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

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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

jeffyscott wrote: Mon Nov 14, 2022 5:50 pm ^ 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.
You may have missed sophiainvests' post above where she was told the fee was for the Jan1-Dec31 calendar year (so, if true, 30 days notice would have been Novemer 2021). Personally - I doubt that's the case and it's not like people that converted or left Vanguard prior to Sept 30 got charged.
Last edited by SmileyFace on Mon Nov 14, 2022 5:59 pm, edited 2 times in total.
Makefile
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Re: New fee for Vanguard mutual accounts

Post by Makefile »

jeffyscott wrote: Mon Nov 14, 2022 5:50 pm ^ 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.
I'm more curious why changing the terms of the account service fee waiver didn't require updating the prospectus once they were changed, even if prior notice wasn't required. I even looked in EDGAR for VTSAX and there is nothing filed about it.
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

sophiainvests wrote: Mon Nov 14, 2022 5:37 pm 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.
Best solution is to vote with your feet if you are really disappointed with Vanguard. If you aren't ready to move existing money to a new brokerage you can open an account at either Fidelity or Schwab and start investing new money there (and wait to move until you have experienced real customer service and have made a final decision). Neither Fidelity nor Schwab nickels and dimes their customers with such fees.
You can be a Boglehead at Fidelity, Schwab, Etrade and a number of other brokerages just as easily (I would argue more easily) than at Vanguard.
Bogle-007
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Re: New fee for Vanguard mutual accounts

Post by Bogle-007 »

Did anyone get the fee reversed?
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

SmileyFace wrote: Mon Nov 14, 2022 5:56 pm
jeffyscott wrote: Mon Nov 14, 2022 5:50 pm ^ 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.
You may have missed sophiainvests' post above where she was told the fee was for the Jan1-Dec31 calendar year (so, if true, 30 days notice would have been Novemer 2021). Personally - I doubt that's the case and it's not like people that converted or left Vanguard prior to Sept 30 got charged.
I did see that, but as you note it's not what was actually done. To me it was 30 days notice, since we had 30+ days to do something to avoid the fee.
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Re: New fee for Vanguard mutual accounts

Post by Mudpuppy »

jeffyscott wrote: Mon Nov 14, 2022 7:03 pm
SmileyFace wrote: Mon Nov 14, 2022 5:56 pm
jeffyscott wrote: Mon Nov 14, 2022 5:50 pm ^ 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.
You may have missed sophiainvests' post above where she was told the fee was for the Jan1-Dec31 calendar year (so, if true, 30 days notice would have been Novemer 2021). Personally - I doubt that's the case and it's not like people that converted or left Vanguard prior to Sept 30 got charged.
I did see that, but as you note it's not what was actually done. To me it was 30 days notice, since we had 30+ days to do something to avoid the fee.
That presumes everyone got the email. I most certainly did not get the email, as verified by checking mail server logs, and I rarely check this particular board on Bogleheads.org. It was a flabbergasting shock when I saw the transaction history. Just glad it happened now instead of back in March when I couldn't use the computer for very long due to pain from a pinched nerve after a neck injury. I wouldn't have noticed in time had it happened in March.
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

jeffyscott wrote: Tue Aug 09, 2022 11:43 am Sent a secure message to Vanguard, yesterday. Here's their response:

We apologize if you have not received our communication yet related to
Vanguard's 2022 Account Service Fee. Accounts that may be subject to the
fee were identified on June 24, 2022, and Fee notice letters and emails are
being sent to clients between July 26 through August 12, 2022.
Here is one example of a Vanguard communication that this is a 2022 Account Service Fee (though this is secure message rather than standardized notification). In my view, Vanguard should clearly designate what time period a 2022 Account Service Fee covers. Without definition, it would be assumed to cover Jan. 1-Dec. 31 2022.

I do get the point that there was 30 days notice before the fee was charged (for those that received it), but seems to me Vanguard should at least be able to explain clearly the time period that this annual fee applies to and if it really applies to 2022, then it's not 30 days notice for the time period charged for. It seems that what they are really doing is charging an annual fee and you pay that fee at the beginning of the year and the period is something like November 2022 - October 2023. But it's not really Vanguard's standard practice to charge the account fee at the beginning of the year charged for but instead in the 3rd quarter, so they couldn't even really claim standard practice precedent if this caught the attention of regulators. That is, since they didn't elaborate the time period, the most obvious assumption is that this is for 2022 calendar year.
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

I just don't see it as "covering" any particular time period, it's an annual fee charged based on account status as of September 30 of each year. I assume that is the same way the fee worked prior to changing the criteria for waiver of it.

I assume that if you had a mutual fund account on September 30, you got charged the full fee even if the account had been created in August of that year. Back when the criteria were different, if you opened an account with $5000 on August 1 and did not go paperless, the full fee would, I assume be charged.

Similarly if you had an account subject to the fee and transferred out in August, you would not be charged the fee that year.

In the current system, if you have a $1,000,000+ balance from Jan 1 to August 31 and then in September make a withdrawal, leaving a balance of $900,000, you will be charged the full fee.
Mudpuppy
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Re: New fee for Vanguard mutual accounts

Post by Mudpuppy »

It's definitely looking like I was never sent the notification email, unless this particular Vanguard Voyager email was sent by a domain other than Vanguard (all other Voyager emails come from a Vanguard domain name though). Not only are there no entries in the local mail server delivery log for the time frame in question (mid-July through mid-August), I also had the spam filter logs checked and there was nothing there either. Time to use secure messaging to report this to Vanguard, not that I'm expecting it will amount to much.
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

Makefile wrote: Mon Nov 14, 2022 5:57 pm
jeffyscott wrote: Mon Nov 14, 2022 5:50 pm ^ 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.
I'm more curious why changing the terms of the account service fee waiver didn't require updating the prospectus once they were changed, even if prior notice wasn't required. I even looked in EDGAR for VTSAX and there is nothing filed about it.
Because the mutual fund prospectus covers charges on the mutual fund. That applies to everyone holding the fund in a particular class.

Separately, you are holding your mutual fund in some sort of account. That account fee is not part of the fee charged by the mutual fund. If you held this fund at Schwab, there would be no $20 fee.

My company was a vendor of Capital One, because they bought a local company that we had worked with for years.

Capital One imposed a 2.5% fee to pay us the money they owed us for work we did for them.
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

EDITED - FINRA (not FDIC ; ) - SORRY!

Hi Mudpuppy,

That's great that you have evidence the email was not sent! It's harder to prove a letter (via post) wasn't sent.

My experience with message center lately has always been terrible. Usually they tell me my problem has been solved, which it never has. Hope you have better luck.

