Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

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Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by nisiprius »

Not much to the story for forum regulars, other than the fact of Bloomberg running it. Most interesting part to me is the "Innovation Studio" story. The title of the story changed from "Inside Vanguard mutual fund company: with Bogle gone, tensions are mounting" to

Vanguard Stumbles in Pivot from Cult of Jack Bogle
For diehard fans of the company’s founder, what’s at stake is the very soul of the $8 trillion mutual-fund giant.
...
Chief Executive Officer Tim Buckley is trying to move beyond parts of the revered founder’s playbook, and rouse the sometimes-sleepy Vanguard.

Courting suspicion from traditionalists, Vanguard is pushing ever deeper into financial advice, known internally as “Engine No. 2” of growth. It’s giving wealthier clients and advisory customers the velvet-rope treatment, in contrast to Bogle’s everyman ethos. With scant notice, it’s quintupled the minimum balance required for one personalized service to $5 million.
("Scant notice" seems to be standard operating procedure for Vanguard nowadays.)
“I don’t think Bogle would have done a number of these things,” said John Rekenthaler, vice president of research for Morningstar Inc....

Some index-fund enthusiasts known as Bogleheads fret the company has veered off the [strait] and narrow.

A series of big moves have surprised employees and investors. Last year, Vanguard abruptly retreated from much of its business in China. It also slashed a long-standing medical benefit for retirees, provoking such outcry that Buckley reversed course and apologized.

“The way that they chose to communicate the termination of that benefit and the timing they chose was extremely poorly done,” said Katherine Lowe, who worked at Vanguard for more than two decades, through 2020....

Just this month, three investors filed a class-action lawsuit, saying changes to popular target-date funds saddled thousands of individual customers with “massive” tax bills, all for the benefit of big institutions.

“The ethics came from Jack Bogle, and I’m a little concerned they’re going in different directions,” said Allan Roth, founder of Colorado-based financial planning firm Wealth Logic, and a self-described Boglehead....

A series of glitches and customer-service errors have infuriated clients. In December, U.S. customers couldn’t access trade confirmations and monthly statements. And that came after high-profile gaffes in 2018 that saw Buckley -- a Vanguard lifer who started as Bogle’s assistant -- vowing to spend $1 billion a year to update the firm’s technology.

Buckley, 52, declined an interview request. Chas Kurtz, a spokesman, said any changes reflect Vanguard’s long history of evolving to meet its clients’ needs....

The culture is partly maintained by hiring employees from local colleges and promoting from within. Vanguard pays about one-third less than the competition, according to a person familiar with its compensation practices.

Kurtz, the Vanguard spokesman, said the firm offers “competitive, comprehensive, and best-in-class total rewards.”

Lower base pay can be offset by its phantom equity program, as well as an unusually generous 401(k) plan that contributes the equivalent of 10% of an employee’s salary to their retirement account.

[PAS is described]. Advisory is supposed to help drive growth now that index funds and fee-cutting are ubiquitous. Vanguard also opened a private equity offering, run with HarbourVest Partners, to qualified individuals -- entering a higher-fee realm than the cheap, accessible index arena.
This was new to me:
[An initiative called Innovation Studio started in 2017.] A series of projects failed to flourish.... the studio turned to direct indexing.... Vanguard set up an outpost for the studio in Philadelphia.... But the team was instructed not to tell potential aquirees they were calling from Vanguard, frustrating and confusing some staff, according to a person familiar with the matter. Instead, they said they represented a Philadelphia-based innovation company, and rarely had their calls returned. Eventually, in 2021 Vanguard acquired Just Invest -- its first acquisition ever. The Innovation Studio shuttered the same year.... the Innovation Studio episode encapsulates a uniquely Vanguard predicament: a history of revolutionary change coupled with an aversion to being a first mover.
Followed by an account of customer service problems.
Last edited by nisiprius on Mon Mar 28, 2022 7:52 am, edited 4 times in total.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Gaston »

Thanks for sharing. We miss Jack.
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Bloomberg article about changes/issues/stumbles at Vanguard post-Bogle

Post by tadamsmar »

[Thread merged into here --admin LadyGeek]

Kind of a hit job on Vanguard, but perhaps of interest to Bogleheads.
Some index-fund enthusiasts known as Bogleheads fret the company has veered off the straight and narrow.
https://www.bloomberg.com/news/articles ... re-brewing
Other Bogleheads are also complaining. Rick Ferri, a longstanding adherent, says discovering Vanguard index funds was “like the fog had lifted and the sun shined through.”

But when it comes to calling Vanguard, “I try not to,” he said. “I have to wait on hold. And wait and wait and wait.”
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by arcticpineapplecorp. »

Thanks for sharing. Innovation studio was news to me too but they wanted it on the down low. Still...
Opened in 2017 with Bogle’s blessing, it was supposed to find ways to reach new kinds of customers.
Sounds like it was a problem with execution.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by LadyGeek »

I merged tadamsmar's thread into the ongoing discussion.

