Vanguard keeps pushing their financial advisors...why?

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meercat8
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Vanguard keeps pushing their financial advisors...why?

Post by meercat8 » Fri Oct 11, 2019 12:16 pm

In the last few months we are getting one email after another from Vanguard saying USE OUR Financial Advisors!!! They have begi=un a big push for this it seems. Does anyone know what they are thinking and what else might be changing at Vanguard? We were used to, in the past, being respected as wanting to do things on our own!

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mhc
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Re: Vanguard keeps pushing their financial advisors...why?

Post by mhc » Fri Oct 11, 2019 12:21 pm

If you are not interested, then ignore it and move on.

I ignore advertisement all the time. I figured everyone does that. Advertisement is everywhere.

WhyNotUs
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Re: Vanguard keeps pushing their financial advisors...why?

Post by WhyNotUs » Fri Oct 11, 2019 12:21 pm

The delete key is your friend. Emails are cheap so we will get lots of them.

VG is not the same as Boglehead or Bogle, they have mouths to feed. The field for low cost, passive investments is getting crowded and I expect that many of the new comers to such would appreciate a little support from PAS.
I own the next hot stock- VTSAX

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simplesimon
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Re: Vanguard keeps pushing their financial advisors...why?

Post by simplesimon » Fri Oct 11, 2019 12:22 pm

Is there an "unsubscribe" button at the bottom of these emails?

DonIce
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Re: Vanguard keeps pushing their financial advisors...why?

Post by DonIce » Fri Oct 11, 2019 12:23 pm

There's plenty of brokerages out there that won't push unwanted services.

life in slices
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Re: Vanguard keeps pushing their financial advisors...why?

Post by life in slices » Fri Oct 11, 2019 12:23 pm

I also believe you can call them to opt-out of these emails from them

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meercat8
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Re: Vanguard keeps pushing their financial advisors...why?

Post by meercat8 » Fri Oct 11, 2019 12:24 pm

I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?

jyoung
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Re: Vanguard keeps pushing their financial advisors...why?

Post by jyoung » Fri Oct 11, 2019 12:26 pm

Maybe I don't have enough money, but they never email me ads. When I occasionally login to their website I see ads on their homepage, but none in the app. So far it hasn't gotten close to a level that bothers me. Maybe that's the solution... have less money. 😄

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GerryL
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Re: Vanguard keeps pushing their financial advisors...why?

Post by GerryL » Fri Oct 11, 2019 1:01 pm

meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Why?
The same reason Starbucks continually sends me emails about ways to increase my reward points and notification of special 'happy hours' even though I NEVER follow up on the offers.
The same reason my credit union emails and snail mails promos for refinancing my home, even though I've never expressed any interest in refinancing.
The same reason AmEx keeps sending me messages about their PlanIt service to manage paying for large purchases, even though I ALWAYS pay my statement in full each month.

Someone has decided that this is a way to grow their business, and the annoyance to their customers is worth it to THEM (not the customers).

student
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Re: Vanguard keeps pushing their financial advisors...why?

Post by student » Fri Oct 11, 2019 1:03 pm

meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Like other businesses, they are trying to increase revenue.

Alan S.
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Re: Vanguard keeps pushing their financial advisors...why?

Post by Alan S. » Fri Oct 11, 2019 1:05 pm

Could be it's another way to make money. Brokerages do not make money in the traditional ways any longer. Commissions and ERs are either gone or heavily reduced following a barrage of competitive expense cuts. And brokerages make money in different ways from other brokers.

Financial advisors can also eliminate client turnover and prevent panic selling, improving business retention. Perhaps they remove some pressure on VG CSRs, which will result in some service improvement for other clients.

Obviously, VG sees various benefits in pushing advisors. Those benefits are probably varied and could include other factors than mentioned above, or maybe none of those mentioned.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by Jack FFR1846 » Fri Oct 11, 2019 1:09 pm

It's a low effort, high margin business for Vanguard.
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Svensk Anga
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Re: Vanguard keeps pushing their financial advisors...why?

Post by Svensk Anga » Fri Oct 11, 2019 1:21 pm

student wrote:
Fri Oct 11, 2019 1:03 pm
meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Like other businesses, they are trying to increase revenue.
And why are they so intent on increasing revenue? They’re not like a regular corporation which has a duty to maximize shareholder value. I suspect it is because executive compensation is tied to revenue growth. This was undoubtedly a good policy when there were still economies of scale to be had. At Vanguard’s current scale (and growth rate), I’m not so sure this policy is beneficial to investors.

fwellimort
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Re: Vanguard keeps pushing their financial advisors...why?