I would urge you to complain to the FINRA if you are bothered enough (as FINRA investigates matters), maybe the SEC, too (though I do think you'll get reimbursed). In my view, Vanguard needs to acknowledge how awful this rollout was and amend any wrongs. The SEC complaint option I found online is supposed to go to Vanguard's compliance department and they have to reply to you and cc the SEC. This particular SEC department is supposed to facilitate the conversation rather than investigate. I did just get my reply from Vanguard for the SEC complaint (just 9 days after submitting the complaint) and it totally does not address the issues in my letter, namely lack of sufficient communication before taking the fee and negative implications for my cost basis. Below in quotes is the bulk of what the VG compliance department said. The SEC, if I recall correctly, indicated when they told me they would forward my complaint to Vanguard that I should consider it the start of a process and that one often may need to follow up based on what the firm writes in its first response to show how they did not address the problem, etc. No kidding!! Their response seems a travesty of a serious SEC process to me as they don't address the specific issues I raise. Maybe it's par for the course and that's why the SEC warns the investor to expect such a useless response on the first round.

"For over a decade, Vanguard has encouraged clients to migrate from our legacy platform to the Vanguard Brokerage Account (VBA) platform. This allows Vanguard to better deliver an intuitive, modern, outcome-oriented investment experience. Our aim in implementing these changes to the ASF is certainly not to collect fees or gain revenue, but rather to encourage more clients to engage with us digitally on our VBA platform. We appreciate you completing the upgrade process, please know that the account service fee will be reimbursed in December. We regret any frustration that you may have experienced regarding this matter."

I have heard this argument they make in the letter also on this board, that they have been encouraging people to do the transition for a long time. But why encourage people for a decade and then give only a few months notice (to some) of a newly instituted fee? It seems nonsensical to me if you have a decade, apportion it correctly! Encourage is not the same as notifying of a new fee! It's almost like hey you were bad, you didn't do what we "encouraged" you to do, so we're going to get you?! If you really have 10 years, why not spend 8 or 9 years encouraging and 1 or 2 years warning of a new annual fee (warn in 2022 and appraise the fee in 2023, like the brokerage is doing for its drastically increased new minimum to avoid account fees with paper statements)..

I'm thinking they didn't even read my letter which acknowledges that I understand the fee will be reimbursed, but that I have a bigger problem with what they did and how they did (or did not) communicate the plan. I'm a little swamped at the moment, but plan to follow up on this note per SEC recommendation via the SEC if that's possible - at least Vanguard could provide an explanation of the period the fee covers and the falsities I have been told about two letters being sent to me in October within two days of each other. And I will probably also do the FINRA complaint when I have time - they are supposed to investigate the matter. I thought FINRA wasn't the entity that oversees Vanguard's mutual fund platform, but they do oversee "Vanguard Marketing Corporation" which is who wrote me the letter in response to the SEC complaint, so sounds like FINRA could be well on-target after all (and they say they send it to the correct regulator anyway if their don't oversee the particular FI in question).

Letter to CEO sent about 10 days ago has yet to receive a response.

The question now is will anyone really read the content of these letters or just respond without reading?
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Oicuryy
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Re: New fee for Vanguard mutual accounts

Post by Oicuryy »

From the prospectus for a Vanguard fund (emphasis added).
Right to Change Policies
In addition to the rights expressly stated elsewhere in this prospectus, Vanguard reserves the right, without notice, to (1) alter, add, or discontinue any conditions of purchase (including eligibility requirements), redemption, exchange, conversion, service, or privilege at any time and (2) alter, impose, discontinue, or waive any purchase fee, redemption fee, account service fee, or other fee charged to a shareholder or a group of shareholders. Changes may affect any or all investors. These actions will be taken when, at the sole discretion of Vanguard management, Vanguard believes they are in the best interest of a fund.
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nps
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Re: New fee for Vanguard mutual accounts

Post by nps »

exodusNH wrote: Wed Nov 16, 2022 4:37 pm
Makefile wrote: Mon Nov 14, 2022 5:57 pm
jeffyscott wrote: Mon Nov 14, 2022 5:50 pm ^ 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.
I'm more curious why changing the terms of the account service fee waiver didn't require updating the prospectus once they were changed, even if prior notice wasn't required. I even looked in EDGAR for VTSAX and there is nothing filed about it.
Because the mutual fund prospectus covers charges on the mutual fund. That applies to everyone holding the fund in a particular class.

Separately, you are holding your mutual fund in some sort of account. That account fee is not part of the fee charged by the mutual fund.
The account fee is listed in the mutual fund prospectus. Have you read it?
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Re: New fee for Vanguard mutual accounts

Post by sajohnson »

Oicuryy wrote: Wed Nov 16, 2022 5:44 pm From the prospectus for a Vanguard fund (emphasis added).
Right to Change Policies
In addition to the rights expressly stated elsewhere in this prospectus, Vanguard reserves the right, without notice, to (1) alter, add, or discontinue any conditions of purchase (including eligibility requirements), redemption, exchange, conversion, service, or privilege at any time and (2) alter, impose, discontinue, or waive any purchase fee, redemption fee, account service fee, or other fee charged to a shareholder or a group of shareholders. Changes may affect any or all investors. These actions will be taken when, at the sole discretion of Vanguard management, Vanguard believes they are in the best interest of a fund.
Ron
That's certainly a handy card to hold.
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Re: New fee for Vanguard mutual accounts

Post by sajohnson »

In transitioning our accounts (Roth and money market) to the brokerage platform, my wife and I noticed that her Roth had been transitioned over 4 years ago. This surprised us because neither of us would have had any reason to transition her Roth (and if we did hers it would have made sense to do mine at the same time).

We have exchanged several secure messages with Vanguard CSRs and determined the exact date of the transfer. There are also a couple letters -- one confirming the transfer and a 'thank you' letter.

It is *possible* that she or I initiated the transition -- if, for example, it was attached to another action with small print (I was told this was not the case though) or if it was possible to do with one inadvertent 'click'. Neither of us knowingly transitioned her Roth.

The Vanguard CSRs are insisting that Vanguard must have customer authorization to initiate a transition. That is as it should be, but they cannot provide any authorization.

The letters from Vanguard do not indicate WHO initiated the transfer, only that it happened. If those letters were enough to confirm that we initiated the transition, then (say) a local car dealer could send a letter to someone who had previously been a customer, thanking them for purchasing a new luxury SUV for $75,000 and borrowing $60,000 for 5 years at 7% interest. It's a done deal!

I'm not suggesting Vanguard is doing anything shady, but it seems reasonable to expect that *IF* we did indeed initiate the transfer, they would have a copy of whatever my wife or I agreed to. They claim they do not. They say that there is nothing other than the letters and account history.
“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
exodusNH
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

nps wrote: Wed Nov 16, 2022 5:45 pm
exodusNH wrote: Wed Nov 16, 2022 4:37 pm
Makefile wrote: Mon Nov 14, 2022 5:57 pm
jeffyscott wrote: Mon Nov 14, 2022 5:50 pm ^ 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.
I'm more curious why changing the terms of the account service fee waiver didn't require updating the prospectus once they were changed, even if prior notice wasn't required. I even looked in EDGAR for VTSAX and there is nothing filed about it.
Because the mutual fund prospectus covers charges on the mutual fund. That applies to everyone holding the fund in a particular class.

