seeking Vanguard money market alternative

[Pappagallina]

I"m only going there to set up a Chase self directed account (on their computer, but on my own with any help answering questions), and to establish bank links. I don't know what "choices" they want to offer, but I feel uneasy about it.

[Pappagallina]

I sent my trust document to the branch manager in advance and was told that it would take about 1 hour to set up a self directed account. I carefully organized all materials and went into the bank. I ended up there for a long period of time (not sure how long—probably close to 2 hours) doing nothing but trying to get a trust account set up. There were more things to accomplish (add banks, register, get checks, and transfer funds from a Vanguard fund--VUSXX). But not even the account was set up in this time period because they have to email the application, verify me on my home phone, and have me e-sign the document. This seems absolutely absurd to me because I was SITTING RIGHT THERE and they could have a REAL SIGNATURE from a REAL VERIFIED PERSON on the spot. But no, we have to go through all sorts of hullabaloo instead.

The above is not the only thing that was disturbing. I had to answer loads of questions posed by some jerk on the phone, and they seemed invasive to me, and I resented the fact that I was being put through all this with no prior warning, and 3 times this jerk threatened to disconnect me because he did not like the way I was speaking to him! What I was saying to him was like nothing—I was simply expressing my frustration with the entire process, and I didn’t even know the answers to the questions he was asking! They were about things I have never thought about or even heard about in my life (I can’t even repeat them because I don’t know what these questions even referred to). And of course, he wanted to know how much money I had. The rep in the room was a sweet woman who was just stuck there doing her job.

I felt absolutely terrible about the whole experience when I left and this hung over me for about 3 hours. I felt like some bank was trying to get its clutches into me. At home, I read reviews of Chase (BBB A-) and JP Morgan (BBB B-). I thought to myself: why on earth would I want to be involved in another convoluted, hellish company (in an attempt to leave Vanguard)? I think I am setting myself up for more bad experiences. There must be a better way to get out of Vanguard.

In addition to the above, prior to going into the bank, a “broker” from the bank called me. She had NO UNDERSTANDING AT ALL of what I was trying to do, and she said to me at one point: we will have to put you into a different money market because we don’t hold that one. This infuriated me. No one is PUTTING me somewhere! I had a plan which this woman did not even take the time to read about (I had sent an email to the branch manager explaining everything), and she did not even know that VUSXX IS ONLY HELD ON THE SELF-DIRECTED PLATFORM (which I learned from this forum). I felt really turned off after this call—like they were trying to manipulate me.

I have not signed the application and my gut instinct is not to sign it. My gut instinct is to stay away from this company. Unfortunately, I am afraid there is nothing better than this--nothing decent around at this point in time in the financial institution realm. Chase/JP Morgan holds VUSXX and it will give a $700 perk when I transfer in kind, but I have a very very bad feeling about moving forward. This was my solution to lousy Vanguard, but I think it is a bad solution destined for worse experiences to come. I don’t trust financial institutions in general at all any more, and especially banks. I don’t know what to do with about half of all assets which are tied up in Vanguard’s VUSXX (with 1undesirable link out, no checks, and an account mishandled by Vanguard 30 years ago). I want to leave, but maybe I should DO NOTHING until I make a plan with the financial advisor I have picked. I am very disturbed by all this.

[livesoft]

I do not use Chase. I think there is no place or financial institution that can do what you want as you have explained things.

I know it is not helpful, but I wanted to repeat the above. Do you have a friend or relative that can help filter out things for you while physically sitting in the same room? While it is interesting to read about your trials and tribulations I don't think remote unknown people will ever appreciate all the hassles you have been subjected to.

[clip651]

I sent my trust document to the branch manager in advance and was told that it would take about 1 hour to set up a self directed account. I carefully organized all materials and went into the bank. I ended up there for a long period of time (not sure how long—probably close to 2 hours) doing nothing but trying to get a trust account set up. There were more things to accomplish (add banks, register, get checks, and transfer funds from a Vanguard fund--VUSXX). But not even the account was set up in this time period because they have to email the application, verify me on my home phone, and have me e-sign the document. This seems absolutely absurd to me because I was SITTING RIGHT THERE and they could have a REAL SIGNATURE from a REAL VERIFIED PERSON on the spot. But no, we have to go through all sorts of hullabaloo instead.

