Vanguard screwed up dividing taxable account

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VictorStarr
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Vanguard screwed up dividing taxable account

Post by VictorStarr »

Two weeks ago I requested Vanguard to divide funds and ETFs in taxable trust accounts into two individual accounts in the name of my ex-wife and I. I specifically asked Vanguard to split taxable funds evenly - for each fund/ETF divide each lot (SpecID) 50:50. The CS representative assured me that they split taxable assets every day and will do the way I requested. I asked Vanguard to allocate temporary designated representative to split multiple account (taxable, IRA and 529) but to no avail.

Vanguard divided account in a timely manner but I found that individual accounts have different cost basis and different total gain/losses.The only asset that was divided correctly (50:50 by each lot) was an ETF from a trust brokerage account. All mutual funds from legacy mutual account were divided without paying any attention to lots.
Frankly, I expected more from Vanguard where we have Flagship select status. On Wednesday, I sent a message to Vanguard and am still waiting for a reply.

Is there a way to escalate my issue and get attention of more capable representatives? After sorting out mess with taxable we have to divide IRA and 529 accounts.
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BolderBoy
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Re: Vanguard screwed up dividing taxable account

Post by BolderBoy »

A friend had a similar problem two years ago. He finally gave up trying to sort it out with the front line CS folks and wrote a detailed, well-organized (and calm) letter to the CEO. Inside of a week he got a call from a woman who IDed herself as a "fixer" who worked out of the CEO's office.

Sure enough within two days everything was fixed to my friend's satisfaction.

Six months after that there was another SNAFU in transferring his father's financial estate proceeds (big money) to Vanguard. Off went another letter to the CEO and again a "fixer" called, offered his direct email address and proceeded to correct all the issues.

In each letter, the ending sentence was something like, "... or would you rather I transfer all my assets to Fidelity?"

YMMV.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
jebmke
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Re: Vanguard screwed up dividing taxable account

Post by jebmke »

VictorStarr wrote: Sun Jan 10, 2021 1:20 am After sorting out mess with taxable we have to divide IRA and 529 accounts.
I would do everything in writing.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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VictorStarr
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Re: Vanguard screwed up dividing taxable account

Post by VictorStarr »

BolderBoy wrote: Sun Jan 10, 2021 4:48 pm A friend had a similar problem two years ago. He finally gave up trying to sort it out with the front line CS folks and wrote a detailed, well-organized (and calm) letter to the CEO. Inside of a week he got a call from a woman who IDed herself as a "fixer" who worked out of the CEO's office.
Thank you for advice. If my issue is not resolved next week I will follow your advice and write to the CEO.
aristotelian
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Re: Vanguard screwed up dividing taxable account

Post by aristotelian »

At least they got the split right and only screwed up the cost basis. You could be this guy, for whom Vanguard gave 76% of his account instead of 49.76%. viewtopic.php?f=2&t=335665

Seems like Vanguard's department for divorce splits is having a bad week.

I have had nothing but positive experience with VG but am tempted to leave based on the number of complaints and lack of anything keeping me there.
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VictorStarr
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Re: Vanguard screwed up dividing taxable account

Post by VictorStarr »

jebmke wrote: Sun Jan 10, 2021 5:24 pm
VictorStarr wrote: Sun Jan 10, 2021 1:20 am After sorting out mess with taxable we have to divide IRA and 529 accounts.
I would do everything in writing.
It is what I did. I sent a message to Vanguard with detailed instructions but I never got a response. So we called Vanguard and gave instructions over the phone. At that time I was pleasantly surprised that Vanguard used voice verification instead of Medallion signature guarantee.

I had a Flagship advisor for around 10 years but I never had a need to contact her. And now when there is an issue I had to talk to different representatives and ask them “to check notes” associated with my accounts.
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VictorStarr
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Re: Vanguard screwed up dividing taxable account

Post by VictorStarr »

aristotelian wrote: Sun Jan 10, 2021 5:58 pm I have had nothing but positive experience with VG but am tempted to leave based on the number of complaints and lack of anything keeping me there.
If your needs are simple and you can do everything online without talking to CS, Vanguard does provide a reasonable service.
Unfortunately for many tasks you either have to fill and mail paper form or call representative.
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BolderBoy
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Re: Vanguard screwed up dividing taxable account

Post by BolderBoy »

VictorStarr wrote: Sun Jan 10, 2021 6:19 pmUnfortunately for many tasks you either have to fill and mail paper form or call representative.
I don't think that filling out and mailing a paper form is an "unfortunate" way to do business with VG. It provides an exacting paper trail.

In January 2020, I wanted to roll over all of my Roth i401k to my rIRA (both at VG). Talked to a rep who put the correct form in my "inbox" at the VG messaging center on my account website. Downloaded, filled out and mailed in. Mission accomplished precisely within 10 days.

In December 2020, I wanted to rollover part of my traditional i401k to my rIRA (both at VG). Filled out the same form template as I used above. Mailed it to the El Paso, TX address. Hit a snag when the first person to look at the paperwork flagged the transfer saying that it couldn't be "direct" from a traditional i401k to a Roth IRA; that it had to touch base with a tIRA first, then I could do the Roth conversion from there. Called 'em up (they sent an email asking me to call), spoke with a retirement plan rep and pointed out that the form clearly allows what I was trying to do. She seemed a bit baffled and put me on hold for a while. When she returned, she asked if it would be okay if it became a two-step process as the first reviewer wanted. I said, "Sure, if you want." Two days later the rollover was done by VG as a one-step process, so apparently more heads got involved (maybe someone reviewing phone logs?)

In early January 2021, using the same form template as used above, I terminated the i401k and rolled it all over to my tIRA. It was accomplished seamlessly a week after I mailed the forms.

All of the above was pre-planned by me and as far as I'm concerned was accomplished without any real hassles. Paperwork has its place.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
Topic Author
VictorStarr
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Re: Vanguard screwed up dividing taxable account

Post by VictorStarr »

UPDATE:

After waiting for two more days (a total of five business days) I did not get any feedback from Vanguard. So I called Vanguard and after a 50 minutes wait I talked with a CS representative. He consulted with another department, admitted that an error was made and promised that case was open and the problem would be fixed in the next 3-5 business days. When I requested a case number he said that he did not have it yet and I had no luck with getting a point of contact for my case. I will wait another five days before escalating this case.

I checked my records, the first time I talked with Vanguard representation about dividing taxable trust accounts was 12/11/2020. And I did not even start with retirement and 529 accounts.
Mudpuppy
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Re: Vanguard screwed up dividing taxable account

Post by Mudpuppy »

As I advised the OP over in the other thread on Vanguard botching a divorce decree (viewtopic.php?f=2&t=335665), if you have a divorce lawyer, make sure that you have informed them of this issue. Should this bring up future legal problems with executing the divorce decree, you want to be sure to involve your lawyer in a timely fashion. It the issue gets beyond their realm of expertise, they can help provide referrals to a lawyer or law firm that does have the appropriate expertise.
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