New fee for Vanguard mutual [and brokerage accounts - July 2023 updates]

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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

sophiainvests wrote: Fri Nov 04, 2022 7:03 pm I am considering writing Mr. Buckley or other senior management about all this, before being done with my efforts. Should I write Buckley or the guy in retail? Has anyone ever had success with writing management? I think they should realize what it's like on the other side. In particular, I think it's weird that they rolled out the fee part of the transition so fast. As far as I can tell, those who got notice of the impending fees got them in August 2022.
If you do, the timeline that I was given by Vanguard may be of interest:
viewtopic.php?p=6816037&#p6816037

Since they had identified all accounts by June, they obviously had decided on these new fees some time prior to that, but didn't feel that their "client/owners" should be notified yet. They could have, but didn't bother, put something in with the June statements, for example.

Given the timing of the message at the link, I suspect that we only got notified because we had asked about it.
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Thanks, Jeffrey - Yes, that timing and timeline is very interesting and I'll be sure and use that in my note to leadership (if I go forward with it). It's very interesting to me that they also indicated to you that this is the "2022 fee." I still don't see how they can charge an annual fee for the year of 2022, if they don't notify people before the year starts. Also, for a firm that has a lot of buy and hold investors, seems weird to push such an aggressive timeline between notification and deadline (for those that were even notified).

Vanguard doesn't seem to have a good way to submit complaints or talk to managers, which is why I'm thinking the only option to express it to top management in a letter. I'm wondering at what level this decision on the timeline/ rollout was made and if top management even knows about it or actually are even the ones behind it.
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Yikes - over half of my assets are now missing on the Vanguard website - I hope this is just a temporary disappearance due to the famous "transition"!!!

Looks like the mutual fund accounts that are being transitioned are empty now but the funds are not showing up either in my existing brokerages or in the two new ones they erroneously set up.
jebmke
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

sophiainvests wrote: Sat Nov 05, 2022 12:39 am Yikes - over half of my assets are now missing on the Vanguard website - I hope this is just a temporary disappearance due to the famous "transition"!!!

Looks like the mutual fund accounts that are being transitioned are empty now but the funds are not showing up either in my existing brokerages or in the two new ones they erroneously set up.
I would try not to worry about this until Monday. Everything could be in some kind of transit stage. Keep in mind that the web site is really just a window into their data. If that window doesn’t give visibility to all the “rooms in the house” that doesn’t mean a specific room with contents does not exist.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

thanks, Jebmke - now, early the next morning, the mutual funds balances have reappeared in the newly created brokerage accounts. they were not merged with the existing brokerage accounts. whereas before the mutual funds could access the sweep in the linked brokerage now I cannot. so definitely worse situation than i had before. i am not sure if vanguard is really planning to merge these two pairs of brokerages for me, as one CSR rep told me, or I need to get on the phone to correct the mistake myself, as another one told me.

strangely, when I tried to test out by starting a $1 transaction with a mutual funds, I was told "specific ID" was not available and "FIFO" would be used. Not so sure how this will work, since I was told "average cost" will need to be use for all funds that were already there when Vanguard made these forced $20 sales with "average cost" on Nov. 1, 2022. Maybe, if specific ID were available one would see all the lots up to Nov. 1 (when VG made the transaction) or up to Nov. 4 (when I selected specific ID) as showing average cost. And, if FIFO, was used, those "first ins" would also have average cost. If specific ID is often not available, I could see it as being a hassle when one wants to sell. Also, is there a chance Vanguard is much more likely to make mistakes with Specific ID than average cost? Is that a reason to choose average cost after all? Experience of past few days has made me more worried about Vanguard making mistakes.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

sophiainvests wrote: Sat Nov 05, 2022 6:10 am thanks, Jebmke - now, early the next morning, the mutual funds balances have reappeared in the newly created brokerage accounts. they were not merged with the existing brokerage accounts. whereas before the mutual funds could access the sweep in the linked brokerage now I cannot. so definitely worse situation than i had before. i am not sure if vanguard is really planning to merge these two pairs of brokerages for me, as one CSR rep told me, or I need to get on the phone to correct the mistake myself, as another one told me.

strangely, when I tried to test out by starting a $1 transaction with a mutual funds, I was told "specific ID" was not available and "FIFO" would be used. Not so sure how this will work, since I was told "average cost" will need to be use for all funds that were already there when Vanguard made these forced $20 sales with "average cost" on Nov. 1, 2022. Maybe, if specific ID were available one would see all the lots up to Nov. 1 (when VG made the transaction) or up to Nov. 4 (when I selected specific ID) as showing average cost. And, if FIFO, was used, those "first ins" would also have average cost. If specific ID is often not available, I could see it as being a hassle when one wants to sell. Also, is there a chance Vanguard is much more likely to make mistakes with Specific ID than average cost? Is that a reason to choose average cost after all? Experience of past few days has made me more worried about Vanguard making mistakes.
You need to calm down and allow a few business days for things to settle and then re-assess. This is Saturday morning. You are reacting to every change you think you observe during a transition period when things should be expected to change. If you try to make further changes or interventions or calls during the transition period, there's a strong possibility of making things worse, confusing customer support agents, and certainly getting yourself even more worked up. Time is your friend here. This isn't the last week of December. Just wait for stability and then figure out what to do from there. Not everything is a catastrophe. Don't look at your accounts again until about 10:00 AM on Monday at the earliest, and possibly 10:00 AM on Tuesday. I made a lot of market moves and a contribution to my donor advised fund in the last 20 minutes the market was open yesterday, and so this is my plan as well. If I were to try to look at things now, it would likely be a bit of a confusing jumble. Try to relax and enjoy the weekend.
retiringwhen
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Re: New fee for Vanguard mutual accounts

Post by retiringwhen »

Cheez-It Guy wrote: Sat Nov 05, 2022 7:14 am If I were to try to look at things now, it would likely be a bit of a confusing jumble. Try to relax and enjoy the weekend.
Even without account transitions, etc. I never take anything the website says as final between 4pm on a trading day and 9am before the next trading day. The systems update at slightly different times and once in a while things will get delayed. Midnight is often a pretty solid time, but not always. Sometimes you will see the transactions/price updates early, but detail on the sweep account might be delayed for example (things still add up, just see them in an interim state). My 401K is on its own inscrutable schedule that seems to have changed a lot in the past 2 years (actually for the better and earlier).
tunafish
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Re: New fee for Vanguard mutual accounts

Post by tunafish »

If I saw this thread before I must have ignored it because it said mutual fund accounts, as I have had only a brokerage account for a long time. Then I found out they dinged me for $20 and plan to do this every year, with no advance notice this first time. I only noticed it when I was looking at my transaction history.