The above is not the only thing that was disturbing. I had to answer loads of questions posed by some jerk on the phone, and they seemed invasive to me, and I resented the fact that I was being put through all this with no prior warning, and 3 times this jerk threatened to disconnect me because he did not like the way I was speaking to him! What I was saying to him was like nothing—I was simply expressing my frustration with the entire process, and I didn’t even know the answers to the questions he was asking! They were about things I have never thought about or even heard about in my life (I can’t even repeat them because I don’t know what these questions even referred to). And of course, he wanted to know how much money I had. The rep in the room was a sweet woman who was just stuck there doing her job.
...

What bank was this, Chase? I haven't heard great things about setting up new accounts with Chase, let alone trust accounts there. But that's just anecdotal experiences of some of my acquaintances.

Please keep in mind than any bank or brokerage you go to will be required to ask you a series of questions that will feel invasive, including how much money you have, and a bunch of things to confirm your identity, and more. If you go to a new financial planner, they'll be required to do this too. It's called Know Your Customer, it's a legal requirement for them to do this. Here is a detailed explanation of it:
https://www.investopedia.com/terms/k/knowyourclient.asp

This law started around 2001. If you have old accounts, you may not have needed to provide so much detail when you opened the accounts years ago. But every bank or brokerage will ask these things for any new account you're opening. Even to open another account at the same institution you will have to provide or reconfirm all of that info. Thinking that the person on the phone or in person who is asking you these questions is a jerk is likely to come through in your tone of voice. You can be frustrated if you want to, but showing that frustration to the people that are trying to help you set up an account will not help the process.

You certainly might be right to trust your gut and not move forward with a Chase account. But wherever you go, you'll need to answer these questions to open an account.

best wishes,
cj

[Pappagallina]

Thank you. I had been trying to think of someone I could talk to about this even before writing. I can't think of anyone who would know what I am talking about in the least. Is there some kind of "financial counseling service" for people? These kinds of issues can be harrowing.

Regarding the questions I was asked: I did have to open new accounts at Schwab after my mother died (2023) but I was never asked such weird, crazy, and invasive questions. Nothing seemed abnormal, whereas this was horrible, with some odd man on a speaker phone asking me invasive questions for a terribly long period of time. And then if I got upset, he would threaten to disconnect me! I just want to disconnect them! Yes, it was Chase. I think the branch manager should have told me that I would be there for two hours because it was a trust, and then nothing would be accomplished that day. I feel that I have been misled, invaded, and that attempts were made to manipulate me. I see no way to resolve this--institutions like this can't resolve things.

[Pappagallina]

Another big thing I worry about is that there will be "fine print" things which will end up being harmful to me, but I won't know how to recognize this beforehand. I have to sign the application. I don't know the ramifications of what I am signing, and I believe these companies only act in their own self interest.

[Pappagallina]

I"m switching into the Gabelli US Treasury Fund and holding it at Schwab. I will decide on more xhlf, etc., later.

[increment]

It looks like Schwab offers the Gabelli US Treasury Money Market Fund only to "Trust Company Customers Only." I hope that they're not charging you a Transaction Fee to buy it.

[Pappagallina]

Thanks, I will look into it. It was recommended to me.

[Pappagallina]

Glad I mentioned it. You're right---I can't buy it at Schwab (I don't know who can). I'll try to see where I can buy it. I am so sick of being given the wrong info--and this was by an advisor doing this for 25 years!

[Curly]

Hello,

I don't recall if you had already decided against using E-Trade for your desired objective. GABXX is available there and I don't think there are any restrictions other than the minimum amount required for initial investment. Be sure to read the prospectus...I think once when I went through it that I read there is a $5 fee for each distribution the investor pulls from the fund. But maybe I'm not remembering the details correctly.

Good luck.

Glad I mentioned it. You're right---I can't buy it at Schwab (I don't know who can). I'll try to see where I can buy it.

[Pappagallina]

Thanks, Curly. I know you really like e-trade. Unfortunately, I think e-trade is one of the F-rated companies. I am about at the end of my rope with all this. Even an advisor for 25 years gives wrong info? How can I trust someone like that? The realm of financial institutions is just full of corruption and people are misled right and left. It's beyond disheartening.

