Vanguard is Discontinuing their VanguardAdvantage Accounts

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Re: Vanguard Advantage Account being Discontinued

Post by Mel Lindauer » Thu Feb 28, 2019 6:07 pm

LASER wrote:
Thu Feb 28, 2019 6:05 pm
Just got notified that Vanguard has decided to terminate the Advantage Account service. This is very disappointing as we just set this up to use the Bill Pay feature. When I called to ask if they had an alternative I was told that they do not. I am not happy with that answer or policy.
Nor am I or many others.
Best Regards - Mel | | Semper Fi

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by Dead Man Walking » Thu Feb 28, 2019 6:23 pm

I believe Vanguard is suffering from asset bloat. The threads on this forum complaining about brokerage accounts and customer service in general are disturbing. Vanguard seems to have problems implementing programs that enhance the investing experience for their “owners.” I have a traditional mutual fund account and have no plans to convert to a brokerage account until Vanguard resolves the issues with annual statements and other problems often discussed here. As mentioned above, Fidelity may have problems with their new business plan. I’m adding investment providers rather trying to find the perfect one stop provider.

DMW

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Vanguard Advantage Account being Discontinued

Post by LASER » Thu Feb 28, 2019 6:39 pm

[Thread merged into here, see below. --admin LadyGeek]

I just posted a comment/query about the Vanguard Advantage Account being discontinued. After one comment by Mel Lindauer the thread has been hidden. What is going on?

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Re: Vanguard Advantage Account being Discontinued

Post by ridebikeseveryday » Thu Feb 28, 2019 6:42 pm

The moderators merge topics that are all about the same thing. The post you commented on wasn't the first, so it got appended:

viewtopic.php?f=10&t=274303&start=100

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Re: Vanguard Advantage Account being Discontinued

Post by LASER » Thu Feb 28, 2019 6:44 pm

Ok, I couldn't find any of the threads on the first 2 pages and was curious.

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Re: Discontinuing VanguardAdvantage Accounts

Post by BoglePaul » Thu Feb 28, 2019 6:55 pm

gowest wrote:
Thu Feb 28, 2019 4:54 pm
BoglePaul wrote:
Thu Feb 28, 2019 4:43 pm

Just keep the account and hopefully the replacement product will be ready by the sunset date. See above post.
I asked about that, and the Flagship rep with whom I spoke said that this was quite unlikely. FWIW
Well, then they really got my hopes up (and was the reason I left my second account open). Just called them a second time, the same person clarified. They have nothing. There is not replacement product.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by PugetSoundguy » Thu Feb 28, 2019 7:07 pm

My guess is that the way financial institutions can offer free bill pay etc. is by paying no or low interest on the underlying account.
That's why I just signed up for VanguardAdvantage and was setting up bill pay; it seemed like a much better deal. :oops: The underlying account (federal money market) paid more than 2% interest with no moving money around such as would be required at most other institutions to get a decent interest rate. I'm pretty sure looking at the program in isolation, Vanguard was losing money paying fees to the bank that was operating the program under the hood. In the larger picture, maybe they were making money if the Advantage program attracted or helped retain customers. But they obviously concluded it was a loser overall for Vanguard as an institution.

So I guess it was too good to last. I have a Schwab Bank/brokerage account that is good (no ATM fees, no foreign transaction fees, etc.) but the account underlying the bill pay pays only about 0.4% or so. So I'll be using that. In the larger scheme of things, not a huge deal, but it was annoying spending the time to set up the Advantage account only to have it go away. When I talked to the Vangaurd rep today about how the transition will work, he was very nice and aplogetic but didn't say anything about a replacement program in the works. Instead, he recommended finding a good bank and using the bank for bill pay.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by ThriftyPhD » Thu Feb 28, 2019 7:34 pm

bhwabeck3533 wrote:
Thu Feb 28, 2019 10:30 am
I was disappointed to get a notice today that Vanguard is discontinuing their VanguardAdvantage Account. The "press release" provides guidance to transition, and there is no replacement product being offered.

It's new info, but I'm looking for a recommended alternative when my account goes away on 7/31/2019.
Fidelity's CMA is better than the VanguardAdvantage account, and they offer equal or better index funds for all your other accounts too.

viewtopic.php?f=2&t=266538
Last edited by ThriftyPhD on Thu Feb 28, 2019 7:35 pm, edited 1 time in total.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by heartwood » Thu Feb 28, 2019 7:34 pm

I tried today to link my existing Fidelity CMA to my Vanguard Federal MM from the Fidelity side w/o using my Advantage account. I wound up talking with my Flagship rep. I asked what the Vanguard routing and account number will be once my Advantage account terminates. He responded that I could initiate ACH transactions from Vanguard (Fidelity readily provides the routing/acct info) but that he was unaware of anyway to initiate an ACH transaction at another company since Vanguard will not have the routing/account numbers to supply. This is incomprehensible to me.

It says I can push or pull to Fidelity if initiated from Vanguard, but I can't push or pull to Vanguard if initiated from another institution since I can't supply the routing/acct numbers!

Please tell me he's wrong!

