Vanguard is Discontinuing their VanguardAdvantage Accounts

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rich126
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Re: Discontinuing VanguardAdvantage Accounts

Post by rich126 » Thu Feb 28, 2019 1:29 pm

Personally I would never use auto pay options where money is automatically taken out of your account. I don't like to cede that control to someone else.

I'm somewhat joking here but if you are cutting costs on funds/ETFs, you have to make up that lack of income elsewhere (by either increasing fees or cutting services).

I use a bank for the bill paying but I can understand the hassles of entering that info. Often a credit union is the best bank to use although in my case I don't use that account for bill paying.

sport
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Re: Discontinuing VanguardAdvantage Accounts

Post by sport » Thu Feb 28, 2019 1:32 pm

elgob wrote:
Thu Feb 28, 2019 1:25 pm
beyou wrote:
Thu Feb 28, 2019 12:55 pm
I find ACH and wire to/from Vanguard works very well and have no need for Vang Advantage.
How do you do ACH from Vanguard, apart from a VanguardAdvantage account (which uses the TBNY Mellon bank routing and account #)?
You link your bank checking account to your Vanguard account. Then you can ACH money in either direction. It's been available for years.

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galawdawg
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Re: Discontinuing VanguardAdvantage Accounts

Post by galawdawg » Thu Feb 28, 2019 1:33 pm

For me as I entered retirement, the key benefits of the VanguardAdvantage account were going to be the simplicity of keeping all of my accounts at one firm and the ability to earn more than the paltry interest paid by most banks on checking. I preferred to be able to keep all of my funds "fully invested", including cash, rather than having a large cushion in a practically zero interest checking account.

In my working years, I didn't draw funds from my Vanguard accounts, instead I added funds. During that period of my life, I had no need for cash management on my Vanguard account. However, now that I am recently retired and going to be drawing upon my Vanguard investments for retirement, being able to pay bills, write checks, withdraw funds and have the cash management features of the VanguardAdvantage account was very important for me. Without cash management on the account, I will have to either maintain a sizable cash cushion in my checking account or anticipate all of my upcoming spending and set up the sales and transfers necessary to meet those spending needs. Neither of those is ideal.

I provided this feedback to my representative, who indicated that it would be passed along. While I would prefer to see Vanguard reconsider this move, I am not particularly optimistic. Having been with Vanguard for several decades, I prefer not to move to Fidelity or Schwab but will now reluctantly begin looking at that as a possibility. I'll have to weigh out the pros and cons. As I told my rep, put me down for "very disappointed" on this development.

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HueyLD
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Re: Discontinuing VanguardAdvantage Accounts

Post by HueyLD » Thu Feb 28, 2019 1:40 pm

My guess is that Vanguard does not need to retain all its customers. The company has grown so much in the past five years that I think Vanguard may actually want to get rid of some of its customers.

I don’t know for sure, but that’s the impression I got from my many years at Vanguard. I have had a few suggestions over the last few years and the rep always said to pass my suggestions along to management. However, no one has bothered to get in touch with me probably because I don’t have $100 million there.

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RickBoglehead
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Re: Discontinuing VanguardAdvantage Accounts

Post by RickBoglehead » Thu Feb 28, 2019 1:41 pm

Here's an outline for my process, worthwhile for me and perhaps no one else:

1) Keep $100 in Ally Checking.
2) Keep 2 months or so of spending in Ally Online Savings.
3) Keep $10,000 in another Ally Online Savings account as "oh no, I need to do more than 6 transfers a month".
4) Keep everything else that's cash in Prime Money Market.

On the whatever Saturday is closest to the 25th of the month, I pull up Quicken and look at the bills for the coming month. As I got them, I entered them into Quicken. I pull up a very tiny Excel spreadsheet and enter these amounts on their respective dates. I then look for logical groupings, i.e. I can do a transfer on the 7th of the month to cover bills from the 8th to the 12th. I have a big bill on the 15th so it gets a transfer, etc.

Each month ends up with 3 - 5 transfers. I enter them into Quicken, ensuring that after each bill is paid from that transfer I'm back at $100 in my checking.

I then sign into Ally and make the 3-5 transfers in advance. Next month is now done. If a check has to be sent (i.e. HOA dues), it's either on Automatic Payment out of Ally or I set to make the one payment I need to make (i.e. taxes twice a year, amount varies).

If I drop below my rough 2 months of spending in Ally Savings, I send some money over from Prime Money Market.