[Curly]

I don't particularly like E-Trade, but I do keep the account open so I can invest using Vanguard VUSXX.

I will say that notwithstanding whatever you have read about E-Trade and the F-rating, if all you want to do is move money there to invest in a money market, with occasional distributions back to your bank account, then E-Trade performs well. Nothing is as fast as Fidelity, in my experience (sometimes cash moves same day from Fidelity to our bank), but E-Trade is often not more than two days.

Good luck as you seek a solution to your money management needs.

Thanks, Curly. I know you really like e-trade. Unfortunately, I think e-trade is one of the F-rated companies. I am about at the end of my rope with all this. Even an advisor for 25 years gives wrong info? How can I trust someone like that? The realm of financial institutions is just full of corruption and people are misled right and left. It's beyond disheartening.

[Pappagallina]

Thank you. That is a thought: that if I am only doing the money market, maybe nothing really disturbing and non-manageable will happen. However, all I did at Vanguard was have a money market (plus one fund from my mother) and I can't even set up bank links because Vanguard screwed up the account 30 years ago, and nobody could even figure that out (hours lost on inept customer service). So I don't know. . . I prefer an organized and efficient company (like Schwab, where of course, this will not work). I will try to look at e-trade again. Thanks.

[Pappagallina]

I read reviews on the BBB site on e-trade. I can't knowingly put myself into that kind of situation. The reviews are terrible. E-trade will not be an option for me.

[Pappagallina]

I found out that one CAN buy the Gabelli US Treasury fund in Schwab, but EVERY TIME a transaction is made, there is a fee, so it doesn't make any sense.

[UpperNwGuy]

OP, it sounds to me that you should simply use Schwab's own money market funds SNSXX (Treasury) and SWVXX (mix of government and commercial). Your yields will be slightly less than VUSXX, but all of your other issues will go away.

Dividends will auto-reinvest in the same funds without you having to do anything. You only need to get involved when you want to add or remove money.

If you take this approach, the Schwab reps will get your money out of Vanguard for you. You won't have to do a thing.

[Pappagallina]

Thank you. I will consider this. The only thing I don't like about the Schwab money markets is that they trade like a mutual fund. This creates lots of problems getting money in and out. I would prefer a non-brokerage account for a money market, but this may not be possible with any kind of decent yield. It's unbelievable to me that I end up with so many problems over a money market!

[Pappagallina]

I called Gabelli directly. I can set up an account there. Any money I move into this US Treasury MM fund goes DIRECTLY into the fund (it does not sit somewhere, and I do not have to move it manually). It's usually 2-3 days to get it out. They can set up 3 banks with no signature guarantee, by sending in voided checks with the application. And they can transfer the funds out of Vanguard. THE ONLY DRAWBACK IS THAT IF I ADD MONEY TO THE ACCOUNT, I CAN'T REMOVE ANY MONEY FOR 7 DAYS WITHOUT PAYING 2%. I think I can manage this. I have never taken any money out of Vanguard--only put it in (which doesn't mean it will always be that way). Does anyone have any experience with Gabelli?

[celia]

Only read the first few posts in this thread...

Here's what I would do in OP's situation since linking 3 new banks to one Vanguard account sounds sort of fishy (as the custodian sees it). First, try to simplify why you are using so many accounts and custodians. Consolidate where you can. I understand if you and your spouse might have employer retirement accounts somewhere else, but even those don't need to be linked to vanguard.

Note that the two accounts you are trying to link need to be titled the same or more paperwork will be required.

Another idea is to create two more accounts at Vanguard and link the 2nd and 3rd banks to them.

[increment]

I called Gabelli directly. I can set up an account there.

Look at the prospectus. Take a bit of time to consider the "Shareholder Fees" table under "Fees and Expense of the Fund" and the section called "REDEMPTION OF SHARES" to make sure that it is consistent with how you want to do business with them.

[Pappagallina]

Thank you. I have read most of the prospectus and I don't see that 2% is kept if one puts money into the fund and then removes money before 7 days. I also did not grasp the fees (shown for various time periods). ???