Separately, you are holding your mutual fund in some sort of account. That account fee is not part of the fee charged by the mutual fund.
The account fee is listed in the mutual fund prospectus. Have you read it?
But it doesn't mean a separate fee couldn't be charged by wherever you hold the fund. E.g., there's nothing in the prospectus about Schwab charging a $75 purchase fee. Or a fee for simply having a Schwab account. Or for allowing online access.
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nps
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Re: New fee for Vanguard mutual accounts

Post by nps »

exodusNH wrote: Wed Nov 16, 2022 7:09 pm
nps wrote: Wed Nov 16, 2022 5:45 pm
exodusNH wrote: Wed Nov 16, 2022 4:37 pm
Makefile wrote: Mon Nov 14, 2022 5:57 pm I'm more curious why changing the terms of the account service fee waiver didn't require updating the prospectus once they were changed, even if prior notice wasn't required. I even looked in EDGAR for VTSAX and there is nothing filed about it.
Because the mutual fund prospectus covers charges on the mutual fund. That applies to everyone holding the fund in a particular class.

Separately, you are holding your mutual fund in some sort of account. That account fee is not part of the fee charged by the mutual fund.
The account fee is listed in the mutual fund prospectus. Have you read it?
But it doesn't mean a separate fee couldn't be charged by wherever you hold the fund. E.g., there's nothing in the prospectus about Schwab charging a $75 purchase fee. Or a fee for simply having a Schwab account. Or for allowing online access.
I don't know how that's relevant to the issue. I'm with Makefile, the prospectus that has listed (and still lists) a $20 account service fee for balances below $10k should have been updated to reflect Vanguard's new minimum of $1M. Especially since the fee notice on the website refers clients to the prospectus.
Makefile
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Re: New fee for Vanguard mutual accounts

Post by Makefile »

exodusNH wrote: Wed Nov 16, 2022 4:37 pm
Makefile wrote: Mon Nov 14, 2022 5:57 pm
jeffyscott wrote: Mon Nov 14, 2022 5:50 pm ^ 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.
I'm more curious why changing the terms of the account service fee waiver didn't require updating the prospectus once they were changed, even if prior notice wasn't required. I even looked in EDGAR for VTSAX and there is nothing filed about it.
Because the mutual fund prospectus covers charges on the mutual fund. That applies to everyone holding the fund in a particular class.

Separately, you are holding your mutual fund in some sort of account. That account fee is not part of the fee charged by the mutual fund. If you held this fund at Schwab, there would be no $20 fee.

My company was a vendor of Capital One, because they bought a local company that we had worked with for years.

Capital One imposed a 2.5% fee to pay us the money they owed us for work we did for them.
Technically with a mutual fund only account you have a separate account with each fund and what looks like an account on the statement is just a "registration." If you have one of these accounts and pull your IRS transcript, you will see that each fund you own files its own 1099 forms separately. The prospectus already discloses the $20 fee and explains the difference between owning shares directly with the fund or with an intermediary and when it does or doesn't apply. Even if your brokerage is Vanguard Marketing Corporation, that still counts as an intermediary. So it's not that the $20 fee isn't disclosed, and it's clear they didn't have to provide advanced notice, but why not update the waiver information in the prospectus now since it's out of date.
EyeDee
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Re: New fee for Vanguard mutual accounts

Post by EyeDee »

.
Mudpuppy,

Like you and sophiainvests, my wife and I both got notices about our brokerage accounts (via regular U.S. mail), but nothing about our accounts that are still on the old mutual fund platform.
Mudpuppy wrote: Sun Nov 13, 2022 10:52 pm . . .
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.
Randy | SCA - Build Savings early by living below one's means, minimize Costs including taxes, and maintain a diverse Allocation.
sophiainvests
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

Thanks, EyeDee -

It's nice to know I may not be crazy! If both you and your wife should have received notice by mail separately, then two lost letters doesn't seem to be likely, just like I am arguing to Vanguard that the two letters they claim to have sent Oct. 13 and Oct. 15 both being lost does not seem likely. Probably they never mailed them. For the "transition", seems I should have received two separate notices as I had both taxable MF platform and Roth IRA MF platform.

I did receive three separate notices that there were changes to brokerage account terms but that they would not affect me. I figure this is the paper to paperless related fee, but the letters did not explain this, which is also unfortunate, because from what I'm hearing I would be affected. (There is some discussion earlier I think about whether the $1 M minimum for brokerage has to be Vanguard branded funds or not - I was told over the phone it does in which case I may be under the limit.) I have three brokerage accounts, so probably they just sent out one letter for each. I was told over the phone this fee will not be charged until Aug. 2023.
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jeffyscott
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

sophiainvests wrote: Wed Nov 16, 2022 5:25 pm "For over a decade, Vanguard has encouraged clients to migrate from our legacy platform to the Vanguard Brokerage Account (VBA) platform..."

I have heard this argument they make in the letter also on this board, that they have been encouraging people to do the transition for a long time. But why encourage people for a decade and then give only a few months notice (to some) of a newly instituted fee? It seems nonsensical to me if you have a decade, apportion it correctly! Encourage is not the same as notifying of a new fee! It's almost like hey you were bad, you didn't do what we "encouraged" you to do, so we're going to get you?! If you really have 10 years, why not spend 8 or 9 years encouraging and 1 or 2 years warning of a new annual fee (warn in 2022 and appraise the fee in 2023, like the brokerage is doing for its drastically increased new minimum to avoid account fees with paper statements).
Exactly. This is what pissed me off about this process. They seem to have gone out of their way to minimize the notifications. There were countless times that I logged in to see obnoxious banners touting transitioning (and PAS). It's easy to count the number of times that I logged in and saw warnings of impending fees, because the count is exactly 0. There were also zero inclusions in statements about this. We got one email (only after I had asked about this via secure message) and may or may not have gotten a mailed letter even later.

On top of all that, they say that they had identified accounts that may be subject to the fee on June 24, 2022. But they then waited another 32-49 days to (supposedly) notify the account holders. Obviously they had decided on fees some time prior to identifying the specific accounts that would not meet the waiver, so they probably could have included a general notice of the impending fees with the June mutual fund account statements, even under this short timeline.
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Re: New fee for Vanguard mutual accounts

Post by sajohnson »

jeffyscott wrote: Thu Nov 17, 2022 4:41 pm
sophiainvests wrote: Wed Nov 16, 2022 5:25 pm "For over a decade, Vanguard has encouraged clients to migrate from our legacy platform to the Vanguard Brokerage Account (VBA) platform..."

I have heard this argument they make in the letter also on this board, that they have been encouraging people to do the transition for a long time. But why encourage people for a decade and then give only a few months notice (to some) of a newly instituted fee? It seems nonsensical to me if you have a decade, apportion it correctly! Encourage is not the same as notifying of a new fee! It's almost like hey you were bad, you didn't do what we "encouraged" you to do, so we're going to get you?! If you really have 10 years, why not spend 8 or 9 years encouraging and 1 or 2 years warning of a new annual fee (warn in 2022 and appraise the fee in 2023, like the brokerage is doing for its drastically increased new minimum to avoid account fees with paper statements).
Exactly. This is what pissed me off about this process. They seem to have gone out of their way to minimize the notifications. There were countless times that I logged in to see obnoxious banners touting transitioning (and PAS). It's easy to count the number of times that I logged in and saw warnings of impending fees, because the count is exactly 0. There were also zero inclusions in statements about this. We got one email (only after I had asked about this via secure message) and may or may not have gotten a mailed letter even later.

