I want to leave Vanguard

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Russianbear
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I want to leave Vanguard

Post by Russianbear » Wed Mar 13, 2019 10:17 am

Vanguard has made it incredibly difficult for me to do business with them. They put a 90 day restriction on my account for freeriding. I made an honest mistake. I deposited money to buy 1, ONE, share of VTI into my regular account. Somehow I accidentally purchased the share in my IRA. I clicked sell and then bought it in my personal account.
Anyhow, it now takes a week or more for money I deposit to be available to purchase in my IRA. I deposited $300 on Friday. I still can not buy VTSAX. I called, the lady tells me it will be available Friday. It doesn't take a week for money to be available in the electronic age. Morevoer she tells me nobody can lift the 90 day restriction. It's an SEC thing. Per their website, they make it sound like it's their choice. [OT comment removed by moderator prudent] Who whould I transfer my IRA to? Schwab? Whos good and low cost?

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fortfun
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Re: I want to leave Vanguard

Post by fortfun » Wed Mar 13, 2019 10:20 am

Russianbear wrote:
Wed Mar 13, 2019 10:17 am
Vanguard has made it incredibly difficult for me to do business with them. They put a 90 day restriction on my account for freeriding. I made an honest mistake. I deposited money to buy 1, ONE, share of VTI into my regular account. Somehow I accidentally purchased the share in my IRA. I clicked sell and then bought it in my personal account.
Anyhow, it now takes a week or more for money I deposit to be available to purchase in my IRA. I deposited $300 on Friday. I still can not buy VTSAX. I called, the lady tells me it will be available Friday. It doesn't take a week for money to be available in the electronic age. Morevoer she tells me nobody can lift the 90 day restriction. It's an SEC thing. Per their website, they make it sound like it's their choice. [OT comment removed by moderator prudent] Who whould I transfer my IRA to? Schwab? Whos good and low cost?
Fidelity. However, it sounds like the same thing would have happened there.

onourway
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Re: I want to leave Vanguard

Post by onourway » Wed Mar 13, 2019 10:21 am

I don’t understand the problem. I don’t deposit any money into my Vanguard account prior to buying. I purchase with my external bank as the funding source and Vanguard then floats me the money while they make the ACH transfer.

If you went afoul of SEC rules, you would have had the same issue at any brokerage.

Topic Author
Russianbear
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Re: I want to leave Vanguard

Post by Russianbear » Wed Mar 13, 2019 10:24 am

onourway wrote:
Wed Mar 13, 2019 10:21 am
I don’t understand the problem. I don’t deposit any money into my Vanguard account prior to buying. I purchase with my external bank as the funding source and Vanguard then floats me the money while they make the ACH transfer.

If you went afoul of SEC rules, you would have had the same issue at any brokerage.
1. It was an honest mistake.
2. ONE share. If I were trying to scam the system, don't you think I would've bought more than one?
3. It's at their discretion.
4. I did deposit prior to buying. The deposit went into the regular account, which is where I intended to purchase the share of VTI. The purchase of the share of VTI, for some reason, went through the IRA. I think I misclicked when making the purchase.

onourway
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Re: I want to leave Vanguard

Post by onourway » Wed Mar 13, 2019 10:26 am

Russianbear wrote:
Wed Mar 13, 2019 10:24 am
onourway wrote:
Wed Mar 13, 2019 10:21 am
I don’t understand the problem. I don’t deposit any money into my Vanguard account prior to buying. I purchase with my external bank as the funding source and Vanguard then floats me the money while they make the ACH transfer.

If you went afoul of SEC rules, you would have had the same issue at any brokerage.
1. It was an honest mistake.
2. ONE share. If I were trying to scam the system, don't you think I would've bought more than one?
3. It's at their discretion.
4. I did deposit prior to buying. The deposit went into the regular account, which is where I intended to purchase the share of VTI. The purchase of the share of VTI, for some reason, went through the IRA. I think I misclicked when making the purchase.
It sounds like, given the dollar amounts involved, that you are likely a new investor. From Vanguard’s perspective this may have been seen as ‘testing the waters.’ I would take it as an extremely inexpensive lesson learned. The fact that you feel it was an honest mistake doesn’t really factor into their decision.

grettman
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Re: I want to leave Vanguard

Post by grettman » Wed Mar 13, 2019 10:30 am

Leave vanguard for having a crappy website and bad customer service and etc but not for this...

