Do I really own anything if everything can require a Medallion signature which I can never get?

[Kevin M]

Vanguard's website says that you may need a medallion signature even to sell securities

https://investor.vanguard.com/account-t ... -questions

You may need a Medallion signature guarantee when:

• You're transferring or selling securities.

• You're transferring a joint account to an individual account.

• Your name on your Vanguard Brokerage Account is not exactly the same as the name that's registered with the company currently holding your

accounts.

So this presumably means that I may need one even to sell some mutual fund shares and move it into my bank account by ACH transfer.

No, it does not mean that. I don't know why they say you may need it if selling securities, but perhaps there are unusual situations in which it may be required. Doing an ACH or wire transfer of proceeds from the sale of mutual fund shares to your externally-linked bank account is not one of them.

If I am not able to get a medallion signature for whatever reason, I will never be able to touch my assets? So is it the case that in some ways I do not own my assets i.e. my ability to use it to say buy a house or something in ten years is a function of someone agreeing to provide a medallion signature guarantee for hundreds of thousands which from previous posts on this board was always hard and is becoming harder everyday?

Perhaps it would ease your concerns to just sell one share of one of your funds and have the proceeds transferred to your linked bank account. This will verify that you have the bank account properly linked to your Vanguard account, and hopefully will eliminate your concerns about being able to access your assets at Vanguard.

As you can see from the replies, many of us have done many such transfers and have never required a MSG to do them.

Kevin

[celia]

OP, If you think you don't "really own anything", who do you think owns YOUR assets?

Why do you think you "can never get" a Medallion signature?

Not asked for one yet, but I am new to investing, I have just been reading through the board, caught my eye on the medallion signature topic, dug more and seems everyone is unhappy about them, except a few people that seem to get it very easily. It seems like I may never be able to get access to the money if I am not able to convince someone to take on the massive liability of guaranteeing the signature.

And to be frank, I am not good at interpersonal interactions (please don't judge), so am convinced that I will never get one because they will think I am not worth the risk

A Medallion signature is stronger than a notary stamp which only requires you show your ID to a stranger (typically). Both confirm your identify, but the Medallion signature is also confirming you have a relationship with a bank. Banks have rules these days that they need to "know the customer" (hence they ask some questions that you might consider invasive, but are part of "knowing" the customer, such as who your employer is). You usually can't just walk into your bank with forms asking for the signature. You usually need to call ahead for an appointment and there is likely only one person in the branch that can sign on the bank's behalf. They may ask what your form is for so they can weed out people who only need a notary. You don't have to "convince someone to take on the massive liability" as it is a common service that banks provide, although not requested very often. (So is closing an account after someone dies or following up after an account has been fraudulently closed out.) These specialized services are likely only processed by one experienced employee in the branch.

Although you don't need to do it now, you should eventually open a checking account at a brick and mortar bank near where you live, so you can start building a relationship with them. Having a 5+ year history with the bank and their ability to "see" your spending and income habits will make them more comfortable in confirming that you are who you say you are. I doubt they will treat you any differently than any other customer, but as your assets and transactions change over the years, it will be good to have a brick and mortar bank on your side.

[Exchme]

We bank at Chase and they do the MSG when needed. We've had to get them several times in the last few years to roll IRAs over to Vanguard, in fact, my wife got two this week to roll her regular and Roth IRAs over. It didn't take her very long as there was little foot traffic in the bank due to COVID. While a bit of a hassle, I think I like having some human check and balance in the process. If you are really worried about finding a place to get an MSG, I suggest developing a stable relationship with a full service bank. Even if they don't pay a lot of interest (Chase pays very little), it's useful when you need a service.

[mhalley]

If you ever need an MSG, you can search for how to get one here

http://www.msglookup.com/index.html

As many banks require you to be a member for 60 days before you can get one, you might go ahead and open an account now if you are concerned about the MSG.

