Vanguard - last straw?

[bobjas]

I did not have the need to contact Vanguard until today. It was not a pleasant experience. I tried to help my 19 years old daughter open an account online at Vanguard. They won't let her open the account online because she is the beneficiary of a 529 account I have for her. They want us to mail or fax the application form. Then, there is no fax number can be found. I went to their website and tried to download an application form to check it out myself and it always redirected me to the online application. That is really dumb. I tried to call them myself and found out there is no special number for flagship services anymore. That is fine, just waiting in the queue. Finally, this guy told me that there is no fax option.


Well, we both opened accounts at Fidelity and I am moving funds over. It is sad, I have been with Vanguard for more than 20 years.


I am not saying Vanguard is worse than the others, it is just not the same experiences I had before.

 

[RunningBum]

My son is in the process of transferring a 401K from an old job to Vanguard. He called, and got the option for them to call back. 30 minutes later they did call back, and he got it all set up with them. It's a little tricky because the 401K was set up with half in traditional 401K and half in Roth 401K but in one account. VG is splitting it into a Roth and a tIRA as we hoped they could. This was just a few days ago, and the money hasn't been transferred over yet, but so far it's been minimal headaches. So not everyone is having bad experiences with VG.

 

[Markola]

+1. I have been calling VG a LOT this year, mostly helping DM get her finances sorted. I find that if I call first thing in the morning, I often get someone directly. Otherwise, I leave my number and wait for the return call within an hour or so. I can tolerate this system, now that I plan for it.

I am not doubting the heartburn others are experiencing, though. It seems a function of the rock-bottom prices we expect from VG in their cut-throat industry. They are clearly evolving, so I plan to have patience and let the new-normal settle.

 

[Russ2020]

I called Vanguard last week and while waiting for a rep the call dropped. I called back and waited 35 minutes for the next rep. When he answered I explained to him not to take this personal but would one more basis point in expense ratio lead to better customer service. He didn't answer specifically but it seemed to me he was also frustrated with his employer. In the end he was helpful and courteous. I don't call Vanguard often. Do you all think one basis point would be enough to provide great customer service and would you be willing to pay for it.

 

[VanWinkle]

I have been with Vanguard for many years with 99.5% of my funds. I find them helpful but hard to reach. They answer my questions, but don't really address any other areas without a question first. My SO(engaged) that has zero interest in handling investments and is currently with a shark that has her with less than 5% equities and 82% of her assets in annuities. She has made between 2-3% annually over the last 8 years. We met with Charles Schwab to discuss moving assets. They are located near her home address so she would be able to sit down in front of a person to ask questions. I really don't need that focus, but would be willing to move my assets as well. No management involved and I made it clear we already knew about their low cost market funds. We are considering moving to eastern Tennessee and would be able to contact a Schwab office there if assistance is needed.

VW

 

[CoolRich59]

Do you all think one basis point would be enough to provide great customer service and would you be willing to pay for it.

Interesting question and I would give a qualified “Yes”.

I’ve been with Vanguard for appx 4 years, but rarely need to connect with them. So, their customer service - or lack thereof - isn’t an issue for me.

But, I am big on customer service. I shop at stores that are known for their customer service. My favorite local restaurant has good food and outstanding service. So, if I needed to interact with Vanguard more than I do, I would be willing to pay a little more to get good service.

 

[tulak]

I was on Fidelity’s customer service chat last week. They said it’s be 5 min and I waited 30 min before I was dropped. Fortunately calling them was a lot quicker. They said 10 min wait on the website, but it was only a few min.

Unfortunately they couldn’t solve my problem, but that wasn’t the reps fault.

 

[bobjas]

[FONT=&quot]My disappointment over Vanguard is that they knew their system has issues. But, they don't fix it. They told me the reason that my daughter could not open an account online is because Vanguard has her profile from the 529 account when she was a minor. They told me their system does not like that, so they need the paper application. My daughter did not have the same problem with Ally where I had a custodial account for her.[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]Since I am transferring my funds from a Vanguard trust account to a Fidelity join account. Fidelity's form indicates that I might need the "Medallion Signature[/FONT] Guarantee". I called Vanguard to confirm. Talked to the Customer Service guy, then transferred me to the investment guy, then transferred me to the on-boarding guy. Each one the wait time is about 10-15 minutes even though they told me the internal phone transfers have high priority. Each one wanted to confirm my identity even the system already confirmed with "voice verification" - At Vanguard, my voice is my password. What a joke. The on-boarding guy was not sure if transfer from a trust account to a join account is allowed. He needed to put me on hold. Anyway, I guess we just need to get used to it.