[jeffyscott]

The fees that I see in the GABXX prospectus seem to be easy to avoid, except the account closure one:

The Fund will charge your account $5.00 for each telephone request for bank wire redemption under $5,000 or telephone request for redemption by check. The Fund will also charge a $5.00 account close-out
fee when you redeem all shares in your account...

[Pappagallina]

Thank you. What you said seemed right to me as I read it, but I wanted to make sure I was not missing something. But I see NOTHING about being charged 2% if I put money in and take money out within 7 days afterwards. This is what the rep said on the phone (I don't see it). I also don't understand the expense example at the beginning. I THINK they are just referring to the .08% expense ratio, but I am not positive. I can't grasp the numbers. Are these examples just referring to the .08% expense ratio? I appreciate being given this prospectus because I don't want any surprises!

[jeffyscott]

I THINK they are just referring to the .08% expense ratio, but I am not positive. I can't grasp the numbers. Are these examples just referring to the .08% expense ratio? I appreciate being given this prospectus because I don't want any surprises!

I see two examples, if you don't redeem it's $8 per $10K per year, which is 0.08% and if you redeem all shares it's $5 more due to the account closing fee.

For the multi year examples, there's a 5% return assumed, so that increases the dollar amount because balance increases each year, e.g. in year two it 0.08% of $10,500.

[chrisdds98]

Thank you. I have read most of the prospectus and I don't see that 2% is kept if one puts money into the fund and then removes money before 7 days. I also did not grasp the fees (shown for various time periods). ???

what is the benefit of this fund besides the absurd rules and higher fees than xhlf?

[Pappagallina]

Thanks, everyone. This is actually the first time I read a prospectus (no time!). I found out that the 2% does NOT apply to money markets (the first rep on the phone did not say this). This is very helpful! For me, the advantage is that it is faster and easier to remove money than xhlf (which seems really good, but not for everything), the interest rate is good like VUSXX, I don't have to deal with inept Vanguard (I already have a person to whom I can write, or call, if I have issues filling out the forms or other issues) and it's a direct connection for money going in and out (it doesn't sit somewhere until I move it, like Schwab, and I don't have to "sell shares" before I can move money, so it's faster). This seems like a great solution, provided the bank links work (they told me they should work as long as my name is on the account--they are different registrations). I think this is my best solution, in conjunction with xhlf and other fixed options, which I do not yet understand. You were all very helpful with this. If anyone wants the name and phone number of the individual investor person at Gabelli, let me know. I know it is public knowledge, but I found it in an odd way. Thank you again.

[Pappagallina]

I am trying to make a plan that allows for possibilities, because I am trying to get financial planning help soon. Although I can't stand dealing with Vanguard, that doesn't mean I may not be interested in one of their funds. The best option is to leave Vanguard completely and buy any future Vanguard fund through Schwab, but I don't know how realistic that is. I called Schwab and it looks like some Vanguard funds are available through Schwab (that means dealing with Schwab people for a Vanguard fund, which is much better). The future is unknown for me. Does anyone here know how extensive the Vanguard purchasing options are at Schwab? Does Schwab offer MOST of the Vanguard funds, or only a few (I don't have enough experience with this)? I don't know if I should leave a little there in VUSXX, just in case. As long as it is just SITTING THERE in a fund and I don't have to move the money around (like with a primary money market), and I don't have to deal with Vanguard itself, it's not so bad. If I do take everything out of Vanguard, that's it forever. I will not open another account. They have also not switched me to a brokerage account yet, and this may be a real problem also. I have to decide whether to leave Vanguard COMPLETELY or leave a little there.

[rkhusky]

You should move completely to Schwab or Fidelity. You can always use ETF’s if it costs too much money to buy mutual funds.

[jeffyscott]

You can find funds available at Schwab on their website:

https://www.schwab.com/research/mutual- ... s/screener

You'd have to pay transaction fees to buy Vanguard mutual funds, unless you get a waiver.

[rkhusky]

I will note that Fidelity, Schwab and Vanguard each has 10’s of millions of customers and trillions of dollars under management. If any were truly bad, that would not be the case. The differences are minor as numerous customer satisfaction surveys show.