Works for me.
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beyou
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Re: Discontinuing VanguardAdvantage Accounts

Post by beyou » Thu Feb 28, 2019 1:45 pm

One of the main reasons for banks to offer online bill payments was to gain your dependence on them, reducing the chance you would switch banks.
Clearly Vanguard does not care to retain your banking business (only your fund/brokerage business).
No real bank would remove online banking with a promise to someday restore it.

Glamdring56
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Re: Discontinuing VanguardAdvantage Accounts

Post by Glamdring56 » Thu Feb 28, 2019 1:52 pm

I can forgive Vanguard their decision to cancel Vanguard Advantage. In a true Risk/Reward analysis they acknowledge they cannot provide a truly adequate product for the future and I must concur.

What I cannot forgive them for is their failure to wield their VAST financial/marketing leverage to PARTNER with best of the breed providers for banking, credit cards, etc..... and provide services for flagship and flagship select clients. If they can't take the effort to find a way for me to get access to better services, than they can provide, then whats the point of a continued relationship?

MidFlorida1214
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Re: Discontinuing VanguardAdvantage Accounts

Post by MidFlorida1214 » Thu Feb 28, 2019 1:55 pm

I have never used Vanguard Advantage, but I do use Fidelity Cash Management. I understand the unease with auto pay. I have a few utilities on auto pay, but I chiefly use a credit card for other recurring charges. I also use Bill Pay at times. All these are better than what I used to do when I travelled extensively back in the 90's. Back then, I would pay my bills in advance, by estimating what I thought would cover them for 2 to 3 months. It worked well, but I would not want to return the those times.

SpaethCo
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Re: Discontinuing VanguardAdvantage Accounts

Post by SpaethCo » Thu Feb 28, 2019 2:05 pm

Nala wrote:
Thu Feb 28, 2019 11:49 am
Second, I like to review my bills before they get paid. Ever hear of incorrect charges?
How often do you find incorrect charges?

Let's say you're going to review statements no matter what, but scheduling payment through your bill-pay provider takes ~3 minutes per bill. (Log in, find the right account, pick the right date, make sure you enter the payment amount correctly, etc)

Figure there are 10 bills per month (mortgage, gas, electric, mobile phone, insurance, various credit cards, etc). You're spending 30 minutes a month scheduling payments that could be automated, and introducing the risk of human error. (entering a wrong payment date, wrong payment amount, paying wrong bill)

That's 6 hours of your time every year that you're committing on the off-chance you find an incorrect charge.

Personally, I've only had 1 billing error that I can remember in the last decade. I stopped scheduling my payments manually once I started to look at the ROI.

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8foot7
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Re: Discontinuing VanguardAdvantage Accounts

Post by 8foot7 » Thu Feb 28, 2019 2:20 pm

Since active users of the Advantage account will have to move, I can report along with many others that the Schwab Bank checking account is pretty much best in class with a couple of minor irritants - Quicken Bill Pay is not supported, although Quicken itself is; the interest rate is a little low, although transfers from a linked brokerage account holding SWVXX are instantaneous and SWVXX is paying 2.32%; and the ATM rebates are reimbursed once per month and not as you go. These are minor concerns. Service is stellar, certainly better than Vanguard's regular service. And no fees, no minimums. Mobile deposits literally post, in most cases with funds immediately available, in a matter of minutes.

Fidelity is also great, but I confess I have a slightly higher confidence level in Schwab because the bank account is a true bank account held by Schwab Bank and not a weird hybrid serviced by a bank you aren't directly a client of. But if you have a zillion bucks at Fidelity already, probably makes sense to stay.

Broken Man 1999
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Re: Discontinuing VanguardAdvantage Accounts

Post by Broken Man 1999 » Thu Feb 28, 2019 2:27 pm

galawdawg wrote:
Thu Feb 28, 2019 1:33 pm
For me as I entered retirement, the key benefits of the VanguardAdvantage account were going to be the simplicity of keeping all of my accounts at one firm and the ability to earn more than the paltry interest paid by most banks on checking. I preferred to be able to keep all of my funds "fully invested", including cash, rather than having a large cushion in a practically zero interest checking account.

In my working years, I didn't draw funds from my Vanguard accounts, instead I added funds. During that period of my life, I had no need for cash management on my Vanguard account. However, now that I am recently retired and going to be drawing upon my Vanguard investments for retirement, being able to pay bills, write checks, withdraw funds and have the cash management features of the VanguardAdvantage account was very important for me. Without cash management on the account, I will have to either maintain a sizable cash cushion in my checking account or anticipate all of my upcoming spending and set up the sales and transfers necessary to meet those spending needs. Neither of those is ideal.

