Is it risky to have all retirement savings with vanguard?

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minnesota315
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Is it risky to have all retirement savings with vanguard?

Post by minnesota315 » Thu Oct 25, 2018 7:36 pm

Hello! I'd love to hear some of your opinions on this. Does anyone view it as risky to have all of our retirement savings in vanguard accounts? My 401k, my husbands roth IRA, and our combined brokerage account. The only funds we have outside of this are my husbands teacher pension fund. And our bank checking account and small bank savings account.

Is it wise to have some funds in vanguard + another company like Fidelity? Or is it safe to have it all 100% through vanguard?

The underlying fear (which may be irrational) is something like: "what if vanguard goes out of business and we lose all our money?"

Would love to hear your thoughts and why. Thank you!

Ron Scott
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Re: Is it risky to have all retirement savings with vanguard?

Post by Ron Scott » Thu Oct 25, 2018 7:42 pm

I doubt VG will go out of business and wouldn't take action to prevent losses on that account.

I have no doubt they are constantly being hacked or are at least thwarting attempts all the time. Who knows what a good hack could do, at least in the short term? I think it's a valid approach to diversify institutions and have 25% of so of your finds elsewhere.

Others obviously disagree and they will post too.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

All Seasons
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Re: Is it risky to have all retirement savings with vanguard?

Post by All Seasons » Thu Oct 25, 2018 7:45 pm

I wouldn't say it's risky per se, but it's not a bad idea to put some money into another institution -- just in case.

You just never know what can happen, and having another account at a different firm can give you all kinds of opportunities to see and hear different perspectives, find good deals on various services, etc.
The market portfolio is always a legitimate portfolio.

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vineviz
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Re: Is it risky to have all retirement savings with vanguard?

Post by vineviz » Thu Oct 25, 2018 7:45 pm

minnesota315 wrote:
Thu Oct 25, 2018 7:36 pm
Hello! I'd love to hear some of your opinions on this. Does anyone view it as risky to have all of our retirement savings in vanguard accounts? My 401k, my husbands roth IRA, and our combined brokerage account. The only funds we have outside of this are my husbands teacher pension fund. And our bank checking account and small bank savings account.

Is it wise to have some funds in vanguard + another company like Fidelity? Or is it safe to have it all 100% through vanguard?

The underlying fear (which may be irrational) is something like: "what if vanguard goes out of business and we lose all our money?"

Would love to hear your thoughts and why. Thank you!
Don’t worry.

The short version is that Vanguard doesn’t HAVE your money: by law, your money is sequestered with an independent (and regulated) custodian.

Vanguard isn’t going out of business, but even if they did you would not lose a penny.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Misenplace
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Re: Is it risky to have all retirement savings with vanguard?

Post by Misenplace » Thu Oct 25, 2018 7:51 pm

Ha! Where you are is where I eventually plan to be. I have accounts spread across Vanguard, Fido, a Big Bad Brokerage Bank, our local Wells Fargo, an on-line savings bank for our emergency fund, two different spouse's pension accounts, and two different HSAs. For various reasons I can't close a lot of those accounts. I suppose I could close Ally but their web interface and customer service are just so great. My 10 year plan is to eventually cut back to Vanguard and our local Wells Fargo.

Bottom line, I think Vanguard and a bank and a pension account is plenty of redundancy for a temporary issue at any one. Also, my instinct is that VG is not going to go out of business- they are wildly successful. As they should be with the quality products they offer.

srt7
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Re: Is it risky to have all retirement savings with vanguard?

Post by srt7 » Thu Oct 25, 2018 7:55 pm

Is it risky to have all retirement savings with vanguard?
No

what if vanguard goes out of business and we lose all our money?
Even if Vanguard goes out of business it won't happen overnight. So you will have enough time to sell your funds and transfer it in to Fidelity etc.

Is it risky to have all my money in stock market?
Yes

Just my 2 cents.
I can't think of anything more luxurious than owning my time. - remomnyc

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Re: Is it risky to have all retirement savings with vanguard?