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Wiggums
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Re: I want to leave Vanguard

Post by Wiggums » Wed Mar 13, 2019 10:31 am

Russianbear wrote:
Wed Mar 13, 2019 10:17 am
Vanguard has made it incredibly difficult for me to do business with them. They put a 90 day restriction on my account for freeriding. I made an honest mistake. I deposited money to buy 1, ONE, share of VTI into my regular account. Somehow I accidentally purchased the share in my IRA. I clicked sell and then bought it in my personal account.
Anyhow, it now takes a week or more for money I deposit to be available to purchase in my IRA. I deposited $300 on Friday. I still can not buy VTSAX. I called, the lady tells me it will be available Friday. It doesn't take a week for money to be available in the electronic age. Morevoer she tells me nobody can lift the 90 day restriction. It's an SEC thing. Per their website, they make it sound like it's their choice. [OT comment removed by moderator prudent] Who whould I transfer my IRA to? Schwab? Whos good and low cost?
In a cash account, a free riding violation occurs when the investor sells a stock that was purchased with unsettled funds. The Federal Reserve Board's Regulation T requires brokers to "freeze" accounts that commit freeriding violations for 90 days.

You are free to move your money, but this would be enforced at other brokerage houses. What’s important is that you don’t repeat this mistake. Vanguard called me once about a violation. I thanked them for educating me. As s general statement, I woukd hope that all brokerage houses enforce the SEC rules.
Last edited by Wiggums on Wed Mar 13, 2019 10:36 am, edited 2 times in total.

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FrugalInvestor
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Re: I want to leave Vanguard

Post by FrugalInvestor » Wed Mar 13, 2019 10:33 am

I'm pleased that Vanguard abides by SEC rules.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

quantAndHold
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Re: I want to leave Vanguard

Post by quantAndHold » Wed Mar 13, 2019 10:36 am

I got that penalty for freeriding once. It was my fault. As I recall, one of those annoying screens came up to tell you you’re doing something wrong, but I ignored it. It was painful, and wasn’t a mistake I made a second time.

Sorry, but that’s not Vanguard’s rule, and you would be in the penalty box at any brokerage.

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GoldStar
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Re: I want to leave Vanguard

Post by GoldStar » Wed Mar 13, 2019 10:41 am

Fidelity. You can transfer your IRA there and use the ZERO-ER Index funds.

Topic Author
Russianbear
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Re: I want to leave Vanguard

Post by Russianbear » Wed Mar 13, 2019 10:42 am

quantAndHold wrote:
Wed Mar 13, 2019 10:36 am
I got that penalty for freeriding once. It was my fault. As I recall, one of those annoying screens came up to tell you you’re doing something wrong, but I ignored it. It was painful, and wasn’t a mistake I made a second time.

Sorry, but that’s not Vanguard’s rule, and you would be in the penalty box at any brokerage.
I don't agree that it takes a week for funds to settle in an account. This is the digital age.

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vineviz
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Re: I want to leave Vanguard

Post by vineviz » Wed Mar 13, 2019 10:45 am

Russianbear wrote:
Wed Mar 13, 2019 10:42 am
quantAndHold wrote:
Wed Mar 13, 2019 10:36 am
I got that penalty for freeriding once. It was my fault. As I recall, one of those annoying screens came up to tell you you’re doing something wrong, but I ignored it. It was painful, and wasn’t a mistake I made a second time.

Sorry, but that’s not Vanguard’s rule, and you would be in the penalty box at any brokerage.
I don't agree that it takes a week for funds to settle in an account. This is the digital age.
There's nothing to agree or disagree with: the SEC has mandated this penalty so Vanguard has to enforce it. If you move the account within 90 days of the violation, the new brokerage will apply the same restrictions on your account.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

Topic Author
Russianbear
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Re: I want to leave Vanguard

Post by Russianbear » Wed Mar 13, 2019 10:47 am

vineviz wrote:
Wed Mar 13, 2019 10:45 am
Russianbear wrote:
Wed Mar 13, 2019 10:42 am
quantAndHold wrote:
Wed Mar 13, 2019 10:36 am
I got that penalty for freeriding once. It was my fault. As I recall, one of those annoying screens came up to tell you you’re doing something wrong, but I ignored it. It was painful, and wasn’t a mistake I made a second time.