I have had a lot of inertia about leaving Vanguard, despite everything they are doing wrong, because I was worried abut either putting all my eggs in one basket (Schwab) or worried the Fidelity website might be terrible like the new vanguard one.

Please tell me, people, does Fidelity have knowledgeable customer service people, 24/7, chat, a decent website, sneak up fees on you with no notice? I think Schwab is fine, I am hoping Fidelity would be the same?
student
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Re: New fee for Vanguard mutual accounts

Post by student »

Makefile wrote: Fri Nov 04, 2022 2:39 pm Public service announcement: every time you invest in a new mutual fund you must switch its cost basis method away from average cost

Note that the IRS only requires that the company offer you the average basis revocation for the first year or prior to the first sale (whatever is sooner), while Vanguard is more generous and gives you all the way up to the first sale. Schwab is reportedly much worse in this regard, see: viewtopic.php?p=5828271#p5828271
Thanks for the info. I did not know that.
PersonalFinanceJam
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Re: New fee for Vanguard mutual accounts

Post by PersonalFinanceJam »

tunafish wrote: Sat Nov 05, 2022 7:32 am If I saw this thread before I must have ignored it because it said mutual fund accounts, as I have had only a brokerage account for a long time. Then I found out they dinged me for $20 and plan to do this every year, with no advance notice this first time. I only noticed it when I was looking at my transaction history.

I have had a lot of inertia about leaving Vanguard, despite everything they are doing wrong, because I was worried abut either putting all my eggs in one basket (Schwab) or worried the Fidelity website might be terrible like the new vanguard one.

Please tell me, people, does Fidelity have knowledgeable customer service people, 24/7, chat, a decent website, sneak up fees on you with no notice? I think Schwab is fine, I am hoping Fidelity would be the same?
Are you getting paper statements? There were different notices that went out about the requirements to avoid the paper statement fee changing. The threads on that did not become as massive as this.
https://www.bogleheads.org/forum/viewt ... p?t=383788
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plannerman
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Re: New fee for Vanguard mutual accounts

Post by plannerman »

Like many posters here, I manage Vanguard accounts for a few family members. One of these family member's accounts would have been subject to the $20/mutual fund fees. Said family member does not have an online account, and therefore could not initiate the transition online. And neither could I. He, therefore, dutifully completed and mailed the two paper forms (one for retirement accounts and one for non-requirement accounts) to move both of his accounts to the brokerage platform. Both accounts were eventually transitioned in September, so no fees were incurred. That is the good news!

However, the permissions for me to transact on his accounts did not automatically transfer to my online account. I called Vanguard and they were able to locate the Agent Authorization form for the retirement account. I answered the FINRA and ownership questions and the retirement account eventually did reappear on my Balances and Holdings page.

Vanguard, for reasons I never quite understood, could not verify that I had agent authorization on the non-retirement account as well, notwithstanding that I had had transaction authority on both his accounts since their inception. They asked that he submit a new Agent Authorization form for that account--which he did.

Well, it has been well over a month, and at least 15 phone calls, several of which were transferred to agents with poor English language skills, apparently in a third world country, who either did not understand the problem, or know how to fix it, or both.

Last Tuesday, I was finally connected with an account maintenance CSR who actually did understand the problem and furthermore promised to get it fixed. She even called me back after hours on Wednesday and left a voicemail that she was still working on the resolution. She has, however, since gone dark.

I login to the Vanguard website every morning with high hopes of seeing that his non retirement account has reappeared only to find I still do not have online permission to act on it. Then I angst over whether to start calling again, which means starting all over again, or just waiting and hoping that someone who cares is really working on the problem.

So, yeah, I am more than a little disappointed in Vanguard’s customer service on this matter.

plannerman
stan1
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Re: New fee for Vanguard mutual accounts

Post by stan1 »

plannerman wrote: Sat Nov 05, 2022 8:39 am Like many posters here, I manage Vanguard accounts for a few family members. One of these family member's accounts would have been subject to the $20/mutual fund fees. Said family member does not have an online account, and therefore could not initiate the transition online. And neither could I. He, therefore, dutifully completed and mailed the two paper forms (one for retirement accounts and one for non-requirement accounts) to move both of his accounts to the brokerage platform. Both accounts were eventually transitioned in September, so no fees were incurred. That is the good news!

However, the permissions for me to transact on his accounts did not automatically transfer to my online account. I called Vanguard and they were able to locate the Agent Authorization form for the retirement account. I answered the FINRA and ownership questions and the retirement account eventually did reappear on my Balances and Holdings page.

Vanguard, for reasons I never quite understood, could not verify that I had agent authorization on the non-retirement account as well, notwithstanding that I had had transaction authority on both his accounts since their inception. They asked that he submit a new Agent Authorization form for that account--which he did.

Well, it has been well over a month, and at least 15 phone calls, several of which were transferred to agents with poor English language skills, apparently in a third world country, who either did not understand the problem, or know how to fix it, or both.

Last Tuesday, I was finally connected with an account maintenance CSR who actually did understand the problem and furthermore promised to get it fixed. She even called me back after hours on Wednesday and left a voicemail that she was still working on the resolution. She has, however, since gone dark.

I login to the Vanguard website every morning with high hopes of seeing that his non retirement account has reappeared only to find I still do not have online permission to act on it. Then I angst over whether to start calling again, which means starting all over again, or just waiting and hoping that someone who cares is really working on the problem.

So, yeah, I am more than a little disappointed in Vanguard’s customer service on this matter.

plannerman
This may be a level of service (agent authorization) that is fast becoming past Vanguard's ability to perform as a low cost, limited service brokerage. It will be a lot of work, but I think you should transition yourself and your entourage to a full service brokerage (which Vanguard is rapidly ceasing to be). Vanguard hasn't cut it off yet, but in time maybe they will.

At this time, Fidelity and Schwab appear to be full service brokerages and have a corporate structure and business model that supports offering such service (which Vanguard does not). Vanguard is owned by its funds, represented by the fund managers not shareholders. Vanguard, its funds, ant their fund managers have shown NO INTEREST in operating a no cost, full service brokerage.
ee_guy
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Re: New fee for Vanguard mutual accounts

Post by ee_guy »

plannerman wrote: Sat Nov 05, 2022 8:39 am Like many posters here, I manage Vanguard accounts for a few family members. One of these family member's accounts would have been subject to the $20/mutual fund fees.
Vanguard will aggregate family accounts to hit $1M, Flagship, Flagship select, Ultra high network, etc... You need to call Vanguard. It would be easier to verify if the address on record for the accounts are the same. I did this years ago when Vanguard answered the telephone in a few rings. The kids are now gone but still have the benefits of not having the fee charged.