Post by fwellimort » Fri Oct 11, 2019 1:23 pm

Cause money. Duhh.

With all the fees approaching and/or becoming zero, the margin for profit is so low.
Vanguard already heavily underpays its workers in my field (software engineering). It can't really sustain itself if it has to keep cutting costs. Plus, I'm sure the CEO would want some extra $.

Don't think of Vanguard as "all Saint" and "we are the shareholders". It's just another company.
If you don't like the Vanguard service, go to Fidelity or Schwab. Fidelity and Schwab already beats Vanguard in almost every aspect except the money market funds in terms of fees.

smectym
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Re: Vanguard keeps pushing their financial advisors...why?

Post by smectym » Fri Oct 11, 2019 1:55 pm

There is a potential dark side to the “happy talk” story about investing moving to a zero-ER, zero-commission world, and part of that will be increased ad and upsell pressure from companies that used to pretty much leave their customers alone and happily collect the fat ER and commission revenue.

UpperNwGuy
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Re: Vanguard keeps pushing their financial advisors...why?

Post by UpperNwGuy » Fri Oct 11, 2019 2:43 pm

Seems to me that Vanguard isn't quite as altruistic as some of the members of this forum think it is.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by Sconie » Fri Oct 11, 2019 2:53 pm

UpperNwGuy wrote:
Fri Oct 11, 2019 2:43 pm
Seems to me that Vanguard isn't quite as altruistic as some of the members of this forum think it is.
My feeling as well. I suspect that PAS is an incredibly profitable service for Vanguard to offer/sell. Unfortunately, Vanguard no longer seems to be the unselfish and altruistic financial organization of years---make that decades----ago.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

student
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Re: Vanguard keeps pushing their financial advisors...why?

Post by student » Fri Oct 11, 2019 2:56 pm

Sconie wrote:
Fri Oct 11, 2019 2:53 pm
UpperNwGuy wrote:
Fri Oct 11, 2019 2:43 pm
Seems to me that Vanguard isn't quite as altruistic as some of the members of this forum think it is.
My feeling as well. I suspect that PAS is an incredibly profitable service for Vanguard to offer/sell. Unfortunately, Vanguard no longer seems to be the unselfish and altruistic financial organization of years---make that decades----ago.
It seems that whether it is for-profit or not, it wants to grow revenue. Another example is thar TIAA is still non-profit, and it is still a good company but it is not the same anymore once it hired wall street types as CEOs.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by Sconie » Fri Oct 11, 2019 3:01 pm

Svensk Anga wrote:
Fri Oct 11, 2019 1:21 pm
student wrote:
Fri Oct 11, 2019 1:03 pm
meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Like other businesses, they are trying to increase revenue.
And why are they so intent on increasing revenue? They’re not like a regular corporation which has a duty to maximize shareholder value. I suspect it is because executive compensation is tied to revenue growth. This was undoubtedly a good policy when there were still economies of scale to be had. At Vanguard’s current scale (and growth rate), I’m not so sure this policy is beneficial to investors.
Unfortunately, we'll never know what the "drivers" of Vanguard's executive compensation are. For all the verbiage around "owned by the shareholders." Vanguard goes to great lengths to keep its individual shareholders in the dark regarding the 'what & how' regarding the compensation of its leadership.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

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Re: Vanguard keeps pushing their financial advisors...why?

Post by Grt2bOutdoors » Fri Oct 11, 2019 3:03 pm

Its all about the money! :moneybag :greedy :moneybag

In reality, Vanguard has expenses much like everyone else, they are using PAS to generate enough revenue/cash flow to pay for increased staff headcount, new software (recall all the bad publicity they received due to website crashing, system upgrades which was done during normal business hours), higher advertising and marketing. The index funds don't generate excess cash flow, it's operated at near cost, remember? Those cost savings are passed onto you, the individual investor, in the form of ultra-low expense ratios.

When you get the e-mail, if you don't like what you see, hit the delete button.
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Re: Vanguard keeps pushing their financial advisors...why?

