Forget Customer Service--Vanguard has lousy Computers

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venkman
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Forget Customer Service--Vanguard has lousy Computers

Post by venkman » Wed Jan 10, 2018 1:01 am

Has anyone else had issues with their Vanguard online account?

Let me preface this by saying it was partially to entirely my own fault, and I was able to fix it myself with minimal consequences and/or annoyance. But it's something that the computers never should have ALLOWED to happen.

Situation: I had two individual stocks whose shares were each split across my TIRA and Roth IRA. I went online Friday and had the shares from the TIRA rolled over to the Roth, so I could sell each stock and only pay the commissions once. I log in on Monday, and Stock 1 has transferred over, no problem. Stock 2 shows no signs of doing anything, and doesn't display anything that suggests a transfer is pending. I think maybe I accidentally only transferred Stock 1. So, I go back in to my TIRA and do a transfer for Stock 2. I log in today, and instead of 100 shares of Stock 2 in my Roth, I have 200 shares. And my TIRA now shows -100 shares of Stock 2. I called VG customer service; the woman was very nice and talked to several different departments, but she was ultimately unable to reverse it. I ended up having to sell shares of VTI in my TIRA to get the cash to buy back the hundred shares of Stock 2, to get it back to zero in my TIRA. Effectively, I ended up rolling over a couple thousand more dollars to my ROTH than I had planned to (not a huge deal for me, because I should be in a low tax bracket this year, but still...)

I'm certainly willing to take responsibility for being impatient and doing the double rollover, but WHY did VG's computer even let me do it? As soon as the first rollover order gets entered, how does it not immediately flag those shares and refuse to let anything else happen with them until the rollover is finished? More disturbingly, how does it let me short sell a stock (in an IRA!!!) when I never even signed up for a margin account (or entered a sell order)?

I can understand VG's rapid growth might cause their human-based customer service to decline. And I have no plans to leave VG. But I just don't see any excuse for their automated systems being this bad...

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whodidntante
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by whodidntante » Wed Jan 10, 2018 1:07 am

You could "jump ship." Thanks, I'll be here all week. Don't forget to tip your server.

tibbitts
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by tibbitts » Wed Jan 10, 2018 1:41 am

Well, this reminds me of the UNIX operating system in the early days. People would ask why it and its "bad" command line interface would let them do seemingly stupid things that other operating systems often wouldn't. I believe the answer was partly that the developers wanted to make it small and relatively fast, but also partly that they didn't believe they could envision everything someone might want to do with the platform, so they intentionally made it capable of doing as many things as possible. Basically, they were building software for people like themselves to use.

Sadly, many of those developers have since passed away, but maybe some are alive and well and working in web development at Vanguard. Who knows, maybe some day you'll log on and be greeted by nothing but a dollar sign. Seems oddly appropriate.

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triceratop
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by triceratop » Wed Jan 10, 2018 2:09 am

tibbitts wrote:
Wed Jan 10, 2018 1:41 am
Well, this reminds me of the UNIX operating system in the early days. People would ask why it and its "bad" command line interface would let them do seemingly stupid things that other operating systems often wouldn't. I believe the answer was partly that the developers wanted to make it small and relatively fast, but also partly that they didn't believe they could envision everything someone might want to do with the platform, so they intentionally made it capable of doing as many things as possible. Basically, they were building software for people like themselves to use.

Sadly, many of those developers have since passed away, but maybe some are alive and well and working in web development at Vanguard. Who knows, maybe some day you'll log on and be greeted by nothing but a dollar sign. Seems oddly appropriate.
I'm not sure this analogy is so useful. The design principles of UNIX and Vanguard's website could not be more different.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

Thesaints
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by Thesaints » Wed Jan 10, 2018 2:20 am

looks like the brokerage account allowed the OP to short stocks. Did he have margin enabled ? Is it at all possible to go short in IRA accounts ?

tibbitts
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by tibbitts » Wed Jan 10, 2018 8:49 am

triceratop wrote:
Wed Jan 10, 2018 2:09 am
tibbitts wrote:
Wed Jan 10, 2018 1:41 am
Well, this reminds me of the UNIX operating system in the early days. People would ask why it and its "bad" command line interface would let them do seemingly stupid things that other operating systems often wouldn't. I believe the answer was partly that the developers wanted to make it small and relatively fast, but also partly that they didn't believe they could envision everything someone might want to do with the platform, so they intentionally made it capable of doing as many things as possible. Basically, they were building software for people like themselves to use.

Sadly, many of those developers have since passed away, but maybe some are alive and well and working in web development at Vanguard. Who knows, maybe some day you'll log on and be greeted by nothing but a dollar sign. Seems oddly appropriate.
I'm not sure this analogy is so useful. The design principles of UNIX and Vanguard's website could not be more different.
Both seem like cases of "it did exactly what I told it to, but shouldn't have let me do that!" I think you meant shouldn't have been more different.