On top of all that, they say that they had identified accounts that may be subject to the fee on June 24, 2022. But they then waited another 32-49 days to (supposedly) notify the account holders. Obviously they had decided on fees some time prior to identifying the specific accounts that would not meet the waiver, so they probably could have included a general notice of the impending fees with the June mutual fund account statements, even under this short timeline.
Jeff and Sophia -- both of you are spot-on. My thoughts exactly.

Vanguard botched this horribly. They should ditch the corporate-speak, apologize, and make at least a token effort to make amends.

In our case we received several emails casually suggesting that we might want to consider transitioning our accounts to the brokerage platform. There was NO deadline mentioned; and no threat of any fees. We were happy with the MF platform so initially I did nothing. Eventually, if only to get the emails to stop, I attempted to transition my Roth. The procedure did not work. I never tried again after that time-sucking experience.

Then, as we all know, out of the blue, Vanguard suddenly went hardcore -- the emails went from laid-back ('It's cool dude') to demanding customers transition all their accounts by a hard deadline just a few weeks away (Sept 30) or get slapped with fines of $20 per account! Needless to say, this caused them to be slammed with phone calls and messages. In my case, I still had a bad taste in my mouth from trying to transition months earlier, so I tried to contact a Vanguard CSR several times by phone (almost 1 hour wait and no call-back option) and by secure message (no reply).

Since the Sept 30 deadline was fast approaching I opened 3 accounts with Schwab. Finally, just as I was preparing to move our accounts to Schwab I got a reply to my message. We've ended up staying with Vanguard for now, but those Schwab accounts are still open and we may yet switch. One reason is that in transitioning our accounts I found that my wife's Roth was already a brokerage account. Neither of us would have knowingly transitioned it (we had absolutely no reason to). I suppose it's *possible* that we did so inadvertently, but it occurs to me that with Vanguard so incredibly fixated with getting MF accounts over to the brokerage, they might have taken it upon themselves to transition her account when some unrelated change was made (perhaps justified with small grey print). They claim that's not possible. Perhaps, but they also say they have no proof of who initiated the process, only that it was done. That is very unusual. Typically a company -- especially a financial firm like Vanguard -- would want to have something to show that the customer initiated any and all actions that require their consent.

No financial harm done either way, but if it turns out that Vanguard played some 'gotcha' game to get her Roth transitioned, then we're going to Schwab.

I say that with regret, as a 30+ year Vanguard customer and cheerleader. I've recommended Vanguard to numerous people over the years. Now I'm beginning to wish I hadn't.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

One potential lesson to take away (whether you were directly affected this time or not) would be that when an important financial service provider telegraphs their intent for an extended duration, go ahead and either get on board or migrate away before it's forced. Instead of hopping the train, you got hit by the cowcatcher. Don't convince yourself that you are somehow special and will be able to skate by unaffected. I'd think even for Flagship clients still getting an exemption for free paper statements, your time is coming.
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Re: New fee for Vanguard mutual accounts

Post by BigJohn »

Cheez-It Guy wrote: Fri Nov 18, 2022 6:43 am One potential lesson to take away (whether you were directly affected this time or not) would be that when an important financial service provider telegraphs their intent for an extended duration, go ahead and either get on board or migrate away before it's forced. Instead of hopping the train, you got hit by the cowcatcher. Don't convince yourself that you are somehow special and will be able to skate by unaffected. I'd think even for Flagship clients still getting an exemption for free paper statements, your time is coming.
I agree and would add the following regarding those that are paying to keep their mutual fund accounts. The handwriting on this has been on the wall for years and is only growing to larger/bold fonts. I believe that VG will continue to make staying on the MF platform more and more painful. They really have no choice since they need to retire the legacy system.

So my advice is, if you do not want to transfer to a VG brokerage account, save yourself some pain and frustration. Start shopping around now and move elsewhere very soon. Waiting and hoping this is a bad as it will get isn’t a good strategy. My guess is the next changes will likely make this one look good by comparison.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

BigJohn wrote: Fri Nov 18, 2022 9:23 am
Cheez-It Guy wrote: Fri Nov 18, 2022 6:43 am One potential lesson to take away (whether you were directly affected this time or not) would be that when an important financial service provider telegraphs their intent for an extended duration, go ahead and either get on board or migrate away before it's forced. Instead of hopping the train, you got hit by the cowcatcher. Don't convince yourself that you are somehow special and will be able to skate by unaffected. I'd think even for Flagship clients still getting an exemption for free paper statements, your time is coming.
I agree and would add the following regarding those that are paying to keep their mutual fund accounts. The handwriting on this has been on the wall for years and is only growing to larger/bold fonts. I believe that VG will continue to make staying on the MF platform more and more painful. They really have no choice since they need to retire the legacy system.

So my advice is, if you do not want to transfer to a VG brokerage account, save yourself some pain and frustration. Start shopping around now and move elsewhere very soon. Waiting and hoping this is a bad as it will get isn’t a good strategy. My guess is the next changes will likely make this one look good by comparison.
I can say for sure that the handwriting was clearly on the wall for me in 2013 when I rolled over my 401(k) to a Vanguard IRA. I can't speak for others.
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Re: New fee for Vanguard mutual accounts

Post by Broken Man 1999 »

Cheez-It Guy wrote: Fri Nov 18, 2022 6:43 am One potential lesson to take away (whether you were directly affected this time or not) would be that when an important financial service provider telegraphs their intent for an extended duration, go ahead and either get on board or migrate away before it's forced. Instead of hopping the train, you got hit by the cowcatcher. Don't convince yourself that you are somehow special and will be able to skate by unaffected. I'd think even for Flagship clients still getting an exemption for free paper statements, your time is coming.
Yeah, the bean counters will soon train their eyes on another cost-cutting opportunity, as they should be doing continuously. When it happens, if the fee is more than I am willing to pay, I will break out my 28 pound 3-hole punched paper and keep on trucking.

Human nature being what it is, the next change that comes down the pike will result in lengthy, heated posts, and lamentations will fill the board once again. When all is said and done, more will be said than done.

