Vanguard customer service reps need some training

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
Doc
Posts: 7690
Joined: Sat Feb 24, 2007 1:10 pm
Location: Two left turns from Larry

Re: Vanguard customer service reps need some training

Post by Doc » Tue Dec 05, 2017 2:28 pm

livesoft wrote:
Tue Dec 05, 2017 2:17 pm
Update: Isn't T+3 now T+2?
:oops: Yes, I forgot?
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

User avatar
jhfenton
Posts: 2278
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Vanguard customer service reps need some training

Post by jhfenton » Tue Dec 05, 2017 2:29 pm

livesoft wrote:
Tue Dec 05, 2017 2:17 pm
Update: Isn't T+3 now T+2?
Yes.

And to address the previous question, you will be dinged for a settlement violation if you buy an ETF at T+2 today and try to cover it by selling a T+2 ETF, T+2 stock, or T+2 corporate bond tomorrow. You will be OK if you sell a T+1 mutual fund or T+1 treasury bond today OR tomorrow to cover it. Or if you transfer in funds today or tomorrow. They credit bank funds immediately.

Vanguard does allow you to game the settlement dates for their own mutual funds by selling an ETF at T+2 and immediately using the proceeds to buy a mutual fund at T+1. They can do this because they are mutual funds, and not stocks or ETFs. (I'm not sure if they do it for third-party mutual funds. I would guess not.)

Tramper Al
Posts: 3613
Joined: Thu Oct 18, 2007 11:42 am

Re: Vanguard customer service reps need some training

Post by Tramper Al » Tue Dec 05, 2017 2:54 pm

Finally had to call Vanguard recently - I also try never to do this. Brutal.

I clicked to open a brokerage window in a workplace retirement account that otherwise is limited to like 4 funds. Sold some shares out of the only fund I can use (due to AA) for use in the VBO and now it sits in cash. Supposed to take 1-2 days but a month later still waiting, still "pending". Been trying via secure email to no effect. On hold an hour or so with different reps to finally hear: yeah, not fixed yet.

User avatar
Doc
Posts: 7690
Joined: Sat Feb 24, 2007 1:10 pm
Location: Two left turns from Larry

Re: Vanguard customer service reps need some training

Post by Doc » Tue Dec 05, 2017 3:52 pm

jhfenton wrote:
Tue Dec 05, 2017 2:29 pm
Vanguard does allow you to game the settlement dates for their own mutual funds by selling an ETF at T+2 and immediately using the proceeds to buy a mutual fund at T+1. They can do this because they are mutual funds, and not stocks or ETFs.
I don't think that's exactly correct. It has nothing to do with whether it is mutual funds/stocks/bonds. It is only the settlement date that counts. It does matter whether it is a brokerage account of a mutual fund only account. All brokerage accounts have to work under SEC rules.
Avoiding cash account trading violations
https://www.fidelity.com/learning-cente ... violations

As I understand the rules, as long as you buy and sell on the same day the settlement date doesn't matter as long an you don't sell what you just purchased until both trades have settled.

Think through these two pairs.

1) Sell a T-1 and buy a T-2 on the same day. The next day you will have a positive cash balance but it will not sweep into your settlement account because you have a pending unsettled debit.

2) Sell a T-2 and buy a T-1 on the same day. The next day you will have a negative cash balance but in a cash account you will not be penalized because you have a cash credit pending.

These two are opposite sides of the same coin. In 1) you don't get interest on your balance and in 2) you don't pay interest on your negative balance.

Assuming that you don't sell the new security until all trades are settled, it doesn't matter if both the buy and sell trades are made on the same day or if they settle on the same day.

Think about rolling a maturing Treasury note. I buy a note at auction today, Tuesday to replace a note maturing Friday. It's all OK because the US Treasury makes Friday the settlement date for the new note purchased at auction.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

User avatar
jhfenton
Posts: 2278
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Vanguard customer service reps need some training

Post by jhfenton » Tue Dec 05, 2017 7:13 pm

Doc wrote:
Tue Dec 05, 2017 3:52 pm
Think through these two pairs.