Maybe the designers encountered some of the severe limitations in VG's mutual fund web platform and decided to overcompensate on the brokerage platform. I don't use the brokerage platform but have encountered several cases where I clearly should have been allowed to do something on the MF side, but the platform wouldn't let me.

Broken Man 1999
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by Broken Man 1999 » Wed Jan 10, 2018 3:13 pm

Reminds me of this:

A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
(attributed to Doug Adams)

No offense intended, it's just some things aren't foolproof, no matter how hard designers might try.

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

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Post by acanthurus » Wed Jan 10, 2018 3:24 pm

Removed
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2015
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by 2015 » Wed Jan 10, 2018 3:30 pm

Broken Man 1999 wrote:
Wed Jan 10, 2018 3:13 pm
Reminds me of this:

A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
(attributed to Doug Adams)

No offense intended, it's just some things aren't foolproof, no matter how hard designers might try.

Broken Man 1999
^^^
This.
When I make a mistake, it's not anyone else's responsibility, partially or otherwise, but my own.

mouses
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by mouses » Wed Jan 10, 2018 3:51 pm

2015 wrote:
Wed Jan 10, 2018 3:30 pm
Broken Man 1999 wrote:
Wed Jan 10, 2018 3:13 pm
Reminds me of this:

A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
(attributed to Doug Adams)

No offense intended, it's just some things aren't foolproof, no matter how hard designers might try.

Broken Man 1999
^^^
This.
When I make a mistake, it's not anyone else's responsibility, partially or otherwise, but my own.
I'm not sure this was actually a mistake on the OP's part. I would also have assumed that somehow I skipped doing the transfer. I might have phoned Vanguard to double check (I drive customer service crazy everywhere being somewhat OCD) but if they were closed and there wasn't an indication anywhere that it was in progress, I would have queued it up again.

Was there really no indication? When I was trying to transfer to and from outside accounts there was a transfer link obviously on the account. Actually it is still there, so maybe it is there all the time.

Sherlock
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by Sherlock » Wed Jan 10, 2018 5:24 pm

As a long time Unix scripter I'm reminded of the saying: "if you know what you're doing Unix will let you do anything and if you don't know what you're doing Unix will let you do anything"

2015
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by 2015 » Wed Jan 10, 2018 6:48 pm

mouses wrote:
Wed Jan 10, 2018 3:51 pm
2015 wrote:
Wed Jan 10, 2018 3:30 pm
Broken Man 1999 wrote:
Wed Jan 10, 2018 3:13 pm
Reminds me of this:

A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
(attributed to Doug Adams)

No offense intended, it's just some things aren't foolproof, no matter how hard designers might try.

Broken Man 1999
^^^
This.
When I make a mistake, it's not anyone else's responsibility, partially or otherwise, but my own.
I'm not sure this was actually a mistake on the OP's part. I would also have assumed that somehow I skipped doing the transfer. I might have phoned Vanguard to double check (I drive customer service crazy everywhere being somewhat OCD) but if they were closed and there wasn't an indication anywhere that it was in progress, I would have queued it up again.

Was there really no indication? When I was trying to transfer to and from outside accounts there was a transfer link obviously on the account. Actually it is still there, so maybe it is there all the time.
OP began his post by stating the error was "partially to entirely my own fault".

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BolderBoy
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by BolderBoy » Wed Jan 10, 2018 9:58 pm

Sherlock wrote:
Wed Jan 10, 2018 5:24 pm
As a long time Unix scripter I'm reminded of the saying: "if you know what you're doing Unix will let you do anything and if you don't know what you're doing Unix will let you do anything"
"If FreeBSD prevented you from doing stupid things, it would also prevent you from doing clever things."
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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Kenkat
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by Kenkat » Wed Jan 10, 2018 10:12 pm

It’s not the computer’s fault; it is the people who write the software and those that operate the software.

We made the software idiot proof but the company just invented better idiots...

TravelGeek
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by TravelGeek » Wed Jan 10, 2018 10:18 pm

tibbitts wrote:
Wed Jan 10, 2018 1:41 am
Well, this reminds me of the UNIX operating system in the early days. People would ask why it and its "bad" command line interface would let them do seemingly stupid things that other operating systems often wouldn't. I believe the answer was partly that the developers wanted to make it small and relatively fast, but also partly that they didn't believe they could envision everything someone might want to do with the platform, so they intentionally made it capable of doing as many things as possible. Basically, they were building software for people like themselves to use.
One of my favorite (computer) books:

https://en.m.wikipedia.org/wiki/The_Uni ... s_Handbook

Perhaps someone should write the Vanguard version. ;)

venkman
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by venkman » Wed Jan 10, 2018 11:06 pm

mouses wrote:
Wed Jan 10, 2018 3:51 pm
Was there really no indication? When I was trying to transfer to and from outside accounts there was a transfer link obviously on the account. Actually it is still there, so maybe it is there all the time.
I'm not ruling out the possibility that there was some indication, and I just missed it. But I'm pretty sure I checked the Pending Activity section and didn't see anything. I think the main problem was that I had put in a single order to transfer both stocks, and one of the stocks went through. It didn't make sense to me that one would have gone through and one wouldn't have.