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Re: New fee for Vanguard mutual accounts

Post by Nate79 »

They should just kill it already, put it out of its misery. Set a date, say 6 months from now where all transactions will be frozen and you can only transfer your account to another brokerage or convert to brokerage.
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

I think it's quite common for companies of various types, including financial institutions, to have legacy accounts where people can do things/ have things that new customers cannot have. Some call it being grandfathered. And these can go on for quite a while. I've never been forced off of one due to newly added fees before this experience. When one does make a change it is usually because one wants a feature that the new option offers (cable company account, cell phone company account) or one had to close the old account for security reasons (bank account).
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Re: New fee for Vanguard mutual accounts

Post by sport »

sophiainvests wrote: Fri Nov 18, 2022 10:18 am I think it's quite common for companies of various types, including financial institutions, to have legacy accounts where people can do things/ have things that new customers cannot have. Some call it being grandfathered. And these can go on for quite a while. I've never been forced off of one due to newly added fees before this experience. When one does make a change it is usually because one wants a feature that the new option offers (cable company account, cell phone company account) or one had to close the old account for security reasons (bank account).
In this case, however, some features are not available in the brokerage accounts. Two that come to mind are the ability to have dividends directed to another fund and an annual statement. People would have less resistance to change if the new version had enhanced features rather than reduced features.
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Re: New fee for Vanguard mutual accounts

Post by EyeDee »

.
I believe it was mentioned somewhere on the board recently that T. Rowe Price still allows setting up either a brokerage and mutual fund only account, so I took a look at T. Rowe Price funds as I seem to recall that they had fairly reasonable fees. In general, if you want or need to have a mutual fund platform it is still cheaper to use Vanguard and pay the fees (plus you get better features than the brokerage such as a cumulative annual statement).

For example, if you have $20,000 in Vanguard's Total Stock Market Index Fund Admiral Shares and pay the $20.00 fee along with the 0.04% expense ratio you would pay $28 a year, but if you owned T. Rowe Price's Total Equity Market Index Fund you would pay $30 a year. At $100,000, Vanguard is $60 a year and T. Rowe Price is $150.

The next change may make the current Vanguard fees look good by comparison, but at the moment Vanguard still seems like the place to keep a mutual fund platform account.
BigJohn wrote: Fri Nov 18, 2022 9:23 am
Cheez-It Guy wrote: Fri Nov 18, 2022 6:43 am One potential lesson to take away (whether you were directly affected this time or not) would be that when an important financial service provider telegraphs their intent for an extended duration, go ahead and either get on board or migrate away before it's forced. Instead of hopping the train, you got hit by the cowcatcher. Don't convince yourself that you are somehow special and will be able to skate by unaffected. I'd think even for Flagship clients still getting an exemption for free paper statements, your time is coming.
I agree and would add the following regarding those that are paying to keep their mutual fund accounts. The handwriting on this has been on the wall for years and is only growing to larger/bold fonts. I believe that VG will continue to make staying on the MF platform more and more painful. They really have no choice since they need to retire the legacy system.

So my advice is, if you do not want to transfer to a VG brokerage account, save yourself some pain and frustration. Start shopping around now and move elsewhere very soon. Waiting and hoping this is a bad as it will get isn’t a good strategy. My guess is the next changes will likely make this one look good by comparison.
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Re: New fee for Vanguard mutual accounts

Post by Makefile »

EyeDee wrote: Fri Nov 18, 2022 1:19 pm .
I believe it was mentioned somewhere on the board recently that T. Rowe Price still allows setting up either a brokerage and mutual fund only account, so I took a look at T. Rowe Price funds as I seem to recall that they had fairly reasonable fees. In general, if you want or need to have a mutual fund platform it is still cheaper to use Vanguard and pay the fees (plus you get better features than the brokerage such as a cumulative annual statement).

For example, if you have $20,000 in Vanguard's Total Stock Market Index Fund Admiral Shares and pay the $20.00 fee along with the 0.04% expense ratio you would pay $28 a year, but if you owned T. Rowe Price's Total Equity Market Index Fund you would pay $30 a year. At $100,000, Vanguard is $60 a year and T. Rowe Price is $150.

The next change may make the current Vanguard fees look good by comparison, but at the moment Vanguard still seems like the place to keep a mutual fund platform account.
Yes, they also have a comprehensive annual statement, and some funds including their S&P 500 fund have higher share classes with lower expense ratios. The issue of course is that you can't switch funds without realizing a capital gain, but TRP might be the last best hope for those we hear from who work in the financial industry and either can't have a brokerage account or don't want to share everything about their brokerage account with their employer if a directly-registered mutual fund is exempt and avoids the whole issue.

There are reports that Fidelity will open a mutual fund account by phone, too.
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

Note that you can create a custom annual report at Vanguard that has all the transactions for each fund in your account, similar to the old annual report. It might not have everything that the old report had, but it is close enough for me, and I have used that the past couple of years for my single brokerage account.
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Re: New fee for Vanguard mutual accounts

Post by Makefile »

Nate79 wrote: Fri Nov 18, 2022 9:52 am They should just kill it already, put it out of its misery. Set a date, say 6 months from now where all transactions will be frozen and you can only transfer your account to another brokerage or convert to brokerage.
They specifically have the right to do this for IRAs. The IRA custodial agreement has a section explaining what happens if the custodian resigns. So if they wanted to do it, that would be the place to start. I'm not sure how much precedent there is for plain taxable accounts for the transfer agent to "quit"?
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Re: New fee for Vanguard mutual accounts

Post by sophiainvests »

rkhusky wrote: Fri Nov 18, 2022 2:32 pm Note that you can create a custom annual report at Vanguard that has all the transactions for each fund in your account, similar to the old annual report. It might not have everything that the old report had, but it is close enough for me, and I have used that the past couple of years for my single brokerage account.
Great info Rkhusky - I wish Vanguard could promote this capability in their efforts for everyone to go paperless! Assuming this custom report would be printable/PDF able? I'm not sure, but figure some hold-outs like me are just concerned about capabilities to print out a comprehensive record and not having to be doing that multiple times a year. I specifically asked an agent "what can I print out that will give a comprehensive picture, such as an annual statement" and mentioned I heard for brokerage there is not an annual statement. The agent did not mention what you shared, but I think mentioned quarterly statements/ transaction records and that we could ask Vanguard for help finding any statement we could not find, even ones no longer available online. Sounded tedious given recent experience trying to get help and my desire to simplify ; )
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Re: New fee for Vanguard mutual accounts

Post by ee_guy »

Nate79 wrote: Fri Nov 18, 2022 9:52 am They should just kill it already, put it out of its misery. Set a date, say 6 months from now where all transactions will be frozen and you can only transfer your account to another brokerage or convert to brokerage.
I have the minority view on the legacy system. For some reason, Vanguard is unwilling to force a conversion to brokerage system. Best guess is that the total assets of all mutual fund accounts are too large for Vanguard to loose with Vanguard continuing to support the legacy system. Those accounts may be the older BH who don't care about the bells and whistle available on cell phones etc.

Given that Vanguard cannot force a conversation, I see three options:

-1 continue the legacy system
-2 continue the legacy but keep increasing the threshold for no fees: $1 million then $5 million, then $10 million, etc..
-3 kill the legacy system and sell the clients to a competitor.

My guess is that Vanguard will continue supporting the legacy system for a long time.
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Re: New fee for Vanguard mutual accounts

Post by Nate79 »

ee_guy wrote: Fri Nov 18, 2022 3:43 pm
Nate79 wrote: Fri Nov 18, 2022 9:52 am They should just kill it already, put it out of its misery. Set a date, say 6 months from now where all transactions will be frozen and you can only transfer your account to another brokerage or convert to brokerage.
I have the minority view on the legacy system. For some reason, Vanguard is unwilling to force a conversion to brokerage system. Best guess is that the total assets of all mutual fund accounts are too large for Vanguard to loose with Vanguard continuing to support the legacy system. Those accounts may be the older BH who don't care about the bells and whistle available on cell phones etc.

