Simple transaction - partial transfer of IRA from Vanguard to T. Rowe Price - sell Vanguard fund shares on one end, wire, open new TRP fund on other end. What could possibly go wrong?
T. Rowe Price insisted on walking me through their form. So I was assured everything was good to go. Emailed it in. Three business days later(!), TRP lets me know that got the form. 2-3 more days until it faxes it to Vanguard. Vanguard promptly sells the indicated dollar amount, wires the money to TRP.
TRP sits on the wire for a day, then rejects the IRA purchase and wires the money back to Vanguard. TRP doesn't tell me this. The next business day (three business days after the VG shares were sold), I call TRP. "Oh, you were buying into a closed fund, and we don't allow that except by transferring money from another TRP account. We'll see if we can fix it without more paperwork."
On the Vanguard side, there's this money sitting in Vanguard's generic HSBC bank account and no record linking my IRA to that money. (Does Vanguard think that TRP is sending it a gift?) With the reverse wire number (that I had to ask TRP for), Vanguard is able to locate the cash. Vanguard asks me what to do with it. That's TRP's problem. I'm not going to touch IRA money that is supposed to be trustee-to-trustee.
TRP resends the IRA transfer request to Vanguard, so Vanguard sells more shares and leaves the cash (still not identified as my money) untouched. TRP gets the new proceeds, uses it to purchase a TRP MMF in my IRA, and same day transfers the cash from the MMF to the target fund. TRP never realizes that there was a double sale and the cash is still in limbo.
I notify TRP. It works with Vanguard to repurchase shares (rather than replace the number sold). Fortunately the market has gone down so I expect to wind up with more shares. Dumb luck. This was last Thursday. TRP told me it anticipated Vanguard to execute on Friday. Nothing. Finally went through yesterday.
But, all's well that ends well.
[Edit: You may have missed this point in my post because it really is that incredible. TRP told me that opening up its closed funds was a work in progress, and that it didn't have the process completely in place yet. Or perhaps I wasn't clear in my post that I was eligible to purchase its closed funds.]
In order to execute the transaction, TRP asked me which MMF they should open inside my IRA. They took the cash proceeds sent the second time from Vanguard, bought shares of the MMF I selected, and same day exchanged shares from one TRP fund (the MMF) to another TRP fund (the closed fund).
All's well that ends well only because I hounded both firms. TRP, that didn't even know the mess it created, and Vanguard, that treated my cash as its own money. Neither of which let me know what had happened.
I thought about it but hesitated due to past (poor and painful) asset transfer experience. Now that one can get into many TRP funds on no-transaction platforms in large brokerages, there is little incentives to go to TRP.
Even so I talked with a TRP representative, got the specific email to send in the transfer form for in-kind transfer ( TRP funds). Now I hesitate whether it is worthwhile given your poor experience.
BTW, they ask me to send the transfer form (with my social security #) and a brokerage statement to a “unsecured email address” to get the process started. Also I need to send in the paper forms. I will NOT send the form unencrypted to an unsecured email address. In this regard, Fidelity is the best and secured where everything is completed online along with the brokerage statement in PDF/jpeg. No mailing the forms is required. The entire transfer takes about 5-7 business days to completed.
This is even worse than the Facebook mess (and no customer support) that my wife has encountered (locked her out of her account), because money and tax law are involved in your case.
Several years ago I opened 529 accounts for my two grandsons at TRP (the state of Alaska plan). I mailed in a check to fund the accounts.
Check didn't clear.
Waited a little while. Called TRP.
Waited a little longer.
Finally they said we've not received the check -- I should send another.
So I agreed to send another check, with the admonition "don't cash the first check!"
Second check arrived there and was deposited in the accounts.
Several weeks later, they returned the first check to me. I'll never know whether they had it all along or it was lost in the mail. I should've stopped payment on it.
Fortunately it all worked out.
The boys are now high school juniors and looking at colleges.
Which TRP fund did you choose to put the transferred funds in? How were you eligible to put money in the closed fund?
To whom have they outsourced their once stellar customer service arm?
You are using Fidelity as your main brokerage?
A few years ago, when changing jobs, I tried rolling my 401k at former employer into Fido (new 401k at new employer) and had issues with a small amount of the proceeds considered 'after tax' money from the sale of company stock. Fido wouldn't process rollover so I switched to tRP. They obliged and asked for a Letter stating what to do with after tax $$$...simple fix!!! TRP received my proceeds because Fido couldn't accomodate me...
@Sven - Yes / I moved all TRP to Fido and followed up with all my PRPFX. Still have accounts with D&C and Invesco. Little need to interact at D&C. Invesco has been fine to work with. And, per your separate post, I’ve had no experience with TRP brokerage. Hopefully better run than their fund client service. And - of course, Fido’s been top notch. The issues at the beginning related to 3 of TRPs transfer checks bouncing at Fido and having to be reissued.
Since msf brought to our attention of TRP’s Summit Program, one can access closed funds, institutional funds (lower ER) and several minor offering. But the hassle that msf experience above cause me to rethink if there is really any benefit at all. Besides, Fidelity’s statement is joy to use for tax preparation.
Internet failed twice , phone once . A real human , one & done !!
This could have been a real disaster for someone who wasn't as engaged or knowledgable as you.
I'm glad it worked out in the end.
My workplace experienced several service outages today due to the AWS issues.
AWS Service Health Dashboard (Snippet)
9:37 AM PST
We are seeing impact to multiple AWS APIs in the US-EAST-1 Region.
