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

More mess at Vanguard

While I did not have any difficulty with a recent Roth conversion at Vanguard, according to the pop up that displays on their web site and The Independent Advisor for Vanguard Investors, there have been numerous people who cannot complete conversions transactions and RMDS in the last week or so. This is a real problem if you are trying to ge tit done before the end of the year.

I will say, Schwab made tax withholding on the conversion/distribution painless and on line. Vanguard required a complicated form with many jump through hoops and final signature on Docusign. I said forget it and just bumped up my estimated tax payment.

I am finding fewer and fewer reasons to stay at Vanguard, other than one Admiral fund I have.

Comments

  • I was surprised to find out that Vanguard participates in while Fidelity and Merrill do not participate in payment for order flows. Does Vanguard make any exception for its own ETFs?
  • Just made a Roth conversion at Fidelity yesterday in 5 minutes-wouldn't have the patience to process the transaction at Vanguard. If I knew E-Trade would continue to sell Vanguard funds ntf, I would transfer my Vanguard account ASAP !
  • I doubt "E-trade" will be recognizable after Morgan Stanley gets thru with it!
  • My recent Roth conversion at Vanguard has completely online without any issue. Actually it is pretty simple and asked whether I want to have tax withheld. I declined and paid the tax directly to IRS (quarterly estimates). Fund was transferred in 24 hours. Wonder if much of the frustration stemmed from the year-end conversion.
  • Vanguard is extremely difficult to deal with in just about any capacity
  • edited December 2021
    I wonder if those Vanguard problems have anything to do with the customer owners?
  • Can I get in to the pity party? Long time Vanguard Flagship customer - service deteriorates year after year. Long waits for a rep, confusing and contradictory instructions. Web site is cumbersome, clunky and annoyingly difficult to navigate for basic information. Good luck reordering checks or locating fund reports!

    Total opposite of Fidelity & Schwab (where I have accounts & I am very pleased).
  • edited December 2021
    I have accounts at Fido, Schwab and Vanguard. Vanguard site is overall the worst of the three but imo Schwab has the worst customer service. Pretty rare for me to get hold of a human with less than 30 min wait no matter the day or time and Schwab's droning market commentary(no option to mute it) while on hold is amongst the worst on hold garbage I have heard.

    Literally my ears and brain hurt by the time a rep comes on. And part of the IVR message is "You can do most things online" which most definitively is false.
  • I got email confirmation TODAY of my VG transaction done on Dec 22. I had to login to remember what I did.
  • I need to send in last 2 months documents to a loan company for a mortgage I'm getting for a condo. I can't send in the Vanguard ones, because I can't get to them. Pain...I did screenshots and hope that's good enough for them--I'll find out monday.

    Can't get the app to work on my phone, but that may because the new Samsung galaxy is very buggy.
  • To be consistent with Fidelity and Schwab, did Vanguard stop charging commission on sale of transaction fees mutual funds?
  • BaluBalu said:

    I was surprised to find out that Vanguard participates in while Fidelity and Merrill do not participate in payment for order flows.

    [and]

    To be consistent with Fidelity and Schwab, did Vanguard stop charging commission on sale of transaction fees mutual funds?

    Picking up on these questions ...

    Both Vanguard and Fidelity claim they receive no PFOF. However, in Fidelity's case, that applies only to equity trades and not to options trades. With respect to Vanguard, its latest Sec 606 filings (3Q 2021) show it is currently taking no PFOF even for options.

    From the NYTimes, Nov. 29, 2019: "The practice, known as “payment for order flow,” is widespread among online brokerage firms. (Fidelity and Vanguard say they do not accept such payments.)"