1) Sell a T-1 and buy a T-2 on the same day. The next day you will have a positive cash balance but it will not sweep into your settlement account because you have a pending unsettled debit.

2) Sell a T-2 and buy a T-1 on the same day. The next day you will have a negative cash balance but in a cash account you will not be penalized because you have a cash credit pending.
1) It does sweep to your MMF, and you do actually get interest on your balance. I end up with odd cents from it all the time. I have one showing in my taxable account right now from a $500 contribution on Friday:

I purchased 2 shares of VIOV at $129.80 at 11:28 AM (at the bottom of the morning crash).
And I purchased 5 shares of VWO at $44.076.
Total -$479.98.
I then transferred $500 from checking. Balance $20.03 (including $0.01 already in the account)
I then purchased $20.03 of VOHIX (1.587 shares at $12.62).

Result the next day (and today):

Image

My transaction history shows a sweep of $479.97 into my settlement fund yesterday (plus the $0.01 that was already there). And that penny was actually the dividend paid out after I purchased shares of VWO last Tuesday with the resulting cash sitting in the MMF for two days. The $479.98 will sweep out tonight and be gone tomorrow. I'll probably get another $0.01 as a dividend.

2) You are correct that Vanguard lets us get away with it. And your implication is correct that you will get dinged for margin interest in a margin account. (I discovered that the hard way.) But not all brokers will let you game the settlement dates that way.

User avatar
Doc
Posts: 7690
Joined: Sat Feb 24, 2007 1:10 pm
Location: Two left turns from Larry

Re: Vanguard customer service reps need some training

Post by Doc » Wed Dec 06, 2017 7:03 am

jhfenton wrote:
Tue Dec 05, 2017 7:13 pm
I then transferred $500 from checking.
That's a different situation than a credit resulting from a sale. Nevertheless my info is from published policy from another broker. Maybe it's not SEC rules. There was a discussion about this here several years ago. If I get time later I'll try to find it.

The trading violation rules apply to all brokers. Application on nuances to the basic rules like your example is a different matter or maybe Vg just has it wrong. But since their interpretation is in the clients favor in the case you presented nobody's complain. :)
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

User avatar
jhfenton
Posts: 2278
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Vanguard customer service reps need some training

Post by jhfenton » Wed Dec 06, 2017 7:46 am

Doc wrote:
Wed Dec 06, 2017 7:03 am
jhfenton wrote:
Tue Dec 05, 2017 7:13 pm
I then transferred $500 from checking.
That's a different situation than a credit resulting from a sale. Nevertheless my info is from published policy from another broker. Maybe it's not SEC rules. There was a discussion about this here several years ago. If I get time later I'll try to find it.
Vanguard treats cash from mutual fund sales the same way, and sweeps it into the MMF even if there is a current debit for an ETF purchase the same day. I could show you another screen clipping from another account where I have a MMF balance and a matching debit as a result of an ETF purchase and matching MF sale on Monday. (Because their system shows everything on a delay, the matching debit+credit do not show up in an account where I made an ETF purchase+fund sale yesterday. The fund sale proceeds will show up tomorrow as having been swept to the MMF today. And on Friday it will be gone, showing the funds swept out of the MMF tomorrow.)

Regardless, we're debating nits at this point. :sharebeer
Doc wrote:
Wed Dec 06, 2017 7:03 am
The trading violation rules apply to all brokers. Application on nuances to the basic rules like your example is a different matter or maybe Vg just has it wrong. But since their interpretation is in the clients favor in the case you presented nobody's complain. :)
I'm certainly not going to complain. :beer I was pleasantly surprised when we moved our accounts to Vanguard 2+ years ago that they were more flexible than TD Ameritrade. (Now I only have an HSA at TD Ameritrade.)