I provided this feedback to my representative, who indicated that it would be passed along. While I would prefer to see Vanguard reconsider this move, I am not particularly optimistic. Having been with Vanguard for several decades, I prefer not to move to Fidelity or Schwab but will now reluctantly begin looking at that as a possibility. I'll have to weigh out the pros and cons. As I told my rep, put me down for "very disappointed" on this development.
You might be surprised at the speed a transfer from a Vanguard settlement account to a linked bank or credit union can be made. I've had next day service (requested day and delivery day must both be business days) on all my transfers from Vanguard to my CU account, IF I made the request by noon of the preceding day. Last week I tested the timing of a transfer request made AFTER noon, it didn't show up in my CU account until day 2. Because of these quick transfer experiences, I now run very lean in my CU checking account.

As a "just in case" fallback plan, I have check-writing for one of my accounts. I don't particularly like writing checks on my Vanguard funds, as I am not able to ship off the taxes like I can do with a normal distribution.

I was surveyed a few weeks ago, and I stated that I would like to see Vanguard AS a bank, which is not the same as Vanguard USING a bank. Looks like long-term Vanguard will be neither.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

hotpancakes
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Re: Discontinuing VanguardAdvantage Accounts

Post by hotpancakes » 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.
Last edited by hotpancakes on Thu Feb 28, 2019 2:54 pm, edited 2 times in total.

retiringwhen
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Re: Discontinuing VanguardAdvantage Accounts

Post by retiringwhen » Thu Feb 28, 2019 2:42 pm

Broken Man 1999 wrote:
Thu Feb 28, 2019 2:27 pm
I was surveyed a few weeks ago, and I stated that I would like to see Vanguard AS a bank, which is not the same as Vanguard USING a bank. Looks like long-term Vanguard will be neither.

Broken Man 1999
Or this is an interim step to them creating their own bank operation. unlikely but not impossible.

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beyou
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Re: Discontinuing VanguardAdvantage Accounts

Post by beyou » Thu Feb 28, 2019 2:45 pm

retiringwhen wrote:
Thu Feb 28, 2019 2:42 pm
Broken Man 1999 wrote:
Thu Feb 28, 2019 2:27 pm
I was surveyed a few weeks ago, and I stated that I would like to see Vanguard AS a bank, which is not the same as Vanguard USING a bank. Looks like long-term Vanguard will be neither.

Broken Man 1999
Or this is an interim step to them creating their own bank operation. unlikely but not impossible.

They previously outsourced operations of the original Vanguard Brokerage Services (VBS) to Pershing years ago.
Outsourcing banking to PNC was analogous, except Vanguard insourced the brokerage, they can certainly do the same for banking if they choose,
but most fund companies historically have outsourced banking functions.

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Sage16
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Vanguard Discounting Advantage Accounts

Post by Sage16 » Thu Feb 28, 2019 3:05 pm

[merged into existing topic - moderator prudent]

I received an email from Vanguard this morning:

"We are writing to let you know that after careful consideration, we have decided to discontinue the VanguardAdvantage® account on July 31, 2019.
Why the change?
At Vanguard, we are always evaluating the services we offer to ensure they meet our clients' needs. Following a recent review, which included feedback from a broad spectrum of clients who use the service, we have determined that VanguardAdvantage is no longer meeting the range of needs articulated by our clients. "

I have never really used the features of the account but set it up strictly as a backup to my normal bank account so this is disappointing that they are shutting it down.
Bogle on investing: Diversify, focus on low costs, invest for the long term. Don't speculate and don't be distracted by volatility.

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galawdawg
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Re: Discontinuing VanguardAdvantage Accounts

Post by galawdawg » 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?

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Re: Discontinuing VanguardAdvantage Accounts

Post by xb7 » Thu Feb 28, 2019 3:25 pm

I had read on this overall forum talk in the past of people leaving Vanguard, but hadn't considered it for myself.

But with this change, I am thinking about it. I definitely go with the 'pull' model for bill pay, because the exact amounts of the bills paid seem to change a lot, so it seems like a PITA to set up a push-model where I have to know --- and then stay on top of and frequently change --- the amount paid for each bill. Where I can I use credit card to pay bills (via pull model), but then the credit card bill is pulled from Vanguard Advantage account. My other bank pays 0.01% interest on the checking account, and my credit card bills can vary a lot. The result is that I would need to keep a fair amount in my essentially zero interest checking account, and even then pay more attention to make sure there was always enough there.