[michaeljc70]

You don't need a signature to sell a security held in you own account that I know of. You do it online or over the phone. Since there is no need for a signature, there is no need for a Medallion signature. I've never signed for hundreds of trades in the last 25 years at umpteen brokerages (including Vanguard) and never needed a medallion signature even when closing accounts or transferring them.

[dbr]

You don't need a signature to sell a security held in you own account that I know of. You do it online or over the phone. Since there is no need for a signature, there is no need for a Medallion signature. I've never signed for hundreds of trades in the last 25 years at umpteen brokerages (including Vanguard) and never needed a medallion signature even when closing accounts or transferring them.

That is exactly right. It comes down to the OP reading a phrase in something published by Vanguard that sounds like but can't possibly actually be a requirement. I suppose trying to ask Vanguard to explain what they mean would be futile.

[dharrythomas]

I’ve had several transactions requiring a signature guarantee. They are a major pain because the institution wants to have all the details of the transaction in front of them. It wasn’t enough that I was who I was and had the documents indicating that I had the right to make the transaction. They wanted to be able to estimate the size of the transaction. It is because for a MSG, the financial institution takes on liability if there is a problem with the signature. It hurts, but it is not the end of the world.

If I remember, I was cleaning up stuff that should have been fixed a decade before by my predecessor when the original owner died.

[theresearcher]

Background regarding Medallion signature guarantee:

SEC overview- although of limited utility if a guarantee cannot be obtained.
https://www.sec.gov/fast-answers/answer ... arhtm.html

Discussion of the program including details of non-U.S. signature guarantee providers.
https://www.colonialstock.com/Medallion ... rantee.htm

Bank of America- mentioned earlier in thread.
https://www.bankofamerica.com/life-serv ... guarantee/

Securities Transfer Association: https://stai.org/page/stamp
eSignature guarantee (mentioned earlier): https://esignatureguarantee.com/

[OnTrack]

A Medallion signature is stronger than a notary stamp which only requires you show your ID to a stranger (typically). Both confirm your identify, but the Medallion signature is also confirming you have a relationship with a bank. ... You don't have to "convince someone to take on the massive liability" as it is a common service that banks provide, although not requested very often.

Since the MSG guarantees the amount of the transaction, the individual authorizing the MSG could be taking on a large liability for the institution that he or she works for. Say the transaction is to transfer $1 million, the the institution providing the MSG is liable for that amount in case of fraud, even if they are not a party to the transaction. It is not just confirming the you have a relationship with the bank.

[celia]

A Medallion signature is stronger than a notary stamp which only requires you show your ID to a stranger (typically). Both confirm your identify, but the Medallion signature is also confirming you have a relationship with a bank. ... You don't have to "convince someone to take on the massive liability" as it is a common service that banks provide, although not requested very often.

Since the MSG guarantees the amount of the transaction, the individual authorizing the MSG could be taking on a large liability for the institution that he or she works for. Say the transaction is to transfer $1 million, the the institution providing the MSG is liable for that amount in case of fraud, even if they are not a party to the transaction. It is not just confirming the you have a relationship with the bank.

I would think that they carry liability insurance for that, just as they do for a customer falling or a fraudulent transfer of money that they can't recover for the customer.

[rossington]

OP, If you think you don't "really own anything", who do you think owns YOUR assets?

Why do you think you "can never get" a Medallion signature?

Not asked for one yet, but I am new to investing, I have just been reading through the board, caught my eye on the medallion signature topic, dug more and seems everyone is unhappy about them, except a few people that seem to get it very easily. It seems like I may never be able to get access to the money if I am not able to convince someone to take on the massive liability of guaranteeing the signature.