Post by Grt2bOutdoors » Fri Oct 11, 2019 3:05 pm

Sconie wrote:
Fri Oct 11, 2019 3:01 pm
Svensk Anga wrote:
Fri Oct 11, 2019 1:21 pm
student wrote:
Fri Oct 11, 2019 1:03 pm
meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Like other businesses, they are trying to increase revenue.
And why are they so intent on increasing revenue? They’re not like a regular corporation which has a duty to maximize shareholder value. I suspect it is because executive compensation is tied to revenue growth. This was undoubtedly a good policy when there were still economies of scale to be had. At Vanguard’s current scale (and growth rate), I’m not so sure this policy is beneficial to investors.
Unfortunately, we'll never know what the "drivers" of Vanguard's executive compensation are. For all the verbiage around "owned by the shareholders." Vanguard goes to great lengths to keep its individual shareholders in the dark regarding the 'what & how' regarding the compensation of its leadership.
The principals are well-paid, on par with industry standards for asset management. I believe, I read somewhere a few years ago, the chairman earned over $10 million in one year.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Sconie
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Re: Vanguard keeps pushing their financial advisors...why?

Post by Sconie » Fri Oct 11, 2019 3:12 pm

Grt2bOutdoors wrote:
Fri Oct 11, 2019 3:05 pm

The principals are well-paid, on par with industry standards for asset management. I believe, I read somewhere a few years ago, the chairman earned over $10 million in one year.
And I suspect that no one begrudges the leadership of Vanguard excellent, competitive, compensation. That said, the extent to which Vanguard seeks to keep that compensation confidential is----at least to this shareholder----bothersome.

https://www.investmentnews.com/article/ ... nder-wraps
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

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Re: Vanguard keeps pushing their financial advisors...why?

Post by Grt2bOutdoors » Fri Oct 11, 2019 3:18 pm

Sconie wrote:
Fri Oct 11, 2019 3:12 pm
Grt2bOutdoors wrote:
Fri Oct 11, 2019 3:05 pm

The principals are well-paid, on par with industry standards for asset management. I believe, I read somewhere a few years ago, the chairman earned over $10 million in one year.
And I suspect that no one begrudges the leadership of Vanguard excellent, competitive, compensation. That said, the extent to which Vanguard seeks to keep that compensation confidential is----at least to this shareholder----bothersome.

https://www.investmentnews.com/article/ ... nder-wraps
What does it matter what they are paid? You as a shareholder want someone competent, knowledgeable and able to keep the keel of the ship on a steady course. In the grand scheme of things, I believe they do a pretty good job over there with some occasional hiccups. I'd think you'd be more upset if the investment performance tanked and continued to stay in a downward pattern.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Vanguard keeps pushing their financial advisors...why?

Post by bikechuck » Fri Oct 11, 2019 3:27 pm

meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
I am surprised that you are surprised. From my perspective it seems like a smart thing for them to promote and drive revenue. Although I do not plan to take advantage of this service I know some family members and friends for whom it would be an excellent fit and far better than the crooks that they are currently embedded with.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by campy2010 » Fri Oct 11, 2019 3:27 pm

If Vanguard provides a service that it's users find valuable and generates revenue that keeps my costs down then as a customer I'm on board. Vanguard isn't a charity and is competing with for-profit companies that are driving costs down and it has to compete. Very simple economics.
Last edited by campy2010 on Fri Oct 11, 2019 3:31 pm, edited 1 time in total.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by fgtayl01 » Fri Oct 11, 2019 3:30 pm

student wrote:
Fri Oct 11, 2019 1:03 pm
meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Like other businesses, they are trying to increase revenue.
But unlike most businesses, Vanguard is owned by it's clients.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by Grt2bOutdoors » Fri Oct 11, 2019 3:36 pm

fgtayl01 wrote:
Fri Oct 11, 2019 3:30 pm
student wrote:
Fri Oct 11, 2019 1:03 pm
meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Like other businesses, they are trying to increase revenue.
But unlike most businesses, Vanguard is owned by it's clients.
Let's get real, yes Vanguard is owned by it's clients, but you'd need a majority of the clients to press for change. Since you don't have that, the idea that Vanguard is owned by it's clients is nothing more than a catchy phrase. You have no real control over what happens at the management company. Much like a public shareholder, you can own 100 or 100,000 shares of say GE, but unless you own a substantial percentage of overall shares outstanding starting with a 1 or 2%, you aren't going to get an audience with the board of directors much less the CEO of the company.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Vanguard keeps pushing their financial advisors...why?

