Soooooo mad at Vanguard!!

[dualstow]

mathjak, I'm glad you brought this up. I only check beneficiaries once a year, but my largest account is joint with my dad. The account was set up when I was under ten years old, and I never took Dad's name off.

My wife is the beneficiary. Or was, last time I checked.Hmm.

Edit: it's just like you said.

[mathjak107]

yep .. i was quite annoyed . there was little reason to do that to us . no one else i have money with did something like that and especially did not notify most of us . that should have required a sign to acknowledge in my opinion .

but for me jpm/chase worked out great and i would have never thought to move anything there had i not been pissed at vanguard

[mathjak107]

here is vanguards official reply .

i disagree 100% with their reasoning . we have no use for this kind of trust . only trust we needed was called a disclaimer trust and it was for estate estate tax purposes at one time . it serves no purpose in this case for not having beneficiaries . everything we have passes via beneficiaries to our kids . nice and clean and simple .

------------------------------------------------------------------------

"Thank you for your email regarding Transfer on Death (TOD).

Vanguard has decided that, in most cases, a TOD plan offers minimal
benefits on joint accounts. Beneficiaries on joint accounts are used to
cover the rare possibility that all the joint account owners will die
simultaneously. Such provisions are beyond the scope of Vanguard's TOD
plan.

I have reviewed this with our management, specifically surrounding the
possibility of simultaneous death of joint owners. While the TOD plan could
allow for the transfer of ownership rights in the unlikely event of
simultaneous death, it may not do so in a tax-efficient manner and may
limit the heirs' options.

Other estate-planning tools, like wills or trusts, allow investors to
utilize strategies that the TOD plan does not have room for, and they could
increase the amounts that heirs actually receive. Additionally, relying on
TOD plans increases the possibility of heirs being responsible for final
expenses, debts and taxes without adequate resources left in the estate to
cover such costs.

As you may know, a Vanguard TOD plan overrides the terms of a client's
trust, will, or other estate planning documents. However, community
property laws outline rules for ownership rights, and these laws remain
intact. This makes it more likely for assets to be transferred to an
inappropriate party and for disputes among beneficiaries. Since our TOD
plan is a Pennsylvania contract, it is interpreted under Pennsylvania law.
The laws of your state of residence may include more favorable provisions.

If you want to ensure that your assets will transfer to listed
beneficiaries for a joint account, we encourage you to contact an estate
planning professional. The estate planning professional will be able to
advise you on what steps you can take to ensure that the assets in your
joint account are transferred to the appropriate beneficiaries.

Please let us know if you have any further questions or concerns."


--------------------------------------------------------------------------------------------------------------

[Mr Vacuum]

My wife got a call about the Vanguard vote. I didn’t pay attention to the provenance of the call. In retrospect it’s a little strange because we have no investment accounts with them directly but hold some Vanguard ETFs through Fidelity. I did not receive a call. We both received online proxy material messages through fidelity.com, which is expected.

[dualstow]

Sorry to bring back the alternate branch of the thread, but it still falls under "soo mad at Vanguard."

I contacted my rep via the issue that math brought up, the dropping of a beneficiary in accounts that are both joint and taxable. I said that it was dropped and without warning. She wrote back "Why do you think that?" I told her I don't think it, I saw it, providing the relevant details, and could she please send the necessary forms and list of things to do to turn my joint into a personal/individual account.

She replied with a link to a form, and no other words. I thanked her and asked, "Was I correct?" No answer.

Meanwhile, I saw a WSJ article yesterday describing the massive inflows continuing at Vanguard. They're way over four trillion in assets now. They're going to turn into the Toyota of investing. That is, those cars once sold themselves so that sales reps were aloof, even rude.

[mathjak107]

i won't give them a dime anymore , but that's me . service every step of the way could not have been worse . i felt like a ping pong ball getting bounced around and ultimately passed right in to a dead end . no one even monitors those phones in that dept they pass you to for incoming calls .

we call fidelity , one person takes the info , they run with the ball and whatever needs to be done is done . i hope you all have better service than i did and we were voyager too . .

[dualstow]

For what it's worth, she did follow up yesterday.

[boglerdude]

Missed a call from "1053621" and got a voicemail asking me to vote. No thread on this at Bogleheads?

edit
https://www.bogleheads.org/forum/viewtopic.php?t=228535

[Tortoise]

Bump.

Escrow just opened on a house that my wife and I are buying, and I had planned for the earnest money deposit and down payment to come from my Vanguard money market account via personal checks. But once escrow opened, I discovered that the funds must be wired.

Long story short, Vanguard does not make it easy to wire money into accounts that have not already been linked to your Vanguard account via the micro-deposit verification process, which takes several days to complete. The only way to wire money to such an “unverified” account is to print out a paper form, fill it out, get something called a “medallion signature,” and either mail or fax the form to Vanguard. (Are we in the 21st century yet?) Not very convenient when a wire transfer is required on short notice.

So I called Vanguard to get some clarification on the process. Not fun. Quite frustrating. The young guy who took my call didn’t know the difference between an ACH transfer and a wire transfer, and I had to explain it to him three (3) times in succession, each time involving him putting me on hold for a couple of minutes while he attempted to relay my question to a more knowledgeable colleague or supervisor but came back each time with the wrong answer because he misunderstood me and asked the wrong question. I almost couldn’t believe it.

What a hassle.