    Vanguard's latest (3Q 2021) Sec 606 filings (no payments received):
    https://nms606.karngroup.com/vgrd/606a/2021Q3/588e3c62ff

    Fidelity's latest (3Q 2021) Sec 606 filings (including payments received and/or made):
    https://clearingcustody.fidelity.com/app/literature/item/9904530.html

    From S&P Global Market Intelligence, Oct 22, 2019: Schwab CEO: Fidelity's payment for order flow claims not 'the whole story'
    https://www.spglobal.com/marketintelligence/en/news-insights/blog/a-new-dawn-for-european-bank-ma-top-5-trends

    There are a number of pieces saying that Fidelity doesn't charge PFOF, while Vanguard does. For example, this Business Insider column from last March says that Vanguard receives PFOF while Fidelity does not. But when one checks the 606 reports (3Q2020) that it links to, Vanguard received payments only on option orders, and the Fidelity report likewise shows Fidelity receiving payment for options orders.

    With respect to Merrill, it routes all its orders to BofA Securities. Just as problematic as PFOF. The problem with PFOF is that orders get routed on a basis other than best execution. The problem with routing to your own company is that the routing is on a basis other than best execution.
    Merrill's SEC 606 filings (zip files): http://public.s3.com/rule606/mlco_gwim/

    Regarding one way transaction fees: AFAIK, only Fidelity and Schwab charge one way fees. Vanguard charges lower two way fees (i.e. to both buy and sell TF funds), and does not jack up that fee on Fidelity funds (unlike Schwab) or on Schwab funds (unlike Fidelity).

    Like Fidelity, Vanguard enables one to buy additional shares of a TF fund for a few bucks by using its automated investing system. Fidelity charges $5 per purchase (can cancel after one purchase); Vanguard charges $3 per "dollar-cost averaging" purchase but requires two purchases. Schwab does not offer reduced rates; it charges $49.95 or $75 for each TF purchase.

    Three different pricing structures. For my investing pattern, Fidelity works best. YMMV.
  • edited January 11
    Excellent research @msf, as usual. My only add is Vanguard’s lower each way TF is not as good for me because I tend to sell in several tranches and would prefer no TF on sales. Interestingly, on a recent partial sale of one of my TF fund, Vanguard did not charge TF and marked it free, which prompted me to ask the question. I checked the research page and it still showed the fund as a TF fund.
  • edited January 11
    Vanguard "simplified" (VG marketing spin) online TF mutual fund transactions fees as of January 25, 2021.
    These fees apply to investors who are not Flagship ($1M - $5M*) or Flagship Select ($5M+*) investors.
    The TF mutual fund fee is now a uniform $20 per transaction.
    Voyager Select ($500K - $1M*) investors previously paid $8 per transaction.
    Ahhh, to live the simple life...


    *in qualifying Vanguard assets
  • A bit off topic -

    Are there any brokerages that would accept limit orders for a fixed number of OEF shares that would trigger based on prior day's NAV? I would think it should be fairly easy for brokerages to offer this feature, especially if I already own those shares and want to sell.
  • I'll say it again: I find Vanguard to be the most ridiculously difficult firm to deal with of all fund shops my wife and I use.
  • @BaluBalu, I don't know of ANY firm that does that.

    Some may allow scheduling one-time purchase on a later date beyond the common automatic investment plans (AIPs), but that is not triggered by prices.
  • @BaluBalu, I don't know of ANY firm that does that.

    Some may allow scheduling one-time purchase on a later date beyond the common automatic investment plans (AIPs), but that is not triggered by prices.

    I suspected as much. Interesting that they would allow pre-set buying but not selling. I guess the business is geared to gather AUM and not necessarily customer focused. We need one or two Robinhoods for OEF industry.
  • I'll say it again: I find Vanguard to be the most ridiculously difficult firm to deal with of all fund shops my wife and I use.

    I tend not to deal much with financial institutions in their role as fund shops. To the extent that I do, my interactions are typically limited to accessing reports/prospectuses, perhaps a little info about the holdings/management, and important to me, capital gains and dividend estimates. Also muni income breakdown by state.

    Cap gains/div estimates: IMHO Vanguard has been superb here. It provided an initial set of estimates along with a release date for an update. Its final estimates included estimates for divs.