Post by Dottie57 » Fri Oct 11, 2019 3:39 pm

fgtayl01 wrote:
Fri Oct 11, 2019 3:30 pm
student wrote:
Fri Oct 11, 2019 1:03 pm
meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Like other businesses, they are trying to increase revenue.
But unlike most businesses, Vanguard is owned by it's clients.
The company still needs to make money to pay the bills.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by RadAudit » Fri Oct 11, 2019 3:41 pm

meercat8 wrote:
Fri Oct 11, 2019 12:16 pm
Does anyone know what they are thinking
0.3% AUM per each account they sign up?
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Re: Vanguard keeps pushing their financial advisors...why?

Post by Mr.BB » Fri Oct 11, 2019 3:50 pm

I found it interesting that in these emails promoting their services there is no unsubscribe button to stop getting these emails. They make you actually go and send them an email asking them to stop; which I did.
About 2-3 weeks later I start getting a couple more emails so again I emailed them telling them to stop sending me these emails and take me off that specific list which they promised they would.
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Re: Vanguard keeps pushing their financial advisors...why?

Post by drawpoker » Fri Oct 11, 2019 3:56 pm

Have noticed the uptick in these email ads too. They are becoming more numerous.

Also, same thing with their surveys (questionaires) they ask me to participate in.

Maybe a reason the come-ons for the advisors keep flooding in - I gave some dumb answers on the surveys.... :oops: :shock:

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greg24
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Re: Vanguard keeps pushing their financial advisors...why?

Post by greg24 » Fri Oct 11, 2019 3:59 pm

If the biggest downside to Vanguard is the PAS emails, we are a lucky bunch.

Delete and move on.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by susa » Fri Oct 11, 2019 4:09 pm

The way we handle VG and other financial firms/banks, is to update our contact information to a black hole email sink. I like Zimbabwe and South Africa email addresses and there is also temp-email.org/Change which literally creates fly-by-night email addresses.

Not ever worried about missing something and if you are, create a dozen different gmail addresses with forwarding rules and delete rules based on origin and pattern match (combination of sender and key words).

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Re: Vanguard keeps pushing their financial advisors...why?

Post by bengal22 » Fri Oct 11, 2019 4:10 pm

meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
$$$$. What else?
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

pyld76
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Re: Vanguard keeps pushing their financial advisors...why?

Post by pyld76 » Fri Oct 11, 2019 4:12 pm

Vanguard has succeeded in leading the cost of asset management to zero + cost. Which means there isn't a whole lot of "easy" AUM (and thus revenue) gains there.

So, now they are going to try to lead the cost of advice to zero + cost, which is where the "easy" incremental revenue still lies.

Because of the (probably founded) theories about how the vanguard compensation plan really only has the one lever to turn, it makes sense that they want to do as much as possible to gather revenue.

The part that drives people off is where longtime customers asked to be left alone, and VG won't/can't take the hint. One of a couple of reasons I've pulled a lot of my AUM--they'll engage in the game of marketing with so little an idea of know thy customer than it is almost embarrassing.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by jebmke » Fri Oct 11, 2019 4:16 pm

simplesimon wrote:
Fri Oct 11, 2019 12:22 pm
Is there an "unsubscribe" button at the bottom of these emails?
There must be. I never get emails from VG and have been with them for many years. I must have gotten one years ago and unsubscribed. I suspect you can also go in and use their secure email and ask them to mark your record down as "do not contact." I told my Flagship rep that there is no need to call me because I never answer the phone.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by Ged » Fri Oct 11, 2019 4:17 pm

Superfluous email and survey requests are one of life's smallest annoyances.

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Re: Vanguard keeps pushing their financial advisors...why?

Post by RickBoglehead » Fri Oct 11, 2019 4:19 pm

Opt out. I get zero marketing emails from VG.
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Re: Vanguard keeps pushing their financial advisors...why?

Post by Gnirk » Fri Oct 11, 2019 4:26 pm

I guess we should consider ourselves lucky: we've received no email from Vanguard soliciting for their PAS. I hope it stays that way!

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Re: Vanguard keeps pushing their financial advisors...why?

Post by friar1610 » Fri Oct 11, 2019 4:31 pm

Sconie wrote:
Fri Oct 11, 2019 2:53 pm
Another example is thar TIAA is still non-profit, and it is still a good company but it is not the same anymore once it hired wall street types as CEOs.
Are you sure about that? My understanding is that TIAA lost its non-profit status in the late 1990's.

