Vanguard Customer Service Improvement Incentive?

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destin
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Vanguard Customer Service Improvement Incentive?

Post by destin » Tue May 15, 2018 3:54 pm

Based on everything we know about Vanguard, what incentive do they have to improve their customer service? What incentives is everyone pushing for so Vanguard improves its customer service? For comparison, how does this incentive differ from another Pennsylvania company, Comcast, who also promises their customer service will improve for years but never does anything worthwhile?

I was thinking I was going to be a Vanguard customer several more decades. Now, I'm not sure anymore. The decline is very noticeable over the years. And ever year, they keep saying they will improve but haven't. This is important.

Do I invest in mutual funds or ETF? I'm not sure anymore. It depends, will Vanguard get better or worse? If it get's better, how will that happen? What incentives do they have to become better?

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JamesSFO
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Re: Vanguard Customer Service Improvement Incentive?

Post by JamesSFO » Tue May 15, 2018 4:25 pm

(1) Don't assume that what you see on this forum is fully representative of experiences. This board likely over-presents the number of negative Vanguard interactions/problems relative to the customer base at large.

(2) Vanguard has owned up to understaffing and is hiring

(3) Even so, it takes time to right the ship, likely multiple years

(4) If you feel another firm will do better go for it. Except for VG Admiral funds which may be challenging to hold at other companies, you can move most of your funds to other custodians easily (and VG mutual funds of all types can be converted to ETFs as a tax-free event)

SpaceCowboy
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Re: Vanguard Customer Service Improvement Incentive?

Post by SpaceCowboy » Tue May 15, 2018 4:34 pm

Move your money to Fido. They're customer service is much better and you can still buy Vanguard ETFs or use Fido's low cost index funds.

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nisiprius
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Re: Vanguard Customer Service Improvement Incentive?

Post by nisiprius » Tue May 15, 2018 5:54 pm

I wouldn't fuss about it. I don't believe there's a serious problem with Vanguard but that doesn't matter. If you have concerns about Vanguard, use Fidelity or Schwab. Spread the business around. You won't even be hurting Vanguard, Vanguard is big enough, maybe too big.

If I had my account at Fidelity or Schwab I would mostly use their own index funds, or Schwab's ETFs, or Fidelity's no-fee iShares ETFs, to avoid fees. I don't think there are any ETFs where I would pay a fee to get the Vanguard-branded product.

Yeah, I like Vanguard better. My wife and I are both quite convinced that we prefer Folger's coffee to Maxwell House, but obviously a lot of people are very happy with Maxwell House so it must just be individual preference. I think it's just the same with Vanguard, Fidelity, and Schwab.

At various times I've been a customer of Schwab for three years, a customer of Fidelity for seven as an individual and fifteen as a 401(k) fund participant, a customer of Vanguard for twenty years, and a customer of TIAA-CREF for forty years. I did not notice any special issues with Vanguard. If I give L. L. Bean customer service an A+, I'd give Vanguard, Fidelity, and Schwab, let's say A-. I have some not-serious-but-infuriating stories about each of them; all the same kind, basically a too-long period of time during which nobody could tell me what was happening or where my money was, but it all came out OK at the end.

I have to put TIAA-CREF in a lower category because of serious problems they had with data processing circa 2006-2007, probably solved by now. That wasn't a customer service problem, though.

I believe that you get a magnified impression of Vanguard customer service problems in this forum. I'm not saying the problems don't exist, in fact Vanguard has openly acknowledge growing pains. I haven't personally experienced any problems yet. But that doesn't matter. It's not a big deal. Folger's or Maxwell House, Coke or Pepsi, Samsung or iPhone, what the heck.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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DaftInvestor
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Re: Vanguard Customer Service Improvement Incentive?

Post by DaftInvestor » Tue May 15, 2018 6:59 pm

I have accounts at Vanguard, Fidelity, and Schwab but have yet to use customer service at any of them so to me - this is a "who cares?". If their computers run okay and their accounting is correct I'm happy (true for all 3).

That said - their incentive is customer satisfaction.

MrPotatoHead
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Re: Vanguard Customer Service Improvement Incentive?

Post by MrPotatoHead » Tue May 15, 2018 7:13 pm

I mentioned this before. You can gain insight into Vanguard's corporate mentality toward customer service by reading reviews from their customer service reps at GlassDoor. The thing I noted is the positive comments about Vanguard are all over the place, in other words, little consistency, but the negative comment are relatively consistent.

Corporations have cultures, Vanguard has a strong corporate culture that is unlikely to change. I am sure they will make occasional, temporary, incremental improvements, but interim progress will likely be undermined by the dominate corporate culture corrosive effect over time.

I think it will be fun to watch. Vanguard may have a real challenge in front of it. With the boomers retiring and unemployment rate falling they may end up facing a labor shortage. It should be fascinating to see how they address it given the current mentality seems to be akin to: the beatings will continue until morale improves.

In short I think the thing that may force them to change is when they can no longer attract employees. They will either have to become more employee and customer service focused or they will have to react by off shoring.

CedarWaxWing
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Re: Vanguard Customer Service Improvement Incentive?

Post by CedarWaxWing » Tue May 15, 2018 7:23 pm

I have Vanguard... and have had no issues, although I am not all the impressed with their website. I noticed that when I actually learned it the website is not as bad as I originally thought, and if I need to I call, and get led through a website maneuver if I felt I needed assistance to avoid a possibly important error.