The process may have changed and no longer the case.
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Cheeze-it Guy – Thanks for the advice on what’s on the screen versus what is really happening! My missing funds are now visible again. It does look like they transitioned my mutual funds into extra/ new brokerage accounts rather than my existing ones, though perhaps a small chance this is part of their process. I am apprehensive about messing up their process (as you mentioned could be the case if I start following up too soon), but at the same time, if they are done with their attempt at a transition and messed up, I would like to get going to try and fix the mess, so I can make purchases from the funds in my prior brokerage sweeps (which I used to be able to use to buy into the mutual funds despite the “separate” platform but can no longer do)..
Retiringwhen – also appreciate your experience with the online account versus realitiy.
Hey Tunafish – are you sure they dinged you because of your brokerage and not that you have a non-brokerage mutual fund somewhere? Reason I’m asking is that one customer service rep told me that the fees for not meeting the new minimum in the brokerage ($1 M in Vanguard branded funds) if you have paper statements will not take effect until next year and specifically won’t be taken out of accounts until Aug. 2023. He made it sounds like just so we handled this matter in advance of that time (i.e. either switch to paperless or get over $1 M in Vanguard branded funds), we could avoid the fee. On the other hand, I get a lot of contradictory and/or wrong info from talking to various folks at Vanguard, though this guy seemed to know his stuff.
I also am thinking about Fidelity/ Schwab after Vanguard raided my accounts for fees thereby locking me into average cost basis method. At the same time, I am quite hesitant to give up Vanguard, particularly because their philosophy seems aligned with mine and because I’m in majority Vanguard branded assets.

All. I am trying to check what the "rules" are. I think FDIC requires brokerages to give customers at least one month's notice before fee changes. I still wonder about this mutual plan platorm fee being for 2022 - that seems like it can't be fair - would make more sense for it to be Nov 2022-Oct 2023, perhaps, though most o the time such a fee would be assessed in Oct 2023 I'd guess.
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

sophiainvests wrote: Sun Nov 06, 2022 12:52 am All. I am trying to check what the "rules" are. I think FDIC requires brokerages to give customers at least one month's notice before fee changes. I still wonder about this mutual plan platorm fee being for 2022 - that seems like it can't be fair - would make more sense for it to be Nov 2022-Oct 2023, perhaps, though most o the time such a fee would be assessed in Oct 2023 I'd guess.
FDIC has nothing to do with investment accounts.

What the fund can / cannot do is covered in it's legal prospectus. You also agreed to some sort of terms and conditions when you created your accounts.

They could charge a fee in advance of the time period.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

sophiainvests wrote: Sun Nov 06, 2022 12:52 am Cheeze-it Guy – Thanks for the advice on what’s on the screen versus what is really happening! My missing funds are now visible again. It does look like they transitioned my mutual funds into extra/ new brokerage accounts rather than my existing ones, though perhaps a small chance this is part of their process. I am apprehensive about messing up their process (as you mentioned could be the case if I start following up too soon), but at the same time, if they are done with their attempt at a transition and messed up, I would like to get going to try and fix the mess, so I can make purchases from the funds in my prior brokerage sweeps (which I used to be able to use to buy into the mutual funds despite the “separate” platform but can no longer do)..
It is still solidly the weekend. Remember that my suggestion is to give several full BUSINESS day cycles. I certainly understand wanting to get it resolved as soon as possible, but you are making a mistake trying to intervene if the transition steps are still underway. This is going to cause confusion for agents who will also see things in a transitory state and will not know what to make of it. I mean, if you think you get contradictory information now, why voluntarily add this on top? As I said, it's not year-end (and not even month-end), so there's really no big rush.

Stop making it harder for yourself and stop trying to figure out some way to claim that Vanguard has no legal right to assess the fees. That's not going to be successful for you. They have the right. Instead, be glad they are allowing a grace period for fee forgiveness. Also, if you are so worried about the ability to use another cost basis method in the future, why did you have the subject funds set to average cost for what sounds like more than a decade?
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retiredjg
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

Sophie, have you read all the posts in this thread? I believe that others have told us that new accounts were created during the transition and they later had to have Vanguard consolidate them. That may just be the way it is. Even if that is not true for all, it is true for you. It's not that big of a deal.

I suggest that you wait at least 10 days and then contact them to consolidate if necessary.

Life is not always fair. You are apparently an adult so you already know that. Maybe, for reasons unknown, you didn't get the notifications. Can't change that at this point. And there is the aggravation about the cost basis getting set in a way that was not your first choice. Frustrating.

But these are not life-changing events. They are unfortunate bumps in the road. It's understandable that you might be upset about this, but at some point you really need to get over it. If you don't, your reaction to this incident will cause you more harm than the incident itself.

What can we do to help you move on from this?
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Exodus NH -

I think maybe the SEC (and yes, not the FDIC) does regulate brokerages in terms of notice they have to give in changing fees. I did not find the rule, but a 2014 consumer bulletin from the SEC states:

"Brokers should provide written notice to customers of all service charges when accounts are opened, and customers also should be provided with written notice at least 30 days prior to the implementation or change of any service charges."

https://www.sec.gov/oiea/investor-alert ... rsmiscfees

If Vanguard didn't provide this notice to each and every affected customer, then they may have broken the SEC rule implied by the customer bulletin. Vanguard I am sure knows this and made a plan to contact everyone in writing. Could the execution have been botched, though?

I guess fees can be charged in advance, but I don't think they can charge fees retroactively for a period that occurred before they gave the notice. I believe they have called this an annual fee for 2022. Problem is the fee period isn't precisely defined, but they have lawyers, so probably they have their bases covered. If the fee is paid for the annual period starting one month after they provided notice and for the year following, it would comply with SEC rules.

My interest in this may be confusing: When I explored the possibility to get the cost basis changed after the "fee transaction" having been made, I found that Vanguard probably has the ability to change the cost basis after the fact, but only, according to IRS rules, if there was an error.
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

sophiainvests wrote: Sun Nov 06, 2022 8:28 am Exodus NH -

I think maybe the SEC (and yes, not the FDIC) does regulate brokerages in terms of notice they have to give in changing fees. I did not find the rule, but a 2014 consumer bulletin from the SEC states:

"Brokers should provide written notice to customers of all service charges when accounts are opened, and customers also should be provided with written notice at least 30 days prior to the implementation or change of any service charges."

https://www.sec.gov/oiea/investor-alert ... rsmiscfees

If Vanguard didn't provide this notice to each and every affected customer, then they may have broken the SEC rule implied by the customer bulletin. Vanguard I am sure knows this and made a plan to contact everyone in writing. Could the execution have been botched, though?

