Vanguard - last straw?

[Morgan22]

Bold by me. I cannot imagine the mess created by beneficiaries on a joint account. Divorce for one and many other legal issues would bring lawsuits. If you had a joint account and one of you wanted to change that but the other didn't, VG would be in the middle. Huge mess. That's why we have an attorney and a living trust for our joint assets completely outside the VG family.

If you have a simple estate plan then having beneficiaries on a joint account is not messy. If spouses do not seem to be on the same page then I guess it would make sense to have an attorney involved with trusts set up. The attorney could play middle man.

DH and myself are on the same page. We only have 2 grown children and we agree that they should inherit everything 50/50 per stirpes. I can't imaging my DH or myself deciding to wanting to cut off one of the kids sometime in the future. But as Koolau would say, "YMMV".

 

[Rianne]

DH and myself are on the same page. We only have 2 grown children and we agree that they should inherit everything 50/50 per stirpes. I can't imaging my DH or myself deciding to wanting to cut off one of the kids sometime in the future. But as Koolau would say, "YMMV".

I won't touch that because you are good and honest folks and love your children.

 

[youbet]

Still, Vanguard passes on to investors the profits from securities lending

Are you talking about a SLFP program like Schwab's? I own some micro-caps that are frequently shorted. Schwab lends them to other customers who want to short the stock and splits the interest with me. One is currently paying 23% to me which I enjoy since the stock itself isn't doing too well.

It's good that you are happy with Fidelity customer service and if you avoid the bad products there and buy Vanguard ETFs maybe you get the best of both.

I'm not with Fidelity, but do hold significant positions of Vanguard MF's at Schwab. Vanguard has some fine funds but Schwab serves my interests as a brokerage. So, combining them makes sense. For example, if I wanted to buy a T Rowe Price fund, I wouldn't go running to T Rowe Price and open a relationship with them. I'd just buy it through Schwab. Life is complicated enough........

 

[pb4uski]

Bold by me. I cannot imagine the mess created by beneficiaries on a joint account. Divorce for one and many other legal issues would bring lawsuits. If you had a joint account and one of you wanted to change that but the other didn't, VG would be in the middle. Huge mess. That's why we have an attorney and a living trust for our joint assets completely outside the VG family.

The things that you seem concerned about (divorce and "many other legal issues" whatever that is) would apply to all joint accounts, whether the joint account has beneficiaries or a joint account without any beneficiaries so I don't get your point.

Bold by me. VG is not in the middle at all. Most things that a single account owner can do one joint account owner can do.... deposits, withdrawals, transfers, etc. ... but that doesn't put Vanguard in the middle. If I clean out our joint account and spend the money on hookers DW has no recourse against the financial institution where the account is since as a joint owner I have the legal right to withdraw money from said joint account.

You write that you can't imagine the mess created by beneficiaries on a joint account. Makes no sense. If DW and I had a joint account with our kids as beneficiaries then if either one of us dies the surviving spouse then owns the account... and if the surviving spouse dies then our kids get it. OTOH, if I have a personal brokerage account and I die DW gets it as the primary beenficiary and if she dies then the kids get it as contingent beneficiaries. In BOTH cases of the joint account or the individual account, once DW has control she can designate Mickey Mouse as the beneficiary if she wants to... but that is the way it is.

Finally, even if you have a living trust for your joint assets you are not necessarily outside the VG family. My family has two different living trusts and each of the two living trusts has an account with Vanguard for the stocks, bonds and funds owned by each living trust.

 

[RetMD21]

Are you talking about a SLFP program like Schwab's? I own some micro-caps that are frequently shorted. Schwab lends them to other customers who want to short the stock and splits the interest with me. One is currently paying 23% to me which I enjoy since the stock itself isn't doing too well. I'm not with Fidelity, but do hold significant positions of Vanguard MF's at Schwab. Vanguard has some fine funds but Schwab serves my interests as a brokerage. So, combining them makes sense. For example, if I wanted to buy a T Rowe Price fund, I wouldn't go running to T Rowe Price and open a relationship with them. I'd just buy it through Schwab. Life is complicated enough........

Vanguard isn't the only firm to share the profits. I don't think most investors are paying attention so it's understandable why a broker would keep the profits.

IDK about T Rowe Price but if Schwab is selling their funds rather than ETFs in their "market place" then TRP is paying Schwab a participation fee. ETFs have been good for investors and Vanguard since Vanguard won't/can't pay to participate. In the dark ages I had to have an account with every fund company to buy their fund.

I don't know why Vanguard doesn't allow beneficiaries on joint accounts but it is hard to imagine that it is to "sell trusts" since these are set up through local attorneys.

 

[Rianne]

The things that you seem concerned about (divorce and "many other legal issues" whatever that is) would apply to all joint accounts, whether the joint account has beneficiaries or a joint account without any beneficiaries so I don't get your point.

Bold by me. VG is not in the middle at all. Most things that a single account owner can do one joint account owner can do.... deposits, withdrawals, transfers, etc. ... but that doesn't put Vanguard in the middle. If I clean out our joint account and spend the money on hookers DW has no recourse against the financial institution where the account is since as a joint owner I have the legal right to withdraw money from said joint account.