I reiterate that, while I was certainly at fault to some degree, there's no way the system should have let me transfer 200 shares of a stock I only had 100 shares of. So, in a way, it was totally not my fault at all... :happy

venkman
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by venkman » Wed Jan 10, 2018 11:15 pm

Thesaints wrote:
Wed Jan 10, 2018 2:20 am
looks like the brokerage account allowed the OP to short stocks. Did he have margin enabled ? Is it at all possible to go short in IRA accounts ?
I just have 3 regular brokerage accounts (TIRA, Roth, taxable). Never actively enabled any margin trading. And I never put in a short sale order (or a buy order in my Roth). It was just supposed to be a transfer.

Apparently you CAN go short in IRA accounts, but it counts as a taxable distribution.

mouses
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by mouses » Thu Jan 11, 2018 12:08 am

2015 wrote:
Wed Jan 10, 2018 6:48 pm
mouses wrote:
Wed Jan 10, 2018 3:51 pm
2015 wrote:
Wed Jan 10, 2018 3:30 pm
Broken Man 1999 wrote:
Wed Jan 10, 2018 3:13 pm
Reminds me of this:

A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
(attributed to Doug Adams)

No offense intended, it's just some things aren't foolproof, no matter how hard designers might try.

Broken Man 1999
^^^
This.
When I make a mistake, it's not anyone else's responsibility, partially or otherwise, but my own.
I'm not sure this was actually a mistake on the OP's part. I would also have assumed that somehow I skipped doing the transfer. I might have phoned Vanguard to double check (I drive customer service crazy everywhere being somewhat OCD) but if they were closed and there wasn't an indication anywhere that it was in progress, I would have queued it up again.

Was there really no indication? When I was trying to transfer to and from outside accounts there was a transfer link obviously on the account. Actually it is still there, so maybe it is there all the time.
OP began his post by stating the error was "partially to entirely my own fault".
That doesn't change the facts I noted.

gostars
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by gostars » Thu Jan 11, 2018 3:03 am

I contacted Vanguard last week to convert 2 funds in my taxable from Admiral shares to ETFs in preparation for moving them to another brokerage. Both converted, but each now shows the cost basis from one of the funds, which would have me owing tax on about $10000 worth of phantom gains. Thanks to this forum and the Vanguard horror stories, I had made a copy of all of my cost basis before making the switch, and have already contacted Vanguard to get it corrected, but they're telling me it will be 14-30 days for something that should have been a simple automated process. Vanguard's funds and philosophy are great, but it's absolutely the right decision to hold them somewhere else whenever possible.

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in_reality
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by in_reality » Thu Jan 11, 2018 4:48 am

mouses wrote:
Wed Jan 10, 2018 3:51 pm
2015 wrote:
Wed Jan 10, 2018 3:30 pm
Broken Man 1999 wrote:
Wed Jan 10, 2018 3:13 pm
Reminds me of this:

A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
(attributed to Doug Adams)

No offense intended, it's just some things aren't foolproof, no matter how hard designers might try.

Broken Man 1999
^^^
This.
When I make a mistake, it's not anyone else's responsibility, partially or otherwise, but my own.
I'm not sure this was actually a mistake on the OP's part. I would also have assumed that somehow I skipped doing the transfer. I might have phoned Vanguard to double check (I drive customer service crazy everywhere being somewhat OCD) but if they were closed and there wasn't an indication anywhere that it was in progress, I would have queued it up again.

Was there really no indication? When I was trying to transfer to and from outside accounts there was a transfer link obviously on the account. Actually it is still there, so maybe it is there all the time.
I'm not sure there's not mistake on Vanguard's part.

Why was there no indication for the second stock being transferred? Was their system actually functioning at intended?

Why was a short position created when trying to transfer out more shares than existed? Is that truly the expected behavior of their system?

Vanguard's brokerage has shown me dead wrong information in trade confirmations before so I personally have reasons to doubt their brokerage system's integrity.

So I would think perhaps it went like this:

1) Vanguard's didn't display a pending transfer
2) OP interpreted that as one not existing and place another transfer.
3) Vanguard perhaps incorrectly transferred twice (and perhaps the reason for them not displaying the pending transfer relates to why the transfer went through).
4) Vanguard created a short position to deal with the mistake of having let the transfer go through twice

In my own personal experience, a significant amount of assets went missing. Vanguard was unable to look at their system and say where or why. In time, my three affected accounts were renamed as part of someone else's estate, placed in someone's trust, and someone was added as a beneficiary to my IRA.