I guess fees can be charged in advance, but I don't think they can charge fees retroactively for a period that occurred before they gave the notice. I believe they have called this an annual fee for 2022. Problem is the fee period isn't precisely defined, but they have lawyers, so probably they have their bases covered. If the fee is paid for the annual period starting one month after they provided notice and for the year following, it would comply with SEC rules.

My interest in this may be confusing: When I explored the possibility to get the cost basis changed after the "fee transaction" having been made, I found that Vanguard probably has the ability to change the cost basis after the fact, but only, according to IRS rules, if there was an error.
That link refers to transaction fees, not account fees.

But in any event, Vanguard did notify people. You didn't see it. Who knows why.

Vanguard's a large company in a highly regulated space. If they charged you fees, I'm 100% certain it was according to documentation that was provided to you, perhaps a decade ago.

As someone else already stated, you need to give the process several business days to shake out.
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

RetiredJG and Cheeze-It Guy -

Already you and others on this board have been incredibly/ hugely helpful (thank you)! I’m actually awed by the Bogleheads online society! I’ve learned a lot through the discussion and gotten input that is going to be very helpful going forward beyond the “2022 surprise mutual platform fee change.”

You’re right it’s probably time to let go but before I do, (a) still checking if the long-shot of proving an error would get me an opportunity to change the cost basis of the transactions (and also whether it’s going to affect my future net income enough to worry about it), (b) considering if I should write top management as a consumer to try and help make things better (and possibly address my own personal issue on cost basis if there is any chance of proving a mistake, but regardless writing to make sure they know what’s going on/ what the real customer experience is like), (c) understanding better whether Vanguard’s handling of things is egregious enough that it really is time to move on to another brokerage.

In terms of help going forward/ input, what I’m still struggling with:

(i) How big of a difference in net income over the years (due to less optimized tax strategy) is the average cost basis lock-in on my $400k to be going forward?

(ii) If (i) is significant, any chance of proving a mistake in the way VG stated this as an annual fee for 2022? Is 2022 defined as Jan – Dec. 2022 (in which case it is a mistake) or in some other way? The purpose of proving a mistake is having a legit rationale for Vanguard to change the cost basis.

(iii) Was it really bad that Vanguard didn’t give more notice of the fee change (sounds like they gave at most 1.5 months notice) and didn’t work harder on getting the word out about the fee change? Especially when the minimum holdings to avoid various fees used to be more like $50,000 and is raised suddenly to $1 M? Or is this behavior pretty run of the mill for brokerages, so that we can’t single out Vanguard as being “bad” by industry standards.

(iv) How many people got caught getting these fees without prior knowledge of them? Just a few (in which case I might be more inclined to have less a reason to write top management the “please improve” type letter and think Vanguard is really “bad”/ “weak”) or thousands or tens of thousands or more?

(v) Should I finally leave Vanguard for Fidelity or Schwab over these latest frustrations at Vanguard? I know there are other threads on “to leave or not to leave”. But I guess with regard to this fee issue, understanding (iii) and (iv) may help. If Schwab and Fidelity would change their fees with such a big minimum change so quickly and/or if their communications will also be similarly weak, maybe that’s how it is and no reason to leave. And the other question is whether the customer service is as weak and mistakes are as common at these other brokerages. And last, will we see a return of fees for trades of Vanguard ETFs at Fidelity/ Schwab someday?

Cheeze-it guy: I had not selected cost basis method and it was thus the default (which is average cost). I had the impression that just so I changed the cost basis method before my first sale, I didn’t have to worry about it – so did not really understand the options and had figured I’d figure it out when the time comes. Lesson learned on this for sure, but if Vanguard hadn’t initiated the sale, I might still have the opportunity to choose. (?)
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Nate79
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Re: New fee for Vanguard mutual accounts

Post by Nate79 »

Vanguard gave over 30 day notice for the fee schedule change. They have written notice. Some people report the notice ended up in their junk folder. Some people can't find their notice (maybe their email provider blocked it as spam?).

If people are so upset with Vanguard then just leave already. There are even better brokers. Hopefully fees get raised again to keep forcing people to convert who seem so stuck in their ways.
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retiredjg
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

sophiainvests wrote: Sun Nov 06, 2022 9:26 am (i) How big of a difference in net income over the years (due to less optimized tax strategy) is the average cost basis lock-in on my $400k to be going forward?
I would expect this to be very small. Your total basis is still the same as it ever was (minus the basis in the $20 fees.) The only thing that changed is that (using made up numbers) now all those old shares have a basis of $10 each. In the past, some shares had a basis of $1 and some maybe $9 and some maybe $25. When shares have a different basis, you can pick what shares to sell so that you can sell the fewest shares with the least tax. This is nice to have, but not required for successful investing or tax paying.

To my understanding, that is all you have lost. If you are wealthy enough to have $400k in a taxable account, I would think this will turn out to be rounding error in the long run. If this money is inherited, your heirs get a stepped up basis anyway and it will not matter a bit.

Someone showed an example of how this works in the last few weeks. It might be earlier in this very long thread. It is a pain to read a very long thread, but you really should do that if you have this intense an interest.


If you read this entire thread, I think you will see that a few posters apparently did not receive notice. A lot of people apparently did receive the notice. Take that however you want to.

As for getting a change or resolution, my guess is "snowball's chance".


(v) Should I finally leave Vanguard for Fidelity or Schwab over these latest frustrations at Vanguard?
You should not listen to anybody who tells you the right answer for this one. It is a personal decision and what anybody else thinks is not relevant. There are certainly several comments from people who have moved and been happy they did.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Generally, I don't think anyone is really suggesting you drop getting the best possible resolution, but I have not yet seen an acknowledgment that you understand the importance of a waiting period before further intervention. This isn't just my opinion. It's based on the way things demonstrably happen at Vanguard. I am telling you that you are making a mistake if you don't wait several business days. I have not seen a compelling reason presented as to why not to wait a few days.

Regarding writing a letter, I suggest you only do this if it will give you some emotional release and make you feel better, not because you think it will change anything. Chances are, it won't change anything, and it won't even get read by the intended recipient, except possibly in aggregate. This in itself doesn't make Vanguard "bad". They serve many millions of clients. It is no longer reasonable to expect that the CEO of an organization of this size can or will read and respond personally to any of the millions of individual clients. That's a quaint ideal of a time in America's distant past. It's simply not going to happen today, and you can easily understand why.
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Re: New fee for Vanguard mutual accounts

Post by ee_guy »

sophiainvests wrote: Sun Nov 06, 2022 9:26 am (v) Should I finally leave Vanguard for Fidelity or Schwab over these latest frustrations at Vanguard? I know there are other threads on “to leave or not to leave”. But I guess with regard to this fee issue, understanding (iii) and (iv) may help. If Schwab and Fidelity would change their fees with such a big minimum change so quickly and/or if their communications will also be similarly weak, maybe that’s how it is and no reason to leave. And the other question is whether the customer service is as weak and mistakes are as common at these other brokerages. And last, will we see a return of fees for trades of Vanguard ETFs at Fidelity/ Schwab someday?
An alternative to consider is to write to Vanguard and see how they respond to the issue. Three possibilities:
(1) Vanguard ignores the letter and not respond at all,
(2) respond and explain why they can or cannot do anything about.
(3) respond and make some adjustments.

