Vanguard - last straw?

[RetMD21]

WOW, I knew they had zero expense funds but I did not know they had so many that were cheaper...


It would be interesting to compare them over time to see the difference...

So I looked at the chart for Fidelity total market fund (FSKAX) since inception in 1997 vs Vanguard (VTSAX) at Morningstar. Vanguard wins despite the ER disadvantage probably due to better trade execution and securities lending policies. I think you can do fine at Fidelity with their index funds.

 

[Out of Steam]

I just spent about 45 minutes on the phone with Vanguard inquiring about opening an account for a small nonprofit organization. I was looking for information, not to open it today.

The experience was sufficiently weird and negative, including repeated transfers, each with waiting times, plus a call drop, and claiming that they couldn't verify my identity, that I will recommend against selecting them.

 

[travelover]

I just spent about 45 minutes on the phone with Vanguard inquiring about opening an account for a small nonprofit organization. I was looking for information, not to open it today.

The experience was sufficiently weird and negative, including repeated transfers, each with waiting times, plus a call drop, and claiming that they couldn't verify my identity, that I will recommend against selecting them.

I'd walk into a brick and mortar Fidelity office if you have one near you. That way, if they give you any grief you can grab them by the tie and establish their priorities.

 

[marinauser]

Also important to keep in mind that while two different index funds may appear to track a common index, that may not actually be true. For instance Vanguard Total Market VTSAX tracks the CRSP US Total Market Index, The Fidelity Total Market FSKAX tracks the Dow Jones U.S. Total Stock Market Index. I expect that there are minor differences between those two indexes including what the actual index charges for using its information.

 

[tulak]

I'm testing the waters using Vanguard's ETFs vs. MFs. I called them today to convert VTIAX (total intl) to VXUS, the ETF equivalent.

I gave them a callback number and they returned my call in 7 minutes and it took 10 minutes to give them the request for the conversion. The longest part was transferring to a different agent and then having him read to me all the disclaimers for the conversion.

While I had him on the call, I asked him about an account that needs to be converted to a brokerage account. Unfortunately, there's no easy way for me to do this. I need to fill in and mail them a form, so I mentioned to him that it's not worth my time.

He made two interesting comments:

1. Vanguard will start charging $20/year fee per fund in the old mutual fund accounts later this year. The charge will only happen if you have less than a million in mutual fund accounts. If you're over a million, then the charge is waived. But they're only counting the balances in mutual fund accounts. If you've already converted some accounts to brokerage accounts and now you're under a million, you're out of luck.

2. He said the conversion to brokerage accounts is the reason they have high call volumes. I guess lots of people are trying to figure this out?

Anyways, that's what he told me.

For #1, we'll see if they add a fee, but it makes sense that Vanguard will do something to try and push people out of the old accounts.

 

[tulak]

Also important to keep in mind that while two different index funds may appear to track a common index, that may not actually be true. For instance Vanguard Total Market VTSAX tracks the CRSP US Total Market Index, The Fidelity Total Market FSKAX tracks the Dow Jones U.S. Total Stock Market Index. I expect that there are minor differences between those two indexes including what the actual index charges for using its information.

I would prefer to stick with VTSAX vs FSKAX. I trust Vanguard more than Fidelity when it comes to index funds. I don't trust Fidelity much because of their past history with their Target Retirement Funds. Here's an article if you're curious: https://www.reuters.com/article/us-funds-fidelity-retirement-special-rep-idUSKBN1GH1SI

Having said that, I have a sizable amount in FSKAX because that's my only option. But if I decide to move from Vanguard, I'll probably use VTI and deal with the downsides of an ETF.

 

[pb4uski]

What a refreshing experience with Schwab compared to Vanguard! I've talked with a Schwab broker a half a dozen times this week regarding the logistics of establishing the brokerage accounts for the trusts, transferring assets from Vanguard and setting up links with the trust bank account.

I call her number and she actually answers the phone! Amazing... and a real breath of fresh air compared to Vanguard. No phone prompts, voice verification, people reading from a script that are otherwise clueless, etc. Back in the day I had "my guy/gal" personal representative at Vanguard that I could call when the Vanguuard bureaucracy balled things up and they could intervene and clear things up... but I haven't had someone like that for a long time.

I dwadled a bit giving Vanguard one last chance to redeem themselves... the CSR that I talked with last Friday couldn't really do anything but promised that someone would call me back... big fail... never got a call.

We signed the apps and had the notarizations done today, I scanned all the documents and uploaded them to Schwab via their secure messaging portal. The broker did a quick review and said that she thinks that they have all that they need and that the accounts should be set up in a couple days and the assets transferred in from Vanguard in about a week to 10 days.