(Thanks to the member who reported the post and provided a link to this thread.)
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by quietseas »

To be honest, Vanguard's ownership structure might not be helping them out. With an ownership structure that resembles a mix of a self-licking ice cream cone and fox watching hen house there is no one in charge and no one accountable. The funds, represented by their managers, who ostensibly own Vanguard, seem to have little interest in the asset administration side of the business other than to the extent where it can accumulate assets under management to make the funds operate more efficiently. We don't know how Vanguard executives are compensated today, but has been reported that during Jack Bogle's time fund managers and executives were compensated for reducing costs. Maybe that stayed too long and no one was being compensated for innovation or the guiding the future of the business once there was no where else to go with low costs. They should buy M1 Finance, but they may not have the financial wherewithal to do so given ownership structure (and would probably mess it up if they did). Note mess was not my first choice of words but being family friendly.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by PersonalFinanceJam »

I agree most of this article is not news to the people hanging out here. The innovation studio was new to me however. I agree with the above that it was probably a failure to execute, but I wonder if things would be different if it could have used the Vanguard name. Seems like that might have earned some good will.

I'm also not overly worried about anything in the article. I think there is probably merit in some of what the article presents, but there are plenty of places to be a Boglehead these days. The article did use a statistic which I've been wondering about for a while but haven't found concrete information on. The 8 trillion figure seems to correspond to the assets under management vanguard reports. I'm assuming this is the value of all of the assets held in Vanguard funds. However, that doesn't mean all of those assets are being held in a Vanguard brokerage (or mutual fund account) does it? For example, I'm assuming this 8 trillion includes the amount of Vanguard ETFs I hold in my taxable account but using Fidelity as the custodian. Is this correct?
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by AlphaLess »

I know we all complain about Vanguard, myself included.

But there are options:
- hold Vanguard funds (ETF or mutual) at other brokerages,
- hold other manager funds at other brokerages.

Thank God for capitalism and consumer choice.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by AlphaLess »

One other thing to consider. What is the difference between the Bogle family and the Johnson family?

Bogle family net worth: $80M,
Abigail Johnson net worth: $22.6B. Family owns the other $22.6B, for a total of $45.2B.

You need $80M 565 times over to get to $45.2B.

What is the significance of this?

Well, Bogle added MORE value to investors than Johnson family will ever do.

So, be happy for what Vanguard WAS.

Not only did it save billions of dollars for rank-and-file investors, but it also forced everyone else to copy the same model.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by MIretired »

AlphaLess wrote: Sun Mar 27, 2022 9:28 pm One other thing to consider. What is the difference between the Bogle family and the Johnson family?

Bogle family net worth: $80M,
Abigail Johnson net worth: $22.6B. Family owns the other $22.6B, for a total of $45.2B.

You need $80M 565 times over to get to $45.2B.

What is the significance of this?

Well, Bogle added MORE value to investors than Johnson family will ever do.

So, be happy for what Vanguard WAS.

Not only did it save billions of dollars for rank-and-file investors, but it also forced everyone else to copy the same model.
Well said.
I was pondering some complaint like 'virtuousity(sp) lost'.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Cheez-It Guy »

I AM thankful.

And yes, it would be cool if Vanguard would buy M1 Finance.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by GP813 »

Maybe Tim Buckley is just a bad CEO by the metric of customer satisfaction and Bogleheads philosophy but since Vanguard is hoovering up fund inflows nobody will care because you could argue he's a great CEO.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by nedsaid »

Times change, the economy changes, the market changes and thus it is inevitable that Vanguard will also change. Were Jack Bogle alive and well, my guess is that he would have done some of the things Vanguard is doing today. There is a point where a company provides what the customer asks for. Customers have been asking for Advice, hence the Vanguard Personal Advisory Service. There were Vanguard customers who were factorheads, Vanguard rolled out Growth, Value, and Multi-Factor funds. When folks were talking about Liquid Alts, Vanguard introduced its Market Neutral fund. Companies want to grow, so they seek to introduce new products and break into new markets. There is also the response to competition.

But yes, it does seem that Vanguard has departed at least somewhat from Jack's mission. You can see the desire to cater to the wealthy and the average Jane or Joe seems to be less of a priority. As others have pondered, Vanguard might actually be trying to fire its lower end customers. Bogle was for the little guy and gal and giving the retail investor a fair shake.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Random Musings »

AlphaLess wrote: Sun Mar 27, 2022 9:28 pm One other thing to consider. What is the difference between the Bogle family and the Johnson family?

Bogle family net worth: $80M,
Abigail Johnson net worth: $22.6B. Family owns the other $22.6B, for a total of $45.2B.

You need $80M 565 times over to get to $45.2B.

What is the significance of this?

Well, Bogle added MORE value to investors than Johnson family will ever do.

So, be happy for what Vanguard WAS.

Not only did it save billions of dollars for rank-and-file investors, but it also forced everyone else to copy the same model.
Sadly, I think that Buckley wants a taste of what the Johnson family has. While reducing the overall quality of customer service.