Years ago, Vanguard lost a check and would not refund the cost for stop payment. I wrote to the CEO and to my surprise was reimbursed for the cost.

In your case, since you have not selected a cost basis, and Vanguard uses FIFO to sell shares, you may have a valid reason to have Vanguard correct the cost basis.

Based on Vanguard's response or non-response, you can decide on what to do.
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Thanks again so much retired JG, Cheeze-it guy, and ee-guy:

I think I can now finally come to the following course of action and conclusions and have to thank you and other Boglehead posters in this thread for helping me finally get to this point:

1) Wait some more business days to see if the new, unneeded brokerages resulting from my “mutual fund platform transition” get merged with the pre-existing ones. My guess is they will not get merged and I’ll need to get back on the phones (sigh). I had wanted to do some investing in the mutual funds with cash in my brokerage sweeps before the mid-terms, but just realized mid-terms are already upon us Monday, so there may be some volatility to avoid next few days.

2) Realize the financial implications of the average cost basis lock-in for the $400 k are not huge, so don’t worry about it too much. If it becomes a big deal, save that part of my taxable funds for my heirs if I have any left and they don’t change the step-up on death regs ;

3) Write CEO Buckley (letter already written) to let him know the speed of rollout of the new fee and problems with notification made me unhappy and to ask (on a longshot) if they can consider an error was made either vis-à-vis their indication that this is an annual 2022 fee or in that notifications were not received - and based on occurrence of an error revise the cost basis method of the sales they made to collect fees.

4) Stay at Vanguard for now. (One reason is the Bogleheads: I realize some have left, but seems like majority stay. Why? And whatever brokerage has something like the Bogleheads?) But, do some research on Fidelity/Schwab including their own index funds and ETFs and also what analysts are saying about whether Fidelity might reinstitute ETF fees in the future. Might move my HSA to Fidelity from Saturna (which was the best option for investment HSA when I set mine up, but Fidelity is probably better now) and maybe my self-directed 401 k to Fidelity from Vanguard. (When I set the self-directed 401k up, Vanguard required you have pooled accounts for self-directed type things, meaning Roth, Tax-Deferred, and After-Tax would all go in the same account and you have to keep track (though you can actually use separate mutual funds of the same type on the old mutual fund platform and Vanguard small biz is not requiring transition yet). Need to check if VG rules have changed.

Thanks again!!
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Re: New fee for Vanguard mutual accounts

Post by stan1 »

@sophiainvests you should ask Vanguard to reverse the transactions in return for you converting the accounts since you weren't aware of the required change. Reversing the sell transactions hopefully would let you set the cost basis how you want it but it may require manual intervention from Vanguard. Seems like that's your best outcome. If Vanguard won't reverse the transactions they may be willing to give you the fees you paid back as cash.
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

thanks, Stan - I think what I'm left with now is the letter to the CEO with this kind of request. I asked them to correct the cost basis method rather than reverse the whole transaction, as I get the impression after something is cleared they can't just reverse it.. About reimbursement, they are already planning to reimburse in cash anyone who got nailed with the fees but converts by Nov. 30, so we'll only be out I guess the taxes on the transactions.
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

How do you think they can correct the cost basis thing without reversing the transaction all together?

Once some of those shares are sold, the cost basis on every share got adjusted to account for it. I don't see a way to "adjust back" all those shares because some of the basis is gone.

Or maybe I just don't understand basis works. :?
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

EDITED VERSION: retired jg: in another thread, i read that Vanguard can adjust (and has adjusted) the cost basis method after the transaction if it makes a mistake. I think the most common mistake is that account holder selects tax lots via special ID, but Vanguard somehow overrides and does FIFO. The transaction still holds, but they correct the transaction report with the correct cost basis method once the account holder explains the mistake and that in turn I guess corrects the records so that future cost basis method applications work correctly. What I've learned is that, by IRS rules, the brokerages can't do this change of cost basis method for transactions that have already cleared unless there was really an error in the cost basis method used. So maybe my argument doesn't work so well, as I'm trying to argue the transaction itself was an error, but saying hey just fix the cost basis and I'm fine with it. (but had I known about the transaction in advance and had a chance to designate cost basis, I would have chosen special ID.. so you can kind of make an argument there is an accident in the cost basis)
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Re: New fee for Vanguard mutual accounts

Post by PersonalFinanceJam »

sophiainvests wrote: Sun Nov 06, 2022 12:51 pm ...
4) Stay at Vanguard for now. (One reason is the Bogleheads: I realize some have left, but seems like majority stay. Why? And whatever brokerage has something like the Bogleheads?) But, do some research on Fidelity/Schwab including their own index funds and ETFs and also what analysts are saying about whether Fidelity might reinstitute ETF fees in the future...
I would offer the existence and discussions of the Bogleheads site shouldn't be a reason to either invest or not invest at Vanguard. As it says at the top of the page, "Investing advice Inspired by Jack Bogle". We are agnostic*. There are dedicated active mega threads for some of the other major brokerages and other posters not at Vanguard get the same great help here. In short, I'm not aware of an accurate accounting of forum members and where they choose to invest or not. Should such a thing exist I don't think that should be given much weight in your own personal criteria.

* - To a point. If you said you were going to try and do low cost investing at Edward jones, I think we'd stage an intervention. :D
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Thanks, PersonalFinanceJam -
Good insights - I was mixing up Bogle with Vanguard and not sure if we can still do that. I am really impressed with the Bogleheads and figured these smart, well-informed people are probably making the best choice for their brokerages. But I can see the flaws in my reasoning - it's not clear if the majority of these folks have stuck with Vanguard (though that's my gut feeling) and, even if they have, maybe some of the same issues (inertia, nostalgia/ hoping some of the more recent customer service deficiencies will see a turnaround, inability to predict the future fees, etc. at the other places, and inability to know for sure that the other places will be better) that have kept me at Vanguard have kept them there. I'll adjust my plan a bit to look at some of these other brokerage megathreads and figure out what the important criteria are for the stay or go decision.
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Re: New fee for Vanguard mutual accounts

Post by catlady »