User avatar
burt
Posts: 578
Joined: Sun Feb 17, 2008 7:47 am

Re: Vanguard customer service reps need some training

Post by burt » Wed Dec 06, 2017 8:18 am

I'm not big on telephone conversations of any type, especially those dealing with financial instructions.
My preference is do it myself with a computer or written instructions sent via USPS.
If it's important.... I want it written.

burt

Emilyjane
Posts: 86
Joined: Sat Jul 27, 2013 6:39 am

Re: Vanguard customer service reps need some training

Post by Emilyjane » Wed Dec 06, 2017 10:07 am

Just had phone contact with Vanguard to recharacterize a Roth conversion I had done earlier in the year. My first time, and seemed to be his first too? Looks like it went OK, but I was surprised that he seemed rather confused as to why I would want to do such a thing!

Recharacterizing seems to be one of the things that cannot be done online (please correct me if I’m wrong on that...)
"Real knowledge is to know the extent of one's ignorance", Confucius

User avatar
Doc
Posts: 7690
Joined: Sat Feb 24, 2007 1:10 pm
Location: Two left turns from Larry

Re: Vanguard customer service reps need some training

Post by Doc » Wed Dec 06, 2017 11:18 am

Emilyjane wrote:
Wed Dec 06, 2017 10:07 am
Recharacterizing seems to be one of the things that cannot be done online (please correct me if I’m wrong on that...)
FWIW Fidelity apparently requires a form. It can be filled out online but I don't know if it can be sent online.

Ditto Vanguard. Search for "IRA Recharacterization".
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

pkcrafter
Posts: 12163
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Vanguard customer service reps need some training

Post by pkcrafter » Wed Dec 06, 2017 10:37 pm

Never ask Vanguard to do more than one thing.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

Engineer250
Posts: 812
Joined: Wed Jun 22, 2016 1:41 pm

Re: Vanguard customer service reps need some training

Post by Engineer250 » Thu Dec 07, 2017 2:16 am

barnaclebob wrote:
Tue Dec 05, 2017 1:17 pm
Munir wrote:
Sat Dec 02, 2017 2:26 pm
garlandwhizzer wrote:
Sat Dec 02, 2017 2:10 pm
A lot of people on this Forum complain about Vanguard in one way or another. There is a simple way for those dissatisfied with Vanguard to fix this problem. Move your assets to another firm. I wish good luck to those who choose to do this.

Garland Whizzer
I think there is a place for constructive criticism and feedback. It doesn't always have to be "love it or leave it". I think Vanguard itself would appreciate feedback and criticisms because it benefits the organization and the clients.
Personally im fine with vanguards customer service driving away the high cost customers that cant do simple things over the internet.
:sharebeer
Where the tides of fortune take us, no man can know.

DippityDoo
Posts: 64
Joined: Mon May 29, 2017 6:06 pm

Re: Vanguard customer service reps need some training

Post by DippityDoo » Fri Dec 08, 2017 5:19 am

barnaclebob wrote:
Tue Dec 05, 2017 1:17 pm
Personally im fine with vanguards customer service driving away the high cost customers that cant do simple things over the internet.
In my not-so-humble opinion, Vanguard has chosen to make some customers "high cost" by not upgrading their tech and web site. I shouldn't be a "high cost customer." I find it quite easy to do anything I like online at Fidelity and Ameritrade. But not so at Vanguard, where I am waiting on them to resolve an issue they acknowledge is on THEIR end and could not be handled online. I know very little about the cost of upgrading technology on a large scale for an organization the size of Vanguard, but I find myself wondering if it's really more expensive than paying CS staff to handle things the web site ought to be able to do.

KyleAAA
Posts: 6369
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Vanguard customer service reps need some training

Post by KyleAAA » Fri Dec 08, 2017 11:37 am

DippityDoo wrote:
Fri Dec 08, 2017 5:19 am
I know very little about the cost of upgrading technology on a large scale for an organization the size of Vanguard, but I find myself wondering if it's really more expensive than paying CS staff to handle things the web site ought to be able to do.
I know very much about the cost involved, and it would be astronomically more expensive in the short and intermediate term. Maybe even in the long term. It just depends on how many people actually end up calling CS as a result.

