Vanguard quick to close accounts

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theplayer11
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Vanguard quick to close accounts

Post by theplayer11 » Wed Jan 09, 2019 9:07 am

So I had assets transferred to Merrill Edge from Vanguard last week, a Roth and a joint brokerage account. I called in yesterday and told the rep to keep my joint brokerage account open as I would be transferring assets in from another institution. I was told no problem and the restriction I had an the account to be able to transfer funds in would be lifted in a day.
So, I woke up this morning to transfer funds in and poof, no accounts listed at all. I called in and was told the accounts were closed early this morning. Not sure why Vanguard is so quick to close accounts, but they just lost my business, moving funds to Schwab now. This was for my emergency fund, Vanguard's money market is a little higher than Schwab's, but I will not open a new account after their screw up.
So, is this standard procedure from Vanguard?..to close accounts after a liquidation? My Schwab accounts were not closed under same scenario.

Walkure
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Re: Vanguard quick to close accounts

Post by Walkure » Wed Jan 09, 2019 9:13 am

Usually just the opposite for me. Have rolled over money from a mutual fund account to a brokerage account and the empty account is still sitting there almost a year later. Considering possible tax record issues, I'm surprised they would wipe out anything before April 15 of the following year.

fourwheelcycle
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Re: Vanguard quick to close accounts

Post by fourwheelcycle » Wed Jan 09, 2019 9:33 am

We might need to know more about how you actually did the transfer, and what instructions you gave. Did you initiate the transfer from Merrill Edge, asking then to contact Vanguard and request a complete transfer of your funds? Is it possible you, or Merrill on their own, indicated this was a full transfer and account close-out? Or, did you initiate the transfer from Vanguard, and is it possible you advised Vanguard you wanted to close-out the account, or that Vanguard somehow misunderstood you?

My experience with transfers is that your rep does not do it - they bring a transfer specialist on the line to help you. So if you somehow told the Vanguard transfer specialist you wanted a full close-out, or if they misunderstood you and thought you asked for a full close-out, calling your rep the following week to say you did not want a full close out might not "stop the presses" if the transfer specialist had already made some type of entry to close-out your account.

Having said all this, my experience with Vanguard is that zero balance accounts remain visible and accessible for many years. If you don't want to see old zero balance accounts on your web page you have to go to the customized view settings and click that you don't want to see them. I am surprised Vanguard would delete an account so quickly, although maybe full account close-outs are treated differently. If you can still log-in I would think you still have an account of some type, and if you want to add a money market fund you could do that and transfer into it.

And finally, even if your Vanguard account looks closed to you I bet it is still accessible at some level. When you do a full transfer, if that is what you requested, the destination firm, Merrill in this case, generally sets their computers to do continuing "look-backs" to transfer any late-arriving dividends that hit your old account at the other institution.

Topic Author
theplayer11
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Re: Vanguard quick to close accounts

Post by theplayer11 » Wed Jan 09, 2019 9:55 am

I requested the transfers from the Merrell Edge website exactly the same for both my Vanguard and Schwab accounts. My Schwab accounts remain open, Vanguard's closed as of this morning. There are no accounts visible and rep stated they were closed.

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RickBoglehead
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Re: Vanguard quick to close accounts

Post by RickBoglehead » Wed Jan 09, 2019 10:01 am

Blame Vanguard all you want. I moved the contents of my Fidelity brokerage account to Vanguard last year. It took several tries mostly due to issues on the Fidelity side. Fidelity told me that I would need to call them AFTER the account emptied to have them then reopen it. I did, but they couldn't do it because there was a dividend following the stock. After that dividend, I called, and they couldn't do it because the settlement account had earned $0.17 interest. Finally that transferred, the account closed, and then they reopened it. I now maintain it with a zero balance, using it to take my Fidelity Credit Card 2% bonus every few months (I barely use it).

My experience is that Vanguard allows zero balance brokerage accounts no problem. If the transfer instructions they receive say all holdings, then it gets closed. A simple phone call would likely reopen it. Of course, if all you're going to keep there is your money market, it's best for those of us remaining that you move on since the cost to service you isn't worth it to Vanguard.
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chambers136
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Re: Vanguard quick to close accounts

Post by chambers136 » Wed Jan 09, 2019 10:23 am

The same thing happened to me. I did a full transfer to Schwab, hoping the VG account would stay open for any Admiral shares we wanted....a few weeks later I got a letter saying the account was closed. Not a real big deal because I'll open again if needed, but it was surprising based on the responses I got to a question I posted on here before I did the transfer- overwhelmingly people said theirs stayed open for years.

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theplayer11
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Re: Vanguard quick to close accounts

Post by theplayer11 » Wed Jan 09, 2019 10:42 am

RickBoglehead wrote:
Wed Jan 09, 2019 10:01 am
Blame Vanguard all you want. I moved the contents of my Fidelity brokerage account to Vanguard last year. It took several tries mostly due to issues on the Fidelity side. Fidelity told me that I would need to call them AFTER the account emptied to have them then reopen it. I did, but they couldn't do it because there was a dividend following the stock. After that dividend, I called, and they couldn't do it because the settlement account had earned $0.17 interest. Finally that transferred, the account closed, and then they reopened it. I now maintain it with a zero balance, using it to take my Fidelity Credit Card 2% bonus every few months (I barely use it).