Given that Vanguard cannot force a conversation, I see three options:

-1 continue the legacy system
-2 continue the legacy but keep increasing the threshold for no fees: $1 million then $5 million, then $10 million, etc..
-3 kill the legacy system and sell the clients to a competitor.

My guess is that Vanguard will continue supporting the legacy system for a long time.
They could also increase the fees.


Vanguard, if you are reading this, $20 per fund is pathetically low. If you want people to move jack it way up.
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Re: New fee for Vanguard mutual accounts

Post by sajohnson »

sophiainvests wrote: Fri Nov 18, 2022 10:18 am I think it's quite common for companies of various types, including financial institutions, to have legacy accounts where people can do things/ have things that new customers cannot have. Some call it being grandfathered. And these can go on for quite a while. I've never been forced off of one due to newly added fees before this experience. When one does make a change it is usually because one wants a feature that the new option offers (cable company account, cell phone company account) or one had to close the old account for security reasons (bank account).
Well said Sophia.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

sajohnson wrote: Fri Nov 18, 2022 3:52 pm
sophiainvests wrote: Fri Nov 18, 2022 10:18 am I think it's quite common for companies of various types, including financial institutions, to have legacy accounts where people can do things/ have things that new customers cannot have. Some call it being grandfathered. And these can go on for quite a while. I've never been forced off of one due to newly added fees before this experience. When one does make a change it is usually because one wants a feature that the new option offers (cable company account, cell phone company account) or one had to close the old account for security reasons (bank account).
Well said Sophia.
I don’t have very many institutions but I’ve never had one run multiple systems. When my bank made a change it was a clean cut. Maybe it is common to run multiple systems and I just got lucky and had a clean cut. I’m not talking about rolling servers which is very common but not something that offers any one user a choice.
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

jebmke wrote: Fri Nov 18, 2022 4:05 pm
sajohnson wrote: Fri Nov 18, 2022 3:52 pm
sophiainvests wrote: Fri Nov 18, 2022 10:18 am I think it's quite common for companies of various types, including financial institutions, to have legacy accounts where people can do things/ have things that new customers cannot have. Some call it being grandfathered. And these can go on for quite a while. I've never been forced off of one due to newly added fees before this experience. When one does make a change it is usually because one wants a feature that the new option offers (cable company account, cell phone company account) or one had to close the old account for security reasons (bank account).
Well said Sophia.
I don’t have very many institutions but I’ve never had one run multiple systems. When my bank made a change it was a clean cut. Maybe it is common to run multiple systems and I just got lucky and had a clean cut. I’m not talking about rolling servers which is very common but not something that offers any one user a choice.
The main area where I've seen multiple systems is in operating systems and applications. Companies often support multiple versions for a number of years, but eventually stop offering support. Eventually the user loses enough capability that it takes them substantial effort to keep the system working.

In terms of web sites and so forth, everyone is forced to use the new version from day 1. When our 529 record keeper changed, you were given the date of the change and everything switched over on that date, like it or not. The same with our 401k provider - there was a complete overhaul of the web site on a given day and everyone was switched over, like it or not.
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Re: New fee for Vanguard mutual accounts

Post by clip651 »

Nate79 wrote: Fri Nov 18, 2022 3:46 pm
ee_guy wrote: Fri Nov 18, 2022 3:43 pm
Nate79 wrote: Fri Nov 18, 2022 9:52 am They should just kill it already, put it out of its misery. Set a date, say 6 months from now where all transactions will be frozen and you can only transfer your account to another brokerage or convert to brokerage.
I have the minority view on the legacy system. For some reason, Vanguard is unwilling to force a conversion to brokerage system. Best guess is that the total assets of all mutual fund accounts are too large for Vanguard to loose with Vanguard continuing to support the legacy system. Those accounts may be the older BH who don't care about the bells and whistle available on cell phones etc.

Given that Vanguard cannot force a conversation, I see three options:

-1 continue the legacy system
-2 continue the legacy but keep increasing the threshold for no fees: $1 million then $5 million, then $10 million, etc..
-3 kill the legacy system and sell the clients to a competitor.

My guess is that Vanguard will continue supporting the legacy system for a long time.
They could also increase the fees.


Vanguard, if you are reading this, $20 per fund is pathetically low. If you want people to move jack it way up.
How about before jacking up fees, they straighten out all the issues with transitioning accounts? Like making sure that agent authority previously granted transfers over with no problems? Making sure previous cost basis selections, dividend reinvestment selections, etc, transfer over properly? So that people are reasonably sure that doing the transition will not simply result in endless headaches with the "upgraded" account and endless time on hold with customer service???

Believe it or not, some of us have legitimate concerns that prevent us from transitioning. It's not a fear of brokerage accounts, or laziness, or whatever. We have accounts that work and don't want them messed up. (In my case, repeating agent authority access for an elder will not be simple, and may not be possible. And it's not going to get easier for us as elder gets even more elder. So until I stop hearing reports from people that they lost agent authority access on one account when they transitioned another, no thanks. And we already have a mix of brokerage and mutual fund accounts, so it's not a fear of the brokerage accounts, just a fear of the transition causing a big mess to try to clean up.)
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Re: New fee for Vanguard mutual accounts

Post by Nate79 »

clip651 wrote: Fri Nov 18, 2022 9:07 pm
Nate79 wrote: Fri Nov 18, 2022 3:46 pm
ee_guy wrote: Fri Nov 18, 2022 3:43 pm
Nate79 wrote: Fri Nov 18, 2022 9:52 am They should just kill it already, put it out of its misery. Set a date, say 6 months from now where all transactions will be frozen and you can only transfer your account to another brokerage or convert to brokerage.
I have the minority view on the legacy system. For some reason, Vanguard is unwilling to force a conversion to brokerage system. Best guess is that the total assets of all mutual fund accounts are too large for Vanguard to loose with Vanguard continuing to support the legacy system. Those accounts may be the older BH who don't care about the bells and whistle available on cell phones etc.

Given that Vanguard cannot force a conversation, I see three options:

-1 continue the legacy system
-2 continue the legacy but keep increasing the threshold for no fees: $1 million then $5 million, then $10 million, etc..
-3 kill the legacy system and sell the clients to a competitor.

My guess is that Vanguard will continue supporting the legacy system for a long time.
They could also increase the fees.


Vanguard, if you are reading this, $20 per fund is pathetically low. If you want people to move jack it way up.
How about before jacking up fees, they straighten out all the issues with transitioning accounts? Like making sure that agent authority previously granted transfers over with no problems? Making sure previous cost basis selections, dividend reinvestment selections, etc, transfer over properly? So that people are reasonably sure that doing the transition will not simply result in endless headaches with the "upgraded" account and endless time on hold with customer service???

