vanguard moved my 401K to "Managed" without my consent

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vanguard moved my 401K to "Managed" without my consent

Postby fh2000 » Thu Jan 31, 2013 1:51 pm

I noticed few days ago, "Managed" appeared under my account name in my Vanguard 401K. Then I received a letter of "Confirmation of Exchange". They changed my allocation, and moved around some funds.

I called them today and found out, they moved my self-managed 401K to "Managed" by a 3rd party vendor for a monthly fee, without my consent. They said there was a letter sent to me 2 weeks ago. Since I did not reply to opt-out, they assume that I agreed to move to "Managed". I asked them to cancel this, and move my funds back to original allocation.

Some funds have already been moved, and I will have to wait for 60 days to move them back if I still want to, or I can send them a letter in writing to move funds back. The representative said if I wait 60 days, I might make some money if the new funds are making bigger increase.

I do not know how a reputable company such as Vanguard could do this to their customers.
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Re: vanguard moved my 401K to "Managed" without my consent

Postby JamesSFO » Thu Jan 31, 2013 1:54 pm

I think there's a bit more to this than meets the eye. You mention this is a 401K, Vanguard likely could not and did not on its own decide to do this, perhaps your plan sponsor decided to implement something and default people into some sort of management option...

Can you clarify and/or post the text of the letter?
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Re: vanguard moved my 401K to "Managed" without my consent

Postby fh2000 » Thu Jan 31, 2013 2:36 pm

The letter that I received does not say that I had requested or approved such action. It simply says "Please examine this statement carefully to confirm the changes made to your account are accurate."

Then a table showing
CHANGE OUT
....

CHANGE IN
.....


The change happened for sure. The representative has cancelled this move, and gave me a confirmation #. She also changed my payroll allocation back to original, and gave me a confirmation # on that.

I do not think our company (a fortune 30 megacorp) would do this for all her employees. Somewhere, somehow, someone moved my account to "Managed".
I guess I am here to give everyone a heads-up to check your Vanguard account to make sure it does not happen to yours.
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Re: vanguard moved my 401K to "Managed" without my consent

Postby mack123 » Thu Jan 31, 2013 2:44 pm

No, it's very possible that the employer did elect that for you. Source: used to work as 401k call center rep.
I should say that virtually no decision about your plan is the recordkeepers(vanguard). The employer makes all the decisions about the rules, the loans, the w/ds, the fund selection, the advice options, etc.

Although I completely agree, what happened stinks
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Re: vanguard moved my 401K to "Managed" without my consent

Postby JamesSFO » Thu Jan 31, 2013 2:48 pm

fh2000 wrote:I do not think our company (a fortune 30 megacorp) would do this for all her employees. Somewhere, somehow, someone moved my account to "Managed".
I guess I am here to give everyone a heads-up to check your Vanguard account to make sure it does not happen to yours.


This is NOT a standard VG offered service, so it is definitely something about your 401K plan.

EDIT to clarify, apparently for 401K plans there is a VG branded offering of Financial Engines that can be paid for.
Last edited by JamesSFO on Thu Jan 31, 2013 3:10 pm, edited 1 time in total.
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Re: vanguard moved my 401K to "Managed" without my consent

Postby mack123 » Thu Jan 31, 2013 2:50 pm

The program is called vanguard managed account program, VMAP. Employers have the option to select this as an advice feature for their plan. There may be promotions from time to time.. They'll send a letter and say unless you opt out, your account will have this feature going forward. This is what happened to OP. It's not Vanguard - VG doesn't care about your 401k and what funds you pick. They offer an advice program, your employer selected it, and decided that the best way to advertise it was to make it an opt out program.
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Re: vanguard moved my 401K to "Managed" without my consent

Postby fh2000 » Thu Jan 31, 2013 2:56 pm

We have two family members who work for the same megacorp, though only one 401K account got moved. Not sure what criteria that triggered this.
The lesson learned here is not to throw away garbage mails without checking, or delete all emails without reading, I guess.
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Re: vanguard moved my 401K to "Managed" without my consent

Postby JamesSFO » Thu Jan 31, 2013 2:57 pm

mack123 wrote:The program is called vanguard managed account program, VMAP. Employers have the option to select this as an advice feature for their plan. There may be promotions from time to time.. They'll send a letter and say unless you opt out, your account will have this feature going forward. This is what happened to OP. It's not Vanguard - VG doesn't care about your 401k and what funds you pick. They offer an advice program, your employer selected it, and decided that the best way to advertise it was to make it an opt out program.


That's my guess.
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Re: vanguard moved my 401K to "Managed" without my consent

Postby mack123 » Thu Jan 31, 2013 2:58 pm

Which sucks, but that's how it goes sometimes. You can probably fax in your trade request as opposed to mailing it and get it rectified today.
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Re: vanguard moved my 401K to "Managed" without my consent

Postby JamesSFO » Thu Jan 31, 2013 3:11 pm

fh2000 wrote:We have two family members who work for the same megacorp, though only one 401K account got moved. Not sure what criteria that triggered this.
The lesson learned here is not to throw away garbage mails without checking, or delete all emails without reading, I guess.


Quite important lesson, while it is possible that the 401K record keeper messed up or misinterpreted a request, it is highly likely there was some correspondence about this.
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