@sophia I’m curious, since you seem concerned about the potential income implications, why didn’t you do any TLH in the last 2 years? The market has been on a downswing for months and you could have been capturing losses to write off against current income (up to $3000 a year) to save on your taxes.
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Hi Catlady! Interesting idea and great point vis-a-vis relevance to the investor who is concerned about how to be strategic tax-wise. I think tax loss harvesting requires more expertise than I currently have - don't know much about it and would really need to study up, but maybe it's time to learn about it.. though now locked in to "average cost" for large part of taxable portfolio..
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

sophiainvests wrote: Sun Nov 06, 2022 11:14 pm Hi Catlady! Interesting idea and great point vis-a-vis relevance to the investor who is concerned about how to be strategic tax-wise. I think tax loss harvesting requires more expertise than I currently have - don't know much about it and would really need to study up, but maybe it's time to learn about it.. though now locked in to "average cost" for large part of taxable portfolio..
It is worth understanding. It is actually simpler than many make it out to be so don’t get put off by complicated explanations. I think the Wiki is probably a good place to start.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: New fee for Vanguard mutual accounts

Post by catlady »

I agree with jebmke, TLH is simple and worth learning about. Regarding your average cost basis shares, I wouldn't be too concerned about them. Before I knew any better I sold some shares which locked in all of our past purchases into average cost basis. Once I learned about TLH I updated so future purchases would be via spec id and have never had an issue. The "average cost" shares function the same, they just have a different basis on them. Having some shares that were adjusted via average cost might not be the most mathematically optimal scenario but I certainly wouldn't lose sleep over it or make any drastic changes as a result.
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Thanks, catlady for sharing your experience and jebmke, too!

All - Just FYI, Change of Ownership people indicate they can merge two taxable brokerages in 1 to 2 biz days, but two IRA brokerages will take 5 to 7 biz days as they have to send it to another department to do it. They can also merge other types (like mutual fund into brokerage in pooled accounts category), but again, 5 to 7 biz days as it has to be sent out. For taxable, cost basis method you've selected would be maintained on the merger. As most of you probably already know, they told me in these merged accounts with different types of assets are grouped together on your holding page - so, visually, mutual funds will still be grouped together as will ETFs.
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

I would not trust the cost basis method to "stick". Check. Then check again because sometimes it does not show up right away.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

retiredjg wrote: Mon Nov 07, 2022 2:38 pm I would not trust the cost basis method to "stick". Check. Then check again because sometimes it does not show up right away.
And download the basis data prior to converting to preserve your records.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Great tips retiredjb jebmnk! I'll follow up accordingly

Meantime, got a call back from a Vanguard supervisor in "investments" as a follow up to a cost basis conversation last week. Here is what he told me:

-Vanguard charges their annual fees in the 3rd quarter of each year and that's why I got the mutual fund fee in Nov (I figure he may have been thinking about the original deadline which was apparently 30th Sept, end of 3rd quarter),
-The fees charged to 8 of my mutual funds on Nov. 1 were annual fees for 2022, which, yes, means Jan. 1 2022 - Dec. 31, 2022.
-I posted the question of whether this is then a retroactive fee in terms of the first 8 months of the year as people who got notice did not get notice until Aug. 2022. He had no good response to this. I pointed out that SEC requires 30 days notice. He said these fees were all approved by FINRA. He says FINRA regulates them, though I'm wondering if it is SEC that regulates their account fee taking.
-He also looked at my file and said I was sent letters about the transition on both Oct. 13, 2022 and Oct 15, 2022, which I believe to be untrue. I do believe him that their record indicates they sent these letters, but don't think they actually executed and sent them: What are the odds two different letters sent just two days apart from the same entity got lost in the mail? And, why did they send the letters just two days apart? It almost suggests something funky/ error laden was going on. I also pointed out to him that these letters were not sent early enough to be one month advanced notice (as the SEC requires) and he didn't really have a response to that. He said this transition fee was first discussed in April 2022 (but discussed with whom I didn't confirm).

Going over with him the frustration of getting wrong info from various VG associates and having to call many times re transition and other topics and asking what I could do differently to have a better customer experience: He suggested the best thing is to get to the right department in the first place each time when I called for future issues ("be as specific as possible"). I asked whether there is an org chart I could refer to in order to figure out the right department (as I have no idea what all the departments are named and what each does), but he did not know of any such resource. Meantime, just based on my own recent experience, some departments that may be of interest are "investments" (he said they deal with trading issues and investor education, as they have credentials in relevant areas that other associates may not have), "account maintenance," and "retirement." And the new one I know about "change of ownership" (if there is a need to merge one's accounts or actually change ownership). I guess I have the worst luck when I go for "none of the above" in the call tree and I had very back luck with the "transition team," which I have the feeling might have been slapped together quickly or outsourced to deal with high volume of transition-related calls.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

^ if you divide the fees in question by the hours you've spent on this, what are you making on an hourly rate? Doing better or worse than minimum wage. Asking for a friend.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

jebmke -

1. please ask your friend if one should do everything one does based on computation of hourly rate
2. the fees are going to be refunded - that's not the point. the bigger issue in terms of possible benefit to me specifically is to try to get the cost basis of my $400 k going forward corrected from average cost basis to specific ID. i do think Vanguard's collecting a full annual fee for a year for which they only notified (some) people 8 months after the start of the period for which they charged should not be approved by the regulators, but don't know if the supervisor really explained the time period to which the fee applied correctly. Your friend may not care about this kind of stuff as it may not impact him or her.
3. beyond the cost basis issue, reasons for investing time in this are: (i) sharing what I've learned on this board, as others have shared with me and thought some might find it interesting, (ii) wanting Vanguard to do better -- and one way for them to do that is learn from their mistakes. This supervisor promised to report the feedback and I've written a letter to the CEO. Yes, people looking at only their hourly "wage" or own individual benefit might not consider these as reasons to do what they do.

I guess this raises a bigger question, since this board is based on those inspired by John Bogle's investment philosophy, does that mean the financial bottom line is all that matters? And does that also mean you don't pursue "long shots" (low probability of success) in any aspect of what you do?

Is everyone contributing to this board discussions doing so on the basis of the hourly rate it brings them - sure don't think so ; ) There is definitely a lot of altruism here and I appreciate it!
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Re: New fee for Vanguard mutual accounts

Post by sajohnson »

sophiainvests wrote: Tue Nov 08, 2022 1:50 pm jebmke -

1. please ask your friend if one should do everything one does based on computation of hourly rate
2. the fees are going to be refunded - that's not the point. the bigger issue in terms of possible benefit to me specifically is to try to get the cost basis of my $400 k going forward corrected from average cost basis to specific ID. i do think Vanguard's collecting a full annual fee for a year for which they only notified (some) people 8 months after the start of the period for which they charged should not be approved by the regulators, but don't know if the supervisor really explained the time period to which the fee applied correctly. Your friend may not care about this kind of stuff as it may not impact him or her.
3. beyond the cost basis issue, reasons for investing time in this are: (i) sharing what I've learned on this board, as others have shared with me and thought some might find it interesting, (ii) wanting Vanguard to do better -- and one way for them to do that is learn from their mistakes. This supervisor promised to report the feedback and I've written a letter to the CEO. Yes, people looking at only their hourly "wage" or own individual benefit might not consider these as reasons to do what they do.