He also mentioned that this was only rolled out to Flagship reps yesterday (Feb 27)

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by LadyGeek » Thu Feb 28, 2019 7:35 pm

ridebikeseveryday wrote:
Thu Feb 28, 2019 6:42 pm
The moderators merge topics that are all about the same thing. The post you commented on wasn't the first, so it got appended:

viewtopic.php?f=10&t=274303&start=100
LASER wrote:
Thu Feb 28, 2019 6:44 pm
Ok, I couldn't find any of the threads on the first 2 pages and was curious.
Exactly. LASER - your thread is next.

I have merged LASER's thread into the on-going discussion, which is in the Investing - Theory, News & General forum (news).
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Re: Discontinuing VanguardAdvantage Accounts

Post by Artsdoctor » Thu Feb 28, 2019 7:59 pm

oneleaf wrote:
Thu Feb 28, 2019 3:41 pm
Sheesh, I just got my checkbook and moved my credit card payments over. What a waste of time!
I was just wondering how long it would take for you to find out about this! I feel bad for you (and me) because I really pushed the Advantage account when you were looking into it. It really provided everything I needed and I had no reservations recommending it but, like others, I will need to look elsewhere.

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Re: Discontinuing VanguardAdvantage Accounts

Post by joe8d » Thu Feb 28, 2019 8:00 pm

Jack FFR1846 wrote:
Thu Feb 28, 2019 10:43 am
Don't most places receiving payments have some kind of auto payment available? Although about 20 payments are done automatically for me, zero are pushed from my home base. I guess it's why I've never seen value in "bill pay" services.
Same.
All the Best, | Joe

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by Artsdoctor » Thu Feb 28, 2019 8:04 pm

heartwood wrote:
Thu Feb 28, 2019 7:34 pm
I tried today to link my existing Fidelity CMA to my Vanguard Federal MM from the Fidelity side w/o using my Advantage account. I wound up talking with my Flagship rep. I asked what the Vanguard routing and account number will be once my Advantage account terminates. He responded that I could initiate ACH transactions from Vanguard (Fidelity readily provides the routing/acct info) but that he was unaware of anyway to initiate an ACH transaction at another company since Vanguard will not have the routing/account numbers to supply. This is incomprehensible to me.

It says I can push or pull to Fidelity if initiated from Vanguard, but I can't push or pull to Vanguard if initiated from another institution since I can't supply the routing/acct numbers!

Please tell me he's wrong!

He also mentioned that this was only rolled out to Flagship reps yesterday (Feb 27)
My Advantage Account is linked to a joint Fidelity account so I suppose that the Advantage Account can act as a feeder account to Fidelity. I'll have to think about this . . .

What a PITA but with the Bogleheads, I'm sure we'll find a reasonable alternative.

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Re: Discontinuing VanguardAdvantage Accounts

Post by hotpancakes » Thu Feb 28, 2019 8:11 pm

galawdawg wrote:
Thu Feb 28, 2019 3:18 pm
Thanks to the posters who provided information on the cash management offerings at Fidelity and Schwab. Since there are offices of both in the Atlanta area, I may drop into each next week to get some more information, get a gut feel for their service (or how hard they push to upsell or get me into their wealth management/advisory services fee based plans) and check on any new account bonuses.

For those who use cash management at Fidelity and Schwab, do I correctly understand that bill payment and other withdrawal transactions automatically pull directly from the money market fund without the need to manually liquidate funds into a sweep account? If the withdrawals come directly from those funds (SPRXX or SWVXX respectively), is there a limit to the number of transactions per month?
That is correct, bill pay and other withdrawal transactions pull directly from Fidelity Money Market funds. There is no limit to the number of transactions per month.

Note that Schwab does not offer this feature; you must manually sell MM funds and wait for the trade to clear before moving money to the checking account.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by pkjr » Thu Feb 28, 2019 8:13 pm

heartwood wrote:
Thu Feb 28, 2019 7:34 pm


It says I can push or pull to Fidelity if initiated from Vanguard, but I can't push or pull to Vanguard if initiated from another institution since I can't supply the routing/acct numbers!

Please tell me he's wrong!

He also mentioned that this was only rolled out to Flagship reps yesterday (Feb 27)
This is correct. Vanguard back-office system has to be really dated. I also believe that their security is not up-to par with other brokerage houses or at least lagging behind.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by heartwood » Thu Feb 28, 2019 8:31 pm

Artsdoctor wrote:
Thu Feb 28, 2019 8:04 pm
heartwood wrote:
Thu Feb 28, 2019 7:34 pm
I tried today to link my existing Fidelity CMA to my Vanguard Federal MM from the Fidelity side w/o using my Advantage account. I wound up talking with my Flagship rep. I asked what the Vanguard routing and account number will be once my Advantage account terminates. He responded that I could initiate ACH transactions from Vanguard (Fidelity readily provides the routing/acct info) but that he was unaware of anyway to initiate an ACH transaction at another company since Vanguard will not have the routing/account numbers to supply. This is incomprehensible to me.

It says I can push or pull to Fidelity if initiated from Vanguard, but I can't push or pull to Vanguard if initiated from another institution since I can't supply the routing/acct numbers!