[mathjak107]

i don't miss vanguard and their hassles one bit . deciding to get a chase private client account and their sapphire reserve card not only got us a few thousand in perks but offers so many other perks too . all we are doing is having chase watch our VOO etf to qualify.

we actually got a free trip planned from ny to new orleans with all we got out of the deal from shifting . we even get free bank wires .

[WiseOne]

Bump.

Escrow just opened on a house that my wife and I are buying, and I had planned for the earnest money deposit and down payment to come from my Vanguard money market account via personal checks. But once escrow opened, I discovered that the funds must be wired.

Long story short, Vanguard does not make it easy to wire money into accounts that have not already been linked to your Vanguard account via the micro-deposit verification process, which takes several days to complete. The only way to wire money to such an “unverified” account is to print out a paper form, fill it out, get something called a “medallion signature,” and either mail or fax the form to Vanguard. (Are we in the 21st century yet?) Not very convenient when a wire transfer is required on short notice.

So I called Vanguard to get some clarification on the process. Not fun. Quite frustrating. The young guy who took my call didn’t know the difference between an ACH transfer and a wire transfer, and I had to explain it to him three (3) times in succession, each time involving him putting me on hold for a couple of minutes while he attempted to relay my question to a more knowledgeable colleague or supervisor but came back each time with the wrong answer because he misunderstood me and asked the wrong question. I almost couldn’t believe it.

What a hassle.

Good for Vanguard. This sounds like a very reasonable safety precaution for wiring money from a brokerage. See recent thread at Bogleheads about an identity thief cleaning out an elderly man's retirement account, because the brokerage had minimal to no safeguards.

What you need to do is transfer the money from Vanguard to your bank using ACH, then, wire from there. Wires require a setup that takes a bit of time, so it's not instant. You might be better off using "sneakernet" to get your lawyer a cashier's check, which is usually how it's done.

[dualstow]

Good point, WiseOne!

For what it's worth, I've been hearing complaints about tenants trying to set up regular wire and other transfers to their landlords, and there were problems and delays aplenty. So it's not just Vanguard.

But yes, it's frustrating to get a new, confused representative at an old brokerage house. Maybe it's a symptom of the recent investor bloat they are seeing.

[Tortoise]

But yes, it's frustrating to get a new, confused representative at an old brokerage house. Maybe it's a symptom of the recent investor bloat they are seeing.

Is the investor bloat unique to Vanguard, or have you heard of it happening at other brokerages recently?

Could it have something to do with the historically low interest rates we've had in recent years, pushing people away from regular savings accounts and CDs and into brokerage accounts in search of higher returns?

[Tortoise]

Good for Vanguard. This sounds like a very reasonable safety precaution for wiring money from a brokerage. See recent thread at Bogleheads about an identity thief cleaning out an elderly man's retirement account, because the brokerage had minimal to no safeguards.

I agree with dualstow: Good point, WiseOne! I didn't think about it that way, but yes, Vanguard's conservatively secure wire process does sound like it's ultimately in the best interest of their clients.

What you need to do is transfer the money from Vanguard to your bank using ACH, then, wire from there. Wires require a setup that takes a bit of time, so it's not instant. You might be better off using "sneakernet" to get your lawyer a cashier's check, which is usually how it's done.

True. I just wish my lender would have told me at the beginning of my house-hunting process that the main fund transfers (earnest money deposit and down payment) would have to be by wire rather than ACH or personal check so that I could have planned accordingly by getting the funds ready in a bank account rather than a Vanguard money market fund. Now I will likely have to do an extra ACH transfer during escrow, thus requiring more "paper trail" paperwork for me to generate and sign for the lender in a couple of weeks. As if escrow didn't involve way too much paperwork already...

[WiseOne]

Your real estate broker and lawyer both should have warned you about that. It's not going to be that much of an extra hassle, but I know it's annoying to get surprises in an already complicated process. Good luck though!!

An alternative might be to write a check to your lawyer, let it clear, then have the lawyer wire the funds. That probably won't take much longer and might be easier for you.

Incidentally, this is why you keep an account at a full service brick and mortar bank. I don't know how people manage with only an online bank or brokerage cash management. I keep my Chase checking account alive and fee-free using paycheck direct deposit and then transfer to my online bank for day to day transactions. I even got Private Client privileges out of stashing my house down payment there temporarily. Free international wires for Perth Mint purchases!

[dualstow]

...
Maybe it's a symptom of the recent investor bloat they are seeing.

Is the investor bloat unique to Vanguard, or have you heard of it happening at other brokerages recently?

Could it have something to do with the historically low interest rates we've had in recent years, pushing people away from regular savings accounts and CDs and into brokerage accounts in search of higher returns?

I do think that has something to do with it, yes, since that channel I'm not supposed to watch (CNBC) said that a lot of people have poured money into stocks just for the dividends. This isn't recent news, more like a year ago or more.

Also, around 2010, there were reports that a significant share of millennials were afraid of the stock market. (I had to tell myself, Sure, I'm putting more money into non-stock asset classes too, but that's different. I'm like a hip pp investor, man, not a millennial ).

At some point between 2010 and now, I stopped hearing about them fearing the market, only individual stocks. They got wise and started pouring money into index funds. It was actually kind of annoying. I wanted them to be traders for some reason, even as I was advising all my friends to get into index funds and stay there. But seriously, good for them. Millennials are smart. Smarter than many give them credit for.

Regarding your first question, I'm sure other brokerages are also seeing influxes (what's the proper plural there?), but Vanguard went from 3 trillion in assets to 4 trillion. They are way ahead, even as other houses match them or even beat them in the cheapness of expense ratios.