As for Vanguard, the cynic in me says that some of VG's recent forays into more revenue generation (which I don't find illegal, immoral or fattening) may have been in the planning stage for a while. When John Bogle died it freed them to put things into action without any disapproval from the company's founder and conscience.
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Re: Vanguard keeps pushing their financial advisors...why?

Post by bengal22 » Fri Oct 11, 2019 4:44 pm

friar1610 wrote:
Fri Oct 11, 2019 4:31 pm
Sconie wrote:
Fri Oct 11, 2019 2:53 pm
Another example is thar TIAA is still non-profit, and it is still a good company but it is not the same anymore once it hired wall street types as CEOs.
Are you sure about that? My understanding is that TIAA lost its non-profit status in the late 1990's.

As for Vanguard, the cynic in me says that some of VG's recent forays into more revenue generation (which I don't find illegal, immoral or fattening) may have been in the planning stage for a while. When John Bogle died it freed them to put things into action without any disapproval from the company's founder and conscience.
Vanguard has always been in a revenue generation mode. That is what Corporations do. More innovation has come as a result of profit seeking than any other reason. Doing right by the customer is a sound marketing strategy. Nothing more. Nothing less.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

student
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Re: Vanguard keeps pushing their financial advisors...why?

Post by student » Fri Oct 11, 2019 5:01 pm

fgtayl01 wrote:
Fri Oct 11, 2019 3:30 pm
student wrote:
Fri Oct 11, 2019 1:03 pm
meercat8 wrote:
Fri Oct 11, 2019 12:24 pm
I know I can delete these weekly emails from Vanguard, I am just wondering why they recently started pushing this, and if any other changes are in the works at Vanguard. Anyone know?
Like other businesses, they are trying to increase revenue.
But unlike most businesses, Vanguard is owned by it's clients.
It does not mean that the CEO doesn't want to increase revenue. The current Vanguard may be better than a typical for-profit business, it is not the "white knight." As others have pointed out, Vanguard even keeps the pay of management out of public eye. https://www.investmentnews.com/article/ ... nder-wraps

student
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Re: Vanguard keeps pushing their financial advisors...why?

Post by student » Fri Oct 11, 2019 5:13 pm

friar1610 wrote:
Fri Oct 11, 2019 4:31 pm
Sconie wrote:
Fri Oct 11, 2019 2:53 pm
Another example is thar TIAA is still non-profit, and it is still a good company but it is not the same anymore once it hired wall street types as CEOs.
Are you sure about that? My understanding is that TIAA lost its non-profit status in the late 1990's.

As for Vanguard, the cynic in me says that some of VG's recent forays into more revenue generation (which I don't find illegal, immoral or fattening) may have been in the planning stage for a while. When John Bogle died it freed them to put things into action without any disapproval from the company's founder and conscience.
TIAA lost its tax-exempt status. It is still a non-profit organization. Here is an article about it losing its tax-exempt status. https://www.nytimes.com/1997/07/30/busi ... ption.html Here is an article about TIAA losing its tax exemption status but it remains non-profit. https://www.chronicle.com/article/Is-TI ... afe-/44807 Here is a book that explains the difference. One may split hair and say TIAA is not a non-profit but the end result is the same as explained in the book. 'Since losing its tax-exempt status, TIAA is no longer a "not-for-profit company" but is now owned by another non-profit corporation." Because of this, TIAA is still referred to as a non-profit such as https://www.investopedia.com/terms/t/tiaa-cref.asp and it is in substance.

Rob1
Posts: 163
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Re: Vanguard keeps pushing their financial advisors...why?

Post by Rob1 » Fri Oct 11, 2019 5:14 pm

Advice and technology are currently core focuses for Vanguard. Tim Buckley, Vanguard’s CEO, in a recent blog post:

“ Now more than ever, we see investors’ long-term success tied not only to the funds they use but also to the advice they receive. For more than 40 years, we’ve been champions in the mutual fund industry for accessibility, affordability, and alignment with clients’ interests. This has enabled investors to keep more of what they earn and to more easily reach their financial goals. We aim to do the same for financial advice.”

Source:
https://investornews.vanguard/behind-ou ... -everyone/

Tim also talked about this in this Vanguard podcast from earlier this year:
https://investornews.vanguard/a-convers ... m-buckley/

fwellimort
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Re: Vanguard keeps pushing their financial advisors...why?

