Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Mutual Fund Company Rant

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

  • Vanguard is horrible if you require interaction.

    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.
  • Mona, you said you concluded it was a scam. Meaning that the scammers made it look like they obtained your password, but really didn't?

    Does anybody know how hackers may be able to steal Vanguard passwords? That's extremely concerning...
  • Guy -- password theft is quite rampant. The fact that Vanguard was hacked is no surprise and alarming in its own right.
  • Guy said:

    Mona, you said you concluded it was a scam. Meaning that the scammers made it look like they obtained your password, but really didn't?

    Does anybody know how hackers may be able to steal Vanguard passwords? That's extremely concerning...

    No, it was in fact my password. Unfortunately, I have been lax in updating my passwords and have used the same one on a few sights. I have been good at changing my username, but the email did not contain my username. Somewhere along the line, I had some account hacked (not Vanguard) and these scamsters have a way to find out this information.

    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.
  • Thanks Mona and Shosta for the warning. I'm going to have to take the necessary precautions.
  • Fund companies do make things difficult with their "Medallion Guarantee" signature requirements; nearly all my fund companies seem to be requiring this. I get them for free from my bank, but nevertheless I have been unable to make some direct transfers because some of my funds are registered to "W Sanders", others to "W Middlename Sanders", for example, which to them are entirely different people.

    Don't be afraid of indirect rollovers. You get one a year from the IRS. No withholding is required.
  • Vanguard is bad for on-line transfers. I needed to move OEF positions from E-Trade to Vanguard.Even if you start the process on line Vanguard still needed a completed transfer form and a copy of my latest E-Trade statement showing the OEF positions, mailed to them. From now on, I'm only transferring cash to Vanguard !
  • edited April 2020
    I'm reading Sorkin's "Too Big To Fail." One big headache, mid-crisis in '08-'09 was the fact that AIG's computers were relics and therefore not very helpful, even simply to uncover baseline numbers to work with, in order to see the extent and weight and height of all the shit on their books. Toxic stuff...... Maybe there will come another event which will uncover the reasons as to WHY some Fund Houses are so (deliberately?) inefficient? ......Part of the problem, surely, is that every question or issue is dealt with as PROCEDURAL. In order to get to WHY, you have to think. Everything is set-up for these phone agents NOT to think. I have been told crazy things such as: "we are not allowed to have pencil and paper with us." (Because it might be USEFUL????? So that I don't need to repeat the same stuff to them 6 times?????) ..... The other day, I had to ask (and WAIT) for a Supervisor, just to make the point that there is a difference between questions of logic and "security" questions. The agents can't even distinguish, and engage on that basis. Logic and Critical Thinking are not being TAUGHT in schools.
  • In some cases, I think they're deliberately inefficient just to prop up their AUM and management fees.
  • edited April 2020
    Unless they charge some kind of fee, I wouldn't bother to transfer IRA assets from one online brokerage to another. Everybody trades ETFs and common stocks for free now.

    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.
  • Recently I've had multiple bad experiences with Vanguard.

    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:
    1. 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.
    2. 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.
    3. 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 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.

    I still like their funds and will continue using their platform for these products.
  • USAA recently "sold" their Investment division to Charles Schwab for $1.8 Billion. That's $1,800,000,000 in cash. USAA will transfer $90 Billion in assets to Schwab sometime in May 2020. I asked how individual investors (there are 1 million) will benefit from this sale. I am still waiting for that answer. This latest move may not mean anything for the orphan investors who are leaving USAA for Schwab. Doesn't look like individual account holders will receive any of this $1.8B as a "bonus" for this asset transfer.

    The 1 million investors seem due some it not all of this windfall.
  • We have been Vanguard customers since at least 1985. We have the majority of our investments at Vanguard. I have had a large number of widely varying types of transactions and interactions with Vanguard employees. The vast majority have been overwhelmingly positive and have completely satisfied my needs. No institution established my humans can expect to be perfect, but Vanguard comes as close as you could reasonably expect from a mutual fund company.
  • edited April 2020

    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.

    Not a rant when it's correct.
    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.
  • FD1000 said:

    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.

    Not a rant when it's correct.
    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.
    Curious why you think Schwab is better than Fidelity?
  • MassMutual stole $50 in order to redeem and cash-out wifey's 403b. (Direct Rollover.) Mairs and Power took $20, when I cashed-out from them. We all like low fees. I'm just letting everyone know. Mass Mutual sucks pus from rat butts.
  • Vanguard cannot do multiplication and division, and their rounding is a matter of opinion not logic, as I find out each year while doing taxes.

    It's good to be Vanguard, eh?
  • 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.

    From Vanguard email I received:
    In a few months, Vanguard will be announcing new mailing addresses in El Paso, Texas, for incoming mail. We're notifying you of this change in advance as a courtesy; you don't need to take any action at this time.
    ...
    We expect to begin operations in El Paso this summer, with the goal of being fully active by the end of July. We'll be changing the addresses on our forms and website over a period of several weeks.
    They're doing this as part of a move to outsource their mail handling. You have been warned.:-(

    "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
  • Outsource. Ya, they want your money. The DON'T want to do the work. Motherlovers. It's the name of the game in 2020.
  • It ain't your parent's Vanguard, that's for sure.

    So much of the industry just doesn't get it.
Sign In or Register to comment.