Vanguard - last straw?

[ShokWaveRider]

I moved from Vanguard to Schwab, we have an office relatively close by when we want to talk to someone face to face.

 

[RetMD21]

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...

I remember Vanguard fees in the old days. Vanguard is pretty upfront about costs. Less sophisticated investors may pay more at Schwab/Fidelity and not notice. Wouldn't apply to anyone here of course.

 

[Koolau]

I recall moving from standard (or whatever the status was called) to "Admiral" shares which lowered fees at Vanguard. The savings were significant. YMMV

 

[EarlyandLate]

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

I never switched. A few years back when I got the message about switching, I happily logged on and started the process. It came to a questionnaire that asked ever more intrusive and personal questions as it progressed. They wanted to know my total net worth and where else I had accounts. Totally IMPERTINENT! I only "park" money there in a couple of index funds and have no intention of ever using them as a broker. That questionnaire was a full stop for me. There was no ability to skip those intrusive questions or to answer "NA". I would gladly have complied with their request to change the type of account save for the impertinent required questionnaire!

 

[OldShooter]

I never switched. A few years back when I got the message about switching, I happily logged on and started the process. It came to a questionnaire that asked ever more intrusive and personal questions as it progressed. They wanted to know my total net worth and where else I had accounts. Totally IMPERTINENT! I only "park" money there in a couple of index funds and have no intention of ever using them as a broker. That questionnaire was a full stop for me. There was no ability to skip those intrusive questions or to answer "NA". I would gladly have complied with their request to change the type of account save for the impertinent required questionnaire!

There are some pretty strict regulatory rules under the "Know your customer" and "Know your client" rubrics. From Investopedia:

FINRA Rule 2111 notes that a broker-dealer must have a reasonable belief that a recommendation is suitable for a customer based on the client’s financial situation and needs. This rule assumes that the broker-dealer has completed a review of the current facts and profile of the customer, including the customer’s other securities and investments before making any purchase, sale, or exchange of a security on the client's behalf.

 

[EarlyandLate]

There are some pretty strict regulatory rules under the "Know your customer" and "Know your client" rubrics. From Investopedia:

FINRA Rule 2111 notes that a broker-dealer must have a reasonable belief that a recommendation is suitable for a customer based on the client’s financial situation and needs. This rule assumes that the broker-dealer has completed a review of the current facts and profile of the customer, including the customer’s other securities and investments before making any purchase, sale, or exchange of a security on the client's behalf.

I have never and will never ask Vanguard for any recommendations. I have never asked them to be my "broker". As I said, I have only parked some money in their funds, period, end of story. They wanted me to update my account for their convenience, which I would have done. They've had my money for 25+ years and I have never contacted them for anything other than to change my address when I move. That's all they need to know.

 

[OldShooter]

I have never and will never ask Vanguard for any recommendations. I have never asked them to be my "broker". As I said, I have only parked some money in their funds, period, end of story. They wanted me to update my account for their convenience, which I would have done. They've had my money for 25+ years and I have never contacted them for anything other than to change my address when I move. That's all they need to know.

Not sure what your beef is. What they "need to know" is whatever the regs say that they need to know. They are not going to tailor their SOPs for one relatively unprofitable customer. Do you expect them to do that?

 

[EarlyandLate]

Not sure what your beef is. What they "need to know" is whatever the regs say that they need to know. They are not going to tailor their SOPs for one relatively unprofitable customer. Do you expect them to do that?

I was merely explaining why I didn't complete the process to switch my account type. Their questions were too intrusive and they have no need to know those things to provide the service I want from them.
In the same way, my health insurance plan has persistently bugged me to fill out a health and lifestyle questionnaire or have a "wellness evaluation" with one of their employees. They have no business knowing anything beyond what submissions they get from my healthcare providers. Even one of my friends, who is an MD, told me that the insurance company has no business asking those kinds of questions.

At any rate, this has drifted way far away from the thread topic of dissatisfaction with Vanguard, so this will be my final post on this thread.

 

[RetMD21]

Not sure what your beef is. What they "need to know" is whatever the regs say that they need to know. They are not going to tailor their SOPs for one relatively unprofitable customer. Do you expect them to do that?

Regulations require questions for new brokerage accounts. I'm not sure SEC would change them for one customer but they would probably be the ones to ask

I'm aware of people getting mad about the hospital for asking about race and ethnicity. It was required by the government but the staff took the blow back. Patient's weren't required to answer correctly or at all.

 

[Koolau]

Not sure what your beef is. What they "need to know" is whatever the regs say that they need to know. They are not going to tailor their SOPs for one relatively unprofitable customer. Do you expect them to do that?

I see what you are saying. However, I think what EarlyandLate is saying is that s/he does not need, does not really want Vanguard as a broker (does not want a broker/client relationship.) Therefore, there is no need for Vanguard to know that info.

I don't understand why V is insisting (at the point of extra fees if you don't) on a brokerage relationship. It can't possibly be for the client's benefit or they would give incentives rather than punish non-brokerage customers.

Dirty little secret: I already have a separate brokerage acct. with V and they either forgot, don't know, can't figure it out, whatever.