And to be frank, I am not good at interpersonal interactions (please don't judge), so am convinced that I will never get one because they will think I am not worth the risk

A Medallion signature is stronger than a notary stamp which only requires you show your ID to a stranger (typically). Both confirm your identify, but the Medallion signature is also confirming you have a relationship with a bank. Banks have rules these days that they need to "know the customer" (hence they ask some questions that you might consider invasive, but are part of "knowing" the customer, such as who your employer is). You usually can't just walk into your bank with forms asking for the signature. You usually need to call ahead for an appointment and there is likely only one person in the branch that can sign on the bank's behalf. They may ask what your form is for so they can weed out people who only need a notary. You don't have to "convince someone to take on the massive liability" as it is a common service that banks provide, although not requested very often. (So is closing an account after someone dies or following up after an account has been fraudulently closed out.) These specialized services are likely only processed by one experienced employee in the branch.

Although you don't need to do it now, you should eventually open a checking account at a brick and mortar bank near where you live, so you can start building a relationship with them. Having a 5+ year history with the bank and their ability to "see" your spending and income habits will make them more comfortable in confirming that you are who you say you are. I doubt they will treat you any differently than any other customer, but as your assets and transactions change over the years, it will be good to have a brick and mortar bank on your side.

I would add that Vanguard as well as other financial institutions and transfer agents have the obligation to prevent fraud and require verification of identity for many types of securities transfers and account changes.
From Investopedia:
"Securities Transfer Agents Medallion Program (STAMP) is a verification system used by many different institutions for guaranteeing individual signatures applied to physical certificates of securities requiring transfers."
"STAMP members - including commercial banks, credit unions, savings banks or broker-dealers - must have Medallion imprinting equipment and surety bond coverage to carry out the service. The Medallion imprint or stamp on a certificate indicates to a transfer agent that a signature is guaranteed by a trustworthy financial institution, which, presumably, knows its customer. A transfer agent will not accept a certificate without a signature guarantee because of the risk of loss or liability if the signature is later discovered to have been forged. Guarantors generally do not charge for the imprint service, instead offering it as a courtesy for their banking or brokerage relationship with the customer."

The bank officer is a registered member of STAMP and signs the required documentation as well as providing a stamp with their membership identification on the document.
I have never found this to be difficult and am glad this proof of identity is required to prevent fraud.

As far as the OP is concerned I believe he is not quite fully understanding what Vanguard means in their regulations and is thus overreacting somewhat.

[dcabler]

I've had to get them three times. It was always a moderate pain. My local bank, where I've been a customer since the days when my signature card was a physical card in something that looked like a floorstanding freezer-chest-sized motorized Rolodex, has done them for free, but it is only a small number of bank officers who do them, only during weekdays, and I needed to check in advance to be sure they would be in that day.

I didn't always need it to move assets from brokerage to brokerage, but Treasury Direct requires them, and I forget where else they popped up. It's always been an unpleasant last-minute surprise. It's never "made sense" that it would be needed.

I regard them as a necessary evil--a racket, if you like but unavoidable. I always tell people to make "medallion signature guarantee" a requirement when choosing a bank. If they won't put it in writing that they can give you a medallion signature guarantee at the specific branch location you will be using, don't open the account.

...I ended up using eSignature Guarantee online which was really easy and cost 149.00 for the Medallion Stamp. Not cheap, but eliminates the hassle...

Good to know. $149? Holy cow. How does that work exactly? Do they no longer care about a physical raised imprint any more?

...
You'll likely go your whole investing life and not need one. On the rare chance you do, worry about it then...

I have not been able to go my whole investing life without one. And I can't agree with "worry about it then" because most banks only do it for "established customers" and that can mean a six month wait. By the time you need one, if your bank doesn't do them it's too late to become an established customer at a better bank.

Under what circumstances is this needed for Treasury Direct? Been buying Ibond for years via TD but haven't run across the need yet..

[Michael Patrick]

How are you guys walking into banks ? All of mine are drive through only. It’s been a while since I needed a Medallion but I agree it’s a pain. I think it’s highly unlikely you ever need one to sell securities.

My credit union does lobby service by appointment. I would assume that would include medallion signatures guarantees.