Post by Grt2bOutdoors » Thu Oct 25, 2018 7:56 pm

minnesota315 wrote:
Thu Oct 25, 2018 7:36 pm
Hello! I'd love to hear some of your opinions on this. Does anyone view it as risky to have all of our retirement savings in vanguard accounts? My 401k, my husbands roth IRA, and our combined brokerage account. The only funds we have outside of this are my husbands teacher pension fund. And our bank checking account and small bank savings account.

Is it wise to have some funds in vanguard + another company like Fidelity? Or is it safe to have it all 100% through vanguard?

The underlying fear (which may be irrational) is something like: "what if vanguard goes out of business and we lose all our money?"

Would love to hear your thoughts and why. Thank you!
First, Vanguard is the management company which itself is actually owned by the mutual funds themselves. Second, assets held in the mutual funds are yours, they are held in custody banks (highly rated, financially strong banks - read the fund annual report to find out who is holding the funds actual security holdings) those banks essentially are safekeeping the fund shareholders money. Third, 401k money is governed by ERISA which has very strict rules around retirement funds including the safekeeping of those assets.

The biggest risk in today’s world that I can see is the risk of technology failures. Failure to be able to view your account, transact in your account, failure to communicate with the investment management company (when one’s webpage is inaccessible or you can’t get through via email or a phone call), threat of a cyber based attack where outsiders attempt to redeem shares that you have NOT authorized.

Those are the real risks and they are industry wide risks. In other words, I believe any concerns I may have are not Vanguard specific, rather the entire financial system is facing some aspects of these risks on a daily basis. That said, there are tremendous resources invested in significantly preventing these risks from materializing including staff, software, cutting edge forensics, data management, built-in business continuity plans, etc. With a significant portion of the world economy attributed to technology one can see the amount of resources dedicated to this area as growing, that should allay one’s concerns that risks are not manageable. However, feel free to use 1 or more providers if it lets you sleep better at night.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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tadamsmar
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Re: Is it risky to have all retirement savings with vanguard?

Post by tadamsmar » Thu Oct 25, 2018 8:23 pm

I think the risks are small.

Perhaps the biggest risk is that your account would get hacked and you would be held responsible for it. But I don't know of any publicly revealed cases where a private brokerage our mutual fund failed to reimburse a hack. It is the case that there are no regulatory guarantees of that not happening. You have some level of responsibility for the security of your login credentials and for monitoring your account for fraud:

https://personal.vanguard.com/us/help/S ... ontent.jsp

All mutual fund companies put some responsibility on you. If you have all your money with one firm then you are depending on the procedures and decisions of that one firm.

boombaz
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Re: Is it risky to have all retirement savings with vanguard?

Post by boombaz » Thu Oct 25, 2018 11:59 pm

The wiki has a useful article on this topic: https://www.bogleheads.org/wiki/Vanguard_safety

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JoMoney
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Re: Is it risky to have all retirement savings with vanguard?

Post by JoMoney » Fri Oct 26, 2018 12:35 am

If company A has a 10% risk of being "hacked"
And company B has a 10% risk of being "hacked"
Does splitting your assets across the two, halve the probability you'll be hacked, double the probability you'll be hacked, or not change the probability at all?

( 1/10 ) / 2 =

( 1/10 ) + ( 1/10 ) =

.5 * ( 1/10 ) + .5 * ( 1/10 ) =


I think the answer is it halves the chance that all your money will be impacted at the same time IF we presume hacks are idiosyncratic, uncorrelated and non-systemic... mutually exclusive.
But doubles the chance that some portion of your money will be impacted.
In aggregate the same exposure but a more complex portfolio.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

GmanJeff
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Re: Is it risky to have all retirement savings with vanguard?

Post by GmanJeff » Fri Oct 26, 2018 7:48 am

The patent benefits of consolidation arguably outweigh the minuscule risks.

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Sheepdog
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Re: Is it risky to have all retirement savings with vanguard?

Post by Sheepdog » Fri Oct 26, 2018 8:10 am

I don't have all of my savings with Vanguard, not because of being scared but because of having variable savings vehicles because of diversification. I have all stock and traditional bond funds plus money markets at Vanguard, yes, but I also have CDs, I Bonds, Treasuries somewhere else.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

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goingup
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Re: Is it risky to have all retirement savings with vanguard?

