[POLL] What would you like Vanguard to change or improve?

[DrDoodle]

Like a lot of folks here, there's a few things about Vanguard that annoy me. It occurred to me that perhaps Vanguard recognizes and respects the Boglehead community sufficiently to pay attention if Bogleheads speak in unison about a concern. So, with encouragement from Nisiprius, I've collected nominations in this thread and am now offering a poll. You can vote for up to three items.

What will happen with the results? I don't know. Maybe nothing. Maybe a Vanguard representative will pass it around the office. Who knows?

[jidina80]

Other: Include Canadian stocks in the Developed Markets Fund.

[NYBoglehead]

I only like changes if they don't increase costs.

[Angst]

Other: Provide a variety of user self-customization options for the Balances and Holdings webpage, such as...

- Option to click on column heading to sort by that.
- Option to truncate names/verbiage in columns to be able to display more info without multiple line wraparounds.
- Option to add/remove columns
(Hint - Think more about customers and their needs, beyond just low-priced funds, and the fact that other companies such as Schwab, Fidelity, etc, are actually beginning to compete with Vanguard on price/expense.)

[grabiner]

It's interesting that the top selection in the poll is a better Portfolio Watch. I don't really need the tool (I have my own spreadsheet), but I would like to see it improved anyway. Almost every time someone posts about Portfolio Watch, I follow up with a note about the inaccuracies, recommending that the poster try M* X-Ray instead.

[longview]

Security please. My gmail has a 2-step authentication. My life's savings has a small password which could be brute forced in several weeks (can't actually do better at Vanguard -- not enough characters). It makes me want to leave them, my email is more secure. Sad.

[umfundi]

More secure passwords.

Other than that, is this really how we want to give feedback to Vanguard?

Keith

[Silence Dogood]

Well, this will be the third time that I post this:

For legal reasons, I don't think that Vanguard can offer admiral shares. SEC regulations do not allow for multiple share classes of fund of funds.

It's more likely that Vanguard will simply eliminate the admiral shares of a few of it's core funds, due to the fact that there is now only a small difference in minimums between the investor shares and admiral shares. For example, the Vanguard Total Stock Market Investor shares has a minimum of $3,000, while the admiral shares of the same fund has a minimum of just $10,000. The easier move for Vanguard to make would be to just converge the two share classes. This would result in a lower expense ratio for the Target Retirement funds.

Does it make sense to ask Vanguard to offer admiral shares of fund of funds when it is not legal for them to do so?

[Noobvestor]

By my estimate, it would probably take 10+ years to brute-force a Vanguard password. I'd still like to use a longer password, but that seems pretty good.

[james22]

1. ISV
2. CCF

[noyopacific]

Other; I'll repeat my earlier suggestion that was not included in the poll:
I would like to require that the total annual compensation for Directors and the top three Vanguard employees be disclosed each year.

The reason is that while I believe that Vanguard is a fantastic company, I think there are significant reasons to be concerned about management's potential to abuse Vanguard's extremely insular governance structure. Board members are currently recruited by management and nominated by the Board of Directors. It would be almost impossible for a group of shareholders to have any influence in the process beyond voting for whomever the board nominates. If there ever were a Board and management team that decided that the time was ripe for them to cook Vanguard's golden goose, the owners (that's us) would not realize it had happened until it were too late to do anything about it.

It seems to me that the simplest way to reduce this risk might be to require Vanguard to disclose the compensation that is paid to top management. This is not a big deal. I believe it is required of publicly-traded companies.

If you think it is unlikely that management would ever stoop so low, you might want to read up on John Brennan's effort to remove Jack Bogle from Vanguards Board. I could not imagine how anyone might have believed that Brennan's efforts to give Mr Bogle the boot were in the best interest of shareholders.

[nisiprius]

... is this really how we want to give feedback to Vanguard?