My experience is that Vanguard allows zero balance brokerage accounts no problem. If the transfer instructions they receive say all holdings, then it gets closed. A simple phone call would likely reopen it. Of course, if all you're going to keep there is your money market, it's best for those of us remaining that you move on since the cost to service you isn't worth it to Vanguard.
well, I made that simple phone call and expressed my disappointed and the rep made no mention that they could reopen it.
As for the cost of servicing just a MM account..I couldn't care less

JBTX
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Re: Vanguard quick to close accounts

Post by JBTX » Wed Jan 09, 2019 10:44 am

Why not leave a small balance in the vanguard account?

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theplayer11
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Re: Vanguard quick to close accounts

Post by theplayer11 » Wed Jan 09, 2019 11:05 am

JBTX wrote:
Wed Jan 09, 2019 10:44 am
Why not leave a small balance in the vanguard account?
Going through the Merrell Edge site, I believe the simplest way was to check transfer entire assets. No where did it state that the account would be closed if I did this. No big deal, just thought it was odd to close the account. Again, if Merrell 's instructions were to do so, why weren't my Schwab accounts closed.....same method.

DaftInvestor
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Re: Vanguard quick to close accounts

Post by DaftInvestor » Wed Jan 09, 2019 11:08 am

Funny - ~20 years ago I used to use E-Trade for my active stock trading. At some point a decade ago I moved all remaining assets out of the account but somehow ended up with a $0.02 credit left in the account (we all know how this happens - cash fund has a dividend). At some point I was thinking they would close out my account and send me a check but they haven't done so yet. I still get emails for monthly statement reminders. I figure leaving it open gives me access to their tools (although I haven't used them in years) and really has no downside (even the linked bank account is so old it isn't one I have open any longer).

snowman
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Re: Vanguard quick to close accounts

Post by snowman » Wed Jan 09, 2019 11:28 am

theplayer11 wrote:
Wed Jan 09, 2019 11:05 am
JBTX wrote:
Wed Jan 09, 2019 10:44 am
Why not leave a small balance in the vanguard account?
Going through the Merrell Edge site, I believe the simplest way was to check transfer entire assets. No where did it state that the account would be closed if I did this. No big deal, just thought it was odd to close the account. Again, if Merrell 's instructions were to do so, why weren't my Schwab accounts closed.....same method.
It really depends on the firm. My experience is that when you initiate transfer from "new" firm, and check the box for full account transfer, the "old" firm will send everything out and will close your existing account. That's why it's so important to initiate transfer only after you have downloaded all statements from old account, since you will lose online access to it as soon as request for full account transfer hits. I learned it the hard way first time I did it years ago.

I initiated full account transfer from TDA to ME 9 months ago, and that's exactly what happened - 3 days later my TDA account was closed. I initiated partial account transfer to ME from Fidelity, and Fidelity account remained open. It's always best to leave some money in the account if you don't want it closed.

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southerndoc
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Re: Vanguard quick to close accounts

Post by southerndoc » Wed Jan 09, 2019 11:48 am

I just transferred my Merrill Edge account to Fidelity. ME closed my account the same day the transfer went through.

NoHeat
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Re: Vanguard quick to close accounts

Post by NoHeat » Wed Jan 09, 2019 1:46 pm

My Vanguard accounts, empty for maybe four years now after a transfer to assets to Merrill Edge, seem to still exist. I just tested it now: I can successfully enter the old password and do the two-factor thing with my cell phone, but then I get a message that 'access to this account has been disabled'.

barnaclebob
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Re: Vanguard quick to close accounts

Post by barnaclebob » Wed Jan 09, 2019 2:21 pm

Next weeks thread "Vanguard didn't close my old accounts!"

"Why would they leave my empty accounts sitting there for scammers and identity thieves to take advantage of when I assumed they'd be closed??? I'm never using Vanguard again!"

Stuff happens, move on. its not that big of a deal to open a new account or try to get the old one reopened.

arf30
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Re: Vanguard quick to close accounts

Post by arf30 » Wed Jan 09, 2019 2:21 pm

A full ACATs transfer out of Vanguard causes them to close the account, it seems like it's just part of the automated process. Noticed this when moving my Roth IRA out. Probably nothing the phone rep can do about it.

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TheGreyingDuke
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Re: Vanguard quick to close accounts

Post by TheGreyingDuke » Thu Jan 10, 2019 9:11 am

I have parental estate accounts at Vanguard that have been empty for 9 years and they remain open
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rkhusky
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Re: Vanguard quick to close accounts

Post by rkhusky » Thu Jan 10, 2019 12:31 pm

There’s probably a difference between emptying one account versus emptying all accounts.

michaeljc70
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Re: Vanguard quick to close accounts

Post by michaeljc70 » Thu Jan 10, 2019 4:27 pm

barnaclebob wrote:
Wed Jan 09, 2019 2:21 pm
Next weeks thread "Vanguard didn't close my old accounts!"

"Why would they leave my empty accounts sitting there for scammers and identity thieves to take advantage of when I assumed they'd be closed??? I'm never using Vanguard again!"

Stuff happens, move on. its not that big of a deal to open a new account or try to get the old one reopened.
That's what I was thinking. You can probably open an account online in a few minutes even though it is a minor inconvenience. See my post in another thread when Vanguard threatened to hand all my assets over to the state due to a piece of mail erroneously returned by the post office!

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