SHHHHHHhhhhhhh!

 

[OldShooter]

... I think what EarlyandLate is saying is that s/he does not need, does not really want Vanguard as a broker (does not want a broker/client relationship.) Therefore, there is no need for Vanguard to know that info. ...

But he wants to buy securities. "I have only parked some money in their funds ... " "I only "park" money there in a couple of index funds" Not sure how he can not have a broker/client relationship and still do that.

I'm probably as private as anyone but I don’t see any logic in getting mad at someone who is simply complying with the regulations of their governing body. IMO life is too short to get spun up about things like that. He will run into basically the same thing anywhere he goes to open an account.

 

[RetMD21]

Helped a family member open an Etrade acct. same new client questions.

 

[Souschef]

I agree about not getting spun up about the questions. The simple way is an error of omissions. You just need to give them enough info to qualify.


If you have 5 accounts, tell them about two. If your NW is $2 mil, tell them you think it is about 1 mil, and so on.
I had the same issue when I was applying for a lease at a new apartment complex. All I had to show was enough assets to meet their requirement.

 

[Koolau]

But he wants to buy securities. "I have only parked some money in their funds ... " "I only "park" money there in a couple of index funds" Not sure how he can not have a broker/client relationship and still do that.

I'm probably as private as anyone but I don’t see any logic in getting mad at someone who is simply complying with the regulations of their governing body. IMO life is too short to get spun up about things like that. He will run into basically the same thing anywhere he goes to open an account.

I see a difference between buying MFs and individual securities. If you don't, then we disagree about all this - and that's okay.

In any case, I've been with V for 25 years and never had these questions asked before (yeah, yeah, yeah, the law has changed - without really creating true fiduciary relationships.)

 

[rayvt]

All I had to show was enough assets to meet their requirement.

This.

Just because they asked questions doesn't mean you have to tell them the truth and the whole truth. Just tell them what you need to get the account opened.

 

[Scrapr]

This.

Just because they asked questions doesn't mean you have to tell them the truth and the whole truth. Just tell them what you need to get the account opened.

according to the Census I am a non binary (she/him) Croation born in New jersey and working in a weed shop in South texas. But wadda I know

*I keed. No whales were hurt in this posting.

 

[RobbieB]

I agree. No full disclosure, only info needed.

 

[Graybeard]

I recall moving from standard (or whatever the status was called) to "Admiral" shares which lowered fees at Vanguard. The savings were significant. YMMV

They are called Investor shares. Not all MF have Investor and Admiral, some now are just Admiral with the lower $3k minimum vs the $50k.

 

[Dreamer]

This thread was enough to get me to change mine and DHs Vanguard over to brokerage accounts. So thanks for that.

 

[RetMD21]

I see a difference between buying MFs and individual securities. If you don't, then we disagree about all this - and that's okay.

In any case, I've been with V for 25 years and never had these questions asked before (yeah, yeah, yeah, the law has changed - without really creating true fiduciary relationships.)

I doubt that the SEC is getting that granular about what you do with a brokerage account. Thus new brokerage account, new questions.

One small upside of moving my fund accounts over to the brokerage account side was one 1099

 

[Rianne]

We've been with VG for 30+ years. Never had an issue with being on hold very long. Always had our questions answered in detail. Maybe we're not as active with our investments. Our investments remained the same except when we got out of the bond funds and bought treasury ladders. That was simple, I was transferred to the bond desk. One and done.

Maybe if investors are more active traders, VG isn't right for you. We're happy with them so far.

 

[OldShooter]

I see a difference between buying MFs and individual securities. If you don't, then we disagree about all this - and that's okay. ...

Well, I don't see a difference but your and my opinions really don't matter. I am pretty sure that the SEC does not see a difference. That matters.

 

[MRG]

Well, I don't see a difference but your and my opinions really don't matter. I am pretty sure that the SEC does not see a difference. That matters.

+1
I worked in an SEC controlled environment. Nobody argues with them, doesn't matter how detached from reality they are. You simply incorporate their requirements into your business processes.

 

[gauss]

FWIW I just applied for an Inherited IRA (owned by the Estate) at Charles Schwab that included a brokerage account.

There were questions about the annual income of the Estate and the total value of the Estate.

I didn't think too much about it.

-gauss

 

[nassa]

For those thinking of changing brokers, just a heads up on a little wrinkle I experienced recently transferring assets from Vanguard to Fidelity.

I did a full transfer of my brokerage account earlier this month. I continued to have access to my account with a zero balance until this morning. When I logged in, I had no account and no account history, at all. Luckily, I had downloaded the important account records before the transfer. However, it made me uneasy to lose complete access to my taxable account history going back years so I called Vanguard and was passed through to the right department that instructed me on how to send a “rescind letter” via fax or USPS to keep my account open. This has to be received by VG within 60 days in order to re-open the account.

The representative was helpful and I suggested he submit feedback that clients should receive notification of closure prior to Vanguard acting on their own, which he said he would.

So, for those thinking of transferring, I suggest downloading the statements and transaction history you think you might need down the road prior to the transfer. Or, don’t do a full transfer as I did so some money is left remaining in your accounts.