Why not? It should be noted, of course, that Vanguard has a "Voice of the Customer" program, so I guess that's what they want us to do--make suggestions through emails or phone and mention that program. But I'm not sure what you mean. It's as likely to be effective as anything else. I have no connection at all with Vanguard but I've worked in big companies, and for sure there are people reading the forum. My mental image of what happens is that perhaps, somewhere, there's some poor person who's been trying for years to do something about (say) Portfolio Watch, and some colleague who reads the forum says, "Hey, Sam, you may want to look at this," and Samantha prints it out and brings it to the next committee meeting and says "See? Gimme me some resources to do something about this." And someone else says "Pooh! That's not a scientific poll, it doesn't mean a thing, how do we know you didn't get all your buddies to vote in it?" But it doesn't matter, it will have had some influence.

Does it really make sense to ask Vanguard to offer admiral shares of fund of funds when it is not legal for them to do so?

Oh, I'm sure they could do it. Where there's a will, there's a way. It can't be any trickier than making ETFs that are share classes of a mutual fund.

I certainly don't know the regulatory ins and outs, but I've seen mutual funds that hold ETFs. I imagine Vanguard could create, perhaps not Admiral shares as such, but a fund that invested in Total Stock, Total Bond, and Total International ETFs in the same proportions as in the existing funds and was thus equivalent to the existing fund, but at a lower cost.

[Cernel]

Other than that, is this really how we want to give feedback to Vanguard?
Keith

A really good question.

In addition to this Poll (hoping that someone from Vanguard in a position to actually act on the information reads this thread), maybe a session in the upcoming BOGLEHEADS 12 Forum can be included in which the organizers invite key representatives from Vanguard to get feedback from the Boglehead community. A Panel discussion with a Q&A session can provide a forum for this community to give additional feedback to Vanguard.

[HardKnocker]

I have no problems with Vanguard. (A stronger password is not a bad idea.)

Vanguard is Vanguard. I'm have no desire to turn Vanguard into Fidelity or John Hancock.

As long as expenses stay low on the index funds I'm in.

[JamesSFO]

Well, this will be the third time that I post this:

For legal reasons, I don't think that Vanguard can offer admiral shares. SEC regulations do not allow for multiple share classes of fund of funds.

It's more likely that Vanguard will simply eliminate the admiral shares of a few of it's core funds, due to the fact that there is now only a small difference in minimums between the investor shares and admiral shares. For example, the Vanguard Total Stock Market Investor shares has a minimum of $3,000, while the admiral shares of the same fund has a minimum of just $10,000. The easier move for Vanguard to make would be to just converge the two share classes. This would result in a lower expense ratio for the Target Retirement funds.

Does it really make sense to ask Vanguard to offer admiral shares of fund of funds when it is not legal for them to do so?

They could just have two different funds, VG TR 2035 and VG TR 2035 Admiral with a higher minimum that are simply distinct funds...

[Grasshopper]

I was one of the Vanguard Flagship community forum members, this went away last month. Are they listening?

[Random Musings]

I don't understand why nine people would vote for not "messing around with anything" - a good firm should always provide continuous improvements with respect to their products/services. Frankly, some of the options provided would be very inexpensive to do. For example, at least with respect to portfolio analysis - Vanguard has all the underlying data for their funds - there is no excuse why investors holding only Vanguard funds/ETF's can't have an improved asset allocation look.

As one example, certain Vanguard active funds hold both domestic and international funds. Investors can see on the funds information sheets what % of those equities are international (perhaps with a month lag). Although there may be a slight change from month to month on these values, including this information on the portfolio tool is more representative of one's portfolio than not including anything at all. What makes this even more head scratching is that they do break out the equity/bond portions for those who hold Wellington or Wellesley (although I don't think they break out int'l equity holdings there). And I'm sure that allocation is not real time and based on a lag/estimates of sorts.

Vanguard, instead of working on that fuzzy ticket tape marketing gimmick, allocate a few more minutes doing this not so complicated upgrade, at least with your funds. Supply information that is more accurate to benefit the consumer of your products.

RM

[Silence Dogood]

Does it really make sense to ask Vanguard to offer admiral shares of fund of funds when it is not legal for them to do so?

Oh, I'm sure they could do it. Where there's a will, there's a way. It can't be any trickier than making ETFs that are share classes of a mutual fund.