Believe it or not, some of us have legitimate concerns that prevent us from transitioning. It's not a fear of brokerage accounts, or laziness, or whatever. We have accounts that work and don't want them messed up. (In my case, repeating agent authority access for an elder will not be simple, and may not be possible. And it's not going to get easier for us as elder gets even more elder. So until I stop hearing reports from people that they lost agent authority access on one account when they transitioned another, no thanks. And we already have a mix of brokerage and mutual fund accounts, so it's not a fear of the brokerage accounts, just a fear of the transition causing a big mess to try to clean up.)
Vanguard has been working on this for what, a decade? Do you really think they are going to fix these issues? At some point they might just not care.
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Re: New fee for Vanguard mutual accounts

Post by clip651 »

Nate79 wrote: Fri Nov 18, 2022 9:29 pm
clip651 wrote: Fri Nov 18, 2022 9:07 pm
Nate79 wrote: Fri Nov 18, 2022 3:46 pm
ee_guy wrote: Fri Nov 18, 2022 3:43 pm
Nate79 wrote: Fri Nov 18, 2022 9:52 am They should just kill it already, put it out of its misery. Set a date, say 6 months from now where all transactions will be frozen and you can only transfer your account to another brokerage or convert to brokerage.
I have the minority view on the legacy system. For some reason, Vanguard is unwilling to force a conversion to brokerage system. Best guess is that the total assets of all mutual fund accounts are too large for Vanguard to loose with Vanguard continuing to support the legacy system. Those accounts may be the older BH who don't care about the bells and whistle available on cell phones etc.

Given that Vanguard cannot force a conversation, I see three options:

-1 continue the legacy system
-2 continue the legacy but keep increasing the threshold for no fees: $1 million then $5 million, then $10 million, etc..
-3 kill the legacy system and sell the clients to a competitor.

My guess is that Vanguard will continue supporting the legacy system for a long time.
They could also increase the fees.


Vanguard, if you are reading this, $20 per fund is pathetically low. If you want people to move jack it way up.
How about before jacking up fees, they straighten out all the issues with transitioning accounts? Like making sure that agent authority previously granted transfers over with no problems? Making sure previous cost basis selections, dividend reinvestment selections, etc, transfer over properly? So that people are reasonably sure that doing the transition will not simply result in endless headaches with the "upgraded" account and endless time on hold with customer service???

Believe it or not, some of us have legitimate concerns that prevent us from transitioning. It's not a fear of brokerage accounts, or laziness, or whatever. We have accounts that work and don't want them messed up. (In my case, repeating agent authority access for an elder will not be simple, and may not be possible. And it's not going to get easier for us as elder gets even more elder. So until I stop hearing reports from people that they lost agent authority access on one account when they transitioned another, no thanks. And we already have a mix of brokerage and mutual fund accounts, so it's not a fear of the brokerage accounts, just a fear of the transition causing a big mess to try to clean up.)
Vanguard has been working on this for what, a decade? Do you really think they are going to fix these issues? At some point they might just not care.
Well, if they can't arrange a proper effective transition, we have no interest in transitioning. And they can't transition accounts without our permission. And I'm pretty darn sure we aren't the only clients stuck in this position. So looks like they are stuck with us, and with many others, who won't transition yet. And yes, I realize they will keep pushing and making it uncomfortable. But if they can't guarantee agent authority will transfer properly, we can't risk making a transition. They may have to wait until clients in similar positions pass away and assets are eventually transferred to beneficiaries.

If they really want people to transition - make it easy. Make it seamless. And make sure there are enough readily available, well trained and well informed customer service agent available to answer any questions ahead of time, etc, and let there be no need to straighten out SNAFUs afterwards. It's not that hard, Vanguard. You've had 10 years to get your act together if you want this done.
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

ee_guy wrote: Fri Nov 18, 2022 3:43 pm
Nate79 wrote: Fri Nov 18, 2022 9:52 am They should just kill it already, put it out of its misery. Set a date, say 6 months from now where all transactions will be frozen and you can only transfer your account to another brokerage or convert to brokerage.
I have the minority view on the legacy system. For some reason, Vanguard is unwilling to force a conversion to brokerage system. Best guess is that the total assets of all mutual fund accounts are too large for Vanguard to loose with Vanguard continuing to support the legacy system. Those accounts may be the older BH who don't care about the bells and whistle available on cell phones etc.

Given that Vanguard cannot force a conversation, I see three options:

-1 continue the legacy system
-2 continue the legacy but keep increasing the threshold for no fees: $1 million then $5 million, then $10 million, etc..
-3 kill the legacy system and sell the clients to a competitor.

My guess is that Vanguard will continue supporting the legacy system for a long time.
They can't force a conversion, because switching from mutual fund to brokerage legally changes ownership from you directly to the brokerage for your benefit. It would, legally, be theft.
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Re: New fee for Vanguard mutual accounts

Post by BigJohn »

clip651 wrote: Fri Nov 18, 2022 9:51 pm
Nate79 wrote: Fri Nov 18, 2022 9:29 pm
clip651 wrote: Fri Nov 18, 2022 9:07 pm
Nate79 wrote: Fri Nov 18, 2022 3:46 pm
ee_guy wrote: Fri Nov 18, 2022 3:43 pm

I have the minority view on the legacy system. For some reason, Vanguard is unwilling to force a conversion to brokerage system. Best guess is that the total assets of all mutual fund accounts are too large for Vanguard to loose with Vanguard continuing to support the legacy system. Those accounts may be the older BH who don't care about the bells and whistle available on cell phones etc.

Given that Vanguard cannot force a conversation, I see three options:

-1 continue the legacy system
-2 continue the legacy but keep increasing the threshold for no fees: $1 million then $5 million, then $10 million, etc..
-3 kill the legacy system and sell the clients to a competitor.

My guess is that Vanguard will continue supporting the legacy system for a long time.
They could also increase the fees.


Vanguard, if you are reading this, $20 per fund is pathetically low. If you want people to move jack it way up.
How about before jacking up fees, they straighten out all the issues with transitioning accounts? Like making sure that agent authority previously granted transfers over with no problems? Making sure previous cost basis selections, dividend reinvestment selections, etc, transfer over properly? So that people are reasonably sure that doing the transition will not simply result in endless headaches with the "upgraded" account and endless time on hold with customer service???

Believe it or not, some of us have legitimate concerns that prevent us from transitioning. It's not a fear of brokerage accounts, or laziness, or whatever. We have accounts that work and don't want them messed up. (In my case, repeating agent authority access for an elder will not be simple, and may not be possible. And it's not going to get easier for us as elder gets even more elder. So until I stop hearing reports from people that they lost agent authority access on one account when they transitioned another, no thanks. And we already have a mix of brokerage and mutual fund accounts, so it's not a fear of the brokerage accounts, just a fear of the transition causing a big mess to try to clean up.)
Vanguard has been working on this for what, a decade? Do you really think they are going to fix these issues? At some point they might just not care.
Well, if they can't arrange a proper effective transition, we have no interest in transitioning. And they can't transition accounts without our permission. And I'm pretty darn sure we aren't the only clients stuck in this position. So looks like they are stuck with us, and with many others, who won't transition yet. And yes, I realize they will keep pushing and making it uncomfortable. But if they can't guarantee agent authority will transfer properly, we can't risk making a transition. They may have to wait until clients in similar positions pass away and assets are eventually transferred to beneficiaries.