RM
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by JenniferW »

I never had any problems with Vanguard customer service. I always got ahold of someone in a timely manner. They were very nice and helpful. They answered all my questions well.

They also help me setup a self direction Roth 401k -- was a simple process.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by ChiGuy »

AlphaLess wrote: Sun Mar 27, 2022 9:28 pm One other thing to consider. What is the difference between the Bogle family and the Johnson family?

Bogle family net worth: $80M,
Abigail Johnson net worth: $22.6B. Family owns the other $22.6B, for a total of $45.2B.

You need $80M 565 times over to get to $45.2B.

What is the significance of this?

Well, Bogle added MORE value to investors than Johnson family will ever do.

So, be happy for what Vanguard WAS.

Not only did it save billions of dollars for rank-and-file investors, but it also forced everyone else to copy the same model.
All of the above is why it is outrageous that Jack Bogle was never awarded the Presidential Medal of Freedom!
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by tj »

Random Musings wrote: Sun Mar 27, 2022 10:22 pm
AlphaLess wrote: Sun Mar 27, 2022 9:28 pm One other thing to consider. What is the difference between the Bogle family and the Johnson family?

Bogle family net worth: $80M,
Abigail Johnson net worth: $22.6B. Family owns the other $22.6B, for a total of $45.2B.

You need $80M 565 times over to get to $45.2B.

What is the significance of this?

Well, Bogle added MORE value to investors than Johnson family will ever do.

So, be happy for what Vanguard WAS.

Not only did it save billions of dollars for rank-and-file investors, but it also forced everyone else to copy the same model.
Sadly, I think that Buckley wants a taste of what the Johnson family has. While reducing the overall quality of customer service.

RM
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Bama12 »

Cheez-It Guy wrote: Sun Mar 27, 2022 9:36 pm I AM thankful.

And yes, it would be cool if Vanguard would buy M1 Finance.
+1
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by CurlyDave »

nisiprius wrote: Sun Mar 27, 2022 8:16 pm Please! It's strait and narrow, not straight and narrow.
I disagree. While strait refers to a navigable body of water, the common expression "straight and narrow" is a conglomeration of bible quotes about "straight" paths and "narrow" paths and gates.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by telemark »

I find the lack of transparency more annoying than anything else, although Vanguard is not the only company with this problem.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Peter G »

'Straight', from the middle English 'stechen' (to stretch), meaning not curved or bent. Or 'stait' from the old French 'estreit' (tight, close, narrow), and the Latin 'strictus' (drawn together). Deviate too far, and Vanguard might be in dire straits one day. I think i'm leaning to 'strait'.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by jhfenton »

CurlyDave wrote: Sun Mar 27, 2022 11:58 pm
nisiprius wrote: Sun Mar 27, 2022 8:16 pm Please! It's strait and narrow, not straight and narrow.
I disagree. While strait refers to a navigable body of water, the common expression "straight and narrow" is a conglomeration of bible quotes about "straight" paths and "narrow" paths and gates.
I've always written "strait" based on the understanding that it came from the passage in Matthew 7:13-14 (KJV):

"Enter ye in at the strait gate: for wide is the gate, and broad is the way, that leadeth to destruction, and many there be which go in thereat:
Because strait is the gate, and narrow is the way, which leadeth unto life, and few there be that find it."
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by KarenC »

jhfenton wrote: Mon Mar 28, 2022 7:18 am
CurlyDave wrote: Sun Mar 27, 2022 11:58 pm
nisiprius wrote: Sun Mar 27, 2022 8:16 pm Please! It's strait and narrow, not straight and narrow.
I disagree. While strait refers to a navigable body of water, the common expression "straight and narrow" is a conglomeration of bible quotes about "straight" paths and "narrow" paths and gates.
I've always written "strait" based on the understanding that it came from the passage in Matthew 7:13-14 (KJV):

"Enter ye in at the strait gate: for wide is the gate, and broad is the way, that leadeth to destruction, and many there be which go in thereat:
Because strait is the gate, and narrow is the way, which leadeth unto life, and few there be that find it."
I found this useful: https://www.phrases.org.uk/meanings/str ... arrow.html
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by kd2008 »

Tim Buckley declining to comment and Vanguard spoke person's laughably canned responses indicate severe work culture issues with the executive leadership. It seems the culture lacks openness and transparency. This is just my opinion.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by nisiprius »

"Strait" just means "narrow." In a nautical and geographic context, that's all it means. Sometimes such a place can be called "a narrows," as in Tacoma Narrows or Verrazano Narrows. I shouldn't have veered off-topic, sorry.