Fidelity... one of my adult sons, a double major in EE and CS... has both VG and Fidelity (the 401 K). He is not that impressed with Fidelity... doesn't think they are any better or knowledgeable than the people at VG, but no worse. To my mind VG is fine, but the first person to answer the phone does not always know when to ask for a higher up to help him/her solve a problem.

dbr
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Re: Vanguard Customer Service Improvement Incentive?

Post by dbr » Tue May 15, 2018 7:37 pm

So far the successful test at the places I keep assets is not having to care about their customer service because I never have to talk to them and everything just works.

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arcticpineapplecorp.
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Re: Vanguard Customer Service Improvement Incentive?

Post by arcticpineapplecorp. » Tue May 15, 2018 7:59 pm

Here's some thoughts:

Comparing Comcast and Vanguard is comparing apples and oranges. Comcast is for profit and publicly traded. Vanguard only has to cover it's costs and is not publicly traded.

Comcast raises your costs. Vanguard lowers your costs (they've lowered mine anyway since I've been investing)

You have to call Comcast when they raise your rates every year like clockwork. Vanguard has lowered my fees overtime and I never called them once to ask them to do so.

When you call Comcast to complain about the increased fees every year they don't lower your costs, but rather give you more channels for the same price. Vanguard has given us more and more over the years (first S&P500 then total stock index. Then total international. Then ETFs. Then Target Date Retirement funds. Now factor funds. Etc.) and has only lowered the fees over time. (By the way, when you call Comcast to complain about the increase and they say they'll keep the bill the same but give you more channels, don't you ever think to yourself, "Hey wait a minute! If you're giving me this extra stuff now for the same amount of money, should I have been getting this all along!??!"

My mother just transitioned her IRAs that were in CDs at the bank over to Vanguard. While there were a couple minor hiccups, these were dealt with quickly and easily and I found the transition to be mostly smooth, nothing to complain about really. My mother was worried about transferring after reading a negative article about people's experience with Vanguard in the Phila. Inquirer.

I had to analyze the article and pointed out a few things. One, some of the people complaining had taxable accounts at Vanguard. This would not be the case with her so that was comparing apples to oranges. Secondly, the people complaining in the article were still using Vanguard. Thirdly, one person interviewed said he was moving more money to Vanguard at the same time he was complaining about Vanguard :confused . Are there problems with any company? Yes. How problems get addressed/resolved is the main point. I think comparing one PA company with another (that are in two different sectors of the market by the way) is kinda silly. How much customer support do you really use with Vanguard anyway? Most things can be done online with the click of a button. Maybe my situation is much more simple than others.

Vote with your wallet. If you don't like things, move. It really is that simple. The incentives as has already been said are built in. If Vanguard does a good enough job they retain customers. If they don't, people will leave. Vanguard will self-correct (to attract new customers/retain customers) or not. Pretty simple.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

2015
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Re: Vanguard Customer Service Improvement Incentive?

Post by 2015 » Tue May 15, 2018 8:32 pm

JamesSFO wrote:
Tue May 15, 2018 4:25 pm
...Don't assume that what you see on this forum is fully representative of experiences. This board likely over-presents the number of negative Vanguard interactions/problems relative to the customer base at large.
...
This.

There are zero incentives for people to focus on the outcome of taking personal responsibility and changing VG as a vendor when they derive so much more satisfaction from the activity of complaining about Vanguard on this forum. As a reminder, the difference between high performing men and women and low performing men and women is that high performing men and women focus on outcomes.

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dwickenh
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Re: Vanguard Customer Service Improvement Incentive?

Post by dwickenh » Tue May 15, 2018 8:41 pm

destin wrote:
Tue May 15, 2018 3:54 pm
Based on everything we know about Vanguard, what incentive do they have to improve their customer service? What incentives is everyone pushing for so Vanguard improves its customer service? For comparison, how does this incentive differ from another Pennsylvania company, Comcast, who also promises their customer service will improve for years but never does anything worthwhile?

I was thinking I was going to be a Vanguard customer several more decades. Now, I'm not sure anymore. The decline is very noticeable over the years. And ever year, they keep saying they will improve but haven't. This is important.

Do I invest in mutual funds or ETF? I'm not sure anymore. It depends, will Vanguard get better or worse? If it get's better, how will that happen? What incentives do they have to become better?
Please don't compare Vanguard to Comcast- that is ridiculous........ Comcast could get 10 times better and still not reach Vanguard.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

venkman
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Re: Vanguard Customer Service Improvement Incentive?

Post by venkman » Tue May 15, 2018 9:37 pm

Most of the problems I've had with Vanguard have been with their automated systems, which is frustrating because it seems like those should be the easiest ones to fix. And their communication when you have an issue can be a problem (i.e. they might be working on fixing your issue, but they neglect to send an email letting you know they're working on it.)

I would rate their customer service overall as "Adequate," or "2.5 stars out of 5." But I'm willing to live with the occasional hiccup, knowing that it will get fixed eventually, and accept that as the trade-off for being able to buy funds and ETF's at cost, with no worries that they'll ever try to squeeze extra money out of me.

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Doom&Gloom
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Re: Vanguard Customer Service Improvement Incentive?

Post by Doom&Gloom » Tue May 15, 2018 9:52 pm

DaftInvestor wrote:
Tue May 15, 2018 6:59 pm
I have accounts at Vanguard, Fidelity, and Schwab but have yet to use customer service at any of them so to me - this is a "who cares?". If their computers run okay and their accounting is correct I'm happy (true for all 3).

That said - their incentive is customer satisfaction.
+1

So far, so good.

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