I certainly don't know the regulatory ins and outs, but I've seen mutual funds that hold ETFs. I imagine Vanguard could create, perhaps not Admiral shares as such, but a fund that invested in Total Stock, Total Bond, and Total International ETFs in the same proportions as in the existing funds and was thus equivalent to the existing fund, but at a lower cost.

Well, I'm not saying there couldn't be a work around. But it still wouldn't technically be "admiral shares." I don't know of any Vanguard mutual fund that owns Vanguard ETFs. Maybe there are or maybe this is something they could do. I still think it would be easier to just converge the admiral and investor shares of a few of their core funds.

They could just have two different funds, VG TR 2035 and VG TR 2035 Admiral with a higher minimum that are simply distinct funds...

I'm not sure if the SEC would allow that. But since most people keep these funds in tax advantaged accounts it could work (i.e. changing from the investor shares fund to the admiral shares fund wouldn't be a taxable event).

By the way, I voted for:

Stronger password security: longer; upper/lowercase; 2 factor
Better "Portfolio Watch" (M* X-ray based?) with more accurate and complete asset allocation data
Show more than 5 years of portfolio performance data

There are a bunch of others that I agree with, too.

I would like to require that the total annual compensation for Directors and the top three Vanguard employees be disclosed each year.

I definitely think this should be included in the poll. It would get my vote.


I edited my original post to get rid of the bold. What looked okay at 2:30AM now looks overly aggressive.

[WHL]

The only thing I really want is a better asset allocation tool. The current pie chart is pitifully frustrating, and I'm not smart enough to make my own Excel sheet with the formulas required. A rebalancing tool would be nice, but I can handle that on my own.

The higher interest rate money market option was my last vote, but it isn't much of a need.

[Doc]

Seamless connection between mutual fund and VBS account, with improved VBS functionality

On Monday I sold some Vanguard Short Term Bond Fund and on Wednesday I bought an ETF at Schwab with the proceeds. (If I transfer money from Schwab to Vanguard I have to wait several days for the ACH funds to "clear" before buying assets at VBS.)

On Monday I sold a non Vanguard fund at Vanguard Brokerage Service to replace the Vanguard Short Term Bond Fund. I still can't buy the Vanguard Bond Fund today, Thursday. Maybe I can by tomorrow but at least by next Monday.

Is this 2013 or 1913? Why can I but investments at Schwab with Vanguard funds sooner than I can buy Vanguard investments at Vanguard with proceeds from Vanguard Brokerage Service?

We are down to holding only three Vanguard funds - S&P 500, Short Bond Index and REIT. The first two are available at the same cost elsewhere and I am DCA'ing out of the REITS. I hope Vanguard people read this poll and take some action soon.

[crowd79]

Stronger password protection.

[DrDoodle]

I would like to require that the total annual compensation for Directors and the top three Vanguard employees be disclosed each year.

I definitely think this should be included in the poll. It would get my vote.

Unfortunately I had to make some fairly arbitrary and uninformed choices to pare the list of nominations down to 18 items (plus "other" and "leave it alone") ... I combined a few, and dropped a few that seemed extremely narrow ... I think I chose to cut the "compensation" issue because it's a bit of an odd man out, dealing with corporate governance rather than Vanguard's suite of products and services, which is how I was envisioning the poll. That said, I get why Vanguard customers might be concerned about compensation and want more transparency; it's just that something had to go.

[TRC]

Stronger password policy enforcement.

[Epsilon Delta]

Is this 2013 or 1913? Why can I but investments at Schwab with Vanguard funds sooner than I can buy Vanguard investments at Vanguard with proceeds from Vanguard Brokerage Service?

It's 2013. In 1913 the equivalent transactions would have taken weeks and cost enough that you probably would not have done it. IMHO things have reached a point where more speed has little utility so it's not worth spending money on. On the other hand it's possible that more speed will actually save money in which case I'd urge Vanguard to go for it.