Then the assets came back. Obviously they had gone to the wrong place and the retitling was necessary to retrieve them.

Vanguard has a record as to why a short position was created. They may not want to disclose it but the record exists and they should know if it is actually the correct default behavior or not.

I think the only way to pursue finding out why might be to contact the dispute resolution department. I don't recommend it though because the result of my personally having done so was Vanguard investigating me and freezing my accounts for my being overseas too much. Nevermind my three properties in the States and that no-other institution had ever taken such a view.

So perhaps Vanguard's system was functioning as intended, or perhaps not. I'd bet on not if I had to wager.

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sometimesinvestor
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by sometimesinvestor » Thu Jan 11, 2018 4:59 am

In my opinion,and this may reflect a lack of skill /confidence on my part , if something goes wrong with an online transaction, I make an effort to speak to a human.

2015
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by 2015 » Thu Jan 11, 2018 3:15 pm

mouses wrote:
Thu Jan 11, 2018 12:08 am
2015 wrote:
Wed Jan 10, 2018 6:48 pm
mouses wrote:
Wed Jan 10, 2018 3:51 pm
2015 wrote:
Wed Jan 10, 2018 3:30 pm
Broken Man 1999 wrote:
Wed Jan 10, 2018 3:13 pm
Reminds me of this:

A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
(attributed to Doug Adams)

No offense intended, it's just some things aren't foolproof, no matter how hard designers might try.

Broken Man 1999
^^^
This.
When I make a mistake, it's not anyone else's responsibility, partially or otherwise, but my own.
I'm not sure this was actually a mistake on the OP's part. I would also have assumed that somehow I skipped doing the transfer. I might have phoned Vanguard to double check (I drive customer service crazy everywhere being somewhat OCD) but if they were closed and there wasn't an indication anywhere that it was in progress, I would have queued it up again.

Was there really no indication? When I was trying to transfer to and from outside accounts there was a transfer link obviously on the account. Actually it is still there, so maybe it is there all the time.
OP began his post by stating the error was "partially to entirely my own fault".
That doesn't change the facts I noted.
The facts you noted were that you would also have "assumed" something and then would have taken a further action without verifying. The prudent action when something is amiss online is to verify before taking further action. Such a prudent action would have included a phone call.

But all of this misses the point. There is absolutely nothing learned from mistakes when one is "blaming" one's own errors on external sources. Nor is there any personal power. It's not a question of whether one is "right", but what can be learned from the situation in order to prevent it from occurring in the future?

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Doom&Gloom
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Re: Forget Customer Service--Vanguard has lousy Computers

Post by Doom&Gloom » Thu Jan 11, 2018 4:43 pm

Everybody has lousy computers. I have IRAs at Vanguard, Fidelity, and Schwab. I must begin RMDs this year, and I decided to withdraw from each rather than combine my RMDs from just one--partially because I wanted to set up electronic transfer capability from each "just in case" I might need that ability in the future.

Vanguard was the only one that seemed to have a mechanism in place to set the RMD process in advance. I was allowed to do it at the end of 2017 for the process to take place in 2018. Vanguard had an online process that allowed me to connect my checking account. The entire process was simple and easy to understand. However, OP's issues seem to illustrate that there are other flaws in Vanguard's computer system.

Fidelity was fairly easy to set up the RMD withdrawal process, but their website was much harder to navigate than necessary. I was very disappointed with that. However, when Fidelity calculated the RMD they did use the correct divisor (not the standard one as my sole beneficiary is DW who is 10+ years younger). That surprised me a bit.

Schwab's process was the most convoluted of the three. If I had wanted them to send me a check for the RMD rather than an EFT to my checking account, it seems that it would have been a snap. Instead I had to set up the EFT process by using snail-mail (gasp!) rather than being able to complete it online. It also appears to me that they are using the standard divisor rather than the appropriate one as Fidelity did. Since this is my smallest IRA, the difference in using different divisors is close to negligible, so I will probably just allow them the issue that amount if it is not "corrected" by the time I make the actual withdrawal.

The point I am trying to illustrate is that a routine process that thousands (millions?) of customers will be using routinely for years varies widely at the three brokerages most often recommended on BH. One task may be easy and foolproof at one institution but another task may not be.

Good luck to OP in the resolution of his issue. I do agree with his point that Vanguard's system should not have allowed at least one of the transactions that was made. These companies must understand that a lot of online transactions will be made by people of advancing age (not looking at OP) who have not been using computers and online services all their lives. They should expect people to make human errors and design their systems to minimize those mistakes and have a process in place to resolve those mistakes quickly.

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