Post by fwellimort » Fri Oct 11, 2019 5:20 pm

I'll just add to this.

College Board is a non-profit organization. And we all know it's very "profitable".
I don't understand all this magical talk about "for the shareholders" or "non-profit organization".

There's so many non-profit organizations out there that I deem quite questionable. Why should Vanguard surprise you just because it is for the "shareholders"?
As far as I'm concerned, I have no control of how much the CEO or the executives in Vanguard get paid. I have no control over the pay structure in Vanguard and so on.

Doesn't help that the average Vanguard investor is quite passive and won't object with a bit 'higher bonus' than last year for the CEO.

Just treat Vanguard like every other company. If their fees are higher, move elsewhere. If their fees are lower or similar, stay.
The whole point of this industry was due to the fees. Not for some "undying love for a company".

Yes, Bogle revolutionized investing. Sure. But Vanguard is not Bogle. Don't confuse a person with a company.

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friar1610
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Re: Vanguard keeps pushing their financial advisors...why?

Post by friar1610 » Fri Oct 11, 2019 5:22 pm

student wrote:
Fri Oct 11, 2019 5:13 pm
friar1610 wrote:
Fri Oct 11, 2019 4:31 pm
Sconie wrote:
Fri Oct 11, 2019 2:53 pm
Another example is thar TIAA is still non-profit, and it is still a good company but it is not the same anymore once it hired wall street types as CEOs.
Are you sure about that? My understanding is that TIAA lost its non-profit status in the late 1990's.

As for Vanguard, the cynic in me says that some of VG's recent forays into more revenue generation (which I don't find illegal, immoral or fattening) may have been in the planning stage for a while. When John Bogle died it freed them to put things into action without any disapproval from the company's founder and conscience.
TIAA lost its tax-exempt status. It is still a non-profit organization. Here is an article about it losing its tax-exempt status. https://www.nytimes.com/1997/07/30/busi ... ption.html Here is an article about TIAA losing its tax exemption status but it remains non-profit. https://www.chronicle.com/article/Is-TI ... afe-/44807 Here is a book that explains the difference. One may split hair and say TIAA is not a non-profit but the end result is the same as explained in the book. 'Since losing its tax-exempt status, TIAA is no longer a "not-for-profit company" but is now owned by another non-profit corporation." Because of this, TIAA is still referred to as a non-profit such as https://www.investopedia.com/terms/t/tiaa-cref.asp and it is in substance.

Thanks - will read the articles; appreciate your passing them on.
Friar1610

TropikThunder
Posts: 1850
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Re: Vanguard keeps pushing their financial advisors...why?

Post by TropikThunder » Fri Oct 11, 2019 5:22 pm

Lots of people theorized that the Fido Zero funds would need to be subsidized by higher-cost funds, and that the Zero fee part was a gimmick/loss leader etc that Fido couldn't realistically run at zero cost. Well, VG runs funds at actual cost, no more no less, and they've pretty much rung out all the cost they can do legitimately.

Since they don't manipulate costs to market a fund lower than it really takes to run it, their revenue model requires low-fee, high-AUM. If competition from Fido and others (Schwab has some funds with lower ER then their VG counterpart) has slowed VG's AUM growth (has it?), then an attractive replacement for AUM growth is fee growth, but in a way that allows them to still be low-cost to the masses.

I'm more than happy to have some PAS clients pay 0.30% AUM and let VG make some money while all my stuff is in VTSAX/VTIAX etc. Same way I would be happy for Fido to make money off other people while I pay no fees in their Zero funds (if I had any).
Last edited by TropikThunder on Fri Oct 11, 2019 5:33 pm, edited 2 times in total.

student
Posts: 4141
Joined: Fri Apr 03, 2015 6:58 am

Re: Vanguard keeps pushing their financial advisors...why?

Post by student » Fri Oct 11, 2019 5:25 pm

friar1610 wrote:
Fri Oct 11, 2019 5:22 pm
student wrote:
Fri Oct 11, 2019 5:13 pm
friar1610 wrote:
Fri Oct 11, 2019 4:31 pm
Sconie wrote:
Fri Oct 11, 2019 2:53 pm
Another example is thar TIAA is still non-profit, and it is still a good company but it is not the same anymore once it hired wall street types as CEOs.
Are you sure about that? My understanding is that TIAA lost its non-profit status in the late 1990's.