Post by goingup » Fri Oct 26, 2018 8:38 am

I appreciate Taylor Larimore's list of benefits of consolidation

Benefits of having all investments in one company:
1. One familiar statement.
2. Less paperwork.
3. Easier tax preparation.
4. Avoidance of low-balance and other small fees.
5. It's much easier to learn only one company's policies, fees, regulations, etc.
6. With larger holdings it may be possible to qualify for lower costs and premium services (Voyager, Admiral, Flagship).
7. Rebalancing and exchanges are easier.
8. Eliminates 3rd party brokerage.
9. A loyal customer is appreciated and usually treated better.
10. Less chance of errors.
11. Knowledge that Vanguard's fine reputation and low-costs are always working for us.
12. More free time for ourselves.
13. In event of death or disability, it will be much easier for others.

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tadamsmar
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Re: Is it risky to have all retirement savings with vanguard?

Post by tadamsmar » Fri Oct 26, 2018 8:48 am

JoMoney wrote:
Fri Oct 26, 2018 12:35 am
If company A has a 10% risk of being "hacked"
And company B has a 10% risk of being "hacked"
Does splitting your assets across the two, halve the probability you'll be hacked, double the probability you'll be hacked, or not change the probability at all?

( 1/10 ) / 2 =

( 1/10 ) + ( 1/10 ) =

.5 * ( 1/10 ) + .5 * ( 1/10 ) =


I think the answer is it halves the chance that all your money will be impacted at the same time IF we presume hacks are idiosyncratic, uncorrelated and non-systemic... mutually exclusive.
But doubles the chance that some portion of your money will be impacted.
In aggregate the same exposure but a more complex portfolio.
By "hacked" I assume you mean hacked and not reimbursed. Now, consider the chance of losing your whole nest egg. If you put it all at one fiduciary, then the chance is 10%. If you put divide it between two fiduciaries, then the chance is 1% if the events are assumed to be independent and practically mutually exclusive.

A chance of 1 in 10 thousand becomes a chance of 1 in 100 million.

But this assumes independence. Since the hack involves your personal security being breached, you are the single point of failure in some scenarios. The only way to reduce this single point risk is for you to improve your security practices.

But the problem is that there is very little public information on any unreimbursed hacks. It's difficult to quantify the risk.

I have only read about one such incident. I once found a forum (not this forum) post somewhere about an old retiree losing some money at Merril Lynch, I think it was around $25,000. The story was that she failed to detect and report the hack for a long period of time. She was somewhat mentally incompetent and no relative was monitoring her finances. But I have lost track of the citation.

Also, there are old stories of unreimbursed hacks of the TSP. The TSP never offered any kind of reimbursement guarantee for hacks where you are at fault. The TSP is not a private firm like Vanguard, they have a captive audience and they have less need to cater to the customer. Sometime after the hack, TSP stopped allowing online disbursements, you have to do it by mail. (I think I can find citations for this old hack, but not sure I can source all the details that I included here based on my recollection.)

I am not sure if Treasury Direct (also a federal agency) has a reimbursement policy when users are hacked. I think they allow online disbursements using genuine 2FA security. I don't know of any cases of unreimbursed hacks there.
Last edited by tadamsmar on Fri Oct 26, 2018 9:13 am, edited 1 time in total.

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dwickenh
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Re: Is it risky to have all retirement savings with vanguard?

Post by dwickenh » Fri Oct 26, 2018 9:00 am

The risks are that you will have low cost funds with a company you own, and a 0% chance of someone trying to up sell you to a managed fund or annuity. I currently have all of my retirement investments with Vanguard and have no loss of sleep. I will likely open a Fidelity account next year just to check out the competition.

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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Re: Is it risky to have all retirement savings with vanguard?

Post by wolf359 » Fri Oct 26, 2018 9:27 am

minnesota315 wrote:
Thu Oct 25, 2018 7:36 pm
Hello! I'd love to hear some of your opinions on this. Does anyone view it as risky to have all of our retirement savings in vanguard accounts? My 401k, my husbands roth IRA, and our combined brokerage account. The only funds we have outside of this are my husbands teacher pension fund. And our bank checking account and small bank savings account.