Please tell me he's wrong!

He also mentioned that this was only rolled out to Flagship reps yesterday (Feb 27)
My Advantage Account is linked to a joint Fidelity account so I suppose that the Advantage Account can act as a feeder account to Fidelity. I'll have to think about this . . .

What a PITA but with the Bogleheads, I'm sure we'll find a reasonable alternative.
Yes, it currently works with Advantage because Advantage checks have a routing and account number. Once that platform disappears there apparently are no such numbers associated with the Vanguard Federal MM so you can't push/pull from outside Vanguard.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by SavageAmusement » Thu Feb 28, 2019 9:11 pm

You typically get what you pay for. Financial services, particularly those offered by Vanguard, are no exception.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by jimcrawford01 » Thu Feb 28, 2019 10:01 pm

I'll be calling Vanguard tomorrow and will give an earful.
The Advantage Account served my needs well.
I will now seek alternatives for my investing needs.
Been a good 43 years with Vanguard.

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Re: Discontinuing VanguardAdvantage Accounts

Post by knpstr » Thu Feb 28, 2019 10:14 pm

Nala wrote:
Thu Feb 28, 2019 11:49 am
To those who say they they have their bills automatically paid, two responses: First, not all bills can be automatically paid by charging to credit card or by bank draft. Second, I like to review my bills before they get paid. Ever hear of incorrect charges?
Every place that I have on autopay sends statements verifying what the autopay amount will be long before it is pulled. Any errors can be corrected at that time.
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius

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Re: Discontinuing VanguardAdvantage Accounts

Post by oneleaf » Thu Feb 28, 2019 10:48 pm

Artsdoctor wrote:
Thu Feb 28, 2019 7:59 pm
oneleaf wrote:
Thu Feb 28, 2019 3:41 pm
Sheesh, I just got my checkbook and moved my credit card payments over. What a waste of time!
I was just wondering how long it would take for you to find out about this! I feel bad for you (and me) because I really pushed the Advantage account when you were looking into it. It really provided everything I needed and I had no reservations recommending it but, like others, I will need to look elsewhere.
Hah, no worries! :sharebeer

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Re: Discontinuing VanguardAdvantage Accounts

Post by klaus14 » Thu Feb 28, 2019 11:02 pm

hotpancakes wrote:
Thu Feb 28, 2019 2:40 pm
If you're looking for a replacement for VanguardAdvantage, I can recommend a Fidelity CMA account. Here's what's nice about it:

1) No minimums. No fees.
2) Debit card that refunds all ATM fees worldwide.
3) No foreign transaction fees at ATMs outside the U.S. (There is a FTF when paying at merchants, but just use a 0% FTF credit card for that).
4) The sweep account interest rate is low, *BUT* Fidelity Money Market mutual funds count as liquid cash and are automatically liquidated behind the scenes without any involvement by you. If you purchase SPRXX, for instance, your current interest rate on cash is 2.27%.
5) Free wire transfers (in addition to ACH), both incoming and outgoing.
6) Free paper checks.
7) Free BillPay. Additionally, funds are debited from your account when the check is cashed, not when the check is sent like many other services.
8) High daily mobile check deposit limits ($50k/100k+).
8) 24/7 customer service.
I have cash management features in my regular Fidelity brokerage account. instead of having a separate cash management account. I wonder if all of these apply to regular brokerage or not.

i have a debit card and a check book.

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Re: Discontinuing VanguardAdvantage Accounts

Post by AlohaJoe » Thu Feb 28, 2019 11:14 pm

gowest wrote:
Thu Feb 28, 2019 10:59 am
I am so mad about this. I just got the same email. No warning ahead of time, etc.
The email is the warning ahead of time. Did you want a warning about the warning?

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by ClevrChico » Thu Feb 28, 2019 11:18 pm

The simple solution is to get an online checking account with Ally or similar institution. They may even offer some advantages. It's really an hour or two of effort to get things switched over.

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Re: Discontinuing VanguardAdvantage Accounts

Post by hotpancakes » Thu Feb 28, 2019 11:27 pm

klaus14 wrote:
Thu Feb 28, 2019 11:02 pm
hotpancakes wrote:
Thu Feb 28, 2019 2:40 pm
If you're looking for a replacement for VanguardAdvantage, I can recommend a Fidelity CMA account. Here's what's nice about it:

1) No minimums. No fees.
2) Debit card that refunds all ATM fees worldwide.
3) No foreign transaction fees at ATMs outside the U.S. (There is a FTF when paying at merchants, but just use a 0% FTF credit card for that).
4) The sweep account interest rate is low, *BUT* Fidelity Money Market mutual funds count as liquid cash and are automatically liquidated behind the scenes without any involvement by you. If you purchase SPRXX, for instance, your current interest rate on cash is 2.27%.
5) Free wire transfers (in addition to ACH), both incoming and outgoing.
6) Free paper checks.
7) Free BillPay. Additionally, funds are debited from your account when the check is cashed, not when the check is sent like many other services.
8) High daily mobile check deposit limits ($50k/100k+).
8) 24/7 customer service.
I have cash management features in my regular Fidelity brokerage account. instead of having a separate cash management account. I wonder if all of these apply to regular brokerage or not.

i have a debit card and a check book.
I believe the Fidelity Brokerage (not CMA) account offers the same features, but only rebates ATM fees if your balance is high enough ($250k?).