User avatar
Munir
Posts: 2349
Joined: Mon Feb 26, 2007 4:39 pm
Location: Oregon

Re: Vanguard customer service reps need some training

Post by Munir » Fri Dec 08, 2017 2:55 pm

Engineer250 wrote:
Thu Dec 07, 2017 2:16 am
barnaclebob wrote:
Tue Dec 05, 2017 1:17 pm
Munir wrote:
Sat Dec 02, 2017 2:26 pm
garlandwhizzer wrote:
Sat Dec 02, 2017 2:10 pm
A lot of people on this Forum complain about Vanguard in one way or another. There is a simple way for those dissatisfied with Vanguard to fix this problem. Move your assets to another firm. I wish good luck to those who choose to do this.

Garland Whizzer
I think there is a place for constructive criticism and feedback. It doesn't always have to be "love it or leave it". I think Vanguard itself would appreciate feedback and criticisms because it benefits the organization and the clients.
Personally im fine with vanguards customer service driving away the high cost customers that cant do simple things over the internet.
:sharebeer
I want Vanguard to be inclusive of all investors (regardless of their computer skills) and not an exclusive elitist club. How about some humility and caring for those who need assistance? This also applies to participation in this forum which traditionally has been open to all investors with varying skills.
Last edited by Munir on Fri Dec 08, 2017 5:43 pm, edited 1 time in total.

Engineer250
Posts: 812
Joined: Wed Jun 22, 2016 1:41 pm

Re: Vanguard customer service reps need some training

Post by Engineer250 » Fri Dec 08, 2017 3:16 pm

Munir wrote:
Fri Dec 08, 2017 2:55 pm
Engineer250 wrote:
Thu Dec 07, 2017 2:16 am
barnaclebob wrote:
Tue Dec 05, 2017 1:17 pm
Munir wrote:
Sat Dec 02, 2017 2:26 pm
garlandwhizzer wrote:
Sat Dec 02, 2017 2:10 pm
A lot of people on this Forum complain about Vanguard in one way or another. There is a simple way for those dissatisfied with Vanguard to fix this problem. Move your assets to another firm. I wish good luck to those who choose to do this.

Garland Whizzer
I think there is a place for constructive criticism and feedback. It doesn't always have to be "love it or leave it". I think Vanguard itself would appreciate feedback and criticisms because it benefits the organization and the clients.
Personally im fine with vanguards customer service driving away the high cost customers that cant do simple things over the internet.
:sharebeer
I want Vanguard to be inclusive of all investors regardless of their computer skills and not an exclusive elitist club. How about some humility and caring for those who need assistance? This also applies to participation in this forum which traditionally has been open to all investors with varying skills.
I called Vanguard a few years ago because I was going to open a rollover tIRA. The woman on the phone explained I could do this online and told me how. The next time I needed to open an account (Roth IRA for my spouse) through Vanguard I did everything online.

This place can be plenty elitist (avg incomes here I'm sure are higher than most, and people's kids here often begin their adulthood with a higher net worth than I have now in my 30s). But learning skills and new things isn't elitist. Folks on here have been kind enough to describe many processes (like Roth conversions) for others to learn. They generally point out you should always fill out your own tax forms and double check everything yourself. In todays modern age, calling a customer service rep (who is likely not paid any better or worse than any other brokerage) and expecting them to handle your trades and rebalances every time because you refuse to learn a new system seems pretty elitist to me. But I've only invested in the electronic era, and my family never had any money that any individual at a bank or brokerage had ever assisted them personally.
Where the tides of fortune take us, no man can know.

User avatar
burt
Posts: 578
Joined: Sun Feb 17, 2008 7:47 am

Re: Vanguard customer service reps need some training

Post by burt » Sun Dec 10, 2017 7:08 pm

I rarely call Vanguard, but needed to do so 7 months ago for inherited funds.
Funds were transferred to beneficiaries without a hitch.

I called Vanguard a few days ago regarding Required Minimum Distributions (RMD) for inherited IRA.
No problem, short wait, professional, polite, and I received an email with confirmation.

I much prefer doing Vanguard transactions on-line if at all possible, but my recent interactions on the telephone have been very positive.

burt

Post Reply