Sorry, but that’s not Vanguard’s rule, and you would be in the penalty box at any brokerage.
I don't agree that it takes a week for funds to settle in an account. This is the digital age.
There's nothing to agree or disagree with: the SEC has mandated this penalty so Vanguard has to enforce it. If you move the account within 90 days of the violation, the new brokerage will apply the same restrictions on your account.
The SEC also makes exceptions for "good faith" violations. Also, it does not take 5 days for funds to be available for use.

onourway
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Re: I want to leave Vanguard

Post by onourway » Wed Mar 13, 2019 10:49 am

Russianbear wrote:
Wed Mar 13, 2019 10:42 am
quantAndHold wrote:
Wed Mar 13, 2019 10:36 am
I got that penalty for freeriding once. It was my fault. As I recall, one of those annoying screens came up to tell you you’re doing something wrong, but I ignored it. It was painful, and wasn’t a mistake I made a second time.

Sorry, but that’s not Vanguard’s rule, and you would be in the penalty box at any brokerage.
I don't agree that it takes a week for funds to settle in an account. This is the digital age.
There has to be more to this story. Is this a new account at Vanguard? Or was this a new bank account from which you were making a transfer for the first time? Either of those situations could cause a 7-day settlement time. Further, with all of my banks and brokerages, if the funds are pulled out of the account by an external institution, the funds do take 7 days to settle. If they are pushed from the institution where the funds are coming from, they typically take 24-48 hours.

In any case, as I said above, other than if this is a new account, there is no reason to transfer funds to Vanguard prior to purchasing a fund. You can do this directly via ACH and the transaction will settle that day even though Vanguard will have to wait for the funds to clear via ACH. Transferring the funds first just adds an unnecessary delay.

Admiral
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Re: I want to leave Vanguard

Post by Admiral » Wed Mar 13, 2019 10:58 am

Russianbear wrote:
Wed Mar 13, 2019 10:47 am
vineviz wrote:
Wed Mar 13, 2019 10:45 am
Russianbear wrote:
Wed Mar 13, 2019 10:42 am
quantAndHold wrote:
Wed Mar 13, 2019 10:36 am
I got that penalty for freeriding once. It was my fault. As I recall, one of those annoying screens came up to tell you you’re doing something wrong, but I ignored it. It was painful, and wasn’t a mistake I made a second time.

Sorry, but that’s not Vanguard’s rule, and you would be in the penalty box at any brokerage.
I don't agree that it takes a week for funds to settle in an account. This is the digital age.
There's nothing to agree or disagree with: the SEC has mandated this penalty so Vanguard has to enforce it. If you move the account within 90 days of the violation, the new brokerage will apply the same restrictions on your account.
The SEC also makes exceptions for "good faith" violations. Also, it does not take 5 days for funds to be available for use.
This is not quite correct. Typically settlement is three days. However, it can be three business days, so if your order when in on a Thursday at 4pm, or there was a banking holiday, or market closure for a holiday, 5 days is entirely possible.

I think you're making a mountain out of a molehill. This seems like an honest mistake on your part, Vanguard acted appropriately, and now you understand how the system works. Chalk it up to experience and move on. Life is short.

jebmke
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Re: I want to leave Vanguard

Post by jebmke » Wed Mar 13, 2019 10:58 am

I skipped all the ranting.

To your original question, Fidelity or Schwab would probably be equally good as a substitute.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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TomatoTomahto
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Re: I want to leave Vanguard

Post by TomatoTomahto » Wed Mar 13, 2019 10:59 am

@RussianBear, for a purchase of less than $150, you got your money’s worth of customer support time. I hope you’re happier elsewhere.
Okay, I get it; I won't be political or controversial. The Earth is flat.