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by MnD » Thu Feb 28, 2019 11:37 pm

I read the terms of this program and my take-away was that it was a substandard cash management program for people with $1M or more at Vanguard even relative to competitors which required $0 minimums. It was a very substandard product if you had $500K-$999K. No big loss.
Last edited by MnD on Thu Feb 28, 2019 11:46 pm, edited 1 time in total.

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Re: Discontinuing VanguardAdvantage Accounts

Post by klaus14 » Thu Feb 28, 2019 11:44 pm

hotpancakes wrote:
Thu Feb 28, 2019 11:27 pm
klaus14 wrote:
Thu Feb 28, 2019 11:02 pm
hotpancakes wrote:
Thu Feb 28, 2019 2:40 pm
If you're looking for a replacement for VanguardAdvantage, I can recommend a Fidelity CMA account. Here's what's nice about it:

1) No minimums. No fees.
2) Debit card that refunds all ATM fees worldwide.
3) No foreign transaction fees at ATMs outside the U.S. (There is a FTF when paying at merchants, but just use a 0% FTF credit card for that).
4) The sweep account interest rate is low, *BUT* Fidelity Money Market mutual funds count as liquid cash and are automatically liquidated behind the scenes without any involvement by you. If you purchase SPRXX, for instance, your current interest rate on cash is 2.27%.
5) Free wire transfers (in addition to ACH), both incoming and outgoing.
6) Free paper checks.
7) Free BillPay. Additionally, funds are debited from your account when the check is cashed, not when the check is sent like many other services.
8) High daily mobile check deposit limits ($50k/100k+).
8) 24/7 customer service.
I have cash management features in my regular Fidelity brokerage account. instead of having a separate cash management account. I wonder if all of these apply to regular brokerage or not.

i have a debit card and a check book.
I believe the Fidelity Brokerage (not CMA) account offers the same features, but only rebates ATM fees if your balance is high enough ($250k?).
Thanks!
Then i would open CMA and move money there only when i need ATM withdrawal which is rare.
For all other things i can use the brokerage account which has SPAXX as settlement fund. So i won't need to buy money market funds manually. But i guess you could also do this with CMA overdraft feature right?

This setup will be better than VanguardAdvantage in some ways (free ATM) and worse in some other ways (SPAXX pays 2.05% due to high expense ratio compared to Vanguard).

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by Tzar Igor » Fri Mar 01, 2019 12:27 am

Today I received a notification by phone from Vanguard about the fate of the Advantage account and associated services.
I've been a Vanguard investor for over 30 years and I am very disappointed in their decision.
As many others have stated on this forum, I too have many links to the Advantage account for bill payment and I use paper check-writing also.
I've lodged a complaint about this through their messaging system; I wonder if anyone will read it or respond to it.
If nothing changes soon, I will be moving my business to Fidelity; they seem to have all the features and services I need without any additional cost or expense. I only wonder how long it will take for Fidelity to follow suit (although their expense ratios are a bit higher than Vanguard on many of mutual funds they manage which might help them defray the costs of providing "banking services" to their customers). The other option is Capital One; a very competitive outfit.

I mourn the passing of Jack Bogle. It seems that Vanguard is now adrift without any rational leadership.

I hope someone at Vanguard hears all of the voices expressed on this forum.

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Re: Discontinuing VanguardAdvantage Accounts

Post by JDDS » Fri Mar 01, 2019 2:34 am

HueyLD wrote:
Thu Feb 28, 2019 1:17 pm
My professional guess is that VG Advantage account as a product is a loss leader and their analyses show that the cost far exceeds the benefits.

And my own personal preference is to do banking with real banks and investing with real brokerages. Companies tend to do a better job when their core business is involved.
These were my thoughts, but then I have no skin in the game. I considered if I would want one of these accounts, but decided I was happy with what I had. If this was a drain on resources, then while painful for everybody with an existing setup, in the long run it may be best overall to end the product. Ending products is in my experience not easy for a company, employees, customers, etc.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by tipswatcher » Fri Mar 01, 2019 4:16 am

You can do checkwriting against the Federal MM account in brokerage, but only for >$250, only using paper checks.
This is not what the Vanguard FAQ says ... https://vanguard.com/pdf/PVPDFCL_022019.pdf

Checkwriting
• Destroy all unused checks.
• Checks presented for payment after July 31, 2019, will be declined.
• Payments submitted by providers using your account’s 9-digit routing and account numbers will not be accepted after July 31, 2019. You will need to give your providers new payment instructions to avoid rejected transactions or delays.
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by RickBoglehead » Fri Mar 01, 2019 6:34 am

tipswatcher wrote:
Fri Mar 01, 2019 4:16 am
You can do checkwriting against the Federal MM account in brokerage, but only for >$250, only using paper checks.
This is not what the Vanguard FAQ says ... https://vanguard.com/pdf/PVPDFCL_022019.pdf

Checkwriting
• Destroy all unused checks.
• Checks presented for payment after July 31, 2019, will be declined.
• Payments submitted by providers using your account’s 9-digit routing and account numbers will not be accepted after July 31, 2019. You will need to give your providers new payment instructions to avoid rejected transactions or delays.
You are quoting the FAQs for how to shutdown Vanguard Advantage.