It would be quite interesting to know how John C. Bogle influenced the Vanguard corporate culture during the 20-odd years he was not formally connected with the company, but kept an office--the "John C. Bogle Financial Markets Research Center"--on the campus. The traditional Vanguard culture likely did create problems, and so far it seems to me that Mortimer Buckley has not yet done a notably brilliant job of solving them.
kd2008 wrote: Mon Mar 28, 2022 7:38 amTim Buckley declining to comment and Vanguard spoke person's laughably canned responses indicate severe work culture issues with the executive leadership. It seems the culture lacks openness and transparency. This is just my opinion.
Indeed. They were handed an opportunity and missed it. I think Vanguard's former PR head, John Woerth--who held the position for a very long time--would have done better. But perhaps, as I think you are suggesting, the current head, named in the article as "Chas Kurtz," isn't given much to work with.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by tadamsmar »

I occurred to me that I sometime turn to this forum for what amounts to Vanguard "customer service". I'd rather try to get an answer here than call Vanguard.

It's kind of like Bogleheads are the owners and the customer service reps.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by tadamsmar »

LadyGeek wrote: Sun Mar 27, 2022 8:49 pm I merged tadamsmar's thread into the ongoing discussion.

(Thanks to the member who reported the post and provided a link to this thread.)
I searched before I posted, but I somehow missed it.

Even searched the front page as well a google since I was not sure how soon google would index a recent post.

Not sure how a missed it. Maybe it too me more than 8 minutes to compose my post, so it was posted while I was composing.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by sschullo »

What is surprising is after 25 years without Jack at the helm, Vanguard has been remarkably the same. Yeah, he had an office in the building but it's not the same. And OF COURSE, when there is a change of leadership, the culture will change too and I think this article only feeds the folks who complain about customer service.

My goodness, I signed on to VG because I did NOT want investment advice. I already know my risk tolerance, my needs, how to diversify etc. etc. I love my cost at about .07% and their value system of not having shareholders is still revolutionizing, and the primary reason I will stay with VG.

I don't call Vanguard customer service much because of the above reason, but the last two calls were questions I had about understanding the tax forms and I got excellent advice and I did not have to wait long.

This article is much ado about nothing. Of course, M* John Rekenthaler had to be quoted as M* are and have been actively managed aficionados forever. John is a great M* contributor but he "actively" looks for any sign of "trouble" with Vanguard.
Last edited by sschullo on Mon Mar 28, 2022 8:40 am, edited 1 time in total.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Chan_va »

Paradoxically, my compliant with Vanguard is not that it is changing, but that it is not changing enough in the areas that matter.

Companies that don't change, die. I don't mind that Vanguard is adding PAS, tweaking fund families etc. I don't mind that they are trying new things with active funds. Companies should innovate, and experiment. Not all experiments will work, but that's fine. As long as they continue to offer low cost index funds in addition to whatever they want to experiment with, that's ok by me.

What I do mind is Vanguard's lack of customer focus. I do want a modern website and app that works. I want to get help when I want it. I want confidence that my funds aren't managed by an ancient accountant sitting on a coffee stained table, in a dusty windowless basement, filing my statements into an overflowing metal cabinet, in a room full of yellowing paper. (This is how I picture Vanguard's IT department in my mind).

I am even willing for them to raise my expenses by a couple of bps. I just want competent execution.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by enuff »

sschullo wrote: Mon Mar 28, 2022 8:36 am What is surprising is after 25 years without Jack at the helm, Vanguard has been remarkably the same. Yeah, he had an office in the building but it's not the same. And OF COURSE, when there is a change of leadership, the culture will change too and I think this article only feeds the folks who complain about customer service.

My goodness, I signed on to VG because I did NOT want investment advice. I already know my risk tolerance, my needs, how to diversify etc. etc. I love my cost at about .07% and their value system of not having shareholders is still revolutionizing, and the primary reason I will stay with VG.

I don't call Vanguard customer service much because of the above reason, but the last two calls were questions I had about understanding the tax forms and I got excellent advice and I did not have to wait long.

This article is much ado about nothing. Of course, M* John Rekenthaler had to be quoted as M* are and have been actively managed aficionados forever. John is a great M* contributor but he "actively" looks for any sign of "trouble" with Vanguard.

I agree with this assessment. It makes me think it is customers who have lost the Bogle way, not the firm, because if you are a buy and hold long term investor you have no need for "advice", exotic products, the need to call customer service every week, or any of these expectations that a brokerage firm is somehow supposed to be anything more than a place to park a total market fund and a total bond fund.

I notice it on this board too from reading through a few threads. A lot of complaining about essentially nothing, most of it perceived and fabricated.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by tadamsmar »

ChiGuy wrote: Sun Mar 27, 2022 10:34 pm All of the above is why it is outrageous that Jack Bogle was never awarded the Presidential Medal of Freedom!
It has been rewarded posthumously.

He is not a perfect fit for the mold, here is the list of recipients: https://en.wikipedia.org/wiki/List_of_P ... recipients

Not sure if there are any business people on the list who were not philanthropists or diversity role models.

Not too many business persons, Warren Buffet got it but he promoted charitable giving on a large scale.

Grace Hopper got it for being a woman in industry role model.

But we think of Bogle as a different kind of philanthropist who helped many retirees instead of trying to get very wealthy. A kind of indirect giving.

Maybe Bogleheads should launch an effort, like a petition or something.