Topic Author
Russianbear
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Re: I want to leave Vanguard

Post by Russianbear » Wed Mar 13, 2019 11:00 am

Admiral wrote:
Wed Mar 13, 2019 10:58 am
Russianbear wrote:
Wed Mar 13, 2019 10:47 am
vineviz wrote:
Wed Mar 13, 2019 10:45 am
Russianbear wrote:
Wed Mar 13, 2019 10:42 am
quantAndHold wrote:
Wed Mar 13, 2019 10:36 am
I got that penalty for freeriding once. It was my fault. As I recall, one of those annoying screens came up to tell you you’re doing something wrong, but I ignored it. It was painful, and wasn’t a mistake I made a second time.

Sorry, but that’s not Vanguard’s rule, and you would be in the penalty box at any brokerage.
I don't agree that it takes a week for funds to settle in an account. This is the digital age.
There's nothing to agree or disagree with: the SEC has mandated this penalty so Vanguard has to enforce it. If you move the account within 90 days of the violation, the new brokerage will apply the same restrictions on your account.
The SEC also makes exceptions for "good faith" violations. Also, it does not take 5 days for funds to be available for use.
This is not quite correct. Typically settlement is three days. However, it can be three business days, so if your order when in on a Thursday at 4pm, or there was a banking holiday, or market closure for a holiday, 5 days is entirely possible.

I think you're making a mountain out of a molehill. This seems like an honest mistake on your part, Vanguard acted appropriately, and now you understand how the system works. Chalk it up to experience and move on. Life is short.
I deposited money on March 8, Friday. Today is Wednesday.

Topic Author
Russianbear
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Re: I want to leave Vanguard

Post by Russianbear » Wed Mar 13, 2019 11:00 am

jebmke wrote:
Wed Mar 13, 2019 10:58 am
I skipped all the ranting.

To your original question, Fidelity or Schwab would probably be equally good as a substitute.
What is Schwab's equivalent of VTSAX? Do they do free trades of their products?

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Wiggums
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Re: I want to leave Vanguard

Post by Wiggums » Wed Mar 13, 2019 11:04 am

TomatoTomahto wrote:
Wed Mar 13, 2019 10:59 am
@RussianBear, for a purchase of less than $150, you got your money’s worth of customer support time. I hope you’re happier elsewhere.
+1

onourway
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Re: I want to leave Vanguard

Post by onourway » Wed Mar 13, 2019 11:05 am

Russianbear wrote:
Wed Mar 13, 2019 11:00 am
Admiral wrote:
Wed Mar 13, 2019 10:58 am
Russianbear wrote:
Wed Mar 13, 2019 10:47 am
vineviz wrote:
Wed Mar 13, 2019 10:45 am
Russianbear wrote:
Wed Mar 13, 2019 10:42 am


I don't agree that it takes a week for funds to settle in an account. This is the digital age.
There's nothing to agree or disagree with: the SEC has mandated this penalty so Vanguard has to enforce it. If you move the account within 90 days of the violation, the new brokerage will apply the same restrictions on your account.
The SEC also makes exceptions for "good faith" violations. Also, it does not take 5 days for funds to be available for use.
This is not quite correct. Typically settlement is three days. However, it can be three business days, so if your order when in on a Thursday at 4pm, or there was a banking holiday, or market closure for a holiday, 5 days is entirely possible.

I think you're making a mountain out of a molehill. This seems like an honest mistake on your part, Vanguard acted appropriately, and now you understand how the system works. Chalk it up to experience and move on. Life is short.
I deposited money on March 8, Friday. Today is Wednesday.
The specifics of how you deposited that money matter, as the answer to why it is taking this amount of time is in the details. You are not being individually targeted at random.

livesoft
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Re: I want to leave Vanguard

Post by livesoft » Wed Mar 13, 2019 11:05 am

Russianbear wrote:
Wed Mar 13, 2019 11:00 am
What is Schwab's equivalent of VTSAX? Do they do free trades of their products?
SWTSX. Yes.