Read this: https://personal.vanguard.com/us/whatwe ... ng?lang=en
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by onourway » Fri Mar 01, 2019 6:49 am

tipswatcher wrote:
Fri Mar 01, 2019 4:16 am
You can do checkwriting against the Federal MM account in brokerage, but only for >$250, only using paper checks.
This is not what the Vanguard FAQ says ... https://vanguard.com/pdf/PVPDFCL_022019.pdf

Checkwriting
• Destroy all unused checks.
• Checks presented for payment after July 31, 2019, will be declined.
• Payments submitted by providers using your account’s 9-digit routing and account numbers will not be accepted after July 31, 2019. You will need to give your providers new payment instructions to avoid rejected transactions or delays.
Paper checks written against your sweep account (which is the Federal MM account) is a standard feature of their brokerage accounts. You simply have to request the capability. As noted, it is paper checks only, for greater than $250. You may set one alternate redemption fund as well - any other money market or select bond funds which are drawn against automatically if there are not adequate funds in your sweep fund. This is entirely separate of the Advantage Cash Management product being discontinued.

I am disappointed to hear that Vanguard is discontinuing this product as well, even though I use Schwab’s version. I hope that they decide to bring it back as a more modern, competitive product available to all customers. It really is a requirement of a modern, competitive brokerage firm. I agree with some of the earlier comments that Vanguard may have an incentive to shed some customers, but I can’t imagine, given the assets required to have access to this product, they really want to shed these particular customers. Sounds like this process should have been handled better.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by TheGreyingDuke » Fri Mar 01, 2019 7:03 am

Funny thing is that, after running a second checking account at a credit union, I was on the verge of closing the credit union account out. Now a month of careful parsing of what actually goes in and out of the Advantage account and get it moved.

Oh, and interest goes way down! Complaining to Vanguard? OK, I will write a note to my person there but don't expect a change in this decision. It is just "bidness" after all.

EDIT: The Advantage account had also lost some of its appeal with the shift to the Brokerage account, I could no longer automatically move dividends from individual accounts at Vanguard to the JTROS where the Advantage account dwelt, they had to go out (in my case to CIT) and then back. Going forward I will continue to move them to CIT and then to the credit union account.
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by RadAudit » Fri Mar 01, 2019 7:27 am

PugetSoundguy wrote:
Thu Feb 28, 2019 7:07 pm
The underlying account (federal money market) paid more than 2% interest with no moving money around such as would be required at most other institutions to get a decent interest rate. I'm pretty sure looking at the program in isolation, Vanguard was losing money paying fees to the bank that was operating the program under the hood.
+1 Probably correct.

So, do I understand correctly that anyone who was using the federal money market fund, and not using Vanguard Advantage, was subsidizing the Advantage users through lower interest rates?
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

Bacchus01
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Re: Discontinuing VanguardAdvantage Accounts

Post by Bacchus01 » Fri Mar 01, 2019 7:28 am

bhwabeck3533 wrote:
Thu Feb 28, 2019 10:45 am
You echo my every sentiment. I sent a note already to my Vanguard advisor predicting a huge backlash by current users/clients of the Advantage account. Up til now I have been a devoted and loyal disciple of Vanguard.

Please provide names of investment firms you are considering as options. I'm pissed off.
You think they didn’t know that already?

Nummerkins
Posts: 358
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Re: Discontinuing VanguardAdvantage Accounts

Post by Nummerkins » Fri Mar 01, 2019 8:42 am

RickBoglehead wrote:
Thu Feb 28, 2019 1:25 pm
I inquired last year about Vanguard Advantage and my Flagship rep suggested I look elsewhere. In addition to not having state of the art capabilities, he said that there were a very small handful, in fact less than 5, people who supported it. Glad I got that guidance.
I feel like this keeps getting glossed over. 5 people! VanguardAdvantage has clearly been on life support for some time. Good riddance.

The great news is that there are many options to fill their shoes, most if not all of them better than VA:

All of the below include free checks, unlimited ATM refunds, billpay and no fees.

1. Chase Sapphire or Private Client with YouInvest -- YouInvest has Vanguard ETFs AND mutual funds with no trading fees. See here: https://am.jpmorgan.com/blob-pbstudio/1 ... d_list.pdf

2. Fidelity CMA with brokerage -- Cheap funds, cheaper than Vanguard. Lots of Index options.

3. BoA checking with Platinum Preferred Rewards level and Merrill Edge -- Free stock/ETF trades. 75% bonus on cashback for credit cards. 3% becomes 5.25%, 1.5% becomes 2.625%. Cash bonuses available to transfer your account over.