I guess this raises a bigger question, since this board is based on those inspired by John Bogle's investment philosophy, does that mean the financial bottom line is all that matters? And does that also mean you don't pursue "long shots" (low probability of success) in any aspect of what you do?

Is everyone contributing to this board discussions doing so on the basis of the hourly rate it brings them - sure don't think so ; ) There is definitely a lot of altruism here and I appreciate it!
Excellent reply sophia. I've been impressed by your posts.

Sometimes principle(s) is more important than money. That is a call we all have to make for ourselves on a case by case basis.
“Fund performance comes and goes. Costs go on forever.” – John Bogle | | “The two greatest enemies of the equity fund investor are expenses and emotions.” – John Bogle
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

transition of my mutual fund accounts finally complete.. if anyone with pre-existing brokerage accounts is still working on getting their mutual fund accounts transferred into the brokerage fund accounts and hits a snaffoo whereby new brokerage accounts are open instead (this is what happened to me after trying to do the transition online). Here is how things worked for me. (Note: This is probably not the right way to do things, but if you end up with new, extra brokerage accounts, here's my experience):

1. Tried to transition the accounts online. There was not an option to indicate the existing brokerage accounts to transfer the mutual funds into (though I was advised it would happen automatically, maybe not good advice). In the end, new brokerage accounts in addition to my old ones were set up. This took just a couple of days to happen, but I waited some more days to make sure no more action would be taken.

2. Called "Change of Ownership" Department. Double checked with them that nothing was in process with the transitioned from mutual fund accounts and transitioned to new brokerage accounts. Then, they were able to move the mutual funds from the new brokerage accounts into the old/pre-existing brokerage accounts. This took just a day or two for the taxable brokerage accounts, and four days for retirement brokerage accounts.

3. The empty, new brokerage accounts in each case continued to show up and I wanted them closed, so called Change of Ownership to confirm processing was complete. The first time I called (after the taxable brokerage account merger was completed) they sent me to "Account Maintenance" and the person I spoke with claimed to have closed the empty taxable brokerage account for me. But when I called Change of Ownership to check that processing of the Roth brokerage account merger was complete, that person told me that the taxable account hadn't been closed - what the "Account Maintenance" person had done was just to hide it on my screen! Then, embarrassingly, he showed me how easy it is to close an account in one's online portal. It was: profile and account settings (upper right corner of screen near the "logout")->(scroll down to) accounts and trading-> (second on left) close accounts - and then your accounts are listed and it's easy to close. He told me the closure was effective immediately.
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Re: New fee for Vanguard mutual accounts

Post by Mudpuppy »

sophiainvests wrote: Sun Nov 06, 2022 1:51 pm thanks, Stan - I think what I'm left with now is the letter to the CEO with this kind of request. I asked them to correct the cost basis method rather than reverse the whole transaction, as I get the impression after something is cleared they can't just reverse it.. About reimbursement, they are already planning to reimburse in cash anyone who got nailed with the fees but converts by Nov. 30, so we'll only be out I guess the taxes on the transactions.
You're not alone in this. I also do not recall receiving an email warning about this fee, and I was charged $60 (three funds, all above $10k individually and electronic-only notification enabled) on November 1st for my Roth IRA account. I just logged in and realized it while doing my monthly account maintenance checks. I had to dig through my clutter folder to even find the transaction notice email. I still haven't found the email warning about the change that this thread has mentioned and I have searched my emails by date, by sender, and by keyword. I found emails from Vanguard in late August saying there are updated prospectuses available and emails in August and September asking me to take a survey, but nothing mentioning this fee. The last email mentioning account transitions was from a year ago. I also received no warning about this when I logged in last month to download the 3rd quarter statement, I see nothing in the internal Vanguard messaging system, and I see nothing on the 3rd quarter statement itself, which all seem like good ways to issue account notifications of this magnitude.

There are so many ways for email to get lost that this shows the short-comings of opting for electronic-only notification. In my case, I know there is an email filter that can silently stop email before it gets delivered to my inbox, because that has happened for some expected emails intermittently in the past. There's no way for me to know when that happens for unexpected emails though, since the filter is silent. It sends no reports to the end-users about what it blocks. Whitelisting email addresses has no effect on that particular filter, because it's a "big data" filter for all end-users, not a filter that is configurable per end-user. It doesn't go into spam. It doesn't go into clutter. If the filter doesn't like the email, it's not getting through; end-of-story. That's the only logical explanation I can see for why I cannot find any evidence of this email being delivered to my inbox.

I really hope the intention to reverse the fee for those who transition by November 30th is a blanket promise, and not something the CSRs told you specifically. I've gone through the hassle of converting the account just now, but I'd hate to find out it wasn't a blanket promise and that I'm still out $60. Then I would definitely pull up stakes and leave Vanguard, with the additional hassles that would cause. I know you personally have no way of knowing this, just something I want to put out there while I'm venting.

At the very least, I'm still going to look into switching my account to a firm that either doesn't charge for postal mail account notifications or that has the ability to list multiple email addresses per account, so I can add a backup address at a vanity domain I own in case the email filter in front of my primary address continues to block important emails. I've dug around the settings at Vanguard and can see no way to add a second email address for a single person. I did trigger a few error pages while digging around, but every entry box was just for one email address.
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Mudpuppy -

I'm not sure whether your notification email was even sent. I kind of think they are pretty disorganized. I think I may have mentioned that reps tell me I was postal mailed a noticed on both Oct. 13 and Oct. 15 - neither made it, so what are the odds of that? Nevertheless, around Nov. 3 I saw a banner when logging into my Vanguard account indicating the fee would be refunded if you transition by Nov. 30, so I've seen it in "writing." If you've never made a sale on your account and did not select cost basis, then average cost basis will be locked in for all funds in place (which is my main complaint now), but maybe most folks (besides me) had cost basis figured out before these unexpected sales. If your funds are in taxable accounts, you may owe a small amount of tax on the sales, which will not be refunded by Vanguard, but the $60 will be refunded in cash in your brokerage account (the one you transition into). I believe they will try to refund us, though don't know if execution will be good. I think it's the first or second week in Dec. that we should expect the funds.

I still think the fee is wrong based on it being an annual fee for 2022, since those that were notified were not notified until Aug. 2022. That's a mostly retroactive fee, whereas 30 days notice is required.