Is it wise to have some funds in vanguard + another company like Fidelity? Or is it safe to have it all 100% through vanguard?

The underlying fear (which may be irrational) is something like: "what if vanguard goes out of business and we lose all our money?"

Would love to hear your thoughts and why. Thank you!
I have given this a lot of thought over the years.

I believe Vanguard is highly unlikely to go out of business. The nature of their business and the character of their management is such that they are not leveraged nor pushing very risky business models. However, "highly unlikely" is not impossible. So let's imagine they DO go out of business. What happens to your assets held at a brokerage that goes bankrupt?

The quick answer is that the brokerage is required by FINRA and other regulators to keep their assets and yours separately accounted for. The assets continue to be yours, and will eventually be returned. There is also $500,000 of insurance to cover fraud and theft by the brokerage. For more complete information, see the FINRA website.
http://www.finra.org/investors/alerts/i ... -its-doors

It is more probable that some sort of disruption could occur that could prevent Vanguard from giving you access to your money. This could be an attack on Vanguard (i.e. cyber attack, regulatory problems, accounting problems, computer glitch, etc.). Some major financial firms were headquartered at the World Trade Center. The events of 9/11 may have disrupted their ability to operate. It could also be an attack on you (identity theft, loss of credentials, etc.) While such events will eventually allow you your money back, it may take a while.

It is therefore reasonable to keep an emergency fund separate from your investments. I also maintain an account at a second major brokerage house. Always have a backup plan. The backup plan doesn't have to be as good as your primary plan, but it should be good enough to keep the lights on if things go wrong.

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Re: Is it risky to have all retirement savings with vanguard?

Post by jpdion » Fri Oct 26, 2018 9:53 am

goingup wrote:
Fri Oct 26, 2018 8:38 am
I appreciate Taylor Larimore's list of benefits of consolidation

Benefits of having all investments in one company:
1. One familiar statement.
2. Less paperwork.
3. Easier tax preparation.
4. Avoidance of low-balance and other small fees.
5. It's much easier to learn only one company's policies, fees, regulations, etc.
6. With larger holdings it may be possible to qualify for lower costs and premium services (Voyager, Admiral, Flagship).
7. Rebalancing and exchanges are easier.
8. Eliminates 3rd party brokerage.
9. A loyal customer is appreciated and usually treated better.
10. Less chance of errors.
11. Knowledge that Vanguard's fine reputation and low-costs are always working for us.
12. More free time for ourselves.
13. In event of death or disability, it will be much easier for others.
I'd like to mention that only at Vanguard are you an "owner/customer" and not just a "customer" because of Vanguard's unique mutual ownership structure. Vanguard is "us" in that sense.

stocknoob4111
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Re: Is it risky to have all retirement savings with vanguard?

Post by stocknoob4111 » Fri Oct 26, 2018 11:34 am

I have 75% of my net worth with VG, I have virtually zero worries. It's such a long shot that they will fold that it's not even worth thinking about.

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Re: Is it risky to have all retirement savings with vanguard?

Post by jcar » Fri Oct 26, 2018 12:04 pm

It is my understanding that the only potential adverse exposure is if you hold cash. I thought all funds and individual stocks are held by a custodian so if Vanguard or whomever collapses those holdings would still be in place. The cash perhaps is even in custodial care.

NotTooDeepLearning
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Re: Is it risky to have all retirement savings with vanguard?

Post by NotTooDeepLearning » Fri Oct 26, 2018 6:01 pm

JoMoney wrote:
Fri Oct 26, 2018 12:35 am
If company A has a 10% risk of being "hacked"
And company B has a 10% risk of being "hacked"
Does splitting your assets across the two, halve the probability you'll be hacked, double the probability you'll be hacked, or not change the probability at all?

( 1/10 ) / 2 =

( 1/10 ) + ( 1/10 ) =

.5 * ( 1/10 ) + .5 * ( 1/10 ) =


I think the answer is it halves the chance that all your money will be impacted at the same time IF we presume hacks are idiosyncratic, uncorrelated and non-systemic... mutually exclusive.
But doubles the chance that some portion of your money will be impacted.
In aggregate the same exposure but a more complex portfolio.

