Vanguard "Growing Pains?"

[SecondCor521]

I worked at a large regional bank in their IT department for about a year right out of college. I ran the "problem management system" so got to read about all the mistakes we made. We corrected almost all of them overnight before the bank opened again the next day, but sometimes it was nip and tuck. One time we had to involve the customer because they erroneously got like a $7T credit to their account, and we needed to ask them not to spend it.

My family has been with Vanguard for at least 35 years. They've never made a mistake to my knowledge. But I've also had accounts at Fidelity and Schwab and they haven't made any mistakes either. But we don't do much, and what we do isn't fancy at all.

My guess is that all the big guys have millions of accounts, and occasionally problems crop up. Random whether it hits you or me or anyone. I'd also guess that the big 3's error rates are approximately equal.

USAA has gone downhill. My son was on his mother's auto insurance and he wanted to either get switched to my auto policy or get his own. Because his mother and I are no longer married, they made life difficult for us in terms of accomplishing this task. Finally the third agent we spoke with was able to help us.

 

[Amethyst]

Frankly (pun intended) I have not been impressed with Flagship reps. They seem like typical customer service: studied politeness while reading from boilerplate. And yes, they do seem to move on quickly. I don't bother with them.

 

[DrRoy]

I was at Vanguard many years ago, but consolidated to Fido as I saw their offering as wider. I have heard complaints about Fido too, but I have been satisfied, and still there.

 

[Paulz]

Daniel Wiener (The vanguard Adviser-https://adviseronline.investorplace.com/) has been warning for a year or so now about the need to keep your eye on Vanguard. He suggests that in the rush to lower and cut fees have made their technology stretch a little farther than it can handle.

I've had my accounts there for 30 years and for the first 25 was just smooth sailing. The last few had had little hiccups that have given me a little concern. I still have my accounts there, but moved a large chunk of it out just to diversify a little.

 

[RetMD21]

With the switch from mutual fund accounts to brokerage accounts holding funds (and other investments) Vanguard managed to characterize this as a distribution They corrected it but it was annoying.

 

[gerntz]

Thanks for the replies. I was afraid my thread might be read as whining by all, evidently not.

I think it's whining, and that's fine. What else you supposed to do?

 

[Brat]

My husband was hit by a USAA insured, car totaled. Settling that claim with minor injuries as a nightmare. He cusses USAA, I remind him that he is not their client but that does not salve his frustration.

 

[target2019]

Thanks for the replies. I was afraid my thread might be read as whining by all, evidently not.

I did not take your post as whining. But it did lead to some interesting turns in the discussion.

"Growing pains" is just corporate speak, and hearing about your negative experience is important.

We have Vanguard and Schwab accounts. Others have Vanguard and Fidelity. If the experience is positive, one tends to shop in the preferred store.

 

[Midpack]

Daniel Wiener (The vanguard Adviser-https://adviseronline.investorplace.com/) has been warning for a year or so now about the need to keep your eye on Vanguard. He suggests that in the rush to lower and cut fees have made their technology stretch a little farther than it can handle.

I've had my accounts there for 30 years and for the first 25 was just smooth sailing. The last few had had little hiccups that have given me a little concern. I still have my accounts there, but moved a large chunk of it out just to diversify a little.

Ive been with them about 20 years and I’d agree they may have slipped more recently. This last episode with the nonchalant response came as a surprise.

 

[PatrickA5]

I think if you're with a firm for long enough and do enough transactions, you're going to run into problems eventually regardless of the company.

I had two larger transaction problems with VG over the years. First one was a rollover of an IRA to VG that got lost for a couple of weeks. The other one was someone else's rollover found it's way to my account. I had an extra $500K in my IRA for about a month. Made my day looking online at my balance. It took them several weeks after I called them to figure out where that money actually belonged.

We recently moved everything from VG to FIDO and have been pleased so far - but I'm sure they aren't perfect either.

 

[FreeBear]

Wow, this stuff is really scary! Important to hear though. Level of incompetence similar to AT&T, yes the local cable provider! Never had a brokerage problem like what’s mentioned here, fortunately. Does make me reluctant to change anything, especially move between brokerages, unless necessary. My costs are low end enough, although not lowest. For me, Best to leave well enough alone, at least until a major issue.