4. Schwab - Checking and brokerage -- cheap funds as well, free iShares ETFs and more. Free ETF list here: https://www.schwab.wallst.com/Prospect/ ... ceETFs.asp

azanon
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by azanon » Fri Mar 01, 2019 9:06 am

Hopefully this turns out to be a blessing in disguise for at least some of you.

I didn't think my system was that special (honestly, I assumed almost everyone did this), but 85-90% of my auto-bills are linked to a rewards credit card (2.5% USAA cash back card in my case), and then that ONE credit card bill is paid monthly from an Ally Savings account that yields 2.20%. 2.5% CC rewards x the sum total of bills I auto pay with that card is a lot of money for me (it's well over 1K a year in cash rewards just for that card alone). My only job here is to rake in the rewards while all of this happen automatically.

Now sure, there are 2 or 3 bills I do have to pay manually with my checking account because they don't support CC auto pay. But that's a minor inconvenience.

lostdog
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by lostdog » Fri Mar 01, 2019 9:35 am

1. Setup a free checking account and bill pay at your local credit union.

2. Link it to your Vanguard brokerage account.

3. Have enough money to pay the bills in the checking account.

4. Put the rest in the Vanguard Federal Money Market sweep account which pays a competing dividend.

The ACH feature between the checking and sweep account takes only a day or two.

Simple.
VTWAX and chill.

informal guide
Posts: 281
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by informal guide » Fri Mar 01, 2019 9:37 am

I have heard from folks who've done financial analysis on CMA type accounts (such as the Vanguard Advantage, Fidelity CMA, etc.) that on a standalone basis these accounts are clearly unprofitable. Because of lots of activity, including deposits, checks, debit card transactions, the operational expenses are high and the revenue streams are at best meager. The justification, that goes back to the original Merrill Lynch CMA, is that clients who have them are much less likely to leave. That is why firms have offered them for several decades with few to no fees. I assume that is also one of the reasons banks offer free billpaying - -but banks, at least have large revenue streams from the value of the deposits kept there by clients and they also benefit by it making switching more of a PITA.

Regardless of my views on discontinuing them, I can understand why Vanguard never actively marketed Vanguard Advantage accounts and why they have decided to discontinue them.

gowest
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Re: Discontinuing VanguardAdvantage Accounts

Post by gowest » Fri Mar 01, 2019 9:40 am

AlohaJoe wrote:
Thu Feb 28, 2019 11:14 pm
gowest wrote:
Thu Feb 28, 2019 10:59 am
I am so mad about this. I just got the same email. No warning ahead of time, etc.
The email is the warning ahead of time. Did you want a warning about the warning?
Yes. I spent the last few weeks setting everything up with VanguardAdvantage. I talked to reps on the phone probably 5 or 6 times, who helped me deal with multiple problems I faced along the way. When it was finally set up, I received the email from Vanguard advising that they're cancelling the whole service. Vanguard KNEW this was coming. And yet Vanguard's management withheld the information from their reps until the day before the email (according to the rep with whom I spoke). That's not how I would ever treat my clients, nor would I stay in business very long if that was standard practice. Defend that practice all you want; it's not a good way to do business in my opinion. YMMV

mtmingus
Posts: 241
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by mtmingus » Fri Mar 01, 2019 9:43 am

What will my Vanguard acct be called now, Vanguard Disadvantaqge?

Carl53
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Re: Discontinuing VanguardAdvantage Accounts

Post by Carl53 » Fri Mar 01, 2019 10:06 am

Nummerkins wrote:
Fri Mar 01, 2019 8:42 am

3. BoA checking with Platinum Preferred Rewards level and Merrill Edge -- Free stock/ETF trades. 75% bonus on cashback for credit cards. 3% becomes 5.25%, 1.5% becomes 2.625%. Cash bonuses available to transfer your account over.
Is this card the cash rewards card? https://www.bankofamerica.com/credit-ca ... dit-cards/

It appears that the 3% and 2% levels revert back to 1% once $2500/quarter is exceeded. If they had a 1.5% level it may have been recently reduced.

xb7
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by xb7 » Fri Mar 01, 2019 11:10 am

azanon wrote:
Fri Mar 01, 2019 9:06 am
I didn't think my system was that special (honestly, I assumed almost everyone did this), but 85-90% of my auto-bills are linked to a rewards credit card (2.5% USAA cash back card in my case), and then that ONE credit card bill is paid monthly from an Ally Savings account that yields 2.20%. 2.5% CC rewards x the sum total of bills I auto pay with that card is a lot of money for me (it's well over 1K a year in cash rewards just for that card alone). My only job here is to rake in the rewards while all of this happen automatically.

Now sure, there are 2 or 3 bills I do have to pay manually with my checking account because they don't support CC auto pay. But that's a minor inconvenience.
This is the particular thing that I want to be able to do --- pay my credit card bills (not just one though), and other bills by having them pulled from a high yielding account. I'm finding it confusing figuring out which option might be best for this now. I hate the idea of having to shift money from and sometimes then maybe back to Vanguard --- more often it's net outflows for living expenses, but sometimes it's investing in the context of rebalancing.