Couple that with Vanguard Investor Shares going away --- I presume this means that even if I don't convert to ETFs, I could move my Flagship funds to another broker. I.e., one less reason to stay, one less benefit for having a larger account with Vanguard.

And, for the second year in a row, I'm waiting for Vanguard's accounting team to --- I hope --- reissue my tax forms, as for the second year in a row they've reported an incorrect cost basis for a fund sale. And I find that for several funds that I bought via Vanguard brokerage, and have always been held by Vanguard --- they don't know the cost basis. I prefer when the company that has most of my money is reliably able to do basic accounting.

So I'm going to start looking at options. It sounds like the favored options among Bogleheads are Schwab and Fidelity. If anyone can think of a reason to stay --- apart from inertia --- please let me know. I think I would still stick with Vanguard funds, but hope for a better one-stop company to keep them at.

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indexfundfan
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Re: Discontinuing VanguardAdvantage Accounts

Post by indexfundfan » Thu Feb 28, 2019 3:27 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?
Only Fidelity will automatically liquidate the MMF. Not Schwab.
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FRANK2009
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Re: Discontinuing VanguardAdvantage Accounts

Post by FRANK2009 » Thu Feb 28, 2019 3:37 pm

Vanguard Advantage worked flawlessly for me for at least 20 years. Just submitted the form from my pension to have direct deposit go to my credit union account. Not happy about it but I don't think the powers that be at Vanguard will reverse their decision. I'm a little concerned that Vanguard no longer wants to be the "one stop shop" like Fidelity or Schwab. I guess one should be happy that they continue to lower costs.


I also don't believe the line in the email indicating that clients were dissatisfied with service.

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oneleaf
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Re: Discontinuing VanguardAdvantage Accounts

Post by oneleaf » 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!

brndog2
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Re: Discontinuing VanguardAdvantage Accounts

Post by brndog2 » Thu Feb 28, 2019 3:46 pm

Nala wrote:
Thu Feb 28, 2019 10:39 am
Everyone who has an Advantage account should write and protest. This is a major inconvenience in two ways. First, establishing bill paying at another institution requires inputing large amounts of information for each bill to be paid times the number of bills. For me, that's probably around 30 different payees.

Second, it means having to transfer money on a frequent basis from my Vanguard money market account to the other institution.

What I find most galling is Vanguard's claim that “we have determined that VanguardAdvantage is no longer meeting the range of needs articulated by our clients.”

What a pile of BS. Why not just tell us the truth about why you’re discontinuing this service—whatever that might be. To say that it is not meeting clients’ needs is ridiculous. It is certainly meeting my needs and the needs of everyone else who uses it.

As long as I have to establish bill paying services elsewhere, I’ll be looking for another institution that can offer me the FULL range of services I had become accustomed to with Vanguard. At some other institutions, I can invest in the same Vanguard funds at no additional cost.
I called them, am so pissed. They didn’t bother to ASK me if it was meeting my needs. I have a large portfolio and will be looking st other one stop shops like Fidelity.

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Youngblood
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Re: Discontinuing VanguardAdvantage Accounts

Post by Youngblood » Thu Feb 28, 2019 3:56 pm

Wow, this was a complete surprise to me. I knew about Vanguard Advantage accounts but since I already had Bill pay set up at Fidelity I just never switched. So sorry for all the folks at Vanguard who have to go through all the work to list payees at another bank or brokerage.

All these years with VG and Fido there are things I like better at each. But, it does seem that VG is dropping the ball a bit with customer service, tax forms, TurboTax freebie ever changing advisors and now this.
"I made my money by selling too soon." | Bernard M. Baruch

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friar1610
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Re: Discontinuing VanguardAdvantage Accounts

Post by friar1610 » Thu Feb 28, 2019 4:00 pm

We have an Advantage account for our joint taxable account. We don't do any automatic bill paying through that account, preferring to use our primary "bank" (actually a credit union). If I recall correctly, Vanguard put me in the Advantage account years ago because I wanted two simple things:

- the ability to write checks against my MM account. Back in the day, that was the Prime MMF. When they changed over to the Fed MMF as the settlement account, that became the account against which checks were written. Still OK with me.

- a debit card that I could use to:

- - withdraw cash from my settlement account via an ATM
- - purchase things using money in the settlement account without getting a credit card bill

Both have worked fine although I probably only do one or the other monthly.