It seems you would want to check out these things on their website before you switched to them. After all, if the Schwab web site sucks and you cannot find the information you want on the web site, then why switch to them?
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Doom&Gloom
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Re: I want to leave Vanguard

Post by Doom&Gloom » Wed Mar 13, 2019 11:07 am

Wiggums wrote:
Wed Mar 13, 2019 11:04 am
TomatoTomahto wrote:
Wed Mar 13, 2019 10:59 am
@RussianBear, for a purchase of less than $150, you got your money’s worth of customer support time. I hope you’re happier elsewhere.
+1
+2

bondsr4me
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Re: I want to leave Vanguard

Post by bondsr4me » Wed Mar 13, 2019 11:12 am

Both Fidelity and Schwab are very good alternatives for investing; that's a very good reason to switch.

If it will make you feel better going forward, that's OK.

Good Luck with your choice!

Wanderingwheelz
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Re: I want to leave Vanguard

Post by Wanderingwheelz » Wed Mar 13, 2019 11:17 am

I once accidentally made a transaction in the wrong account at Vanguard just like you explained. I called and explained what I did and they had me fix it, but Vanguard still imposed a penalty on me. It wasn’t 90 days as I recall, but it was enough to annoy me.

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Russianbear
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Re: I want to leave Vanguard

Post by Russianbear » Wed Mar 13, 2019 11:20 am

Wanderingwheelz wrote:
Wed Mar 13, 2019 11:17 am
I once accidentally made a transaction in the wrong account at Vanguard just like you explained. I called and explained what I did and they had me fix it, but Vanguard still imposed a penalty on me. It wasn’t 90 days as I recall, but it was enough to annoy me.
Did you leave? Sounds like Schwab is the place to go. Better customer service than Vanguard.

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Dialectical Investor
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Re: I want to leave Vanguard

Post by Dialectical Investor » Wed Mar 13, 2019 11:22 am

I, too, was incensed when my broker, who had a high reputation among the discounts, slapped restrictions on my account when I started investing 20 years ago and made a similar mistake. I thought it was kind of insulting. I had a message pop up every time I logged in to my account until the 90 days was up, reminding me of my offense. You seem frustrated with yourself as well as Vanguard, but you'll pick up on more of the details over time, no matter what broker you use.

Jack FFR1846
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Re: I want to leave Vanguard

Post by Jack FFR1846 » Wed Mar 13, 2019 11:23 am

Assuming you're leaving for someone else, I'd recommend the following. First, to make things portable and easily traded anywhere for nearly nothing and keeping your money invested, convert your mutual fund to an ETF. For VTSAX, that's VTI.

Next, look at what bonuses are available out there for your balance. Some places will give you nothing if you have any account already (Schwab). Some allow a new account to get a bonus (TDAmeritrade). Fidelity will give you nothing. Merrill Edge always has bonuses but to get the biggest ones, you'll need to open some flaming hoop accounts and keep money in prison there to avoid huge fees.

I find the easiest place (save ME as I have not gone there) is Fidelity, where you can likely move all online.

In any move, do it from your "to" firm. You'll fill out a form of some kind and have to probably scan in your most recent Vanguard statement.

I'm in the middle of moving to TDA to get some bonus money, plus they don't charge anything to leave, so if I decide to move somewhere else in a year where there's a bonus, I can do so for free.

There are others offering bonuses....Ally Invest and TDAmeritrade come to mind.
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H-Town
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Re: I want to leave Vanguard

Post by H-Town » Wed Mar 13, 2019 11:36 am

Russianbear wrote:
Wed Mar 13, 2019 10:17 am
Vanguard has made it incredibly difficult for me to do business with them. They put a 90 day restriction on my account for freeriding. I made an honest mistake. I deposited money to buy 1, ONE, share of VTI into my regular account. Somehow I accidentally purchased the share in my IRA. I clicked sell and then bought it in my personal account.
Anyhow, it now takes a week or more for money I deposit to be available to purchase in my IRA. I deposited $300 on Friday. I still can not buy VTSAX. I called, the lady tells me it will be available Friday. It doesn't take a week for money to be available in the electronic age. Morevoer she tells me nobody can lift the 90 day restriction. It's an SEC thing. Per their website, they make it sound like it's their choice. [OT comment removed by moderator prudent] Who whould I transfer my IRA to? Schwab? Whos good and low cost?
Welcome to life...