Please help me understand your Ally setup better. 2.2% yield on their savings --- not checking --- account. So do you ACH from savings to pay the credit card bills, or how exactly do you do that? I get the impression from you that this happens automatically. Their web site says that you're limited to 6 transactions per month, after which they charge $10/transaction. I wonder if I would run into that often? I certainly couldn't pay all of my bills that way, and in my case I'm sure there are a number of bills that won't accept credit card, though I'll have to go back on a case by case basis and look harder.

Do you also use their checking account too (shifting money there back and maybe forth?), and if so for what please? That currently pays 0.6% interest, or 0.1% if your balance is less than $15,000. When I first looked at Ally I was assuming that's what I would need to use, and so was less interested.

TIA !

azanon
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by azanon » Fri Mar 01, 2019 11:25 am

xb7 wrote:
Fri Mar 01, 2019 11:10 am
azanon wrote:
Fri Mar 01, 2019 9:06 am
I didn't think my system was that special (honestly, I assumed almost everyone did this), but 85-90% of my auto-bills are linked to a rewards credit card (2.5% USAA cash back card in my case), and then that ONE credit card bill is paid monthly from an Ally Savings account that yields 2.20%. 2.5% CC rewards x the sum total of bills I auto pay with that card is a lot of money for me (it's well over 1K a year in cash rewards just for that card alone). My only job here is to rake in the rewards while all of this happen automatically.

Now sure, there are 2 or 3 bills I do have to pay manually with my checking account because they don't support CC auto pay. But that's a minor inconvenience.
Please help me understand your Ally setup better. 2.2% yield on their savings --- not checking --- account. So do you ACH from savings to pay the credit card bills, or how exactly do you do that? I get the impression from you that this happens automatically. Their web site says that you're limited to 6 transactions per month, after which they charge $10/transaction. I wonder if I would run into that often? I certainly couldn't pay all of my bills that way, and in my case I'm sure there are a number of bills that won't accept credit card, though I'll have to go back on a case by case basis and look harder.

Do you also use their checking account too (shifting money there back and maybe forth?), and if so for what please? That currently pays 0.6% interest, or 0.1% if your balance is less than $15,000. When I first looked at Ally I was assuming that's what I would need to use, and so was less interested.

TIA !
Yes, I use ACH transactions from the Ally savings account to actually pay 3 different credit cards, though 1 card has the majority of transactions (I have the 2.5% cash back, amazon CC, and AMEX Preferred for 6% on groceries). So I'm only using 3 of the max 6 ACH transaction per month, and maybe occasionally I'll have one or two other random ACH transactions. But I've never hit the 6 limit that causes the $10 charge yet.

For Checking, I admit I just use USAA's checking which doesn't pay much interest, but reinburses up to $15 worth of ATM withdrawal fees per month. I'm required to direct deposit into the checking account in order to be eligible for that 2.5% cash back USAA Credit card.

But yeah, once you get all of your auto transactions set up on the best rewards card you can find, that's easy money, and no risk as long as you have the credit card bills setup to autopay out of a savings account with plenty of money. So I don't know why anyone would pass on that easy money and just be paying bills from something like VanguardAdvantage instead.

MisterMister
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by MisterMister » Fri Mar 01, 2019 11:53 am

ClevrChico wrote:
Thu Feb 28, 2019 11:18 pm
The simple solution is to get an online checking account with Ally or similar institution. They may even offer some advantages. It's really an hour or two of effort to get things switched over.
Yes, a lot of Boglers like Ally (I use it also).

Their Web site and technology are both very good, enabling easy ACH transfers in/out. And they have a very attractive savings rate which they frequently boost if the market justifies it. I think their savings rate now is 2.2%.

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RickBoglehead
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by RickBoglehead » Fri Mar 01, 2019 11:57 am

Nothing stops you from setting up multiple Ally Savings accounts... If you exceed 6 transactions a month, eventually they will shut your account, not just charge you a penalty.

You can't have them mail a check from a Savings account.

Ally also uses Zelle. I can do an instantaneous transfer to/from my own brick and mortar bank with Zelle instead of waiting any time.
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PatrickA5
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by PatrickA5 » Fri Mar 01, 2019 11:58 am

I guess I should be glad that I left $5 in my Ally Savings and MM accounts, so I guess I could go back to using those.

I was an Advantage account holder for several years, but didn't set up any bill paying and rarely wrote a check. Most of my bills are pulled from the various utilities, etc from my regional B&M bank. I've been moving money from Prime Money Market (VG) to my bank monthly to pay the bills.

I might have to look into Fidelity CMA. I might set one up to test the Fidelity waters. If I like it, then we might move our retirement funds over too. I've been contemplating this for several years, but haven't had a reason until now. I like the idea of Fidelity having a local office that DW can go to when I'm gone. What I don't like about Fidelity is that they may push DW into higher fee funds or high expense financial advisor products.

retiringwhen
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by retiringwhen » Fri Mar 01, 2019 12:14 pm

PatrickA5 wrote:
Fri Mar 01, 2019 11:58 am
I guess I should be glad that I left $5 in my Ally Savings and MM accounts, so I guess I could go back to using those.