    Contrast that with many other fund shops, e.g. Morgan Stanley, which at best provided a single estimate in October (based on Sept 30th figures) and no estimate of divs.
    https://www.morganstanley.com/im/publication/forms/tax/2021-estimated-year-end-distributions.pdf

    Finding reports/prospectuses/fund info on Vanguard's site is not as streamlined as it could be (there doesn't seem to be a page aggregating all funds). Still, from the personal investor home page one can enter the name or ticker of a fund to go directly to the fund page. That page has a link to prospectuses and reports, and pretty clear information one can tab through for full holdings, management, etc.

    Contrast that with Schwab. When I type Schwab 1000 into the search box on its home page it brings me to 3,338 search results. Maybe there's a fund page in there somewhere, but I can't tell.

    Instead, one can use the accounts & products drop down (-> investment products-> mutual funds) to get to a generic MF page. The drop down on that page, "Find Mutual Funds" has an "Investor Information" selection. That gets one to a page listing Schwab funds, with links to the fund pages and additional links to their reports, holdings, etc.
    "https://www.schwab.com/mutual-funds/find-mutual-funds/investor-information

    As a brokerage, Vanguard has recently made it harder to find third party funds. I haven't found any direct way to get to the 3rd party fund page since the website revamp. One can enter another company's fund name or ticker into the home page search box to go to that particular fund. From there one finds a link to "Other companies' funds & ETFs".

    That brings you to the old 3rd party page: https://investor.vanguard.com/other-funds/

    Still, that's better than brokerages like Merrill or T. Rowe Price, where there doesn't seem to be any way to find out from them what third party funds they offer without opening a brokerage account.

    What I've found to be the worst part of dealing with Vanguard is its phone service. Routinely 40 minutes on hold. But no worse than T. Rowe Price in that regard. (I was recently on the phone continually with both in trying to get a simple IRA transfer between the two straightend up.)

    Vanguard is not the easiest fund shop to work with. But IMHO it's also far from the worst. (I think TIAA is in a league of its own, but that's a whole 'nuther story.)
  • edited January 12
    @msf said, “ I tend not to deal much with financial institutions in their role as fund shops. To the extent that I do, my interactions are typically limited to accessing reports/prospectuses, perhaps a little info about the holdings/management, and important to me, capital gains and dividend estimates. Also muni income breakdown by state.”

    Rather than starting a new thread - a related personal question, if I may. I have just one fund outside my IRAs, PRIHX. Having transferred that from TRP to Fido last year “in kind”, I’m curious which will provide tax information? Will a statement come from TRP? Fido? Or both? Thanks.

    To the broader issue here, I’m of the opinion that the deterioration of service at businesses and institutions is commonplace - driven by cost constraints and profit motives. As consumers we want the lowest prices. As shareholders we want the greatest profitability. Those sometimes clash or lead to ruin of service we once found reliable. I sometimes find my self shouting angrily at Walgreen’s “robo assistant” when calling in or checking on prescriptions. But it’s a lot easier to move your prescriptions elsewhere than to transfer all your retirement money.
  • Info should be split in TRP & Fido 1099s.
  • msf
    edited January 12
    hank said:


    Rather than starting a new thread - a related personal question if I may. I have just one fund outside my IRAs, PRIHX. Having transferred that from TRP to Fido last year “in kind”, I’m curious which will provide tax information? Will a statement come from TRP? Fido? Or both? Thanks.

    It's a question of general interest. If you had any divs from PRIHX prior to transferring the fund (likely since it pays monthly divs), then you'll get a 1099 from TRP for all the divs you got there. The remaining distributions (if any) for 2021 will show up on your Fidelity 1099.

    If there are any tax-exempt divs from the fund, you may need to go to TRP's tax site to find out what percentage is exempt from your state's income tax. This information is often provided with a 1099 that you receive directly from the fund shop. But if you get a 1099 from a brokerage, it won't have this information.

