I gotta tell you, for the cheapest go-to, "shareholder first" fund company out there, Vanguard is sure the most bureaucratic fund company out there. Trying to do a simple XFER by mail is a complete nightmare.
And...speaking of transfer nightmares, Dodge & Cox has a pretty miserable record here as well. Yet again, my wife tried to move money into D&C from another fund family and...wait for it...D&C got the transaction all spun around and mixed up. You think that for money coming in, they'd be all over themselves trying to get it right the first time. This is about the third time in the past year or two that they've messed something up.
Please, Vanguard, D&C, Royce, others -- get this right.
Comments
A few weeks ago, I received a troubling email (blackmail) that included my Vanguard password (not user name). While I suspected that it was a scam, clearly my password was hacked. In addition to turning it over to the FBI, I called Vanguard to freeze my accounts. I did the same with Schwab and Fidelity where I have a small account. All accounts were frozen immediately.
So far, so good. The weekend passed, I changed my password and determined that it was a scam. I called all three back and Schwab and Fidelity removed the freeze immediately. Vanguard said that they would submit the paperwork to the appropriate department and that it would take two weeks! Finally, after 10 days, I had access to my account.
Anything that is not routine, Vanguard is as bureaucratic as the federal government.
Does anybody know how hackers may be able to steal Vanguard passwords? That's extremely concerning...
I have voice authentication when I call and a code sent to my cell phone to log-in to my account, so once I settled down, I realized that my accounts were secure. I realized that it was a scam by doing a Goole Search.
Don't be afraid of indirect rollovers. You get one a year from the IRS. No withholding is required.
IRAs held directly by a mutual fund company are different, you don't have as many choices. As I mentioned before, I'm bailing out of the losers once per year and rolling over the proceeds to an online brokerage acccount.
I've identified what appear to be two sources of their problems:
- Vanguard is focused on its brokerage side, virtually to the exclusion of its mutual fund platform
- Vanguard's front line support is oriented towards sales, not service.
The workaround is (a) resign oneself to investing through their brokerage platform, and (b) always push to talk with a specialist for whatever service you're calling about.
Three illustrative examples:
- I transferred cash to an account on the mutual fund platform. On the paper transfer form I put in writing that the cash was to purchase VMMXX. Instead, Vanguard put the cash into VMFXX, which is the default settlement (core) fund in brokerage accounts.
- Vanguard told me that when I closed out the VMFXX position the account would be left open and that trailing divs would be deposited at the end of the month. That's how brokerage settlement accounts work. But on mutual fund platforms, trailing MMF divs are paid when a position is liquidated, even mid-month. Vanguard gave me incorrect information.
- A friend called the IRA number on Vanguard's website to ask whether an oddball type of IRA could be transferred in kind to a Vanguard IRA. In reality, the call went to a department that was focused on gathering IRA assets. That rep claimed that so long as the old IRA contained funds that Vanguard could hold, the transfer could be in kind. That was just plain wrong. There are some types of IRAs that cannot be transferred in kind.
I still like their funds and will continue using their platform for these products.I got a direct number to Vanguard's IRA transfer specialists. The rep I spoke with there was clearly experienced, understood the situation, and was well versed on what could and couldn't be done.
The 1 million investors seem due some it not all of this windfall.
I had a long discussion about D&C a few weeks ago, investors can't distinguish between D&C as a great company to lagging performance with higher volatility.
I had an account at Vanguard in the 90". One day I placed an order to buy their index fund at 9 AM. At 10 AM I decided to cancel it but I couldn't, so I called a VG rep and he said that you can't cancel it by design. In 2 days I liquidated my account and transferred it to Fidelity. Several years ago I transferred most of it to Schwab because they are better. VG lower expenses are meaningless or don't exist compared to Schwab and if companies realized that Schwab Target funds at ER=0.08% are cheaper than VG at 0.09 maybe they will start switching their 401K to Schwab.
VG is a dinosaur.
It's good to be Vanguard, eh?
"Keep in mind that our website is still the fastest, most convenient way to complete most transactions and perform maintenance on your accounts."
Vanguard just doesn't get it. Their website, or other electronic means (even, dare I say, facsimile) would be preferable to being forced to use snail mail for any transactions.
"On June 30, 2000, President Bill Clinton signed the Electronic Signatures in Global and National Commerce Act (ESIGN Act) into law ..."
https://acrobat.adobe.com/content/dam/doc-cloud/en/pdfs/Adobe_E-Sign_Act_WhitePaper_ue.pdf
So much of the industry just doesn't get it.