If I understand correctly, both these capabilities will go away with the demise of the Advantage accounts. This isn't the end of the world for me but it's an inconvenience and a disincentive to stick with VG. I understand that I could convert my VG MF shares to ETFs and then move them to Fidelity or Schwab with no tax consequences. I'll look into doing that if I determine that either of them can provide the check-writing and debit card capabilities that VG wants to remove.

As an aside, probably like many of you, I'm a member of the VG Steering Community. About once a week I receive a short survey from VG in which they ask about various aspects of their products/services or about my investing habits. This feedback is presumably used to improve things for VG clients. I can't recall ever having been asked for feedback on Advantage accounts although I suppose it's possible that I'm misremembering. But it makes me wonder what was the client feedback that drove this change?
Friar1610

sia
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Vanguard Advantage going away?!

Post by sia » Thu Feb 28, 2019 4:01 pm

[merged into existing thread - moderator prudent]

Maybe not a lot of people here use this, but I use it a ton.

Vg just announced they are ending the service. Super frustrating. All my direct deposits, bill pay and checking were done through that.

Not sure why they want me to start talking w other local banks at a time when its all vertically consolidated, guess I finally will answer the calls from Merrill, Chase, Schwaab and Fidelity. Am assuming soon they'll give some offer to transfer over.

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Re: Discontinuing VanguardAdvantage Accounts

Post by galawdawg » Thu Feb 28, 2019 4:07 pm

friar1610 wrote:
Thu Feb 28, 2019 4:00 pm
...
As an aside, probably like many of you, I'm a member of the VG Steering Community. About once a week I receive a short survey from VG in which they ask about various aspects of their products/services or about my investing habits. This feedback is presumably used to improve things for VG clients. I can't recall ever having been asked for feedback on Advantage accounts although I suppose it's possible that I'm misremembering. But it makes me wonder what was the client feedback that drove this change?
I do wonder how many in the "accumulation" phase of their life use VanguardAdvantage vs. those in the "decumulation" phase?

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Re: Discontinuing VanguardAdvantage Accounts

Post by xb7 » Thu Feb 28, 2019 4:22 pm

indexfundfan wrote:
Thu Feb 28, 2019 3:27 pm
Only Fidelity will automatically liquidate the MMF. Not Schwab.
I just had an online chat with a Schwab representative. It took some go-rounds in the discussion to find this out, but she ultimately said the same thing.

Time to start reading up more about Fidelity!

Thanks.

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avenger
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Re: Discontinuing VanguardAdvantage Accounts

Post by avenger » Thu Feb 28, 2019 4:24 pm

You can call and register a complaint by calling their nain number at 877-662-7447.

I simply stated: "I can't fathom, that a brokerage as large as Vanguard can't offer adequate cash management services to its clients. If my Vanguard Advantage account is canceled, I will be transferring all of my money to another institution."

The rep said my complaint will be forwarded to upper management.
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [3 fund portfolio: VTI, VXUS, SV fund (yield 3.01%)]

mptfan
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Re: Discontinuing VanguardAdvantage Accounts

Post by mptfan » Thu Feb 28, 2019 4:28 pm

HueyLD wrote:
Thu Feb 28, 2019 1:40 pm
My guess is that Vanguard does not need to retain all its customers. The company has grown so much in the past five years that I think Vanguard may actually want to get rid of some of its customers.
This is my sense as well.

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Re: Vanguard Advantage going away?!

Post by trailmk » Thu Feb 28, 2019 4:34 pm

I am in the same boat. EVERYTHING - direct deposit, bill pay, ACH, check writing etc. is through our Advantage account. I have almost three dozen accounts/businesses that I'll have to contact, setup new arrangements and verify that everything is working. This includes two accounts with Treasury Direct - oh, joy. I am NOT HAPPY.

From the email, it seems to be too late to reverse this, but I did send an email to our VG rep. I don't know what customers they received feedback from, but I certainly wasn't contacted!!

Really, really upset and annoyed by all the addition work and inconvenience this decision has created.

MKT

trailmk
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Re: Discontinuing VanguardAdvantage Accounts

Post by trailmk » Thu Feb 28, 2019 4:35 pm

I am in the same boat. We are retired and EVERYTHING - direct deposit, bill pay, ACH, check writing etc. is through our Advantage account. I have almost three dozen accounts/businesses that I'll have to contact, setup new arrangements and verify that everything is working. This includes two accounts with Treasury Direct - oh, joy. I am NOT HAPPY.

From the email, it seems to be too late to reverse this, but I did send an email to our VG rep. I don't know what customers they received feedback from, but I certainly wasn't contacted!!

Really, really upset and annoyed by all the addition work and inconvenience this decision has created.