[umfundi]

Is this 2013 or 1913? Why can I but investments at Schwab with Vanguard funds sooner than I can buy Vanguard investments at Vanguard with proceeds from Vanguard Brokerage Service?

It's 2013. In 1913 the equivalent transactions would have taken weeks and cost enough that you probably would not have done it. IMHO things have reached a point where more speed has little utility so it's not worth spending money on. On the other hand it's possible that more speed will actually save money in which case I'd urge Vanguard to go for it.

I ran into a similar issue which led me to abandon my Vanguard Money Market fund. Their money transfer times are the maximum allowed.

An electronic payment from my checking account to my AMEX credit card is instantaneous 24/7. An electronic transfer from my Vanguard MM account to my checking account is 3 or 4 business days plus intervening high days and holidays. Ask on Friday evening, the funds will be available the next Thursday.

Keith

[JamesSFO]

They could just have two different funds, VG TR 2035 and VG TR 2035 Admiral with a higher minimum that are simply distinct funds...

I'm not sure if the SEC would allow that. But since most people keep these funds in tax advantaged accounts it could work (i.e. changing from the investor shares fund to the admiral shares fund wouldn't be a taxable event).

Why not? The two funds would have different holds one would old regular shares and the other admiral, they would similarly have different expense ratios etc.

There may be many administrative/complexity reasons not to do it, but I really think the SEC is a false blockade here.

[Alskar]

Explanation of my vote for "Other": Individual tax lot identification in retirement accounts.

For whatever it's worth, I recently closed my Vanguard accounts and moved everything to Fidelity out of frustration with VBS, the Vanguard website, Vanguard customer service, Vanguard "security", and so on. I now hold my all-Vanguard ETF portfolio at Fidelity.

[grabiner]

Explanation of my vote for "Other": Individual tax lot identification in retirement accounts.

Why is this of any use? Do you pay taxes to a foreign country which does not recognize the retirement account?

It is useful in some tax-sheltered accounts; I wil use specific identification if I sell ETFs in my HSA, since the capital gain is taxable in New Jersey.

[Grt2bOutdoors]

Other - keep cutting costs. One can always improve upon the low costs already offered. In doing so, you put more heat on the competition. And I'm sure they'll appreciate all your hard effort in making life more difficult for them.

[Juniormint]

Other - Hoping that Vanguard can automate my 403b deposits. Right now, my employer has to cut a check and since I only get paid once a month, my investments don't hit my account until a week to two weeks after I get paid

[Random Musings]

With respect to the choices, I would not want a rebalancing tool offering until they improve their asset allocation analysis. But the rebalancing tool is not high on my list anyway.

RM

[MnD]

For whatever it's worth, I recently closed my Vanguard accounts and moved everything to Fidelity out of frustration with VBS, the Vanguard website, Vanguard customer service, Vanguard "security", and so on. I now hold my all-Vanguard ETF portfolio at Fidelity.

1
In ~5 years I expect to consolidate a 7 figure portfolio and all banking at either Schwab for Fidelity where I'll hold a few Vanguard ETF's among many other investments.
And that's assuming the Schwab and BlackRock Core ETF's haven't reached an overall parity with Vanguard ETF's by then.

If the Vanguard model is simply to offer low cost funds and ETF's that's fine, but it certainly isn't in the running currently for an asset home base.

[Majormajor78]

How about a rebalancing tool that also doesn't trigger the mutual fund lockdown period is used annually.

[Gort]

T.Rowe Price has a nice rebalancing tool for their investors. I wish Vanguard would have one. High on my wish list!

[Boglenaut]

I picked the last option, it is fine the way it is.

I don't really mean that, but cannot think of any specific improvements at this time. I'm pretty happy with them.

[billjohnson]

(1) Improved VBS functionality

(2) Better "Portfolio Watch"

(3) Show more than 5 years of portfolio performance data

(4) Customizable vanguard.com homepage

(5) Rebalancing tool

[digit8]

I'd strongly vote against the money market rate bump. In the current environment, the only thing that would do for me is set off alarm bells. How would Vanguard cover that? Making crazy-risky bets, or draining money from somewhere else to supplement it? Either way, it's bad hoodoo. Money market rates suck right now, fact of life.