Someone needs to brush up on their probability theory :wink: The statistical term we are interested in here is independence. Two events are independent if the occurrence of one event does not influence the probability of the other event occurring. I think it's fair to assume brokerages getting hacked would be independent from each other--unless it's a state actor with a lot of resources doing something big.

Assuming independence, and your given probabilities, the probability all your money is hacked is actually (1/10) * (1/10) = 1/100, a tenth of the probability associated with having all your money at one institutional.

Mutually exclusive means two events cannot occur at the same time. Hackings in general are not mutually exclusive events.

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Re: Is it risky to have all retirement savings with vanguard?

Post by GAAP » Fri Oct 26, 2018 6:08 pm

minnesota315 wrote:
Thu Oct 25, 2018 7:36 pm
The underlying fear (which may be irrational) is something like: "what if vanguard goes out of business and we lose all our money?"
I don't find that fear to be reasonable, but my wife does. Her assets are managed in a different manner than mine.

The concern that I do have is for a short-term issue accessing any given account -- that in turn leads me to wanting to hold some reserve funds in an additional checking account.

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JoMoney
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Re: Is it risky to have all retirement savings with vanguard?

Post by JoMoney » Fri Oct 26, 2018 6:21 pm

NotTooDeepLearning wrote:
Fri Oct 26, 2018 6:01 pm
JoMoney wrote:
Fri Oct 26, 2018 12:35 am
If company A has a 10% risk of being "hacked"
And company B has a 10% risk of being "hacked"
Does splitting your assets across the two, halve the probability you'll be hacked, double the probability you'll be hacked, or not change the probability at all?

( 1/10 ) / 2 =

( 1/10 ) + ( 1/10 ) =

.5 * ( 1/10 ) + .5 * ( 1/10 ) =


I think the answer is it halves the chance that all your money will be impacted at the same time IF we presume hacks are idiosyncratic, uncorrelated and non-systemic... mutually exclusive.
But doubles the chance that some portion of your money will be impacted.
In aggregate the same exposure but a more complex portfolio.

Someone needs to brush up on their probability theory :wink: The statistical term we are interested in here is independence. Two events are independent if the occurrence of one event does not influence the probability of the other event occurring. I think it's fair to assume brokerages getting hacked would be independent from each other--unless it's a state actor with a lot of resources doing something big.

Assuming independence, and your given probabilities, the probability all your money is hacked is actually (1/10) * (1/10) = 1/100, a tenth of the probability associated with having all your money at one institutional.

Mutually exclusive means two events cannot occur at the same time. Hackings in general are not mutually exclusive events.
So if the events are independent (which may not be the case), the probability of both accounts being impacted at the same time would be
(1/10) * (1/10) = 1/100
What about the chance that some of the money (one or the other account) get's impacted?
( 1/10 ) + ( 1/10 ) = 2/10 = 1/5 , is that correct?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

NotTooDeepLearning
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Re: Is it risky to have all retirement savings with vanguard?

Post by NotTooDeepLearning » Fri Oct 26, 2018 6:24 pm

JoMoney wrote:
Fri Oct 26, 2018 6:21 pm

So if the events are independent (which may not be the case), the probability of both accounts being impacted would be
(1/10) * (1/10) = 1/100
What about the chance that some of the money (one or the other account) get's impacted?
( 1/10 ) + ( 1/10 ) = 2/10 = 1/5 , is that correct?
Yeah the chance some money is hacked does double.

Edit: Actually it would be 1/10 + 1/10 - 1/100 = .19 so not quite doubling but close. Intuition consistently fails me.
Last edited by NotTooDeepLearning on Fri Oct 26, 2018 6:28 pm, edited 1 time in total.

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Re: Is it risky to have all retirement savings with vanguard?

Post by lukestuckenhymer » Fri Oct 26, 2018 6:25 pm

Online banking is very well protected by Two-Factor Authentication. I don't lose a minute of sleep over online banking or investing.
Credit cards don't have two-factor protection, and you should always keep a watch out for fraud. I've had two CC #s swiped in the last two months.

