I want to leave Vanguard

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JBTX
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Re: I want to leave Vanguard

Post by JBTX » Wed Mar 13, 2019 2:55 pm

OP is a new investor and sounds like needs a lot of hand holding. Vanguard didn't do anything wrong but fidelity is probably better for investors who buy one share at a time.

BSBHead
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Re: I want to leave Vanguard

Post by BSBHead » Wed Mar 13, 2019 3:04 pm

vineviz wrote:
Wed Mar 13, 2019 10:45 am
Russianbear wrote:
Wed Mar 13, 2019 10:42 am
quantAndHold wrote:
Wed Mar 13, 2019 10:36 am
I got that penalty for freeriding once. It was my fault. As I recall, one of those annoying screens came up to tell you you’re doing something wrong, but I ignored it. It was painful, and wasn’t a mistake I made a second time.

Sorry, but that’s not Vanguard’s rule, and you would be in the penalty box at any brokerage.
I don't agree that it takes a week for funds to settle in an account. This is the digital age.
There's nothing to agree or disagree with: the SEC has mandated this penalty so Vanguard has to enforce it. If you move the account within 90 days of the violation, the new brokerage will apply the same restrictions on your account.
The reason it will take a week to settle is they will have their risk operations/compliance investigate. Investigations take a bit of time.

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Wiggums
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Re: I want to leave Vanguard

Post by Wiggums » Wed Mar 13, 2019 3:17 pm

BSBHead wrote:
Wed Mar 13, 2019 3:04 pm
The reason it will take a week to settle is they will have their risk operations/compliance investigate. Investigations take a bit of time.
Regarding your reason for the week to settle, where is this documented?

I electronically move money all the time. What transaction triggers an investigation?
Last edited by Wiggums on Wed Mar 13, 2019 3:23 pm, edited 1 time in total.

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Doom&Gloom
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Re: I want to leave Vanguard

Post by Doom&Gloom » Wed Mar 13, 2019 3:18 pm

JBTX wrote:
Wed Mar 13, 2019 2:55 pm
OP is a new investor and sounds like needs a lot of hand holding. Vanguard didn't do anything wrong but fidelity is probably better for investors who buy one share at a time.
+1

I am eagerly looking forward to OP's post a year from now complaining that he owes taxes on the one share he sold in his IRA :twisted:

pennylane
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Re: I want to leave Vanguard

Post by pennylane » Wed Mar 13, 2019 3:24 pm

Don’t blame vanguard for your ignorance. They did nothing wrong.

withrye
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Re: I want to leave Vanguard

Post by withrye » Wed Mar 13, 2019 3:25 pm

OP has gotten all useful/actionable information out of this thread and now we're just dancing on the thread's grave. I think we can call it a day, no?

quantAndHold
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Re: I want to leave Vanguard

Post by quantAndHold » Wed Mar 13, 2019 3:40 pm

Wiggums wrote:
Wed Mar 13, 2019 3:17 pm
BSBHead wrote:
Wed Mar 13, 2019 3:04 pm
The reason it will take a week to settle is they will have their risk operations/compliance investigate. Investigations take a bit of time.
Regarding your reason for the week to settle, where is this documented?

I electronically move money all the time. What transaction triggers an investigation?
I suspect that OP is conflating the freeriding penalty (no new purchases with unsettled funds) with the fact that, for him, it’s taking a week for newly deposited funds to be available for trading. Probably either because he’s a new customer, or because he’s a new customer who broke a SEC rule on practically his first trade. I know when I was in the freeriding penalty box, I couldn’t buy with unsettled funds, but my ACH transfers were available for trading as soon as the transfer was complete. But I had been a Vanguard customer for at least 10 years at the time.

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TomatoTomahto
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Re: I want to leave Vanguard

Post by TomatoTomahto » Wed Mar 13, 2019 4:11 pm

Wiggums wrote:
Wed Mar 13, 2019 3:17 pm
I electronically move money all the time. What transaction triggers an investigation?
I imagine that a first transaction on a new account starts some KYC (Know Your Customer) process that might be called an investigation. The first check my Bill Pay sends to someone new also seems to take a while, even though I’ve been banking there a long time.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Dale_G
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Re: I want to leave Vanguard

Post by Dale_G » Wed Mar 13, 2019 4:14 pm

The 7 day hold rule does not apply to the purchase of securities - it applies to withdrawals of newly deposited funds. A prudent business practice these days.

Dale
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Earl Lemongrab
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Re: I want to leave Vanguard

Post by Earl Lemongrab » Wed Mar 13, 2019 4:27 pm

Swap your funds to ETFs and be free to move where you want. I would choose Merrill Edge if you have significant assets. You can get a cash bonus and free trades. TD Ameritrade and Etrade also have bonuses to consider.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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White Coat Investor
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Re: I want to leave Vanguard

Post by White Coat Investor » Wed Mar 13, 2019 4:36 pm

Russianbear wrote:
Wed Mar 13, 2019 10:17 am
Vanguard has made it incredibly difficult for me to do business with them. They put a 90 day restriction on my account for freeriding. I made an honest mistake. I deposited money to buy 1, ONE, share of VTI into my regular account. Somehow I accidentally purchased the share in my IRA. I clicked sell and then bought it in my personal account.
Anyhow, it now takes a week or more for money I deposit to be available to purchase in my IRA. I deposited $300 on Friday. I still can not buy VTSAX. I called, the lady tells me it will be available Friday. It doesn't take a week for money to be available in the electronic age. Morevoer she tells me nobody can lift the 90 day restriction. It's an SEC thing. Per their website, they make it sound like it's their choice. [OT comment removed by moderator prudent] Who whould I transfer my IRA to? Schwab? Whos good and low cost?
Don't let the door hit you on the way out!