If you think anything is wrong in how it was handled on Vanguard's end, an option is to write the SEC, which will forward the note to Vanguard's compliance department (who would then be supposed to get back in touch with you to explain themselves or acknowledge their error) and to also write FINRA, which I think would investigate the matter or send it to the body that would investigate it. It seems both have online complaint option, but SEC's is more of a "help you get through to your financial institution" whereas FINRA's seems more investigatory. This is confusing, because I think SEC is the one that regulates the mutual platform part of Vanguard's business (the part that is going away) whereas FINRA regulates the brokerage part.

I think in this day and age, Vanguard should know (if they even sent them) that notices don't always get through and should have sent multiple ones and hopefully through at least two modalities (one post, one email and adding the online banner to the accounts for a good period of time as well, probably..)
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Re: New fee for Vanguard mutual accounts

Post by Mudpuppy »

sophiainvests wrote: Sun Nov 13, 2022 9:16 pm I'm not sure whether your notification email was even sent. I kind of think they are pretty disorganized. I think I may have mentioned that reps tell me I was postal mailed a noticed on both Oct. 13 and Oct. 15 - neither made it, so what are the odds of that? Nevertheless, around Nov. 3 I saw a banner when logging into my Vanguard account indicating the fee would be refunded if you transition by Nov. 30, so I've seen it in "writing." If you've never made a sale on your account and did not select cost basis, then average cost basis will be locked in for all funds in place (which is my main complaint now), but maybe most folks (besides me) had cost basis figured out before these unexpected sales. If your funds are in taxable accounts, you may owe a small amount of tax on the sales, which will not be refunded by Vanguard, but the $60 will be refunded in cash in your brokerage account (the one you transition into). I believe they will try to refund us, though don't know if execution will be good. I think it's the first or second week in Dec. that we should expect the funds.
I also don't know if the notification email was sent, but I checked the delivery logs for my inbox and can verify that it was never received. The only email from vanguard.com that was delivered to my inbox in August was the prospectus notice on August 23rd. There were no emails from vanguard.com delivered to my inbox in September. The Vanguard survey came through medallia.com, so that was the domain in the logs for the surveys in August and September, but Voyager emails come through vanguard.com, so that should have been the domain in the logs.

If I had the ability to have two email addresses on my Vanguard account, I would add my vanity domain as a backup. But it's not reliable enough as a primary. Apparently my primary isn't reliable enough either, but it's more reliable than the vanity domain. Usually the filtering algorithm only stops spam, and it's only in very rare situations that it stops something legitimate. This is a rather horrible case of it stopping something legitimate though, presuming that's the reason why the email never was delivered to my inbox.

There's also the possibility that since my rollover IRA is a brokerage account, Vanguard never actually notified me about the impending charges to my Roth IRA that was on the old platform. It would be a ridiculous mistake to make, because the rollover IRA was converted into the Roth IRA ages ago and the rollover IRA contains no balance while the Roth IRA contains all of my active holdings, but I could see that happening. Both you and I are in the situation of having both brokerage and old platform accounts prior to November 1st, so that makes me wonder if that's why we didn't receive notification.
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Thanks Mudpuppy,
I think it's possible some people received no notice at all and certainly that they did not send multiple notices as claimed by customer service reps to me. I figure that some of the other posters that got notice had both brokerage and mutual fund platforms, though not sure - so perhaps that is the reason some did not get notice. Maybe another is having $1 million in VG branded funds when they did their planning, but the market dropping so one is below the limit to avoid the fees when they actually executed. Not sure if there is a way to reach their compliance department directly about the issue that this fee was for Jan 1-Dec 31 2022, but those that did get notification got it mostly likely only in August 2022, so it is a retroactive fee in a sense which is against SEC 30 day notice rule on account fees and therefore not in compliance. If more than one person would do a complaint with SEC and also FINRA, maybe VG would get the message at least to improve itself and/or the persons responsible for botched rollout suffer the consequences. In any event, I'm wagering the refunds will go through if only Vanguard can handle the complexity of doing it! And maybe they can manage since they managed to take the fees in the first place!
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

sophiainvests wrote: Mon Nov 14, 2022 10:10 am Thanks Mudpuppy,
I think it's possible some people received no notice at all and certainly that they did not send multiple notices as claimed by customer service reps to me. I figure that some of the other posters that got notice had both brokerage and mutual fund platforms, though not sure - so perhaps that is the reason some did not get notice. Maybe another is having $1 million in VG branded funds when they did their planning, but the market dropping so one is below the limit to avoid the fees when they actually executed. Not sure if there is a way to reach their compliance department directly about the issue that this fee was for Jan 1-Dec 31 2022, but those that did get notification got it mostly likely only in August 2022, so it is a retroactive fee in a sense which is against SEC 30 day notice rule on account fees and therefore not in compliance. If more than one person would do a complaint with SEC and also FINRA, maybe VG would get the message at least to improve itself and/or the persons responsible for botched rollout suffer the consequences. In any event, I'm wagering the refunds will go through if only Vanguard can handle the complexity of doing it! And maybe they can manage since they managed to take the fees in the first place!
You keep referencing this "30 day period." But the link you referenced from 2014 is about transaction fees, not account fees, as it references "buy and sell". There's probably an argument to be made that accounts on the mutual fund platform aren't covered by brokerage rules. (Pure speculation, but since they're not brokerage accounts, it doesn't seem entirely unreasonable, but this isn't an area where I'd be surprised to be corrected on by people with real knowlege.)

But even still, I bet that in the original documentation you agreed to, there was some note of fees and what it would take to get waived. One could be pedantic and claim that this wasn't a new fee being levied as much as the rules for waiving it have changed.

A multi-trillion dollar company is not going to risk federal fines for $20. I think this safe to assume that the fee was legally applied. Even with all of its flaws, Vanguard is not known for shady practices or for having an "ask forgiveness, not permission" policy.
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

good points - but I still can't imagine regulators would allow mutual fund companies, which i guess are considered "investment companies" for regulatory purposes to announce a fee that charges retroactively for a portion of time before the fee is announced. if vanguard didn't do that, then they miscommunicated what they did. ADDITION: But if they miscommunicated what they did, that also seems to be a kind of noncompliance. That is, I think you both need to comply by giving advance notice and your advance notice of what kind of fees you are charging for what period needs to be accurate.
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

^ While I agree this was very poorly implemented (and it even inspired us to leave or at least accelerate plans to eventually leave), they did give 30 days notice (to those who got it, anyway). Notification in August of a fee that will be applicable as of Sept. 30 is more than 30 days notice. If your mutual fund account no longer existed as of Sept 30, due to converting to brokerage or emptying/closing the account, there was no fee charged.
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