MKT

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BoglePaul
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Re: Discontinuing VanguardAdvantage Accounts

Post by BoglePaul » Thu Feb 28, 2019 4:42 pm

Retracted
Last edited by BoglePaul on Thu Feb 28, 2019 6:55 pm, edited 1 time in total.

stan1
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Re: Discontinuing VanguardAdvantage Accounts

Post by stan1 » Thu Feb 28, 2019 4:43 pm

GoldStar wrote:
Thu Feb 28, 2019 1:26 pm
stan1 wrote:
Thu Feb 28, 2019 1:19 pm
People want full service including a designated call center rep along with zero fees and no monetization of personal data. Maybe there's an opportunity for someone to start such a business? Would be curious to see the business plan leading to profitability.
The key is to balance out the zero fees and call center with some supposed value-added managed funds that others are willing to pay for. The managed funds support the business and the free Cash Management / Banking features and ZERO expense ratio funds serve as loss leaders. Customers are allowed to use only the loss leaders. Business Plan? Copy Fidelity since this is what they are already doing.
Ah, you must have missed the other thread where an internal Fidelity memo was quoted in the WSJ as saying their business model was failing and they needed to charge higher fees for access to their fund marketplace. So that business plan is broken even more with their zero fee funds.

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BoglePaul
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Re: Discontinuing VanguardAdvantage Accounts

Post by BoglePaul » Thu Feb 28, 2019 4:43 pm

retracted
Last edited by BoglePaul on Thu Feb 28, 2019 7:12 pm, edited 1 time in total.

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BoglePaul
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Re: Discontinuing VanguardAdvantage Accounts

Post by BoglePaul » Thu Feb 28, 2019 4:45 pm

avenger wrote:
Thu Feb 28, 2019 4:24 pm
You can call and register a complaint by calling their nain number at 877-662-7447.

I simply stated: "I can't fathom, that a brokerage as large as Vanguard can't offer adequate cash management services to its clients. If my Vanguard Advantage account is canceled, I will be transferring all of my money to another institution."

The rep said my complaint will be forwarded to upper management.
I'd call and ask more details about their upcoming replacement product.

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GoldStar
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Re: Discontinuing VanguardAdvantage Accounts

Post by GoldStar » Thu Feb 28, 2019 4:47 pm

stan1 wrote:
Thu Feb 28, 2019 4:43 pm
GoldStar wrote:
Thu Feb 28, 2019 1:26 pm
stan1 wrote:
Thu Feb 28, 2019 1:19 pm
People want full service including a designated call center rep along with zero fees and no monetization of personal data. Maybe there's an opportunity for someone to start such a business? Would be curious to see the business plan leading to profitability.
The key is to balance out the zero fees and call center with some supposed value-added managed funds that others are willing to pay for. The managed funds support the business and the free Cash Management / Banking features and ZERO expense ratio funds serve as loss leaders. Customers are allowed to use only the loss leaders. Business Plan? Copy Fidelity since this is what they are already doing.
Ah, you must have missed the other thread where an internal Fidelity memo was quoted in the WSJ as saying their business model was failing and they needed to charge higher fees for access to their fund marketplace. So that business plan is broken even more with their zero fee funds.
Meh - that was the response of a company spokesperson to someone in the media regarding third-party charges. May have even been misquoted given how unreliable media is today.
Fidelity is alive and well and will be far into the future.

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Re: Discontinuing VanguardAdvantage Accounts

Post by 8foot7 » Thu Feb 28, 2019 4:49 pm

If they had a replacement product that close to being ready, there is no way that communication about cancelling the product would have gone out without mentioning it. You most likely talked with a lower level call center rep that wanted to tell you what you obviously wanted to hear.

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Re: Discontinuing VanguardAdvantage Accounts

Post by gowest » 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

brndog2
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Re: Discontinuing VanguardAdvantage Accounts

Post by brndog2 » Thu Feb 28, 2019 4:57 pm

8foot7 wrote:
Thu Feb 28, 2019 4:49 pm
If they had a replacement product that close to being ready, there is no way that communication about cancelling the product would have gone out without mentioning it. You most likely talked with a lower level call center rep that wanted to tell you what you obviously wanted to hear.
Just like mobile check deposit would only take a few months. I’m losing confidence in VG. Maybe they were waiting for Jack to depart before throwing customer service out the door.

animal_drawing
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Re: Discontinuing VanguardAdvantage Accounts

Post by animal_drawing » Thu Feb 28, 2019 4:57 pm

So, I just set up VanguardAdvantage back in August, and it's taken the last five months to get everything moved over. Fortunately, I have a pretty good handle on how to do this stuff now, so I don't fear doing it again, but it's still work I'd prefer not to do. The only bills that auto-draft from our Advantage account are the mortgage and our credit cards. And, it was only this month that I was able to convince my DW to direct deposit some of her paycheck into our Advantage account. It's going to be a hard sell to move to yet another institution.