I think my last straw happened today. I am the lead co-trustee for a couple of our family's trust accounts that are with Vanguard and I manage my 91 yo mom's tIRA and Roth IRA for her. I recently decided that I wanted out of bond fund and preferred to invest in CDs and USTs so I started converting these accounts from mutual fund accounts to brokerage accounts since the mutual fund accounts can't invest in CDs and USTs.

The IRAs were easy... a few clicks and wait a few days and they were done. The trusts were another story. Even though we have had these trust accounts with Vanguard for 17 years we still had to fill out paperwork so I had to print it, sign it and mail it to co-trustee 1500 miles away and have her sign it an mail it to Vanguard. They received the paperwork June 24th. I patiently waited for the accounts to change from mutual fund accounts to brokerage accounts for a couple weeks and then called them.

They said that they needed additional information and I said ok, what do you need? They said that they couldn't tell me but could only tell my mother. Now I'm the co-trustee that set up the trust accounts with Vanguard and have maintained it for 17 years and you can't tell me what is needed? Yup, they insisted on talking with my mother. So then we went through a whole process to get her verified that became so ridiculous that she and I were on the phone together with them and she had to answer their questions and I couldn't tell her the answer and have her repeat it to them but I could write down the answer and then she could say it to them and that was ok.

Anyway, we go through all that and it turns out that all they needed was my dad's death certificate which mother doesn't have anyway... so I emailed it to them while we were on the phone and the guy says that they had all that they needed to transition the trust accounts.

A week later... no change. I call and they say that these things sometimes take time and to wait another week.

So I log on today... still no change so I call. Only thing they can tell me is that they have what they need and it is still in process. No kidding.

I told them that if I don't get a call by the end of today letting me know that the transition is done that I'm starting the paperwork to move the accounts to Schwab. I'm so done with Vanguard and their lousy customer service. Back 5 years ago or so I had an assigned representative that I would chat with a couple times a year and who could navigate through their bureaucratic bottlenecks for me when needed. Not any more.

Paperwork to transfer the accounts to Schwab is printed and ready to be signed and mailed.

 

[pb4uski]

Another update. The two trust accounts are set up and show up on my dashboard... Schwab did in 3 hours what Vanguard couldn't do in over a month. Very impressed with Schwab so far.

 

[tulak]

1. Vanguard will start charging $20/year fee per fund in the old mutual fund accounts later this year. The charge will only happen if you have less than a million in mutual fund accounts. If you're over a million, then the charge is waived. But they're only counting the balances in mutual fund accounts. If you've already converted some accounts to brokerage accounts and now you're under a million, you're out of luck.

As mentioned in another thread, Vanguard sent out an e-mail this morning confirming that as of Sept 30, 2022, they will start charging $20 per fund account. They didn’t mention an exception, so no idea if it’s possible to get the fee waived.

 

[Scrapr]

Another update. The two trust accounts are set up and show up on my dashboard... Schwab did in 3 hours what Vanguard couldn't do in over a month. Very impressed with Schwab so far.

Was this all on the phone/computer? Did you visit an office?

*asking for a friend

 

[Koolau]

As mentioned in another thread, Vanguard sent out an e-mail this morning confirming that as of Sept 30, 2022, they will start charging $20 per fund account. They didn’t mention an exception, so no idea if it’s possible to get the fee waived.

Exception 1: Delete the fee or delete me

 

[braumeister]

As mentioned in another thread, Vanguard sent out an e-mail this morning confirming that as of Sept 30, 2022, they will start charging $20 per fund account. They didn’t mention an exception, so no idea if it’s possible to get the fee waived.

We got one of those emails today and I had to laugh. We closed our Vanguard account ten years ago. So I followed their link and signed in using the old password and it showed up (nothing in it, of course). I clicked the "Close account" just as I had done back then and it was confirmed. Hoping they finally get the message this time.

 

[jazz4cash]

We got one of those emails today and I had to laugh. We closed our Vanguard account ten years ago. So I followed their link and signed in using the old password and it showed up (nothing in it, of course). I clicked the "Close account" just as I had done back then and it was confirmed. Hoping they finally get the message this time.

Better keep an eye out they don’t debit some account that was linked wayback when.

 

[Texas Proud]

We got one of those emails today and I had to laugh. We closed our Vanguard account ten years ago. So I followed their link and signed in using the old password and it showed up (nothing in it, of course). I clicked the "Close account" just as I had done back then and it was confirmed. Hoping they finally get the message this time.

Taking all your money out and closing an account are two things...


I recently got a letter from TD saying that since I have not done anything to my account in awhile they were gong to close it unless I funded it... heck, it has to be 20 or more years since I used TD...


