A family member has had some of her IRA invested in some Vanguard mutual funds for decades. She has been taking RMDs from these investments for some time. That all has worked smoothly. The initial investment(s) predated the existence of Vanguard's brokerage. Last week she received an email from Vanguard urging her to "transition" (is that really a verb?) her mutual fund accounts to the VBA platform or face the consequences. VBA turns out to stand for Vanguard Brokerage Account, not Very Bad Arrangement. The consequences are a yearly fee of $20 and a $60 penalty.
Well, OK, she has no need for a brokerage but the method is said to be simple. Click right there in the email message, follow the directions that will appear as a website window opens and it will all be done in a few minutes. And if there's a problem (why are they anticipating problems ?) just phone this number. She clicked. She followed the directions. A few minutes later a message appeared saying it was all accomplished; transition complete. Next day she logged into her account and there appeared not one but two messages urging her to "transition" as soon as possible.
Together we phoned the number. The recorded voice told us everyone was busy but if we leave a phone number we'll be phoned back in a few minutes. We did and we did receive a call soon after. The Vanguard feller was intelligent and competent. I received permission to join the conversation and he said he'd complete the process. It didn't work for him either. He said that in that case he would create a new account and put everything there and all would be well. He couldn't do it. The computer system told him there was nothing in her account eligible for transition. He told us he'd look into it and phone us back the next day. That was 5 days ago. He did not phone. There is no change in her account and no apparent transition.
Vanguard is threatening fines and fees if customers don't comply with a system that does not work. I suggested to the Vanguard agent that perhaps the system was overloaded and it would take time to process the transition. He said that was possible but he just did not know what was wrong. I guess he still doesn't know.
There are people here at MFO who are savvy and well-informed. Does someone have an idea what might be going on?
Comments
Don’t panic. Sounds like the kinds of snafus that come up when humans and computerized systems interact. There was a lot of discussion here about a year ago pertaining to VG’s decision to push mutual fund clients into their brokerage system. And there was (still is) some angst over that. As one who recently “stumbled” from a single company mutual fund account into a brokerage account I can tell you the latter is much better in terms of choices and freedom to select the investments you want.
If I understand your post correctly, it sounds like about $80 in penalties and fees is being threatened. Not nice VG. But neither be it a monumental loss. Yes, your frustrations with VG client support have echoed here for some time. (And they’re not the only asset manager so scorned.) Sounds like their system is broken. I trust you’ll get the matter straightened out soon.
When I transitioned ,no problems.
Then on the other hand, a few nights back I tried to buy a CD. For some reason "it" wouldn't allow me to enter an amount.
Good luck, Derf
In another forum, people also got notices to switch to electronic statements to avoid $20 annual fee. VG uses a householding system and the previous threshold to avoid that fee was $50K in household assets, but it was suddenly bumped up to cool $1 million. The deadline for that is also 9/30/22.
Have a good day , Derf
It appears there are issues ¹ as a result of recent Vanguard "improvements."
1) No margin on left side of page.
2) Headers (Overview, Performance & fees, Portfolio composition, etc.) are not listed on top.
They occupy most of the page which makes it extremely difficult to view the corresponding data.
¹ Chrome and Edge work fine.
Vanguard is making two changes. One is to increase the threshold balance for waiving fees from $10K to Flagship status ($1M), for both legacy and brokerage platforms. (There is a different $50K threshold for SIMPLE IRAs and solo 401(k)s that is not changing.)
The other change is that Vanguard is eliminating electronic delivery as a way to wave fees on the legacy platform. Vanguard is retaining this waiver on its brokerage platform. The practical effect of this if you are counting upon using electronic delivery to have fees waved is to nudge you onto the brokerage platform. This has no impact on Flagship customers as they will continue to have maintenance fees waived.
Apparently (I have not received communication from Vanguard), the new fee schedule for existing accounts goes into effect on Sept. 30th.
Old fee schedule
New fee schedule
(Links "borrowed" from Bogleheads thread.)
Later , Derf
I was unable to purchase Treasuries in May via Vanguard's website using Firefox.
More info here.
My guess is that Vanguard has optimized their website for Chromium-based browsers.
Firefox uses the Quantum browser engine and is not based on Chromium.
PS - TRP’s final “goodby” to me was to bounce their first 3 transfer checks. So I was in trouble at Fido right from day 1.
“Free Ride” is buying a security with unsettled cash and than selling it again before the cash used to purchase it has settled. You got a free ride using Fido’s money. While it sounds dumb to begin with, a Free Ride can occur if you make a mistake in purchasing something you didn’t intend to and just exit the position right away. Free-Rides are also an SEC violation.
“Good Faith” violations ISTM occur when you sell a security and than turn right around and buy it back same or next day with the proceeds from the initial sale before those proceeds have settled. (Normally takes 2 or 3 days for proceeds from sales to settle out.)
Something to watch is to not inadvertently buy something into your Roth account you intended to buy for the Traditional or vise-versa. Fido’s website isn’t great at signaling which account the trade is destined for. The info is displayed, but not prominently. I believe it was trying to correct for that kind of mixup that led to some of my past violations. So double check which account you are dealing with before hitting “send”.
After moving the account, however, I can no longer log in to get tax documents etc. They say I have to call them to set up access, which I have not done due to time involved. They did promise I would get hard copy of 1099 next year in mail. We will see.
I see no point in phoning them again. If they eventually do phone I'll post a summary here of what was said. If after the deadline for transition they charge the fees punishing us for their incompetence I will contact FINRA.
The IRAs transferred easily and automatically for my wife and I. Both T-IRA and R-IRA transitioned together. All personal info transferred except one secondary phone number that I added later. Beneficiaries also transferred, and so did the bank links (I was surprised by that).
As others have noted here or elsewhere, VG created a new VMFXX (settlement) although we already had VMFXX. To avoid possible confusion, I moved all of the old VMFXX onto the new VMFXX (settlement).
Trust a/c transition is still pending. It required more papers - upload of copies of some trust pages, more Trust related questions. I had to call an indicated number as the auto-process got stuck and was I surprised to get through quickly - it could be a special number for account processing. Apparently, some manual processing is also required at Vanguard's end, so this is still pending. I will follow up on it mid next week if not done by then.
I didn't sign up for electronic delivery - that option was offered but I skipped. I know I have to do that too by the month end.
I give B+ for the process.
With respect to 1099s, make sure you set up for “electronic delivery” as well. You will get email notification when 1099s are available before the paper copies get send. Typically you can get the electronic copy a week earlier before the paper copies arrive. Over time, I found that is easier to obtain and organize all 1099s in one place for tax purposes.