If they really want people to transition - make it easy. Make it seamless. And make sure there are enough readily available, well trained and well informed customer service agent available to answer any questions ahead of time, etc, and let there be no need to straighten out SNAFUs afterwards. It's not that hard, Vanguard. You've had 10 years to get your act together if you want this done.
First, I understand your worry about agent authorization after fighting with VG over accepting the POA for my wife with Alzheimer's to no avail. Second, I agree that VG could have done this much better, especially with more advanced notice of the deadlines and changes that were coming. With that said I'll quote one of my former bosses... "Hope is not a strategy!".

At this point the chances of VG making the transition easier/better or changing their position on accepting POA's is infinitesimally small. However, the chances of them making this more and more painful are a near certainty. It's not just a matter of if/how they value customers or the volume of business on the MF platform. In other discussions on this topic, experienced programmers have commented that the people resources required to maintain the code for this custom built legacy system no longer exist. So, I'll respectfully disagree with comments that predict this system will be around for a long time just because of inertia.

Don't count on the next steps just being higher cost either. They've already telegraphed a willingness to eliminate some on-line transaction capability so maybe more to come with only telephone/mail transactions available on the MF platform? Comments above are correct, they can't legally force the change. However, as far as I know, there are no legal requirements that they must provide the access and conveniences that we've all come to see as standard.

In your shoes I'd want to take control of my own destiny. I'd be looking to move all the accounts to a brokerage that would accept my current POAs as adequate agent authorization. And, I'd want to do this at a time of my own choosing not when VG makes another change on short notice. I think I've read on this forum that Fidelity is much easier to deal with on this POA issue but check it out. I suspect there are others as well.

Just my two cents. Best of luck no matter what path you choose :beer
"The greatest enemy of a good plan is the dream of a perfect plan" - Carl Von Clausewitz
rkhusky
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

Vanguard operates things at cost, so perhaps $20/fund currently covers their expenses. In the future, costs will go up and so will their fees ($25?, $50?). And, if they do, I imagine people will start consolidating their funds, perhaps to a single TR/LS fund in tax-advantaged and one or two stock funds in taxable.
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Cheez-It Guy
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Do you have the account login information for the relatives for whom you have POA / agent authorization? If you should need to reestablish agent authorization, I think it can be done digitally with web form acknowledgement.
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Re: New fee for Vanguard mutual accounts

Post by BigJohn »

rkhusky wrote: Sat Nov 19, 2022 7:31 am Vanguard operates things at cost, so perhaps $20/fund currently covers their expenses. In the future, costs will go up and so will their fees ($25?, $50?). And, if they do, I imagine people will start consolidating their funds, perhaps to a single TR/LS fund in tax-advantaged and one or two stock funds in taxable.
I honestly don't think it’s a matter of cost. Once you can’t buy parts anymore to fix your old car/truck, it’s time to get a new one no matter how much you might want to keep it. That’s the situation I believe VG is in on this and why I believe the level of pain will get ratcheted up over time.
"The greatest enemy of a good plan is the dream of a perfect plan" - Carl Von Clausewitz
mkc
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Re: New fee for Vanguard mutual accounts

Post by mkc »

Cheez-It Guy wrote: Sat Nov 19, 2022 7:37 am Do you have the account login information for the relatives for whom you have POA / agent authorization? If you should need to reestablish agent authorization, I think it can be done digitally with web form acknowledgement.
Only up to transact authority, not Full Authority (which lets the agent change/add financial accounts, make certain address changes, and a few other things). These may be important when dealing with an elderly relative's account.

I don't recall if anyone with Agent Access for an Incapacitated Person has transitioned that other person's account. That's a situation that requires several paper items - recent letter on physician's letterhead confirming incapacity, POA, and Vanguard's official form. It then goes for review before that access is granted. That is not possible to accomplish online.
clip651
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Re: New fee for Vanguard mutual accounts

Post by clip651 »

Cheez-It Guy wrote: Sat Nov 19, 2022 7:37 am Do you have the account login information for the relatives for whom you have POA / agent authorization? If you should need to reestablish agent authorization, I think it can be done digitally with web form acknowledgement.
The people reporting problems earlier in this thread (or a similar thread) had, for example, two able bodied competent spouses, and they still had a significant delay/hassle/lots of problems re-establishing agent authority after an account transition messed it up. Two people able to make phone calls, sign and mail paper work, weeks to months of trying to straighten it out, etc. Just having online access might be sufficient if things work well on the first try, but it is not going to be sufficient to fix a problem, per previous reports. I don't have time for that sort of nonsense, my hands on caregiving duties are way more important than fighting with customer "service" agents. Seems to me it can be painful to interact with VG on the brokerage side too! I strive to arrange my/our accounts so I don't really need to interact with them, I can do basic transactions myself online.

I currently have full agent authority (arranged properly long ago) on the elder's account at VG. It gives me all the access I need to monitor accounts and transact for them on their brokerage and mutual fund accounts. I am not going to risk messing that up at this stage of their life. For the mutual fund account all I really need to do is take a yearly RMD and keep an eye on the balance.

Funny thing is, as far as I can tell VG hasn't even charged the elder a fee yet, it should have been $40 I think (two funds in their mutual fund account). They did charge me a fee in my remaining mutual fund account ($20 for my one fund in my one non-brokerage account). So they don't even appear to have their act together on the fees.

I also have a written POA (so I have legal authority aside from the VG agent authority), but I really have no interest in going through the hassles of getting that recognized at VG or elsewhere if not necessary.

In theory I would be happy to start over somewhere else that might have their act together better than VG. But in practicality I don't have time to establish new accounts, transfer things over, get the POA recognized elsewhere, etc, etc. Perhaps after elder eventually passes away I'll try a different brokerage for myself. Until then, we'll carry on as is. And again, I suspect we are not the only clients in this sort of situation, or some variation of it. A portion of mutual fund account owners are likely to be in their 70s, 80s, or 90s - ages where inertia is increasingly strong, and the likelihood of complicated medical situations taking precedence over one's attention to small financial details is rather large. Those that have caregivers with plenty of free time to address account change hassles are probably in the minority.
clip651
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Re: New fee for Vanguard mutual accounts

Post by clip651 »

clip651 wrote: Sat Nov 19, 2022 12:44 pm
Funny thing is, as far as I can tell VG hasn't even charged the elder a fee yet, it should have been $40 I think (two funds in their mutual fund account). They did charge me a fee in my remaining mutual fund account ($20 for my one fund in my one non-brokerage account). So they don't even appear to have their act together on the fees.
I looked at our accounts online. My mutual fund account has a button next to it to transition now. Elder's account does not. I think they have something or other that prevents them from being eligible for online transitioning of the account, not sure what. They have never had the transition button as far as I can recall. So perhaps that is why no fee for them yet. I did look at transaction history to double check, and yep, I've had $20 deducted, but elder has not had a fee deducted yet.

Just an FYI to anyone reading along about what we've observed with respect to fees so far.
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