I probably still have an ETrade account open...

 

[pb4uski]

Was this all on the phone/computer? Did you visit an office?



*asking for a friend

All via phone and secure messaging since the nearest office is over an hour from my rural summer home.

 

[mathjak107]

Taking all your money out and closing an account are two things...


I recently got a letter from TD saying that since I have not done anything to my account in awhile they were gong to close it unless I funded it... heck, it has to be 20 or more years since I used TD...


I probably still have an ETrade account open...

many who take advantage of the citi bank promos find out the difference when they draw out the money after they get the promo .

unless you close the account officially they charge you a monthly service fee

 

[RetMD21]

I never understood why people were reluctant to change to Vanguard brokerage accounts.

Customer service at Vanguard could be better and the decline in Flagship service is unfortunate. E Jones has great customer service. Getting them to recognize a DPOA was easy. Vanguard and others want their own forms. Although not onerous it is one more step.

 

[travelover]

..........E Jones has great customer service. ..........

Given what they charge, they should.

 

[pb4uski]

Another update. The two trust accounts are set up and show up on my dashboard... Schwab did in 3 hours what Vanguard couldn't do in over a month. Very impressed with Schwab so far.

And it gets even better! While on the golf course yesterday I got a call from someone at Schwab informing me that we are eligible for a bonus promotion that they are doing.... a low-to-mid 4-figure bonus at that!

 

[Koolau]

Just got "the letter" from Vanguard informing me of the coming fees. But they never mentioned the amount. Next sentence stated that due to my "account status" I would not be charged. I wonder if my account goes down due to unfavorable results, will I lose my favorable status?

 

[ejman]

Just got "the letter" from Vanguard informing me of the coming fees. But they never mentioned the amount. Next sentence stated that due to my "account status" I would not be charged. I wonder if my account goes down due to unfavorable results, will I lose my favorable status?

I got the same email "We're writing to let you know we're making changes to the Vanguard Brokerage Services® annual account service fee. However, based on your account status or level of Vanguard qualifying assets, you won't be charged" And wonder the same thing.

 

[PaunchyPirate]

Just got "the letter" from Vanguard informing me of the coming fees. But they never mentioned the amount. Next sentence stated that due to my "account status" I would not be charged. I wonder if my account goes down due to unfavorable results, will I lose my favorable status?

That was a relatively worthless letter, wasn't it. Using the link provided, it leads you to a page that says "Updated January 25, 2021". I had to poke around and finally found on the "Other Services" tab that one section says "Effective September 5, 2022". It is the Account Service Fee section and it now says:

Vanguard Brokerage Services charges a $20 annual account service fee. We don't charge the fee to any of the following:

• Clients who have an organization or a trust account registered under an employee identification number (EIN).
  
• Clients who’ve elected e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates.
  
• Brokerage accounts enrolled in an advisory program serviced by an affiliate of Vanguard.
  
• Clients with at least $1 million in qualifying Vanguard assets.

 

[Koolau]

That was a relatively worthless letter, wasn't it. Using the link provided, it leads you to a page that says "Updated January 25, 2021". I had to poke around and finally found on the "Other Services" tab that one section says "Effective September 5, 2022". It is the Account Service Fee section and it now says:

Vanguard Brokerage Services charges a $20 annual account service fee. We don't charge the fee to any of the following:

• Clients who have an organization or a trust account registered under an employee identification number (EIN).
  
• Clients who’ve elected e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates.
  
• Brokerage accounts enrolled in an advisory program serviced by an affiliate of Vanguard.
  
• Clients with at least $1 million in qualifying Vanguard assets.

Thanks for doing the homework for us. I didn't think I qualified, but now I think I see why I do. YMMV

 

[Texas Proud]

I got the same email "We're writing to let you know we're making changes to the Vanguard Brokerage Services® annual account service fee. However, based on your account status or level of Vanguard qualifying assets, you won't be charged" And wonder the same thing.

If you remember they used to charge the mutual fund accounts if they were less than a certain amount... not sure but I think it was $10 per quarter...


They used to look at your assets each quarter... I would assume they are dong the same... but could be annual...


IMO they do not want to charge the fee, they want you to move your accounts..

 

[ejman]

If you remember they used to charge the mutual fund accounts if they were less than a certain amount... not sure but I think it was $10 per quarter...


They used to look at your assets each quarter... I would assume they are dong the same... but could be annual...


IMO they do not want to charge the fee, they want you to move your accounts..

I guess so. Tempted to move the accounts right out of Vanguard as several posters here have done. I wonder if Schwab will calculate RMD's on Vanguard accounts transferred to them and distribute the money to a MM fund. I guess I'll have to ask them.