Maybe I should stop hijacking this thread.
Last edited by tadamsmar on Mon Mar 28, 2022 11:15 am, edited 1 time in total.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by arcticpineapplecorp. »

nedsaid wrote: Sun Mar 27, 2022 10:09 pm Times change, the economy changes, the market changes and thus it is inevitable that Vanguard will also change. Were Jack Bogle alive and well, my guess is that he would have done some of the things Vanguard is doing today. There is a point where a company provides what the customer asks for. Customers have been asking for Advice, hence the Vanguard Personal Advisory Service. There were Vanguard customers who were factorheads, Vanguard rolled out Growth, Value, and Multi-Factor funds. When folks were talking about Liquid Alts, Vanguard introduced its Market Neutral fund. Companies want to grow, so they seek to introduce new products and break into new markets. There is also the response to competition.

But yes, it does seem that Vanguard has departed at least somewhat from Jack's mission. You can see the desire to cater to the wealthy and the average Jane or Joe seems to be less of a priority. As others have pondered, Vanguard might actually be trying to fire its lower end customers. Bogle was for the little guy and gal and giving the retail investor a fair shake.
i agree with this, but as I read it I wondered to myself, "But haven't people been mostly asking for better customer service from Vanguard for years now? Why can't Vanguard give the customers what they want?"

perhaps launching a market neutral fund or factor etfs is a much easier problem to solve than fixing poor customer service?
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by wesgreen »

enuff wrote: Mon Mar 28, 2022 8:53 am
sschullo wrote: Mon Mar 28, 2022 8:36 am What is surprising is after 25 years without Jack at the helm, Vanguard has been remarkably the same. Yeah, he had an office in the building but it's not the same. And OF COURSE, when there is a change of leadership, the culture will change too and I think this article only feeds the folks who complain about customer service.

My goodness, I signed on to VG because I did NOT want investment advice. I already know my risk tolerance, my needs, how to diversify etc. etc. I love my cost at about .07% and their value system of not having shareholders is still revolutionizing, and the primary reason I will stay with VG.

I don't call Vanguard customer service much because of the above reason, but the last two calls were questions I had about understanding the tax forms and I got excellent advice and I did not have to wait long.

This article is much ado about nothing. Of course, M* John Rekenthaler had to be quoted as M* are and have been actively managed aficionados forever. John is a great M* contributor but he "actively" looks for any sign of "trouble" with Vanguard.

I agree with this assessment. It makes me think it is customers who have lost the Bogle way, not the firm, because if you are a buy and hold long term investor you have no need for "advice", exotic products, the need to call customer service every week, or any of these expectations that a brokerage firm is somehow supposed to be anything more than a place to park a total market fund and a total bond fund.

I notice it on this board too from reading through a few threads. A lot of complaining about essentially nothing, most of it perceived and fabricated.
Agreed, mostly. Although I do not appreciate how I was sold a Vanguard annuity, and 20 years later dumped to Transamerica.
In regard to
"All of the above is why it is outrageous that Jack Bogle was never awarded the Presidential Medal of Freedom!", after reading the list of recipients, I'm glad he did not get dragged down to that level. He deserves better.
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drumboy256
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by drumboy256 »

Cheez-It Guy wrote: Sun Mar 27, 2022 9:36 pm I AM thankful.

And yes, it would be cool if Vanguard would buy M1 Finance.
Fidelity will buy them before Vanguard would.
Promise is one thing. Fulfilling that promise is quite another. - Sir Alex Ferguson | // Merri-Bogle WW SCV + Chill
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willthrill81
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by willthrill81 »

AlphaLess wrote: Sun Mar 27, 2022 9:20 pm But there are options:
- hold Vanguard funds (ETF or mutual) at other brokerages,
- hold other manager funds at other brokerages.
I agree that holding Vanguard funds at other brokerages is a wise move when possible.

Sadly, there are some Vanguard funds that, TMK, cannot be held at other brokerages, such as Wellington and Wellesley.
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ResearchMed
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by ResearchMed »

willthrill81 wrote: Mon Mar 28, 2022 10:07 am
AlphaLess wrote: Sun Mar 27, 2022 9:20 pm But there are options:
- hold Vanguard funds (ETF or mutual) at other brokerages,
- hold other manager funds at other brokerages.
I agree that holding Vanguard funds at other brokerages is a wise move when possible.

Sadly, there are some Vanguard funds that, TMK, cannot be held at other brokerages, such as Wellington and Wellesley.
We've got Wellington and Wellesley in our 403b at TIAA, in the brokerage window.
Perhaps it makes a difference that it was transferred in kind when the plan moved? But I'm not aware of any restrictions, although that doesn't mean there are none.

When the plan moved, in 2020, there were some seriously incorrect statements made about what could/could not transfer and what could/could not have more purchased once at TIAA.
Thus far, no restrictions on "purchasing more" of anything, but we haven't tried everything...
And everything/almost everything (i'm forgetting by now, without checking records) transferred just fine in kind. There are fees to purchase Vanguard funds, except for several key V funds that are in the "core" section, such as Total Stock/International/Bond, Social, Target Date series... The others are in "brokerage window".