I voted for Portfolio Watch improvements. It's a persnickety wish, but I like the basic way it's set up, would love to view all my holding through it, but aside from some general inaccuracies, there is the tendency for my 401k funds with Fidelity(all indexes!) to go to that white "unknown" for days or weeks at a time.

Increased password security is easily the most realistically beneficial, gonna-happen-sometime item on the list. I suspect the only thing delaying it is Vanguard knowing the knee-jerk deluge of complaints they'll receive the first few weeks. The financial institution I'm employed in just made such a change, and the resultant response put me on a month of 60-hour weeks calming people down.

[Saleen]

2 factor authentication please. The focus on brute force is misplaced, people should be worried about their passwords being taken by keyloggers!

If blizzard and google can do it, vanguard can do it!

[Winthorpe]

I would like to have a Vanguard checking account, similar to Schwab's high-yield checking account. Other banking type services? I'm not interested because all I use at any bank/credit union is checking.

Not a big deal, but it would be nice for simplicity/consolidation to have more accounts at a single institution.

[Mudpuppy]

By my estimate, it would probably take 10+ years to brute-force a Vanguard password. I'd still like to use a longer password, but that seems pretty good.

While one can, to some extent, guard against keyloggers by being vigilant with one's computer security and one can take full advantage of the alphanumeric+symbols password space, up to the limit of 10 characters, one cannot control what happens on Vanguard's end with respect to their employees (the insider problem is one of the hardest problems in computer security) and their servers.

Once the malicious person recovers the password hash through any means, it simply becomes a matter of farming it out to a GPU cluster to crack. GPU clusters are setting cracking records on an almost monthly basis. The fastest records at the start of the year (probably broken by now) stand at about 63 billion/second for SHA1 and 180 billion/second for MD5. Even a moderate GPU rig can manage 2 billion/second for MD5. If you crowd source this to multiple GPU clusters, each working on a separate portion of the password space, then you could feasibly recover the password with a few days to weeks of work. GPU cracking teams have already recovered almost all of the LinkedIn passwords from that hash file disclosure, which was SHA1 encrypted. Passwords fall very, very quickly once the hashes are revealed, particularly if they are limited to only 10 characters in length. It's no longer sufficient to say "it would take x years to brute force this password space" because hash cracking efforts are no longer isolated or slow.

Granted, if it was a hash disclosure, it would be Vanguard's responsibility to make one whole again. But proving it was a hash disclosure if it was a sneaky insider who only took a small subset of the hashes would be time-consuming and it would have to take a pattern of people who knew their computers were secure (and who convinced a corporation of this fact) before an investigation would even commence. Adding two-factor authentication guards against this to some extent, particularly if no one employee were allowed access to both the password hash file and second factor seed file.

One could drive oneself nuts thinking about all the possible ways an account could fall. In the end, it all comes down to a risk analysis and a cost/benefit analysis for the existing method and for adding two-factor authentication.

[sommerfeld]

Security please. My gmail has a 2-step authentication. My life's savings has a small password which could be brute forced in several weeks (can't actually do better at Vanguard -- not enough characters). It makes me want to leave them, my email is more secure. Sad.

Indeed. What I specifically want is the ability to sign up for 2-step authentication requiring entry of a one-time code generated by a smartphone app, token device, or delivered by SMS. And I'd pay a small annual fee to enable this.

Bonus points if they can arrange it so that they only require the token if you want to change something (move money around, change your address, add a bank account) and not if you just want to check on things.

[ram]

rebalance tool

[littlebird]

I wish they would hire someone from P.O.E.M. (Professional Organization of English Majors) to correct the syntax of their telephone warning, which currently states that "as a committment to service, your call is being monitored" . I would also like them to stop addressing my account information to me "and family" in the manner of a holiday greeting card. As a user of the phone and mail, my suggestions seem somewhat dated, even to me.

[Angst]

I'm disappointed only 1 other person beside myself seems to care that Vanguard requires a min. $10,000 TIPS purchase.