I missed the old day, I just need to email/talk to my Flagship contact person for some answers.

 

[RetiredAt55.5]

I missed the old day, I just need to email/talk to my Flagship contact person for some answers.

You can still get that same level of customer service.

It'll only cost you 30 basis points (i.e., sign up for their advice service).

Not joking.

 

[bobjas]

You can still get that same level of customer service.

It'll only cost you 30 basis points (i.e., sign up for their advice service).

Not joking.

Is that based on your personal experience?


I think I may have them manage one of my accounts.

 

[Ole Red 29]

i moved an IRA account from Charles Schwab to Vanguard recently. Went online to Vanguard to start the process. Vanguard's system was easy and quick to make the transfer by logging into Schwab's system through Vanguard and typing in what I wanted to transfer. During the process, the Vanguard system suggested I should contact Charles Schwab and tell them what I was doing in case they had any forms needing to be completed. I called Schwab and was able to talk to a pleasant lady about the process. She said I did need to fill out a form and she would email it to me. After I hung up, I wondered if I should stay with Schwab becuase of the quick and courteous service I received. Unfortunately, I soon realize the service rep I visited with had no idea what she was talking about. After she sent me the wrong form 3 different times, I gave up. Fortunately, the process I started through Vanguard was sufficient to make the transfer happen. I think all of these companies have good and bad service reps. What you get is the luck of the draw.

 

[Markola]

Is that based on your personal experience?


I think I may have them manage one of my accounts.

Yes, 30 basis points for AUM management and advice. It is called Vanguard Personal Advisor Services. 500K+ gets you an assigned advisor. Less than that and you get a new advisor from a pool for each call. My mother gets advice from the pool and the people are always high quality. We have 7 figures in the service and are very happy with the program and our assigned CFP.

 

[Koolau]

Yes, 30 basis points for AUM management and advice. It is called Vanguard Personal Advisor Services. 500K+ gets you an assigned advisor. Less than that and you get a new advisor from a pool for each call. My mother gets advice from the pool and the people are always high quality. We have 7 figures in the service and are very happy with the program and our assigned CFP.

Since most folks do not have everything at (in this case) Vanguard, does the advisor 1) Know the client's other investments 2) Include those other investments in the advice?

I would hope the advice would not take the form of "You need to sell your other investments and transfer them to us." No idea on my part, so YMMV.

 

[Markola]

No, Vanguard is, uniquely, a kind of co-op owned by the fund shareholders, ie, me, and has never money grubbed, in my experience. Their models do count the amounts and savings rates in any external accounts and assume/expect that those will have similar asset allocations as the ones under management at Vanguard by, for example, having one’s 401k at w*rk in a Target Date Fund with a similar allocation.

 

[Koolau]

No, Vanguard is, uniquely, a kind of co-op owned by the fund shareholders, ie, me, and has never money grubbed, in my experience. Their models do count the amounts and savings rates in any external accounts and assume/expect that those will have similar asset allocations as the ones under management at Vanguard by, for example, having one’s 401k at w*rk in a Target Date Fund with a similar allocation.

Wonder how they would handle MYGAs, PMs, I-bonds, GIFs, etc.?

 

[Gremlin]

+1. I have been calling VG a LOT this year, mostly helping DM get her finances sorted. I find that if I call first thing in the morning, I often get someone directly. Otherwise, I leave my number and wait for the return call within an hour or so. I can tolerate this system, now that I plan for it.

I am not doubting the heartburn others are experiencing, though. It seems a function of the rock-bottom prices we expect from VG in their cut-throat industry. They are clearly evolving, so I plan to have patience and let the new-normal settle.

I had to call Vanguard yesterday for the first time. I had made a mistake when I tried to do my (maybe last) backdoor Roth contribution. I called right when they opened and I waited maybe a total of 3 minutes to get to the right person who promptly fixed my problem. Not that this experience negates other people’s complaints, just that I was pleasantly surprised by the experience.

 

[Markola]

Wonder how they would handle MYGAs, PMs, I-bonds, GIFs, etc.?