From what I've read so far in this thread, the Fidelity cash management account (CMA) is the closest you can get to Advantage, full checking / ACH, with auto-liquidation of higher-yielding but low-risk money market assets.

I just surveyed all the other checking accounts out there, and the difference in interest between them just isn't worth opening a new account. Even Ally is 0.1% < $15k and 0.6% on the over $15k balance.

One of the other things I've enjoyed about Advantage is the ability to keep the bulk of the account in a CA muni fund (VCTXX) so that the dividends/interest is tax free. I tested the auto-redemption of those funds, and it worked fine. It makes it so I can sweep money into that tax efficient vehicle without worrying about bouncing a check. A traditional check/savings account pair, even with good rates, doesn't really compete with that. The auto-liquidation of money market funds means you can get by with a smaller cash pile.

We already have checking accounts with Citibank, Wells Fargo, and BofA. We have credit cards with Capital One, Chase, Citibank, and AmEx. My employer uses Schwab as the broker to award RSUs. Is there one of those in particular that I should look at harder, or is Fidelity CMA really the best? So far I like Schwab, Chase, and Capital One, but I'm not sure I should open one more checking account. I know this forum is full of research on this stuff, so if you want to answer in the form of a link to another thread, that's fine.

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Re: Discontinuing VanguardAdvantage Accounts

Post by Wiggums » Thu Feb 28, 2019 5:05 pm

smectym wrote:
Thu Feb 28, 2019 1:25 pm
I too recently set up Vanguard Advantage. Fortunately, hadn’t yet set up the bill pay.
I’ve been following all these threads about poor and unpredictable Vanguard service and I do find it concerning. We’re also experiencing our own ongoing problems. Don’t want to overreact (and the business decision to discontinue Advantage is not a big deal in itself) but at some point you can’t just shrug off “poor service“ as something entirely unrelated to the safety of ones assets.

Spouse has been angry with Vanguard since they unaccountably botched an IRA transfer. She wants us to leave; Fidelity the likely destination. I’ve been dragging my feet but now I’m starting to think more seriously about it.

Smectym
The good news is that you can open an account at Fidelity and try it out without moving all your funds. I have accounts at T. Rowe Price, Vanguard, Fidelity and Schwab. The ER is higher at TRP so I only have a state bond fund there. I don’t have any major complaints with the others.

Good luck to you.

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Re: Discontinuing VanguardAdvantage Accounts

Post by mindboggling » Thu Feb 28, 2019 5:08 pm

As a long-time Vanguard investor, I never signed up for Advantage. I've always preferred to keep banking and investing separate. I would never invest through a bank or visa versa.

I wonder if the same people who love "one stop shopping" for all their money needs are the same ones who avoid SPIAs for their single-company risk?
Last edited by mindboggling on Thu Feb 28, 2019 6:23 pm, edited 1 time in total.
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Re: Discontinuing VanguardAdvantage Accounts

Post by LadyGeek » Thu Feb 28, 2019 5:11 pm

This thread is now in the Investing - Theory, News & General forum (news). I also retitled the thread for clarity.

As a reminder, please state your concerns in a civil, factual manner.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: Discontinuing VanguardAdvantage Accounts

Post by galawdawg » Thu Feb 28, 2019 5:15 pm

BoglePaul wrote:
Thu Feb 28, 2019 4:42 pm
Good news! Called Vanguard, they are going to offer a similar, replacement product in the near future. The replacement product will be a direct offering from Vanguard so that they can meet their customers expectations. The current Vanguard Advantage product is a rebrand of a 3rd party solution. Looking forward to the exciting new product!
If the person you spoke with has accurate information, it is incredibly foolish of Vanguard to announce that they are pulling the plug on VanguardAdvantage without having another cash management product ready to go. It would also be ill advised for Vanguard to fail to provide information on a new cash management offering to Flagship representatives who are more likely to receive inquiries from current VanguardAdvantage customers. Also, the Vanguard announcement information provided by OP reads:
bhwabeck3533 wrote:
Thu Feb 28, 2019 11:00 am

Why the change?
At Vanguard, we are always evaluating the services we offer to ensure they meet our clients' needs. Following a recent review, which included feedback from a broad spectrum of clients who use the service, we have determined that VanguardAdvantage is no longer meeting the range of needs articulated by our clients.