    Going forward, you should be getting 1099s only from Fidelity.
  • Cool … Thanks to both.
  • BaluBalu said:

    Some [brokerages] may allow scheduling one-time purchase on a later date beyond the common automatic investment plans (AIPs), but that is not triggered by prices.

    I suspected as much. Interesting that they would allow pre-set buying but not selling. I guess the business is geared to gather AUM and not necessarily customer focused. We need one or two Robinhoods for OEF industry.
    Fidelity lets you schedule automatic investments on a one-time basis via its AIP system. You set up an automatic investment schedule with a stop date shortly after the first investment. (It used to be that Fidelity would not allow you to schedule fewer than two investments so that you had to cancel manually after the first; the system seems to be more forgiving now, though I didn't actually place the test order.)

    Fidelity lets you schedule one-time withdrawals explicitly, i.e. there is an option for non-recurring withdrawals. The system allows you to specify which funds to sell in which amounts at the time of the withdrawal.

    So while the interfaces for scheduling one-time withdrawals and one-time investments as a little different, the effect is the same. Perfectly symmetric, no bias toward gathering, or disbursing, AUM.
  • edited January 12
    @msf, Thanks. +1 on your brokerage comparative analysis.

    "[W]hile the interfaces for scheduling one-time withdrawals and one-time investments as a little different, the effect is the same. Perfectly symmetric, no bias toward gathering, or disbursing, AUM."

    Please let us know where this feature (to schedule future sale of an OEF in an IRA) is hidden. I simply want to sell an OEF and buy another OEF or move the sale proceeds to the sweep MM. I am not interested in withdrawing and not eligible for RMDs.

    For those interested in scheduling a future (time based, not price based) sale of an OEF at Fidelity, you get to the feature the same way as for Automatic investments. When you click "Schedule a new transfer," on the next pop-up, instead of choosing Automatic investments, choose "Recurring transfers and withdrawals."

    "Recurring transfers and withdrawals

    Scheduling recurring transfers and withdrawals can help you:

    manage regular transfers between your Fidelity accounts
    grow your managed account investments
    plan to meet your required minimum distribution (RMD)"

  • msf
    edited January 12
    Perhaps I read a little too much into the comment that "I guess the business is geared to gather AUM". For brokerages, AUM usually means total assets in the brokerage accounts. So gathering AUM would mean pulling money into the brokerage account and reducing AUM would mean disbursing money out of the account.

    Not what you're interested in - a sale without a withdrawal.

    For completeness, one can schedule a one time withdrawal from an IRA here:
    https://digital.fidelity.com/ftgw/digital/transfer/sell

    Upon closer examination, I see that one can either schedule two or more withdrawals in the future, or a single withdrawal "today". The "one time" option does not allow one to select a date for the transaction.

    If one schedules a sequence of withdrawals in the future, I expect one could cancel after the first withdrawal, just as one can cancel a sequence of investments in the future after the first purchase.

    Close, but not quite as I had described it. And there's one other gotcha. In order to force the desired sale, one must have no assets in MMFs in the account. To deal with that if there's cash in the account, open another IRA and transfer the cash there.

    All of this is independent of RMDs, except to the extent that one can schedule RMDs rather than fixed amounts.
  • edited January 13
    I think we drifted too far away from my original premise / request. That is, to be able to mimic a future OEF sale similar to a future (limit order) ETF or stock sale. The potential solution presented is too tortured for me. I mentioned brokerage because they are more likely than the fund companies themselves to offer the feature; a lot of the brokerages (Vanguard, Fidelity, TRP, Schwab, etc.) we discuss in this forum are also fund companies themselves, and as such the distinction is not that important. In addition, even if a fund company offers that feature, that in of itself will not attract me to its funds. Personally, except TRP, I only have brokerage accounts and no fund accounts. If TRP brokerage was half as decent as Vanguard's (which is already the subject of this thread), I would have converted TRP fund accounts into a brokerage account.
Sign In or Register to comment.