I was an Advantage account holder for several years, but didn't set up any bill paying and rarely wrote a check. Most of my bills are pulled from the various utilities, etc from my regional B&M bank. I've been moving money from Prime Money Market (VG) to my bank monthly to pay the bills.

I might have to look into Fidelity CMA. I might set one up to test the Fidelity waters. If I like it, then we might move our retirement funds over too. I've been contemplating this for several years, but haven't had a reason until now. I like the idea of Fidelity having a local office that DW can go to when I'm gone. What I don't like about Fidelity is that they may push DW into higher fee funds or high expense financial advisor products.
My solution is keep my investments and my banking separate.

We use Vanguard for long-term investing (including Money Markets for emergency funds) and all my banking is done with a high quality local credit union. That way I get what I need at a low cost from organizations specializing in those services. There is a risk of the credit union upselling advisory services, but it is very easily side-stepped.

Ally would suffice as well.

It seems to me that this whole Advantage debacle is a signal that Vanguard is stripping down to be an organization focussed on low-cost and funds (back to the future?), not being a full-service provider. Frankly, I am okay with that, especially if it lets them focus on improving customer service for the core services they feel are most important.

brndog2
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Re: Discontinuing VanguardAdvantage Accounts

Post by brndog2 » Fri Mar 01, 2019 12:34 pm

hotpancakes wrote:
Thu Feb 28, 2019 11:27 pm
klaus14 wrote:
Thu Feb 28, 2019 11:02 pm
hotpancakes wrote:
Thu Feb 28, 2019 2:40 pm
If you're looking for a replacement for VanguardAdvantage, I can recommend a Fidelity CMA account. Here's what's nice about it:

1) No minimums. No fees.
2) Debit card that refunds all ATM fees worldwide.
3) No foreign transaction fees at ATMs outside the U.S. (There is a FTF when paying at merchants, but just use a 0% FTF credit card for that).
4) The sweep account interest rate is low, *BUT* Fidelity Money Market mutual funds count as liquid cash and are automatically liquidated behind the scenes without any involvement by you. If you purchase SPRXX, for instance, your current interest rate on cash is 2.27%.
5) Free wire transfers (in addition to ACH), both incoming and outgoing.
6) Free paper checks.
7) Free BillPay. Additionally, funds are debited from your account when the check is cashed, not when the check is sent like many other services.
8) High daily mobile check deposit limits ($50k/100k+).
8) 24/7 customer service.
I have cash management features in my regular Fidelity brokerage account. instead of having a separate cash management account. I wonder if all of these apply to regular brokerage or not.

i have a debit card and a check book.
I believe the Fidelity Brokerage (not CMA) account offers the same features, but only rebates ATM fees if your balance is high enough ($250k?).

You need a cma account at Fidelity to automatically back up the low interest fidc core account. You cam have mm funds in brokerage, but the do not automatically back up fidc low interest core cma fund.

I just transferred a seven figure amount from Vanguard to Fidelity. Extremely easy to do and the Fidelity rep was very knowledgeable and helpful. Bye bye VG, think before you act in the future!

stan1
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by stan1 » Fri Mar 01, 2019 12:49 pm

As someone who mostly uses Vanguard ETFs and who has only called Vanguard twice in the last 10 years I'm fine with cutting expenses on services I don't use. I'm all in on cost accounting that allocates expenses to share classes based on actuals. Mutual fund owners who want to keep the legacy IT platform should pay for it not ETF investors. Flagship customers should get a rep at a call center not a dedicated person. Customers that want more service than they get at Walmart go to Nordstrom so with investing people can choose to go to Fidelity or Merrill if they want to pay for extra services.

I do see that if I'm in my 80s I might want to move assets to a full service financial services firm that would offer increased personalized service to my executor or guardian if that unfortunate step ever became necessary. Vanguard might not exceed at the special cases these situations bring up.

retiringwhen
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by retiringwhen » Fri Mar 01, 2019 12:55 pm

stan1 wrote:
Fri Mar 01, 2019 12:49 pm
As someone who mostly uses Vanguard ETFs and who has only called Vanguard twice in the last 10 years I'm fine with cutting expenses on services I don't use. I'm all in on cost accounting that allocates expenses to share classes based on actuals. Mutual fund owners who want to keep the legacy IT platform should pay for it not ETF investors. Flagship customers should get a rep at a call center not a dedicated person. Customers that want more service than they get at Walmart go to Nordstrom so with investing people can choose to go to Fidelity or Merrill if they want to pay for extra services.

I do see that if I'm in my 80s I might want to move assets to a full service financial services firm that would offer increased personalized service to my executor or guardian if that unfortunate step ever became necessary. Vanguard might not exceed at the special cases these situations bring up.
After being a front-seat observer of an estate being managed out of a full-service financial services firm, I would hazard that 90% of all investors would do their heirs a great service by putting their money at Vanguard. Every single thing costs tons of money to do and the help just got in the way. I would hazard that the brokerage siphoned a good 3-4% off the assets by their shenanigans by either levying fees or giving and controlling advisory actions that were not truly in the interest of the estate.

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