 

[gwraigty]

Here's an interesting data point, in light of the massive changes coming to the commission structure among the major brokerages. Vanguard's no commission fees on over 1800 ETFs did not transfer to DH's VBO account. They charged the full $7 for all non-Vanguard ETF purchases. (Yes, I could have avoided that by sticking with Vanguard ETFs, but I liked the others better.) The total value of DH's Vanguard 401k would have been equivalent to their Voyager Select service levels, with about half of that in the VBO. (On a side note, they tried to overcharge on individual bond commissions several times. I had to correct this each time before authorizing the purchases and sales. Annoying.)

Late last month, Vanguard transferred all VBO assets in the employer plan to TD Ameritrade SDBAs. TDA has extended the no commissions on stocks and ETFs to the SDBAs. Trading is allowed in the new accounts starting next week. So far, our dealings with TDA customer service/policies have been vastly better than Vanguard.

The non-brokerage 401k part is still at Vanguard, but we probably won't have to have contact with them now until it's time for a rollover after DH's retirement.

 

[FLSUnFIRE]

Sorry to hear of your issues... always frustrating, especially with an entity holding a big chunk of your networth. Fortunately, I'm one of the quiet (majority?) that hasn't had any issues and am a happy Vanguard client. I had to recharacterize my Roth contributions earlier this year after realized capital gains kicked me out of eligibility this year (hindsight probably should have borrowed instead of sold to raise cash) and they handled it fine (I guess I have to wait for tax docs but everything looks right).


I do find it "clunky" that I now have a a Brokerage account, a Roth IRA Account, a Traditional IRA brokerage account, and regular mutual fund account! I get they are trying to transfer/update and am not upset. It does make setting up automatic transfers between them all a PITA but I expect that will be improved with time.

 

[Z3Dreamer]

2 items about which I wish to pontificate:
1) Many institutions struggle with Joint Accounts. DW and I have been married 35 years or so. Just about everything is joint. Retirement accounts can't be Joint, but we have given each other trading authority, blanket authority, you name it. But yet, on many occasions, we are told: "I need to speak to the primary account holder before I can do anything." What? Are DW and I the only married couple who share finances?
2) Many companies think that having a dedicated account rep is an improvement to service. I have found, just like a number of you, that a dedicated rep moves on quickly, doesn't want to know about my business, only make the sale, and is never available. So, instead of placing my order with anyone in the pool, I have to wait until he is available.

 

[Rianne]

2 items about which I wish to pontificate:
1) Many institutions struggle with Joint Accounts. DW and I have been married 35 years or so. Just about everything is joint. Retirement accounts can't be Joint, but we have given each other trading authority, blanket authority, you name it. But yet, on many occasions, we are told: "I need to speak to the primary account holder before I can do anything." What? Are DW and I the only married couple who share finances?
2) Many companies think that having a dedicated account rep is an improvement to service. I have found, just like a number of you, that a dedicated rep moves on quickly, doesn't want to know about my business, only make the sale, and is never available. So, instead of placing my order with anyone in the pool, I have to wait until he is available.

We are in a similar situation. VG has never questioned my inquiries regarding DH tIRA or any of our accounts. Although, if we want to make a change in tIRA, DH has to do it. We have full access to all accounts and can question without the other being there.

 

[Z3Dreamer]

We are in a similar situation. VG has never questioned my inquiries regarding DH tIRA or any of our accounts. Although, if we want to make a change in tIRA, DH has to do it. We have full access to all accounts and can question without the other being there.

Occasionally, I will get a VG newbie who cannot talk to me about DW's online logon. Last time, I pointed out to the newbie that the largest position in DW's online login was my IRA - 4 times the size of DW's rollover IRA. Newbie put me on hold then came back, fully able to talk to me.

A bank with initials WF has no customers in the US who are married with Joint Accounts. I am exaggerating but time and time again they cannot talk to me without her being present - on our Joint account. "Mr. Z3, although you are Joint on the account, each account has a primary owner and each owner has a unique logon. Since you are talking to the online service department, we must talk to Mrs. Z3."

An unnamed, high fee, B&M brokerage firm will allow me to place an order, but must call her to read the details and make sure it is OK. What is the point of me having trading authority if DW must redo the transaction with them?