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Re: Is it risky to have all retirement savings with vanguard?

Post by caffeperfavore » Fri Oct 26, 2018 6:35 pm

I think it's unlikely for there to ever be an issue with Vanguard and most of the posters here are likely right. Still, I don't like having a single point of failure for all of our investments, so we've spread things out a bit, although the slim majority is still in Vanguard. It's not much trouble for us to keep money elsewhere, and you never know, crazy stuff sometimes happens. Spreading money across a couple or more institutions makes me feel a bit better.

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Re: Is it risky to have all retirement savings with vanguard?

Post by arcticpineapplecorp. » Fri Oct 26, 2018 6:48 pm

minnesota315 welcome to the group. You might not have seen this wiki page titled "Vanguard Safety". Part of this wiki page was written by Mel Lindauer and is titled, "What if Vanguard went broke?":

https://www.bogleheads.org/wiki/Vanguard_safety

Hopefully that link answers your questions/concerns. If not, what other questions/concerns do you have that weren't answered?

Also, I'd recommend if you have a question to type it into the search bar (one appears on each page at bogleheads). Chances are most questions have been asked and exhaustively answered already. Then if you don't find your question asked or answered sufficiently, ask away!
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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JoMoney
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Re: Is it risky to have all retirement savings with vanguard?

Post by JoMoney » Fri Oct 26, 2018 6:53 pm

NotTooDeepLearning wrote:
Fri Oct 26, 2018 6:24 pm
JoMoney wrote:
Fri Oct 26, 2018 6:21 pm

So if the events are independent (which may not be the case), the probability of both accounts being impacted would be
(1/10) * (1/10) = 1/100
What about the chance that some of the money (one or the other account) get's impacted?
( 1/10 ) + ( 1/10 ) = 2/10 = 1/5 , is that correct?
Yeah the chance some money is hacked does double.

Edit: Actually it would be 1/10 + 1/10 - 1/100 = .19 so not quite doubling but close. Intuition consistently fails me.
It seems like it should be + 1/100 , ( the chance of one , plus the chance of the other , plus the chance of both at the same time ), no?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Is it risky to have all retirement savings with vanguard?

Post by bengal22 » Fri Oct 26, 2018 7:16 pm

I would not feel comfortable having all of my assets in one location. I have it spread 60/40 between fidelity and vanguard. I believe vanguards ownership structure is more a marketing ploy and has zero impact on my financial strategy.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

minnesota315
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Re: Is it risky to have all retirement savings with vanguard?

Post by minnesota315 » Fri Oct 26, 2018 8:22 pm

Thanks for the opinions, all! Lots to consider... hmmm...

RickBoglehead
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Re: Is it risky to have all retirement savings with vanguard?

Post by RickBoglehead » Fri Oct 26, 2018 8:31 pm

Right, a marketing ploy...

I have 95% at Vanguard. If they had top notch banking, I'd have 100%.
Last edited by RickBoglehead on Fri Oct 26, 2018 10:26 pm, edited 1 time in total.

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Phineas J. Whoopee
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Re: Is it risky to have all retirement savings with vanguard?

Post by Phineas J. Whoopee » Fri Oct 26, 2018 8:56 pm

Hi minnesota315.

Your concern is not misplaced. It's always good to look out for systemic risks.

I wrote about what I do in this post. It isn't a prescription for everybody, but it's one approach.

PJW

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Re: Is it risky to have all retirement savings with vanguard?

Post by obafgkm » Fri Oct 26, 2018 9:06 pm

goingup wrote:
Fri Oct 26, 2018 8:38 am
I appreciate Taylor Larimore's list of benefits of consolidation

Benefits of having all investments in one company:
1. One familiar statement.
2. Less paperwork.
3. Easier tax preparation.
4. Avoidance of low-balance and other small fees.
5. It's much easier to learn only one company's policies, fees, regulations, etc.
6. With larger holdings it may be possible to qualify for lower costs and premium services (Voyager, Admiral, Flagship).
7. Rebalancing and exchanges are easier.
8. Eliminates 3rd party brokerage.
9. A loyal customer is appreciated and usually treated better.
10. Less chance of errors.
11. Knowledge that Vanguard's fine reputation and low-costs are always working for us.
12. More free time for ourselves.
13. In event of death or disability, it will be much easier for others.
Numbers 6 and 11, as originally presented, are not "benefits of having all investments in one company." They are benefits of having all investments in Vanguard. In my opinion, bogleheads.org should not be a shill for Vanguard, or seem to make Vanguard the default brokerage company.