You write that you can't imagine the mess created by beneficiaries on a joint account. Makes no sense. If DW and I had a joint account with our kids as beneficiaries then if either one of us dies the surviving spouse then owns the account... and if the surviving spouse dies then our kids get it. OTOH, if I have a personal brokerage account and I die DW gets it as the primary beenficiary and if she dies then the kids get it as contingent beneficiaries. In BOTH cases of the joint account or the individual account, once DW has control she can designate Mickey Mouse as the beneficiary if she wants to... but that is the way it is.

Finally, even if you have a living trust for your joint assets you are not necessarily outside the VG family. My family has two different living trusts and each of the two living trusts has an account with Vanguard for the stocks, bonds and funds owned by each living trust.

Yes, the bolded part by me is what I'm thinking. If you have an individual account, your beneficiary is just that, your decision alone. As a joint account, you and your spouse agree on beneficiaries with the intention that those are the beneficiaries, even upon death. Trust and beneficiary intention. If Mickey Mouse inherits that entire upon the death of that spouse, I would think original beneficiaries would fight it. If surviving spouse runs away with the pool guy and leaves everything to him...maybe I'm watching too many Netflix documentaries. In my mind, VG could be in the middle as to who changed the beneficiary. Again, Netflix documentaries.

 

[MarieIG]

There are pluses and minuses with VG.

The biggest plus in the interest rate on the settlement fund. If you have a large cash position AND limit orders pending, your interest rate is much higher with VG.

I have a TD account (the interest rate on the settlement fund stinks). The interest rate at Schwab on the settlement fund is also poor. I don't want to always have to tie my money up to get more income.

TD has better customer service than VG.

 

[harllee]

I have been with Vanguard for 40 years. Every once in a while I need to talk to someone at Vanguard. I used to have a Personal Advisor and that worked fine but that is no more. I have recently had an issue with a Vanguard check stolen in the mail and needed to call Vanguard. What a disaster. On hold each time an hour plus, forwarded to a different number, cut off etc. I don't need brick and mortar but I do need someone to answer the phone. I am strongly considering leaving Vanguard. What firm is a good alternative that will answer the phone?

 

[pb4uski]

Yes, the bolded part by me is what I'm thinking. If you have an individual account, your beneficiary is just that, your decision alone. As a joint account, you and your spouse agree on beneficiaries with the intention that those are the beneficiaries, even upon death. Trust and beneficiary intention. If Mickey Mouse inherits that entire upon the death of that spouse, I would think original beneficiaries would fight it. If surviving spouse runs away with the pool guy and leaves everything to him...maybe I'm watching too many Netflix documentaries. In my mind, VG could be in the middle as to who changed the beneficiary. Again, Netflix documentaries.

Yes, you have definitely been watching too many Netflix documentaries. Let me say it again... Vanguard will NEVER be in the middle... if you think so then you don't understand how these things work.

If the surviving spouse runs off with the pool guy and leaves everything to him the original beneficiaries have NO recourse against Vanguard as long as the surviving spouse changed the beneficiaries properly, which is a very low bar.

It seems that you are against joint accounts in general since the surviving party then gains total control and could change the contingent beneficiaries. Realize that there may well be circumstances where the contingent beneficiaries should be changed.

The only way I know of to prevent the switcheroo that you are so concerned about is to put the assets in a living trust where the co-trustees are the surviving spouse and two contingent beneficiaries, with any actions taken by the trust requiring the approval of 2 of the 3 co-trustees to prevent the trust from being emptied by the surviving spouse to the detriment of the contingent beneficiaries.

 

[Texas Proud]

There are pluses and minuses with VG.

The biggest plus in the interest rate on the settlement fund. If you have a large cash position AND limit orders pending, your interest rate is much higher with VG.

I have a TD account (the interest rate on the settlement fund stinks). The interest rate at Schwab on the settlement fund is also poor. I don't want to always have to tie my money up to get more income.

TD has better customer service than VG.

I was going to mention this as I just got my Vanguard stmts and was looking at their interest rates.... a WHOLE lot more than anybody else..


With the others I have to remember to move my money to a ST ETF to get any kind of good interest... at Vanguard I do not...

 

[Trailwalker]

I have been with Vanguard for 40 years. Every once in a while I need to talk to someone at Vanguard. I used to have a Personal Advisor and that worked fine but that is no more. I have recently had an issue with a Vanguard check stolen in the mail and needed to call Vanguard. What a disaster. On hold each time an hour plus, forwarded to a different number, cut off etc. I don't need brick and mortar but I do need someone to answer the phone. I am strongly considering leaving Vanguard. What firm is a good alternative that will answer the phone?

I have Vanguard but also have Fidelity for HSA and charitable giving. I had issues with setting up both Fidelity accounts, and it was easy getting through on the phone and resolving the issues. The voice recognition security worked well both times. Both issues came up due to problems navigating Fidelity's site. I've never needed to talk to anyone at Vanguard on the phone.

 

[Physics Guy]

In the dark ages I had to have an account with every fund company to buy their fund.