 

[larrycombs]

I transferred my IRA to Vanguard 4 years ago with no problems. I had a problem with an account at John Hancock and Vanguard helped me fix all that with 3 way phone calls- something that Vanguard did not have to do. I paid too much in fees for years but not anymore and the Vanguard advice has been excellent. I am more than pleased with them.
..just my experience. It may be luck but I haven't had anything except excellent service and quick responses from them.

 

[The Cosmic Avenger]

I've noticed something similar with Fido; even though I have full trading authority (or whatever the highest level of access is for another account), I can't do my partner's backdoor Roth conversion from my account. The thing is, I set up my partner's online account. They have little interest the day-to-day details of our finances and zero interest in actually managing them. So every month I log in to both accounts in separate browser sessions and do our backdoor Roth IRA conversions. I went over it once thoroughly, and they asked me to do so, although I can't guarantee that they'd be able to tell you what I'm doing off the top of their head if you asked.

 

[travelover]

Yesterday I noticed a $30 overdraft penalty in my credit union account. Upon investigation, it turns out that Vanguard tried to withdraw $35,000 twice - Once in early October and then again yesterday. The first transfer was a request by me, the second was a screw up by them. I don't normally keep $70,000 in my checking account, thus the bounce.

To their credit, they did later send me an email admitting the mistake and I was able to call and get them to reimburse me, but this shakes my confidence in them.

 

[RunningBum]

I did a transfer of some stock to another family member's account at VG. It all went well, except the confirmation on my end had the correct account number, but said it was his Roth. I had to call them and check that the acct # was right, and that the stock went to the right account. I got an invitation to evaluate the process, and slammed them. This is unacceptable. There shouldn't be any question about exact where money gets transferred to. I checked the box to allow them to contact me for follow up. We'll see if they do.

 

[travelover]

Update

Yesterday I noticed a $30 overdraft penalty in my credit union account. Upon investigation, it turns out that Vanguard tried to withdraw $35,000 twice - Once in early October and then again yesterday. The first transfer was a request by me, the second was a screw up by them. I don't normally keep $70,000 in my checking account, thus the bounce.

To their credit, they did later send me an email admitting the mistake and I was able to call and get them to reimburse me, but this shakes my confidence in them.

So, I checked my credit union account later today and find that Vanguard has moved the whole $35,000 back to my credit union account. This is actually a windfall for me as the investment I bought in early October had lost 1% since I bought it. I never requested this action, but I think I'll keep my mouth shut. This further shakes my confidence in Vanguard.

 

[JustCurious]

I'd rate Fidelity and Schwab almost equal in costs and customer service. Fidelity has a slight edge in allowing MMFs as a core settlement, plus the 2% cash back Fidelity Visa.

Fidelity also has a slight edge because they offer HSA accounts whereas Schwab does not. I am a Schwab customer and I love them, but I wish they would offer HSAs.

 

[JustCurious]

A bank with initials WF has no customers in the US who are married with Joint Accounts. I am exaggerating but time and time again they cannot talk to me without her being present - on our Joint account. "Mr. Z3, although you are Joint on the account, each account has a primary owner and each owner has a unique logon. Since you are talking to the online service department, we must talk to Mrs. Z3."

That would be reason enough for me to not do business with them.

 

[Rianne]

I called VG to redeem a CD at maturity last week. We bought a new car. I didn't need to talk to our Flagship rep to do this. I got a newbie. We use voice activation for password. The newbie, sounded like right out of college, tried to reason with me about my funds in my Roth. Honestly, kind of cute. I have 100% stock funds in there. She kept saying I should reconsider my allocation. We ended up on a 3 way. I humored her, was polite and told her "good luck." Told her my intentions were 100% stock index.

We all start somewhere. I recall some dumb questions I've had on this forum. Most of our posters, very helpful. I'd rather a newbie sincerely trying to help, than a disinterested ignorant kid.

 

[Scrapr]

Tried to do a webinar yesterday at VG. I had signed up weeks ago. About 5 minutes before I log in and nothing is happening yet. I wait & wait & wait. Nothing. I check the FAQs and see a test my connection. Fail. Hmmm, must be my chromebook. I'll go downstairs to the desktop. Same thing. So 25 minutes later I log out & give up. Next time I will try to be better prepared. And test connections ahead of time

OTOH, I had a big deposit wired in last week. I went to the brick & mortar and got everything ready & sent. When I got back to the office I logged in to check some other stuff. The deposit had hit the right account already! I was shocked. Not that they got it allocated correctly. Just that it was so fast