Things might be harsh. It's difficult to work with other people. But what else is new? You either deal with it, or switch to other brokerage and then deal with similar thing later.

lostdog
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Re: I want to leave Vanguard

Post by lostdog » Wed Mar 13, 2019 11:40 am

Awhile ago I was able to sell VTI and buy VTWAX at Vanguard. Is this because I bought VTWAX index mutual fund within Vanguard and not another ETF? I did not get a free ride warning for this.

OliverQueen
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Re: I want to leave Vanguard

Post by OliverQueen » Wed Mar 13, 2019 11:51 am

Not to cause any problems or such, just looking for information, but what exactly did the OP do that caused the IRS (and therefore Vanguard) to put a restriction on her? Is there an IRS limit as to how often you can buy and sell mutual funds?

Thanks,
Oli

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Dialectical Investor
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Re: I want to leave Vanguard

Post by Dialectical Investor » Wed Mar 13, 2019 11:51 am

lostdog wrote:
Wed Mar 13, 2019 11:40 am
Awhile ago I was able to sell VTI and buy VTWAX at Vanguard. Is this because I bought VTWAX index mutual fund within Vanguard and not another ETF? I did not get a free ride warning for this.
I think free riding is simply when you sell the security without having settled funds to pay for your initial purchase of that security. Under that definition, your scenario would not be free riding.

core4portfolio
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Re: I want to leave Vanguard

Post by core4portfolio » Wed Mar 13, 2019 11:53 am

All brokerage have some warning / lock out time if you made such transaction.
Its not something vanguard alone does for customers.
I got free riding warning in fidelity, vanguard and also in sharebuilder when i do something similar
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lakpr
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Re: I want to leave Vanguard

Post by lakpr » Wed Mar 13, 2019 11:55 am

OliverQueen wrote:
Wed Mar 13, 2019 11:51 am
Not to cause any problems or such, just looking for information, but what exactly did the OP do that caused the IRS (and therefore Vanguard) to put a restriction on her? Is there an IRS limit as to how often you can buy and sell mutual funds?

Thanks,
Oli
OP made a trade without having funds available to do so. He deposited funds in a taxable account but bought VTI in his IRA. This is an SEC rule, not IRS rule.

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bertilak
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Re: I want to leave Vanguard

Post by bertilak » Wed Mar 13, 2019 11:58 am

Dialectical Investor wrote:
Wed Mar 13, 2019 11:51 am
lostdog wrote:
Wed Mar 13, 2019 11:40 am
Awhile ago I was able to sell VTI and buy VTWAX at Vanguard. Is this because I bought VTWAX index mutual fund within Vanguard and not another ETF? I did not get a free ride warning for this.
I think free riding is simply when you sell the security without having settled funds to pay for your initial purchase of that security. Under that definition, your scenario would not be free riding.
Right. In a sense you are selling something you don't yet own and the trying to spend the proceeds of that sale. This is allowed in a margin account because the funds will be formally lent to you. Note that an IRA cannot be a margin account.

Some brokerages may let you get away with this (as a courtesy) in non-IRA accounts. It is still called free riding and a brokerage my put its foot down if the "courtesy" ia abused. I was chastised for doing this once. I didn't even know I was doing it until the chastisement!
Last edited by bertilak on Wed Mar 13, 2019 3:48 pm, edited 2 times in total.
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willthrill81
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Re: I want to leave Vanguard

Post by willthrill81 » Wed Mar 13, 2019 12:01 pm

I urge the OP to read the forum's rules.
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Wiggums
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Re: I want to leave Vanguard

Post by Wiggums » Wed Mar 13, 2019 12:10 pm

willthrill81 wrote:
Wed Mar 13, 2019 12:01 pm
I urge the OP to read the forum's rules.
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+1000

NMBob
Posts: 143
Joined: Thu Apr 23, 2015 8:13 pm

Re: I want to leave Vanguard

Post by NMBob » Wed Mar 13, 2019 12:22 pm

Multi day hold on money transferred in before you can invest is not something I have to deal with so don't think I would tolerate it. It may have a legal basis, but you likely can skip that somewhere else. In my schwab account, if I go to schwab online during business hours today and initiate a transfer from my already entered, non schwab set up bank account, the transfer will happen tomorrow morning if it is a work day. Schwab will then also let me invest that transferred money tomorrow. However, I am pretty sure there is some message that says I can trade the money now, but I cannot withdraw it for a couple days. Would seem 5 days is a long time for a transfer in to settle if that is the issue now. Merrill Edge also seems to be the same going back a few years so but could be different since I have Bank America linked to it which is the same company.