Off topic but it is interesting that you mention that as I was just looking at my four or so "legacy" funds created with the individual fund companies back in the early 90s and wondering if it would be worth it to move them to my brokerage account.

 

[youbet]

Vanguard isn't the only firm to share the profits. I don't think most investors are paying attention so it's understandable why a broker would keep the profits.

.

I don't know how investors could avoid paying attention to a share-loan program. You have to give a specific OK to participate. A separate account is created to hold your shares that are being loaned. You receive an email each time the interest rate changes, which seems to be quite often. You get written confirmation that cash collateral has been placed in your account while your shares are on loan. It's definitely not a behind the scenes activity.

I wonder if we're talking about two different types of programs?

 

[youbet]

The interest rate at Schwab on the settlement fund is also poor. I don't want to always have to tie my money up to get more income.

Agree. When Schwab changed their settlement account to be a low interest paying account at Schwab Bank, I almost left them. I called, fussed, argued, etc. for months. The work-around is that you can still buy the decent-yielding MM fund they used to use for settlement accounts, but it's now a purchased fund and you have to actually place an order to buy and later an order to sell. And I just do that. It settles one day faster than other trades, so settlement times Are no issue, but it's still pain in the butt. I probably have to do it a couple of dozen times a year.

As everyone keeps saying, each place seems to have its pros and cons.

 

[pb4uski]

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.

 

[Koolau]

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.

I've had that kind of Mickey Mouse "establishing authority to act" kind of thing when changing ownership of an insurance policy. They didn't say "here's the way you do it exactly." They simply kept rejecting my attempts. I finally got one of their independent brokers (a favor by my sister) to go to bat for me. It turned out it was a very simple issue, but no one at the company (on the phone) could tell my why my attempts were being rejected. Apparently the broker knew who to call or insisted on talking to someone higher up until he got an answer. I owe Big Sis one for that. It was driving me batty. YMMV

 

[Texas Proud]

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.

I am not going to admit anything but I know of someone who had their older sister answer all the questions for mother... and then say 'you can talk to my son'....

 

[Koolau]

I am not going to admit anything but I know of someone who had their older sister answer all the questions for mother... and then say 'you can talk to my son'....

I LOVE it! Probably illegal, but there's "legal" and there is "right." I'd rather be right than legal - but don't quote me on that.

 

[pb4uski]

I am not going to admit anything but I know of someone who had their older sister answer all the questions for mother... and then say 'you can talk to my son'....

I wish that I had thought of that.

I have got to thinking though that with my luck I'll submit to Schwab paperwork to transfer the trust mutual fund accounts to Schwab and by the time Schwab sends it to Vanguard that Vanguard will have finally converted the trust accounts to brokerage accounts so I'll have to start the transfer process all over again.

 

[mathjak107]

I've had that kind of Mickey Mouse "establishing authority to act" kind of thing when changing ownership of an insurance policy. They didn't say "here's the way you do it exactly." They simply kept rejecting my attempts. I finally got one of their independent brokers (a favor by my sister) to go to bat for me. It turned out it was a very simple issue, but no one at the company (on the phone) could tell my why my attempts were being rejected. Apparently the broker knew who to call or insisted on talking to someone higher up until he got an answer. I owe Big Sis one for that. It was driving me batty. YMMV

I am going through just that with met life now

 

[mathjak107]

Vanguard isn't the only firm to share the profits. I don't think most investors are paying attention so it's understandable why a broker would keep the profits.

IDK about T Rowe Price but if Schwab is selling their funds rather than ETFs in their "market place" then TRP is paying Schwab a participation fee. ETFs have been good for investors and Vanguard since Vanguard won't/can't pay to participate. In the dark ages I had to have an account with every fund company to buy their fund.

I don't know why Vanguard doesn't allow beneficiaries on joint accounts but it is hard to imagine that it is to "sell trusts" since these are set up through local attorneys.

Vanguard tried to refer us to their own trust department to set them up when they removed our beneficiaries

 

[RetMD21]

Vanguard tried to refer us to their own trust department to set them up when they removed our beneficiaries

Vanguard administers trusts but this isn't required.

 

[mathjak107]

That is why I pulled my money out .

We needed no trust ….all we needed was beneficiaries on our joint accounts which vanguard removed .

Their response was that those who have beneficiaries on joint accounts would be better served with a trust which they would be glad to help us with ..

Nonsense ….

So coupled with their poor customer service whatever we had there we removed.

Fidelity and chase have no problems with beneficiaries being put on joint accounts

 

[Chuckanut]

I LOVE it! Probably illegal, but there's "legal" and there is "right." I'd rather be right than legal - but don't quote me on that.

IIRC, there is a saying " The more rules and laws you have, the more rule breakers and tax evaders you have."

 

[RetMD21]

That is why I pulled my money out .

We needed no trust ….all we needed was beneficiaries on our joint accounts which vanguard removed .

Their response was that those who have beneficiaries on joint accounts would be better served with a trust which they would be glad to help us with ..

Nonsense ….

So coupled with their poor customer service whatever we had there we removed.

Fidelity and chase have no problems with beneficiaries being put on joint accounts

I don't understand Vanguard's policy on this but I don't think they "sell" trusts