RM
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willthrill81
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by willthrill81 »

ResearchMed wrote: Mon Mar 28, 2022 10:22 am
willthrill81 wrote: Mon Mar 28, 2022 10:07 am
AlphaLess wrote: Sun Mar 27, 2022 9:20 pm But there are options:
- hold Vanguard funds (ETF or mutual) at other brokerages,
- hold other manager funds at other brokerages.
I agree that holding Vanguard funds at other brokerages is a wise move when possible.

Sadly, there are some Vanguard funds that, TMK, cannot be held at other brokerages, such as Wellington and Wellesley.
We've got Wellington and Wellesley in our 403b at TIAA, in the brokerage window.
Perhaps it makes a difference that it was transferred in kind when the plan moved? But I'm not aware of any restrictions, although that doesn't mean there are none.

When the plan moved, in 2020, there were some seriously incorrect statements made about what could/could not transfer and what could/could not have more purchased once at TIAA.
Thus far, no restrictions on "purchasing more" of anything, but we haven't tried everything...
And everything/almost everything (i'm forgetting by now, without checking records) transferred just fine in kind. There are fees to purchase Vanguard funds, except for several key V funds that are in the "core" section, such as Total Stock/International/Bond, Social, Target Date series... The others are in "brokerage window".

RM
That's news to me. My understanding was that only Vanguard ETFs could be held at other brokerages, but that's clearly not the case.
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ResearchMed
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by ResearchMed »

willthrill81 wrote: Mon Mar 28, 2022 10:24 am
ResearchMed wrote: Mon Mar 28, 2022 10:22 am
willthrill81 wrote: Mon Mar 28, 2022 10:07 am
AlphaLess wrote: Sun Mar 27, 2022 9:20 pm But there are options:
- hold Vanguard funds (ETF or mutual) at other brokerages,
- hold other manager funds at other brokerages.
I agree that holding Vanguard funds at other brokerages is a wise move when possible.

Sadly, there are some Vanguard funds that, TMK, cannot be held at other brokerages, such as Wellington and Wellesley.
We've got Wellington and Wellesley in our 403b at TIAA, in the brokerage window.
Perhaps it makes a difference that it was transferred in kind when the plan moved? But I'm not aware of any restrictions, although that doesn't mean there are none.

When the plan moved, in 2020, there were some seriously incorrect statements made about what could/could not transfer and what could/could not have more purchased once at TIAA.
Thus far, no restrictions on "purchasing more" of anything, but we haven't tried everything...
And everything/almost everything (i'm forgetting by now, without checking records) transferred just fine in kind. There are fees to purchase Vanguard funds, except for several key V funds that are in the "core" section, such as Total Stock/International/Bond, Social, Target Date series... The others are in "brokerage window".

RM
That's news to me. My understanding was that only Vanguard ETFs could be held at other brokerages, but that's clearly not the case.
Oh, I thought you were referring specifically to Wellington and Wellesley.

In general, Vanguard funds can be held in other brokerages, but there's a fee to purchase (and perhaps to sell) in at least some cases.
We've even got some Admiral class (where there is still an Advisor class), and those transferred in kind and we *could* purchase more of the Admiral class. I'm not sure if one can start new with Admiral class shares elsehwere, however.

One advangtage of using Vanguard ETFs at other firms is one avoids those fees.
(But we can't use ETFs in the 403b; only mutual funds.)

RM
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dbr
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by dbr »

willthrill81 wrote: Mon Mar 28, 2022 10:24 am
ResearchMed wrote: Mon Mar 28, 2022 10:22 am
willthrill81 wrote: Mon Mar 28, 2022 10:07 am
AlphaLess wrote: Sun Mar 27, 2022 9:20 pm But there are options:
- hold Vanguard funds (ETF or mutual) at other brokerages,
- hold other manager funds at other brokerages.
I agree that holding Vanguard funds at other brokerages is a wise move when possible.

Sadly, there are some Vanguard funds that, TMK, cannot be held at other brokerages, such as Wellington and Wellesley.
We've got Wellington and Wellesley in our 403b at TIAA, in the brokerage window.
Perhaps it makes a difference that it was transferred in kind when the plan moved? But I'm not aware of any restrictions, although that doesn't mean there are none.

When the plan moved, in 2020, there were some seriously incorrect statements made about what could/could not transfer and what could/could not have more purchased once at TIAA.
Thus far, no restrictions on "purchasing more" of anything, but we haven't tried everything...
And everything/almost everything (i'm forgetting by now, without checking records) transferred just fine in kind. There are fees to purchase Vanguard funds, except for several key V funds that are in the "core" section, such as Total Stock/International/Bond, Social, Target Date series... The others are in "brokerage window".