Just kidding mostly, but don't expect awesome service anywhere when your goal is to buy 1 share at a time and make 3 figure deposits. I like Schwab, but I like Vanguard too so you might be pickier than I am.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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onthecusp
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Re: I want to leave Vanguard

Post by onthecusp » Wed Mar 13, 2019 4:37 pm

finite_difference wrote:
Wed Mar 13, 2019 2:47 pm
DB2 wrote:
Wed Mar 13, 2019 2:14 pm
grettman wrote:
Wed Mar 13, 2019 10:30 am
Leave vanguard for having a crappy website and bad customer service and etc but not for this...
+1
Isn’t this issue in fact due to a crappy website?

Why would Vanguard’s website allow you to free ride? The website should simply prohibit it.
I for one would prefer to sell something when I want and accept the violation penalty. It happened to me a couple times in the late 90s.

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nisiprius
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Re: I want to leave Vanguard

Post by nisiprius » Wed Mar 13, 2019 4:42 pm

RussianBear: Why do you say "I want to leave Vanguard?" Go ahead, leave, just do it. There's no need for you to get validation from anyone. The posters who have given you tips on how to change brokerages smoothly are giving you your best help.

You seem to think that Vanguard has punished you for a trivial, accidental infraction where they had discretion to let it go, and should have let it go. Could be, maybe not, I don't know. But if I believed that had happened to me, I'd be outa there. Why hang around?

Try another brokerage, what have you got to lose? It will make you feel that you've taken appropriate action.

My expectation is that you won't see any big difference. In 'The People, Yes,' poem 52, Carl Sandburg wrote:
He leaned at the gatepost and studied the horizon... Drove up a newcomer in a covered wagon: 'What kind of folks live around here?' 'Well, stranger, what kind of folks was there in the country you come from?' 'Well, they was mostly a lowdown, lying, thieving gossiping, backbiting kind lot of people.' 'Well, I guess, stranger, that's about the kind of folks you'll find around here.' And the dusty gray stranger had just about blended into the dusty gray cottonwoods in a clump on the horizon when another newcomer drove up: 'What kind of folks live around here?' 'Well, stranger, what kind of folks was there in the country you come from?' 'Well, they was mostly a decent, hardworking, lawabiding, friendly lot of people.' 'Well, I guess, stranger, that's about the kind of folks you'll find around here.'"
"What are the folks here at Schwab like?" "Well, what kind of folks was there at Vanguard? I guess stranger, that's about the kind of folks you'll find around here."
Last edited by nisiprius on Wed Mar 13, 2019 4:44 pm, edited 3 times in total.
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.

S_Track
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Re: I want to leave Vanguard

Post by S_Track » Wed Mar 13, 2019 4:42 pm

finite_difference wrote:
Wed Mar 13, 2019 2:47 pm
DB2 wrote:
Wed Mar 13, 2019 2:14 pm
grettman wrote:
Wed Mar 13, 2019 10:30 am
Leave vanguard for having a crappy website and bad customer service and etc but not for this...
+1
Isn’t this issue in fact due to a crappy website?

Why would Vanguard’s website allow you to free ride? The website should simply prohibit it.
This is a good question, why does the web site allow this? I know when I contribute to my IRA it tells me this account has unsettled funds/shares for a few days. I never sell so never had a problem. Seems like the web site should block such a transaction.

retire2022
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Re: I want to leave Vanguard

Post by retire2022 » Wed Mar 13, 2019 4:53 pm

Russianbear wrote:
Wed Mar 13, 2019 10:17 am
Vanguard has made it incredibly difficult for me to do business with them. They put a 90 day restriction on my account for freeriding. I made an honest mistake. I deposited money to buy 1, ONE, share of VTI into my regular account. Somehow I accidentally purchased the share in my IRA. I clicked sell and then bought it in my personal account.
Anyhow, it now takes a week or more for money I deposit to be available to purchase in my IRA. I deposited $300 on Friday. I still can not buy VTSAX. I called, the lady tells me it will be available Friday. It doesn't take a week for money to be available in the electronic age. Morevoer she tells me nobody can lift the 90 day restriction. It's an SEC thing. Per their website, they make it sound like it's their choice. [OT comment removed by moderator prudent] Who whould I transfer my IRA to? Schwab? Whos good and low cost?
Russianbear

You can thank all of this to Osama Bin Laden "The USA Patriot Act, passed by Congress a little over a month after 9/11 and largely still in place today, amended numerous existing laws including the federal anti-money laundering statute and the Bank Secrecy Act of 1970, to make them tougher on terrorism." https://www.ballardspahr.com/eventsnews ... -9-11.aspx

Would you consider a Vanguard Margin account? this would solve the issue of buying ETFs without having funds in the account.