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JoMoney
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Re: Is it risky to have all retirement savings with vanguard?

Post by JoMoney » Fri Oct 26, 2018 9:23 pm

obafgkm wrote:
Fri Oct 26, 2018 9:06 pm
... In my opinion, bogleheads.org should not be a shill for Vanguard, or seem to make Vanguard the default brokerage company.
Do you know of any other brokerage / fund company that has a structure of being truly "mutual", offering funds at cost, and incentives to the agents for cutting costs ?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Is it risky to have all retirement savings with vanguard?

Post by Nate79 » Fri Oct 26, 2018 9:27 pm

There was a thread on here in the not so distant past where a case of what was either identity theft or insider theft of a posters relative's (?) retirement money went missing from their account. I recall the process was quite long but they eventually got it back. Perhaps someone remembers that thread? It was quite facinating.

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Re: Is it risky to have all retirement savings with vanguard?

Post by xb7 » Fri Oct 26, 2018 9:57 pm

I'm moving down this same road, and I think like many of us I've had the same thought/concern.

I too think that the benefits outweigh the potential risk, and would add that two things factor in as I get older:

(1) the benefit of simplicity is higher when I get old enough that someone else might have to manage the money and/or when I die and the proceeds are to be passed on to my heirs.

(2) One asset that will always be external to Vanguard is the value of my social security income, so there's at least something there to give some buffer should anything happen to temporarily lock me out of access to Vanguard assets.

And as someone else pointed out, banking at Vanguard is a little limited, so I think I'll always have some assets outside of Vanguard in that regards too. Then one can also add tangible assets --- I wouldn't care to borrow against my house, but could do so if absolutely required.

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Re: Is it risky to have all retirement savings with vanguard?

Post by obafgkm » Fri Oct 26, 2018 10:05 pm

obafgkm wrote:
Fri Oct 26, 2018 9:06 pm
... In my opinion, bogleheads.org should not be a shill for Vanguard, or seem to make Vanguard the default brokerage company.
JoMoney wrote:
Fri Oct 26, 2018 9:23 pm
Do you know of any other brokerage / fund company that has a structure of being truly "mutual", offering funds at cost, and incentives to the agents for cutting costs ?
No, but I think we can agree that
(1) the question is not germane to what I wrote (or even what was quoted here), and

(2) Mr. Larimore's "Benefits of having all investments in one company", as written, is not general but specific to a particular company. If they were presented as "benefits of having all investments in (a particular company)" I likely would not have commented. I acknowledge Mr. Larimore himself did not post the list in this thread.

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Re: Is it risky to have all retirement savings with vanguard?

Post by tadamsmar » Sat Oct 27, 2018 4:47 pm

JoMoney wrote:
Fri Oct 26, 2018 9:23 pm
obafgkm wrote:
Fri Oct 26, 2018 9:06 pm
... In my opinion, bogleheads.org should not be a shill for Vanguard, or seem to make Vanguard the default brokerage company.
Do you know of any other brokerage / fund company that has a structure of being truly "mutual", offering funds at cost, and incentives to the agents for cutting costs ?
TIAA is a non-profit. But I know very little about them.

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tadamsmar
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Re: Is it risky to have all retirement savings with vanguard?

Post by tadamsmar » Sun Oct 28, 2018 1:51 pm

Nate79 wrote:
Fri Oct 26, 2018 9:27 pm
There was a thread on here in the not so distant past where a case of what was either identity theft or insider theft of a posters relative's (?) retirement money went missing from their account. I recall the process was quite long but they eventually got it back. Perhaps someone remembers that thread? It was quite facinating.
Probably this one:

viewtopic.php?f=2&t=228799

PFInterest
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Re: Is it risky to have all retirement savings with vanguard?