RM
That's news to me. My understanding was that only Vanguard ETFs could be held at other brokerages, but that's clearly not the case.
It has been confusing. There was a thought at one time that Admiral class index funds couldn't be held, or maybe it was Admiral class non-index or something. I have held VAIPX, which is Admiral class non-index, at another broker. Recently I have replaced any Vanguard bond funds in 401k/brokerage link with bond funds from other companies that I prefer and have lower ERs. Usually at other brokerages ETFs might be chosen for free trading. My new bond funds are from the broker where they are held (Fidelity, Schwab, that sort of thing) and have no cost to buy.
retiringwhen
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by retiringwhen »

arcticpineapplecorp. wrote: Mon Mar 28, 2022 9:06 am I agree with this, but as I read it I wondered to myself, "But haven't people been mostly asking for better customer service from Vanguard for years now? Why can't Vanguard give the customers what they want?"
I think the problem is good customer service costs a lot of money and Vanguard, through their successful drive to lower the consumer's cost of investing, has made sure they don't have the funds available to allocate to improved customer service. This problem has been brewing for at least a decade as a result of their successful drive to lower the cost of index investing (over 50% of the AUM is in funds with an ER under 0.1%).

The addition of PAS, new active strategies, private equity, etc. are pretty clear attempts to find some margin above 0.04% ER.

The removal of older customer perks/services like CMA accounts, etc. are attempts to find a fine line between breadth and quality of service.

The company is in a very serious bind, with few options to exit successfully.

If the PAS/active strategy fails, I suspect that jettisoning their retail business and a complete focus on fund management is in their future.

In contrast, Fidelity only dabbles in indexing as a necessary evil to retain customer loyalty, they focus that majority of their business on active strategies, advice and value added services. This creates its own problems, but at least they have a business that generates margin.

Blackrock doesn't have any pesky retail customers to complain, and they have grown to the largest financial complex on earth in less than 20 years (with a load of Mergers and Acquisitions)
retiringwhen
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by retiringwhen »

A series of big moves have surprised employees and investors. Last year, Vanguard abruptly retreated from much of its business in China.
I believe the retreat from China will be seen as one of Mr. Buckley's best moves in the long run.
Fallible
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Fallible »

kd2008 wrote: Mon Mar 28, 2022 7:38 am Tim Buckley declining to comment and Vanguard spoke person's laughably canned responses indicate severe work culture issues with the executive leadership. It seems the culture lacks openness and transparency. This is just my opinion.
And this is just my opinion. With serious problems, bad publicity, and important questions mounting, the focus is where it should be - on the man at the top, Tim Buckley. It's time, past time, for him to comment directly and to stop handing his comments to others to make for him. Will/can he do it?

I'm a longtime Vanguard customer who first began having problems with customer service last fall regarding estate planning. When it finally was resolved, I realized how simple it should have been - and wondered whether it would have been if I'd had several million with VG.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
Fpdesignco
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Fpdesignco »

retiringwhen wrote: Mon Mar 28, 2022 11:12 am
arcticpineapplecorp. wrote: Mon Mar 28, 2022 9:06 am I agree with this, but as I read it I wondered to myself, "But haven't people been mostly asking for better customer service from Vanguard for years now? Why can't Vanguard give the customers what they want?"
I think the problem is good customer service costs a lot of money and Vanguard, through their successful drive to lower the consumer's cost of investing, has made sure they don't have the funds available to allocate to improved customer service. This problem has been brewing for at least a decade as a result of their successful drive to lower the cost of index investing (over 50% of the AUM is in funds with an ER under 0.1%).

The addition of PAS, new active strategies, private equity, etc. are pretty clear attempts to find some margin above 0.04% ER.

The removal of older customer perks/services like CMA accounts, etc. are attempts to find a fine line between breadth and quality of service.

The company is in a very serious bind, with few options to exit successfully.

If the PAS/active strategy fails, I suspect that jettisoning their retail business and a complete focus on fund management is in their future.

In contrast, Fidelity only dabbles in indexing as a necessary evil to retain customer loyalty, they focus that majority of their business on active strategies, advice and value added services. This creates its own problems, but at least they have a business that generates margin.

Blackrock doesn't have any pesky retail customers to complain, and they have grown to the largest financial complex on earth in less than 20 years (with a load of Mergers and Acquisitions)
The reality is, that is what they should do. They should get out of brokerage, sell it off, and just manage funds. There is no way they will catch up, and even if they do they might hold a small market share most of which are forced through workplace retirement plans. Better of cutting losses, selling to Schwab or Fidelity.

I mean not the same thing, but kind is the same thing of how USAA cut their independent broker-dealer relationship and funds selling out to Schwab, best decision they ever made. Their investment platform was horrible and had zero benefits over the competition. Vanguards only real benefit over competition is their no fee on their funds, as well as "class conversions" - however if they sold, they do what everyone else does and negotiate terms for listed funds without fee's.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by NoRoboGuy »

enuff wrote: Mon Mar 28, 2022 8:53 am
I agree with this assessment. It makes me think it is customers who have lost the Bogle way, not the firm, because if you are a buy and hold long term investor you have no need for "advice", exotic products, the need to call customer service every week, or any of these expectations that a brokerage firm is somehow supposed to be anything more than a place to park a total market fund and a total bond fund.