Is $10,000 no big deal to the avg. Boglehead?
Maybe I'm just out of my league, or is it because it's now March 2013 and not the end of 2008?

[nisiprius]

I'm disappointed only 1 other person beside myself seems to care that Vanguard requires a min. $10,000 TIPS purchase.

Is $10,000 no big deal to the avg. Boglehead?
Maybe I'm just out of my league, or is it because it's now March 2013 and not the end of 2008?

I'm that other person. But I'm sure it's just a question of how many people actually buy individual TIPS.

It could also be a question of prioritization--in order to check off that one, I had to forego checking off the one about fixing Portfolio Watch, which I think is important, too.

As for being out of our league, in a sense, yes, I think most investors who buy individual bonds are not buying them in onesies and twosies. Ages ago, when you couldn't buy them online and there was a $40 commission at Vanguard to buy them at auction, I'd call Vanguard and they'd put me through to the bond desk, and they would take down the information and ask how many I wanted to buy, and I'd say "three." And there would be a long pause and a change in tone of voice. "You want to buy... three?" "Yes, three, about $3,000 worth. For my Roth." Shocked pause. "Sir, you are aware that the cost of the commission will be more than six months' interest on these bonds?" I would think to myself, "Jeez, the $40 commission isn't my idea and the $3,000 Roth limit isn't my idea." But I would just say "yes."

[Angst]

I'm disappointed only 1 other person beside myself seems to care that Vanguard requires a min. $10,000 TIPS purchase.

Is $10,000 no big deal to the avg. Boglehead?
Maybe I'm just out of my league, or is it because it's now March 2013 and not the end of 2008?

I'm that other person. But I'm sure it's just a question of how many people actually buy individual TIPS.

It could also be a question of prioritization--in order to check off that one, I had to forego checking off the one about fixing Portfolio Watch, which I think is important, too.

I think you're right about "prioritization", and perhaps people's priorities are affected by the present situation with I-bonds being the better deal in the short and intermediate term; so maybe TIPS aren't so much on people's radar as before. If it were easier to purchase TIPS though, I think more people would generally buy them. As it is, Vanguard's $10,000 minimum purchase does not complement the $5,500 maximum annual IRA contribution, and I think this is a real limiting factor. Be that as it may, I presently don't have so much interest in buying TIPS, but I expect rates will rise again, someday, and I'll become more interested then.

ps - your little TIPS purchase conversation was entertaining. The poor agent really must have felt you were lost.

[tfb]

As it is, Vanguard's $10,000 minimum purchase does not complement the $5,500 maximum annual IRA contribution, and I think this is a real limiting factor.

It's been reported this is already fixed. New minimum is $1,000. viewtopic.php?p=1484231#p1484231

[Angst]

As it is, Vanguard's $10,000 minimum purchase does not complement the $5,500 maximum annual IRA contribution, and I think this is a real limiting factor.

It's been reported this is already fixed. New minimum is $1,000. viewtopic.php?p=1484231#p1484231

I don't know how that thread slipped past me. I think I'll finish my posts re: TIPS there, not to hijack this poll, but I do know that in the past Vanguard had listed all "treasury" securities as $1,000 min, implicitly including TIPS, but TIPS still were not actually allowed at less than $10,000. I can't confirm online right now but I'm anxious to hear if anyone has successfully bought less than 10k through VBS. Of course I'm hopeful! Anyhow, thanks for the info, and I'll post to the other thread here.

[Munir]

Return the "My Fund Watch" function to the way it was last summer/fall when:

1. The YTD returns were on the same page as the 1 & 5 year returns. Why not include the 3 year return too?

2 The ability to look at all these results without having to sign in. The new set up does not allow that.

[Gort]

From the T.Rowe Price website concerning their quarterly automatic rebalancing program:

"Prior to the rebalancing of my accounts, T. Rowe Price will calculate for each fund account included in the IRA Asset Rebalancing the absolute value of the difference between the actual percentage and percentage I selected. If the difference is greater than 5%, the rebalancing will occur."