Or you could advance funds into your account before you decide to do the transaction, it is really simple problem. I agree with other posters you will have the same issue with other brokerages.

NMBob
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Re: I want to leave Vanguard

Post by NMBob » Wed Mar 13, 2019 4:59 pm

Schwab IRA online , if you have no cash in ira, and nothing sold and settling, brings up a warning and makes you click a tiny box in front of it , stating you realize the warning that you do not have settled funds to pay for the purchase, and then have to go below and hit ok.

quantAndHold
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Re: I want to leave Vanguard

Post by quantAndHold » Wed Mar 13, 2019 5:08 pm

NMBob wrote:
Wed Mar 13, 2019 4:59 pm
Schwab IRA online , if you have no cash in ira, and nothing sold and settling, brings up a warning and makes you click a tiny box in front of it , stating you realize the warning that you do not have settled funds to pay for the purchase, and then have to go below and hit ok.
Vanguard does too.

Having been caught in a similar situation as OP once upon a time, I think the real problem is that all of these guys post so many warnings about so many things, that it’s easy to ignore the one that’s important.

aristotelian
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Re: I want to leave Vanguard

Post by aristotelian » Wed Mar 13, 2019 5:13 pm

quantAndHold wrote:
Wed Mar 13, 2019 5:08 pm
NMBob wrote:
Wed Mar 13, 2019 4:59 pm
Schwab IRA online , if you have no cash in ira, and nothing sold and settling, brings up a warning and makes you click a tiny box in front of it , stating you realize the warning that you do not have settled funds to pay for the purchase, and then have to go below and hit ok.
Vanguard does too.

Having been caught in a similar situation as OP once upon a time, I think the real problem is that all of these guys post so many warnings about so many things, that it’s easy to ignore the one that’s important.
Exactly. But if the website had automatically disallowed the contribution, some other poster would be furious that the transaction won't go through!

S_Track
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Re: I want to leave Vanguard

Post by S_Track » Wed Mar 13, 2019 5:33 pm

Nice link below that explains how to avoid problems. After reading that I am trying to figure out when the OP made the violation. He states the following:

"Every payday I deposit $250-$300 into my IRA. I select either the 2045 fund I have in my IRA or the VTSAX. I mean, it submits the deposit directly into the index fund I choose. I also have an individual account where I buy a share or two every couple of weeks of VTI. So, I deposited $150 into my individual account. When I logged on later to purchase the share, somehow I was in my IRA, so it bought the share there, with the cash sitting in the other account. I didn't know how to back out of the inadvertent purchase, so I clicked sell."

So funds were deposited into his taxable account, I assume this means the settlement account. He then purchased a share of VTI in the IRA. Is that where the violation occurred since the funds had not yet settled into his settlement account? Or did it happen when he immediately sold the share of VTI in his IRA? It also seems like he will get hit with a 10% penalty for removing funds from his IRA unless this a Roth.

https://www.fidelity.com/learning-cente ... violations

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celia
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Re: I want to leave Vanguard

Post by celia » Wed Mar 13, 2019 5:36 pm

Doom&Gloom wrote:
Wed Mar 13, 2019 11:07 am
Wiggums wrote:
Wed Mar 13, 2019 11:04 am
TomatoTomahto wrote:
Wed Mar 13, 2019 10:59 am
@RussianBear, for a purchase of less than $150, you got your money’s worth of customer support time. I hope you’re happier elsewhere.
+1
+2
+3 Also, from our perspective, you may have used up a lot of customer service time which we all pay for, indirectly.

boglesmind
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Re: I want to leave Vanguard

Post by boglesmind » Wed Mar 13, 2019 6:02 pm

S_Track wrote:
Wed Mar 13, 2019 4:42 pm
finite_difference wrote:
Wed Mar 13, 2019 2:47 pm
DB2 wrote:
Wed Mar 13, 2019 2:14 pm
grettman wrote:
Wed Mar 13, 2019 10:30 am
Leave vanguard for having a crappy website and bad customer service and etc but not for this...
+1
Isn’t this issue in fact due to a crappy website?

Why would Vanguard’s website allow you to free ride? The website should simply prohibit it.
This is a good question, why does the web site allow this? I know when I contribute to my IRA it tells me this account has unsettled funds/shares for a few days. I never sell so never had a problem. Seems like the web site should block such a transaction.
If Vanguard or some other brokerage did prohibit such transactions, I am sure there will be a hue and cry about "nanny organizations" and zillion posts for/against such practices! Haven't we seen such posts in other threads already?

Boglesmind.

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LadyGeek
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Re: I want to leave Vanguard

Post by LadyGeek » Wed Mar 13, 2019 6:17 pm

I removed an off-topic post. This thread has run its course and is locked (rant, getting contentious). See: Locked Topics
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