As for Vanguard, the cynic in me says that some of VG's recent forays into more revenue generation (which I don't find illegal, immoral or fattening) may have been in the planning stage for a while. When John Bogle died it freed them to put things into action without any disapproval from the company's founder and conscience.
TIAA lost its tax-exempt status. It is still a non-profit organization. Here is an article about it losing its tax-exempt status. https://www.nytimes.com/1997/07/30/busi ... ption.html Here is an article about TIAA losing its tax exemption status but it remains non-profit. https://www.chronicle.com/article/Is-TI ... afe-/44807 Here is a book that explains the difference. One may split hair and say TIAA is not a non-profit but the end result is the same as explained in the book. 'Since losing its tax-exempt status, TIAA is no longer a "not-for-profit company" but is now owned by another non-profit corporation." Because of this, TIAA is still referred to as a non-profit such as https://www.investopedia.com/terms/t/tiaa-cref.asp and it is in substance.

Thanks - will read the articles; appreciate your passing them on.
You're welcome.

Silence Dogood
Posts: 1161
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Re: Vanguard keeps pushing their financial advisors...why?

Post by Silence Dogood » Fri Oct 11, 2019 8:12 pm

pyld76 wrote:
Fri Oct 11, 2019 4:12 pm
The part that drives people off is where longtime customers asked to be left alone, and VG won't/can't take the hint. One of a couple of reasons I've pulled a lot of my AUM--they'll engage in the game of marketing with so little an idea of know thy customer than it is almost embarrassing.
Excellent point.

Hanlon's razor: "Never attribute to malice that which is adequately explained by stupidity."

Last year around Black Friday, I purchased some clothes that were on sale from a well-known outdoorsy-type retail store. I was asked if I wanted to become a member or something along those lines. This wasn't a line of credit, just a way to basically add me to their email marketing list - and they were offering me a discount to do so. I accepted the offer and (as expected) I was soon getting a bunch of marketing emails from them. After about a week or so of this, I clicked the unsubscribe link at the bottom of the email. Interestingly, however, I noticed that instead of only having the option to unsubscribe, I was given the option to choose the frequency of the marketing emails (daily, weekly, biweekly, monthly, never) and what I would like to get emails about (sales only, women's clothing, men's clothing, outdoor gear, etc.). Instead of choosing never, I decided a monthly email about sales was okay with me.

Contrast that to the marketing department of Vanguard. Starting sometime earlier this year, I think in the spring, I started to become inundated with these emails and even postcards in the mail about VPAS.

Now, Vanguard already knows a lot about me (unlike, for example, the retail clothing store). If their marketing department were smart, they would probably conclude that VPAS is not a good solution for me. I'm young, so there are no reasonable concerns of cognitive decline. I'm only invested in a tax advantaged account, so tax-efficient fund placement is not an issue for me. I'm invested in one of their own Target Retirement funds, so my portfolio is well-diversified, rebalancing is already taken care of, and my asset allocation is appropriate for someone my age. They should also be able to see that, at least so far, I haven't been making behavioral errors - I've simply been maxing out my Roth IRA, up to the contribution limit, each and every year. I haven't been going in and out of funds, I haven't been buying individual stocks, etc.

Anyway, in order to stop the emails/postcards, I had to call Vanguard and ask them to stop. I actually asked the Vanguard rep if it would be possible for them to only stop the VPAS marketing, but that I don't mind being kept in the loop with any other marketing. I was told that this isn't possible. It was all-or-nothing. Note that there is no way to log on to their website to choose how I want to be marketed to, if at all. I may have even been okay with the weekly VPAS emails, but the postcards were a deal-breaker for me. So I opted completely out.

My conclusion is that the Vanguard marketing department lacks the resources needed to do "smart" marketing. They have no ability to tailor their marketing to match the appropriate products/services with the appropriate clients. They also lack the resources to allow their clients to choose how they would like to be marketed to.

smectym
Posts: 615
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Re: Vanguard keeps pushing their financial advisors...why?

Post by smectym » Fri Oct 11, 2019 8:37 pm

I don’t get the emails but my former Flagship guy cold-called me to pitch PAS ( which I had tried earlier for a year or two but quit several years back). Unusual, never before has a Flagship Rep called out of the blue to try to upsell me.

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