If i trade in my ira with funds before they are settled, fyi stocks take 2 days to settle and mutual funds 1, it warns me that if settled funds aren't there I will be restricted to trading with only settled funds in the future. Here is how you/I can screw it up. Luckily i learned this in a margin account where i simply went on margin for a day. If you sell a stock/etf and then buy the same amount in stock or etf, that works as both events settle 2 days out . However, if you sell a stock/ etf and buy a mutual fund with that money on the same day, that will not work. Your stock will not settle/deposit money into account until 2 days from now but the mutual fund will be looking to settle and buy/pay for its purchase in 1 day which is tomorrow.

Yes schwab has schb and swtsx for broad total market low cost index funds, and many many others. 500 trade free etfs in schwab onescource.

On the subject of deposits of money being held, an interesting personal experience. 4 years ago, My buddy gets a certified check at escrow company at closing from a house sale, goes to his bank in Florida and they say it will be available in 5 days... a certified check. HIs wife then went to bank and ripped them and I think they might have said ok 3 days. Soon after, he writes me a check close to 80k off his own small business checking account which I deposit to my bank of america. All funds are available to me the next day..
Last edited by NMBob on Wed Mar 13, 2019 12:43 pm, edited 2 times in total.

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galawdawg
Posts: 57
Joined: Thu Dec 14, 2017 12:59 pm
Location: Georgia

Re: I want to leave Vanguard

Post by galawdawg » Wed Mar 13, 2019 12:25 pm

Here is some information on "freeriding" from the SEC. https://www.investor.gov/additional-res ... h-accounts. From that SEC bulletin:
“Freeriding” is not permitted under Regulation T, and may require the investor’s broker to “freeze” the investor’s account for 90 days. During this 90-day period, an investor may still purchase securities with the cash account, but the investor must fully pay for any purchase on the date of the trade. An investor may avoid having a “freeze” placed on his cash account by fully paying for the securities by the settlement date with funds that do not come from the sale of the securities.
I assume you did not follow the "safe haven" provision italicized above?

There is often a cost to our failure to read or abide by regulations that may apply to us (including those that govern posts on this forum). Hopefully you will learn something helpful from this "freeriding" violation (and since you mention in another post you are a federal employee, I hope you aren't posting this thread while you are "on the clock" :o )

User avatar
Wiggums
Posts: 454
Joined: Thu Jan 31, 2019 8:02 am

Re: I want to leave Vanguard

Post by Wiggums » Wed Mar 13, 2019 12:28 pm

I electronically transferred 250k to Vanguard and Fidelity last Friday. I did not run into any issues with either transfer or fund purchase.

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ruralavalon
Posts: 15029
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: I want to leave Vanguard

Post by ruralavalon » Wed Mar 13, 2019 12:31 pm

Russianbear wrote:
Wed Mar 13, 2019 10:17 am
Vanguard has made it incredibly difficult for me to do business with them. They put a 90 day restriction on my account for freeriding. I made an honest mistake. I deposited money to buy 1, ONE, share of VTI into my regular account. Somehow I accidentally purchased the share in my IRA. I clicked sell and then bought it in my personal account.
Anyhow, it now takes a week or more for money I deposit to be available to purchase in my IRA. I deposited $300 on Friday. I still can not buy VTSAX. I called, the lady tells me it will be available Friday. It doesn't take a week for money to be available in the electronic age. Morevoer she tells me nobody can lift the 90 day restriction. It's an SEC thing. Per their website, they make it sound like it's their choice. [OT comment removed by moderator prudent] Who whould I transfer my IRA to? Schwab? Whos good and low cost?
This is a SEC rule, it applies to any fund firm. I don't see this as a reason to leave.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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greg24
Posts: 3439
Joined: Tue Feb 20, 2007 10:34 am

Re: I want to leave Vanguard

Post by greg24 » Wed Mar 13, 2019 12:36 pm

I fully support the OP's desire to leave Vanguard.

