put Fido well ahead of Vanguard. The Vanguard folks are always very pleasant but have little ability to be problem solvers. They quote VG policy and that is about it.
Earlier comments about trading costs are right on, not to mention differences in quality of execution. Fido has much better research features available and a broader list of funds and VG. Tried to get a Morningstar rating on a VG fund from the VG site--lots of luck. At least I have not figured out how. In contrast, I can compare 5 different funds from any family and get M* results plus 1, 3, 5 and 10 yr perfomrance results in one table.
Unless you are a passive investor and are only good use VG funds, I would recommend you look at other options first.
Nwsteve

 

[freebird5825]

Everything is under Vanguard's roof as of Nov 09. Less paperw*rk and account tracking is ideal for this kid. I had created quite a mess in the past.
I have a few non-VG mutual funds and a single stock holding in my VG brokerage account. The rest of my holdings are VG funds.

 

[ItDontMeanAThing]

Schwab, Vanguard, Fidelity and maybe even WellsFargo provide superior service, reduced fees for clients with million in assets or more.

Vanguard's Voyager Select service kicks in when one has 500,000 in assets there. I am satisfied with the service and quality of people I've dealt with on the phone, it's as good as I'd hoped it would be.

90%+ of my assets are at Vanguard because my investment philosophy is asset allocation via market segment index funds. I have some money at USAA because I was already a member and I like their gold mining fund.

 

[Ed_The_Gypsy]

Everything is under Vanguard's roof as of Nov 09. Less paperw*rk and account tracking is ideal for this kid. I had created quite a mess in the past.
I have a few non-VG mutual funds and a single stock holding in my VG brokerage account. The rest of my holdings are VG funds.

WOW! That is exactly my situation!

There is no risk in moving everything into Vanguard. I agree with ziggy about their brokerage costs, but it is so nice to have it all under the same roof and I do not trade much at all.

 

[FIREd]

Right now our assets are split between Fidelity (401K) and Vanguard (everything else). I am satisfied with the Fidelity funds we own (very low cost Spartan index funds) but, when the time comes, I will probably rollover the 401K to Vanguard. I am not worried about Vanguard per se, because of the way Vanguard is structured. Vanguard is owned by its funds, and the funds are themselves owned by the people who invest in them. So, each Vanguard fund is a separate entity and even if one were to get in trouble, the other funds should be fine (although funds of funds could still be impacted).

 

[ejman]

Right now our assets are split between Fidelity (401K) and Vanguard (everything else). I am satisfied with the Fidelity funds we own (very low cost Spartan index funds) but, when the time comes, I will probably rollover the 401K to Vanguard. I am not worried about Vanguard per se, because of the way Vanguard is structured. Vanguard is owned by its funds, and the funds are themselves owned by the people who invest in them. So, each Vanguard fund is a separate entity and even if one were to get in trouble, the other funds should be fine (although funds of funds could still be impacted).

I'm mostly in Vanguard funds as well. I agree that Vanguard should be very very safe given its ownership structure (the shareholders) Any attempts by any future management to tweak the structure would I'm sure result in mass exodus. All the more reason to read all that fine print when we get the proxies info.

 

[mickeyd]

There is no additional risk by grouping all of your investments with low cost companies like Vanguard, USAA, TRP or Fido. Your risk exposure is with the securities included in the funds, not the fund family.

 

[BUM]

I have no problem with Vanguard as I expect Vanguard to be around much longer than I will.

My thoughts exactly. I'm ready for my annual plan review on Monday. Thats where VG tells me what to do. Then I do something else.

 

[tsturbo]

VG all the way! The day I told my broker at Morgan-Stanley to stick his high fees and ER was a great day and that I was moving it all to VG, haven't looked back since, very pleased with VG!

 

[tmm99]

VG pretty much all the way now (I moved old 401K's to IRAs to VG a couple of years ago and any new saved investment money is going there.) My current 401K is at Fidelity so there is some split but to me it is easier to go to only a couple of places to check asset allocations, etc.

 

[unclemick]

Vanguard Target Retirement 2015 full auto deduct to PrimeMM. A few Norwegian widow stocks in VG broker to putz with when it's not football season.

Still have one file drawer of DRIP stocks I haven't yet canceled and transfered to VG and some coins in safety deposit - to treat hormone flare-ups.

heh heh heh - 16 years of ER - maybe I'll get around to the rest (put in VG) or not. No rush..

 

[GoodSense]

But what if some hacker hacks into Vanguard, and all accounts are frozen for a week or two? I am just thinking if the Chinese government can hack into Google, there is no reason hackers can't hack into Vanguard...

[Just a hypothetical, I don't think it's actually gonna happen, but what if??]

 

[easysurfer]

Yes, anything can happen, but for the sake of organization and consolidation, I'm willing to take the chance.

For the same reason that when I use computer software (Turbotax) to file my taxes, I stick only with Turbotax as opposed to spreading my "safety" by filing some years with Turbotax and others with Taxcut or another program.

 

[TromboneAl]

Here's a link to a thread that links to a thread that has a quote from an old thread on this topic:

http://www.early-retirement.org/forums/f28/all-your-eggs-in-one-basket-41302.html#post761659

From an article (no longer available) on Vanguard's site:

Diversifying by fund family: Limited benefits

Another misapplication of Sancho Panza's advice is investing with more than one fund company to protect against the risk that financial troubles in one fund will infect the fund family's other funds.

Such a scenario is impossible. Each mutual fund is its own corporation. A problem at one mutual fund wouldn't affect another, even if both were managed by the same company. If you own two funds from the same fund family, you have, in effect, put your eggs in two different corporate baskets. In addition, mutual funds are required by law to keep fund assets with a third-party custodian, large well-capitalized banks hired to safeguard shareholder assets. Daily checks are made between mutual funds and their custodians to make sure that assets are where they're supposed to be. The custodian banks, in turn, carry insurance coverage on their own to cover losses of securities and cash in their possession. And Vanguard, like most mutual fund companies, carries substantial insurance resources to protect against any illegal acts. (Thanks to Vanguard's vigorous fraud-protection efforts, though, we have never had to draw on this insurance.)

What about risks to your fund company's recordkeeping and administrative operations? Vanguard's approach has been to develop extensive contingency plans, backup systems, and multiple geographic locations. The Vanguard® funds' trustees are continually working with Vanguard's leadership to ensure that our operations are the industry's most secure.