Post by PFInterest » Sun Oct 28, 2018 1:53 pm

minnesota315 wrote:
Thu Oct 25, 2018 7:36 pm
Hello! I'd love to hear some of your opinions on this. Does anyone view it as risky to have all of our retirement savings in vanguard accounts? My 401k, my husbands roth IRA, and our combined brokerage account. The only funds we have outside of this are my husbands teacher pension fund. And our bank checking account and small bank savings account.

Is it wise to have some funds in vanguard + another company like Fidelity? Or is it safe to have it all 100% through vanguard?

The underlying fear (which may be irrational) is something like: "what if vanguard goes out of business and we lose all our money?"

Would love to hear your thoughts and why. Thank you!
you are more likely to encounter an electronic problem preventing access to your money than anything.

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Re: Is it risky to have all retirement savings with vanguard?

Post by bikechuck » Mon Oct 29, 2018 10:52 am

GmanJeff wrote:
Fri Oct 26, 2018 7:48 am
The patent benefits of consolidation arguably outweigh the minuscule risks.
After a career working in financial management I disagree with this. Any firm can have an occasional systems failure or become the target of a cyber attack. It is likely that in these cases the problems will eventually be solved without long term consequences for individual investors.

However if and when the above incidents happen, as they eventually will for nearly all firms, there is a risk that there could be periods of disruption where individuals are without access to their funds. Why not mitigate this risk by keeping funds in two or more financial institutions?

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Re: Is it risky to have all retirement savings with vanguard?

Post by tennisplyr » Tue Oct 30, 2018 7:42 am

Ever heard the quote about "putting all of your eggs in one basket"? Obviously, there are rational and emotional elements to this question.
Those who move forward with a happy spirit will find that things always work out.

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Re: Is it risky to have all retirement savings with vanguard?

Post by NotTooDeepLearning » Fri Nov 02, 2018 4:53 pm

JoMoney wrote:
Fri Oct 26, 2018 6:53 pm
NotTooDeepLearning wrote:
Fri Oct 26, 2018 6:24 pm
JoMoney wrote:
Fri Oct 26, 2018 6:21 pm

So if the events are independent (which may not be the case), the probability of both accounts being impacted would be
(1/10) * (1/10) = 1/100
What about the chance that some of the money (one or the other account) get's impacted?
( 1/10 ) + ( 1/10 ) = 2/10 = 1/5 , is that correct?
Yeah the chance some money is hacked does double.

Edit: Actually it would be 1/10 + 1/10 - 1/100 = .19 so not quite doubling but close. Intuition consistently fails me.
It seems like it should be + 1/100 , ( the chance of one , plus the chance of the other , plus the chance of both at the same time ), no?
The "total" probability of one individual event includes the possibility of the joint. So when we add the individual probabilities we count the joint event twice. This is usually illustrated with a venn diagram of two overlapping circles, where the overlap is the joint event. If summing were analogous to coloring, if you color the full individual circles, the overlap would be colored twice. Since we want to count the total area just once, we get that by subtracting the overlap.

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Re: Is it risky to have all retirement savings with vanguard?

Post by nesdog » Fri Nov 02, 2018 9:47 pm

FWIW, my wife and I have discussed this as well. After a lifetime of jobs, we have multiple tax deferred accounts with multiple vendors.
In our case, we are consolidating our funds with both Fidelity and Vanguard, both of which already had some of our investments for a long time. We are in the process right now of moving items and will end up with just the two firms (instead of 4 or 5).

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JoMoney
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Re: Is it risky to have all retirement savings with vanguard?

Post by JoMoney » Fri Nov 02, 2018 11:07 pm

NotTooDeepLearning wrote:
Fri Nov 02, 2018 4:53 pm
...
The "total" probability of one individual event includes the possibility of the joint. So when we add the individual probabilities we count the joint event twice. This is usually illustrated with a venn diagram of two overlapping circles, where the overlap is the joint event. If summing were analogous to coloring, if you color the full individual circles, the overlap would be colored twice. Since we want to count the total area just once, we get that by subtracting the overlap.
Thank you for the great explanation!
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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