:sharebeer

rich126
Posts: 355
Joined: Thu Mar 01, 2018 4:56 pm

Re: I want to leave Vanguard

Post by rich126 » Wed Mar 13, 2019 12:37 pm

I'm not exactly fond of Vanguard but opened an account for some diversity and it gave me easy access to Wellington and Wellesley funds. I don't like having all of my money with any one company. Previously I had ThinkorSwim which got acquired by TD Ameritrade. I also had Scottrade which also got acquired by TD Ameritrade. Sometimes its hard to stay diversified :)

I may try Fidelity or Schwab.

I generally like TD with a nice app for the iphone/ipad and since I often buy stocks it works well. I also have an option and futures account, neither of which I've used in a while (and only used in special cases).

Actually my biggest issue with TD was some annoying account manager calling me and asking if he could help me since my account was a decent size. I tried to make it clear I don't want their help and to leave me alone. I think I got 10 free trades out of that and have rarely been bothered since.

Every company has their good and bad days. And every one has different needs. I do think because you messed up, you don't seem to want to accept the blame and want to blame Vanguard. Most of us do that when something goes wrong.

lws
Posts: 58
Joined: Tue Apr 25, 2017 6:12 pm

Re: I want to leave Vanguard

Post by lws » Wed Mar 13, 2019 12:58 pm

Don't leave because of this. For some of us there are other good reasons to leave though.

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TomatoTomahto
Posts: 8195
Joined: Mon Apr 11, 2011 1:48 pm

Re: I want to leave Vanguard

Post by TomatoTomahto » Wed Mar 13, 2019 1:17 pm

lws wrote:
Wed Mar 13, 2019 12:58 pm
Don't leave because of this. For some of us there are other good reasons to leave though.
That's the great thing about capitalism. You can choose to leave, and I can choose to stay.
Okay, I get it; I won't be political or controversial. The Earth is flat.

lostdog
Posts: 1550
Joined: Thu Feb 04, 2016 2:15 pm

Re: I want to leave Vanguard

Post by lostdog » Wed Mar 13, 2019 1:17 pm

This is why I hate ETF's.

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Svensk Anga
Posts: 504
Joined: Sun Dec 23, 2012 5:16 pm

Re: I want to leave Vanguard

Post by Svensk Anga » Wed Mar 13, 2019 1:22 pm

Russianbear wrote:
Wed Mar 13, 2019 11:20 am

Did you leave? Sounds like Schwab is the place to go. Better customer service than Vanguard.
FWIW, I am having a minor squabble with Schwab currently. I called them about the issue and they asked for some time to resolve it due to tax season. (a whole month before tax due date, really?) Don't expect perfection wherever you wind up.

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corn18
Posts: 1256
Joined: Fri May 22, 2015 6:24 am

Re: I want to leave Vanguard

Post by corn18 » Wed Mar 13, 2019 1:43 pm

If you switch to FIDO, they will hold your money for at least 5 business days as a new investor. At least that's what they did with me when I opened my joint brokerage with them and transferred a boatload of stuff over from USAA. It's now 30 days later and money seems to move quite well and expeditiously. I felt like a special snowflake, but now I understand why they kept an eye on me for a bit while there was a lot of money moving in and about my very new accounts. We seem to be getting along swimmingly now.
Don't do something, just stand there!

DB2
Posts: 204
Joined: Thu Jan 17, 2019 10:07 pm

Re: I want to leave Vanguard

Post by DB2 » Wed Mar 13, 2019 2:14 pm

grettman wrote:
Wed Mar 13, 2019 10:30 am
Leave vanguard for having a crappy website and bad customer service and etc but not for this...
+1

finite_difference
Posts: 1194
Joined: Thu Jul 09, 2015 7:00 pm

Re: I want to leave Vanguard

Post by finite_difference » Wed Mar 13, 2019 2:47 pm

DB2 wrote:
Wed Mar 13, 2019 2:14 pm
grettman wrote:
Wed Mar 13, 2019 10:30 am
Leave vanguard for having a crappy website and bad customer service and etc but not for this...
+1
Isn’t this issue in fact due to a crappy website?

Why would Vanguard’s website allow you to free ride? The website should simply prohibit it.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

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