11:26 AM PST
The root cause of this issue is an impairment of several network devices in the US-EAST-1 Region. We are pursuing multiple mitigation paths in parallel, and have seen some signs of recovery, but we do not have an ETA for full recovery at this time.
3:03 PM PST
Many services have already recovered, however we are working towards full recovery across services.
4:35 PM PST (latest update as of 6:25 PM PST)
With the network device issues resolved, we are now working towards recovery of any impaired services.
1) Switching from paper statements to online statements as my internet capability improved did not result in fewer paper statements as intended. The opposite happened and they began mailing monthly statements that I did not welcome - often replete with account numbers and balances. So I called them. First they said I had to remove checkwriting capability from my money market account if I wanted these frequent mailings halted. I did so at some inconvenience to me. But the flood of paper did not stop. If anything it increased. Calls to try to resolve this often had me on hold for anywhere from 30 minutes to 2 hours. Still, the monthly (occasionally weekly) paper statements continued to arrive. And every “agent” I talked to seemed to have a different “take” on what the problem was.
(2) For years TRP had agreed to stop taking Michigan withholding from distributions provided I filed the appropriate Michigan tax form ahead of time. And every January 1 I completed a new form and sent it (certified mail) along with a brief typed letter to Price. But when I took a 2021 distribution mid-year, they did not honor that opt-out form. To be more specific, they did honor the opt-out provision on part of the distribution (from one bond fund) but they pulled the state tax from the other part (from a second bond fund). When I followed up with a call to try to ask why they essentially “blew me off” saying something like “sometimes we do and sometimes we don’t” (honor the opt-out request). Interestingly, Fido let’s you opt out of state withholding when you submit the transaction - a feature missing at TRP.
(3) While 90+% of the transfer to Fido was in-kind, there were 3 short term bond funds having small balances I elected to liquidate. Rather than combine these into a single check, Price mailed Fido 3 separate checks. Fido credited those to my account and allowed me to trade with them, which I did. But 3 days later Fido had the checks returned to them from their bank as “unpaid.” The next thing I knew my investments were being force sold by Fido and I was being hit with a slew of related fees. I was suspended from being able to trade with unsettled funds for 3 months. My record still bears a “Free Riding” violation which the SEC considers fraudulent behavior and a serious breech of law.
(4) Daily for over a week I was in phone contact with TRP, experiencing those 30 minute to 2 hour wait times on virtually every call trying to resolve this. Their phone personnel seemed poorly informed and ill prepared to deal with the issue. Repeatedly I was told “we’ll call you” which rarely really happened. They did eventually apologize for the matter and send out 3 new checks to Fido. What a horrendous experience - considering that TRP had long held the bulk of my retirement assets and had been trusted by me for decades to do things right.
So, @Derf and others …. it’s not so much the % of things that go wrong as the type of issue involved and how well equipped they are to resolve a problem once one occurs.
I'm going to think you know longer do business with them, & what others may expect if they do.
I held their funds at one time through 401-k, but not directly with them.
Good luck hoop-ster, Derf
When an institution (or in this case, two) mess up a transaction, they should unwind the transaction and fix things up as though the transaction had been processed correctly. Instead, VG and TRP agreed to "fix" the second sale of a VG fund, the one that shouldn't have happened, by repurchasing shares at market price.
It turned out that the repurchase price was about 1/5% higher than the price of the erroneous sale. So the repurchase left me a few shares short of where I would have been had the second sale never have taken place.
VG just reversed that sale, and also reversed the repurchase transaction that shouldn't have been used as a fix. So now it really is as if the second sale had never happened.
I'm okay with the "once in a millennium" error if it's handled correctly, promptly, and I'm kept in the loop. As hank said, it's not the frequency that's the problem, it's the severity, and IMHO more importantly it's how it is handled that matters.
I won't abandon VG or TRP because of this, because they each have offerings that I want. I trade infrequently and try to keep things simple with them. I thought that moving cash might be less error prone than transferring shares.
In hindsight, BaluBalu's suggestion of moving holdings in-kind looks like it might have helped avoid part of this mess. At least then the transactions that could get messed up would have been only on the TRP side.
Side note related to Observant1's comments on AWS: Morningstar was also affected at the same time. They had a banner saying that some of their services were impaired because of AWS problems, and I wasn't able to pull up any fund pages.
A year later, TRP funds became available in major brokerages on no-tranaction fee platforms in Schwab, Fidelity and Vanguard (plus others). I consolidated my TRP funds away from TRP and lived much happier.
Recently. I have considered giving TRP another chance because of what their Summit Program offers. But now I have second thought in light of @msf has gone through.
Really sorry to hear of the frustration @msf has endured. Hats off to him for sticking with TRP. More patient than I am.
I own TRP funds both at TRP (from a 401(k) rollover) and outside. I will wait for a year or so before deciding if I transferring assets to participate in Summit program would be worthwhile. I try not to be the first mover to allow the service provider time to iron out any kinks ( same with buying new products). The ER between investor class and institutional class for TRP funds is not that much. Also, if I avoid making one irrational / emotional choice in a year, that would result in a much bigger saving than all the proactive savings I can make in that year. So, not in a hurry.
I agree with that ! I'm not the person to have the first one on the block.
INDEED! Seems to me that training for employees at those (effing) Call Centers is woeful. You just have to be lucky enough to connect with someone who's already been around the block once or twice. That whole system of farming-out customer "service" should be goddam illegal, anyway. "Don't tell me you work for X, you work for a shitless CALL CENTER."