I notice it on this board too from reading through a few threads. A lot of complaining about essentially nothing, most of it perceived and fabricated.
This is what the all the hit pieces on Vanguard consistently (and I suspect, intentionally) avoid.
There is no free lunch.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by UpperNwGuy »

NoRoboGuy wrote: Mon Mar 28, 2022 1:39 pm
enuff wrote: Mon Mar 28, 2022 8:53 am
I agree with this assessment. It makes me think it is customers who have lost the Bogle way, not the firm, because if you are a buy and hold long term investor you have no need for "advice", exotic products, the need to call customer service every week, or any of these expectations that a brokerage firm is somehow supposed to be anything more than a place to park a total market fund and a total bond fund.

I notice it on this board too from reading through a few threads. A lot of complaining about essentially nothing, most of it perceived and fabricated.
This is what the all the hit pieces on Vanguard consistently (and I suspect, intentionally) avoid.
And that makes Vanguard, Fidelity, and Schwab exactly equal, because all three provide a free place to park a total stock market fund and a total bond fund. I have accounts at all three. I don't call customer service at any of them. I don't ask for advice. I don't use exotic products.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by retiringwhen »

Fpdesignco wrote: Mon Mar 28, 2022 1:20 pm ... if they sold, they do what everyone else does and negotiate terms for listed funds without fee's.
I'd suggest they keep their 401K business (probably still makes money) while moving almost 100% to CITs as the lowest cost best vehicle for the retirement plan business.

Then convert their entire retail facing set of index AND active mutual funds to ETFs and put paid to the prophesied end of Mutual Funds as a business separate from the retail brokerage business. If they want to put a world of hurt on Fidelity, this will hurt deeply. It is actually an innovation that plays to Vanguard's strengths without creating a new animal from old DNA.

Heck Vanguard could sell the their brokerage business as part of the deal and probably make a decent coin on the 10M retail accounts (however many actual retail customers exist. I have found this number to be a mystery).
Wrench
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Wrench »

GP813 wrote: Sun Mar 27, 2022 9:45 pm Maybe Tim Buckley is just a bad CEO by the metric of customer satisfaction and Bogleheads philosophy but since Vanguard is hoovering up fund inflows nobody will care because you could argue he's a great CEO.
I would say it more strongly - Tim Buckley IS a bad CEO. Multiple gaffs in dealing with employees, leading a pretty dramatic shift in corporate direction that many have questioned, not clearly articulating what IS the new direction, introducing a horrible mobile app with a new name, backtracking to re-introduce with the old name but just as bad, etc. etc. About the ONLY really good thing that is happening is the increase in assets in Vanguard funds and that cannot be clearly attributed to Buckley's leadership. New leadership at the top is needed.

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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Silence Dogood »

I would really like to hear more from Vanguard leadership about their plans to add private equity to their Target Retirement Funds. I think it's a big deal and hasn't been given the attention/scrutiny that it deserves.

Is Vanguard planning to add private equity to their existing funds? Or are they planning to create a new fund series? There are things that Vanguard leadership has said that do not make sense to me. [See this post and this post.]

Also, I notified Vanguard - back in July - about a security flaw with their mobile app. It should be a fairly easy fix.

They still haven't fixed it.

I still like Vanguard - including some of their recent decisions - but I am concerned about the direction they're headed in.
Last edited by Silence Dogood on Tue Mar 29, 2022 6:09 am, edited 1 time in total.
Jack56
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by Jack56 »

I have been with Vanguard for 25 years and have done nicely in large part because of their low cost products that enable easy low cost diversification -- the only free lunch in investing. For what matters in investing, low costs, Vanguard is the best. Continually endeavoring to reduce costs. No sneaky charges. Jack had his day but the world moves on and subsequent Vanguard leaders have lowered prices to levels that Jack would never have dreamed of -- it is the large amount of AUM that enables Vanguard to continually reduce costs and offer retail products with rock bottom fees. With the growth there have been some glitches -- so for example the legacy IT system is inadequate. Vanguard is aware of the problem and trying to fix it. My guess is that they will be successful. None of the carping is at all persuasive to move somewhere else. The reason that Fidelity or Schwab, both of which exist solely to earn profits for their owners, compete on price is because they need to compete with Vanguard. If Vanguard weren't there you can bet that their prices would rise.
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Re: Bloomberg, "Vanguard Stumbles In Pivot From Cult of Jack Bogle"

Post by anil686 »

I have not been with Vanguard as long as some others have - I have been with them for about 15 years now as both a brokerage and holding their funds. A few years ago, secure messaging was the easiest way to have my questions answered as phone times were about 15 minutes and you never knew who you were going to get even as a flagship customer. Now, secure messaging is the only way to get through as the phone times for flagship members are running in the hours of hold time. I have no problem with VG trying to get into advice but as their brokerage quality slips (and I would have preferred to stay a mutual fund only client), there becomes less and less of a difference when considering holding VG ETFs at another brokerage. I have thought about this for the past year - just have not done it yet….
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