We realize that discontinuing VanguardAdvantage will require you to establish similar services, such as bill pay, with your bank. We sincerely regret this inconvenience. This notification is intended to provide you with as much lead time as possible to make the necessary changes.

What do you need to do?
Although VanguardAdvantage will be available until July 31, 2019, we encourage you to begin the transition process now. By starting now, you will allow sufficient time to establish alternative arrangements with your bank as well as ensure that withdrawals can clear from your account before the checkwriting, bill pay, and debit card features of VanguardAdvantage are discontinued.
Since Vanguard twice directs affected customers to make alternative arrangements with their bank, it doesn't sound to me like a similar cash management features are coming anytime soon, if ever. If they had a replacement product in the wings, it seems the announcement would provide the good news of improved cash management offerings.

Grasshopper
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by Grasshopper » Thu Feb 28, 2019 5:21 pm

Dear Flagship Representative

Just want to share my displeasure with the discontinuing of VanguardAdvantage. This has been the one service that I have relied on for the past 10 or so years. Very sorry to see that the customer appears to come last.

I believe I am at or near my 35th year with Vanguard.

Regards, Grasshopper

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by Vanguard Fan 1367 » Thu Feb 28, 2019 5:24 pm

I am enjoying all the feedback on this discontinuing. It was like Fantasy island when through Bogleheads I discovered Vanguard Advantage and set everything up there. I loved the "advantages" of Vanguard Advantage. Since I have a Fidelity Account it sounds like I can get everything there that I had at Vanguard with the checking.

I am not really into the zero expense ratio fund ideas so I hope Fidelity can continue to give great service to their Cash Management customers and make a profit somewhere. While they offer the Cash Management feature I think that I will try to take advantage of it.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by MisterMister » Thu Feb 28, 2019 5:28 pm

Primarily I am a Fidelity customer although I have a Vanguard account.

I don't use Fidelity CMA. I just can't get used to the idea of essentially having a big pile of money at one institution linked into my ACH accounts.

As for Vanguard, I'm glad they plan to offer a replacement service to satisfy those people here that are losing a valuable service.

At some point I will move to Vanguard because my wife will need PAS after I "move on", and Fidelity is too costly. Having said that I'd personally be happy if VG did not provide full banking service. It's seems pretty much unanimous here that VG's service is mediocre at best. Broadening their services without first addressing that issue doesn't seem like a good path to improvement.

Some years back a fraudulent transaction came into my bank for several thousand dollars via a bogus Paypal transaction. All the perpetrator needed to make that happen was my routing / account number, which they had gained due to a virus on my computer. My bank reversed that charge immediately without question. I'm glad that account information was not directly attached to my retirement savings, and that I had a conventional bank to work with when the event occurred.

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by galawdawg » Thu Feb 28, 2019 5:46 pm

As I begin researching cash management options at Fidelity, Schwab, etc. it seems to appear that most major investment companies offer a cash management account. Is that correct? Is Vanguard going to be the outlier that doesn't offer that service?

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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by mervinj7 » Thu Feb 28, 2019 5:58 pm

MisterMister wrote:
Thu Feb 28, 2019 5:28 pm
Primarily I am a Fidelity customer although I have a Vanguard account.

I don't use Fidelity CMA. I just can't get used to the idea of essentially having a big pile of money at one institution linked into my ACH accounts.
You can turn off overdraft so your CMA and brokerage accounts are not linked. You can also activate Money Transfer Lockdown to further restrict any outgoing transfers. For example, we leave lockdown turned on and only briefed turned it off for a outgoing downpayment wire transfer. BillPay and debit card use are not affected.

https://dpcs.fidelity.com/ftgw/dpcs/sec ... kdown/info
Last edited by mervinj7 on Thu Feb 28, 2019 6:01 pm, edited 1 time in total.

trailmk
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Re: Vanguard is Discontinuing their VanguardAdvantage Accounts]

Post by trailmk » Thu Feb 28, 2019 6:00 pm

It's ironic how VG just forced everyone to convert to brokerage accounts and NOW VG does away with VG Advantage. As far as I know, every major brokerage company offers a CMA account except VG.

Still fuming,

MKT

LASER
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Vanguard Advantage Account being Discontinued

Post by LASER » Thu Feb 28, 2019 6:05 pm

[merged into existing thread - moderator prudent]

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.

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