I really couldn’t say for sure. They seem to be all about simple index funds. My guess is, if more fancy securities are in a taxable account, they would advise leaving them alone, slowly spending them or moving them elsewhere or would just not include that account under management. I’m only guessing though. I had a small amount of the TIPS index in a tax advantaged accounts when we started the program a few years ago, which they moved into the total bond index (with my approval.)

 

[OverThinkMuch]

I don't recall ever voting on Vanguard's policies, even though Vanguard has a client ownership structure. In practice, I don't recall ever being able to act like an owner.

Schwab, Fidelity and Vanguard all charge $0/trade for ETFs and stocks (and surprisingly, Vanguard was NOT first!). And for call options, Schwab charges 33% less, so for my purposes Schwab is cheaper than Vanguard. I'm still deciding if most of my assets will move there in 2022.

Whenever I login to Vanguard, I use 2FA. But for the past month, I get a warning that the API used (by Vanguard) is being deprecated in Feb 2022. No problems on other websites - just Vanguard. When I brought it to their attention, they said they plan to fix it by Feb 2022. That's not a great way to schedule required security changes - fixed by the very last moment.

 

[The Cosmic Avenger]

Whenever I login to Vanguard, I use 2FA. But for the past month, I get a warning that the API used (by Vanguard) is being deprecated in Feb 2022. No problems on other websites - just Vanguard. When I brought it to their attention, they said they plan to fix it by Feb 2022. That's not a great way to schedule required security changes - fixed by the very last moment.

As an IT manager, I can tell you that if they plan to fix it by 2/22, they will probably not have it working properly until at least 2 months later!

 

[Chuckanut]

Here's an interesting commentary on Vanguard's customer service issues by Clark Howard. Check out the first 10 minutes of the 12/21/21 podcast here:

https://clark.com/podcasts/

I found his comparison of fans of Vanguard with fans of SpaceX to be interesting. Both are companies that shocked the old, stuck in the mud, dinosaurs of their business with a new ways of thinking and getting things done. Both saw others jump in and copy a good chunk of what they did.

 

[Koolau]

Here's an interesting commentary on Vanguard's customer service issues by Clark Howard. Check out the first 10 minutes of the 12/21/21 podcast here:

https://clark.com/podcasts/

I found his comparison of fans of Vanguard with fans of SpaceX to be interesting. Both are companies that shocked the old, stuck in the mud, dinosaurs of their business with a new ways of thinking and getting things done. Both saw others jump in and copy a good chunk of what they did.

I'm not sure I'd describe myself as a "fan" but when I discovered Vanguard many years back, it was refreshing (getting away from load funds and all kinds of fees, for instance.) I probably could just as easily have gotten into Fidelity instead. So "loyalty" as such isn't a real factor - just performance and (decent - if not stellar) service. YMMV

 

[SoReady]

In further piling on to Vanguard, this came in my email today from Seeking Alpha.

It is lengthy and describes why if you own VTSAX you should go from the mutual fund to the ETF (VTI), but then delves into the issues with Vanguard. It certainly gives me pause regarding Vanguard.

Bob

 

[Major Tom]

In further piling on to Vanguard, this came in my email today from Seeking Alpha.

It is lengthy and describes why if you own VTSAX you should go from the mutual fund to the ETF (VTI), but then delves into the issues with Vanguard. It certainly gives me pause regarding Vanguard.

Bob

Thanks for posting this. It's useful food for thought. I'm with Vanguard, and the entire stock portion of my portfolio is in VTSAX - all in a taxable account. The ability to exchange to the ETF version of the fund without triggering a taxable event is helpful information.

Two questions come to mind -

1) Will the option of performing this fund-to-ETF transfer, without triggering a taxable event, always exist, or does a "window of opportunity" apply?

2) Vanguard have to realize that allowing such a transfer could, and probably will, result in losing some customers. Why would they do this?

 

[RetMD21]

The conversion possibility has been around for years and there is no reason for it to go away. I just don't see an advantage to converting unless you want to hold shares outside Vanguard. FWIW I have some of each.

 

[JoeWras]

I have a lot of VTSAX non-covered shares pre 2012. I sell specID using my records. What would a conversion do to managing the basis? Sounds like more work.

Since 2013, I've been buying VTI. So I have both. I'll probably just stay the course for now.