We've only ever had to get a MSG once, when my wife closed an IRA account at American Funds and transferred it to Vanguard. American Funds required it. It took her longer to bike to the credit union and back than it did to get the document.

[dknightd]

So this presumably means that I may need one even to sell some mutual fund shares and move it into my bank account by ACH transfer.

Not likely. You should try it. I suspect it will be point and click once your bank account has been linked to your mutual fund account.

[tesuzuki2002]

...Banks will do them very easily if you do need one...

Have you actually had experience with a bank that you have no relationship with doing a Medallion guarantee?

well.. yes. you likely need to go to your bank. I've never gone into a bank that I wasn't a current customer with...

[Armoured]

I needed to have this done while transferring my funds from TRowe Price to Vanguard. Having an online bank made this all nearly impossible. My mortgage was held by Chase, a notary at Wells Fargo actually advised me to contact them to get the medallion signature. A local Chase bank agreed to help me with the paperwork. It took the poor man about 30 minutes to just to get the special stamp. Only a portion of my IRA was transferred. When I followed up with Vanguard they acted like it
was no big deal and told me to just request another transfer. I still have both accounts. I've never had any other problems setting up accounts.

Edited to add: the TRowe Price and Vanguard accounts. Also, people that use USAA or online banking may find getting a medallion signature onerous.

[mattsm]

I needed one for a rollover of a 401(k). I wrote CALL MY NUMBER ON FILE DUE TO CURRENT CIRCUMSTANCES in lieu of the medallion and they called to confirm my identity. It's a little bit weird but in the end, it made sense.

-M

[TheGreyingDuke]

While voice verification at Vanguard has eliminated many calls or medallion guarantee at Vanguard, the same is not true at Fidelity.

Long story short, when Vanguard gave up their Advantage account I opened a cash management at Fidelity. I now have a need to give a relative some money each month. Since I want to deposit it directly into her account, Fidelity requires the medallion guarantee, voice verification was not adequate.

I tried using the debit card with the account via Zelle, which declined its use. Setting up Zelle at CIt was a complete nightmare, CIT bank will not let you log in using a password manager, they expect me to type in a 36 character, case sensitive password each time I access it. Relative does not do PayPal (nor do I)

[gwe67]

I needed to have this done while transferring my funds from TRowe Price to Vanguard. Having an online bank made this all nearly impossible. My mortgage was held by Chase, a notary at Wells Fargo actually advised me to contact them to get the medallion signature. A local Chase bank agreed to help me with the paperwork. It took the poor man about 30 minutes to just to get the special stamp. Only a portion of my IRA was transferred. When I followed up with Vanguard they acted like it
was no big deal and told me to just request another transfer. I still have both accounts. I've never had any other problems setting up accounts.

Edited to add: the TRowe Price and Vanguard accounts. Also, people that use USAA or online banking may find getting a medallion signature onerous.

The only way to get USAA medallion signature is to appear in person at their San Antonio office, which is "closed until further notice".

[Armoured]

I needed to have this done while transferring my funds from TRowe Price to Vanguard. Having an online bank made this all nearly impossible. My mortgage was held by Chase, a notary at Wells Fargo actually advised me to contact them to get the medallion signature. A local Chase bank agreed to help me with the paperwork. It took the poor man about 30 minutes to just to get the special stamp. Only a portion of my IRA was transferred. When I followed up with Vanguard they acted like it
was no big deal and told me to just request another transfer. I still have both accounts. I've never had any other problems setting up accounts.

Edited to add: the TRowe Price and Vanguard accounts. Also, people that use USAA or online banking may find getting a medallion signature onerous.

The only way to get USAA medallion signature is to appear in person at their San Antonio office, which is "closed until further notice".

After going through this mess I opened a small Wells Fargo account. I also took my son to open his primary account with them as they have loads of locations both in the East and West of the United States. Lesson learned.

[michaeljc70]

In the last 2 weeks I transferred 3 brokerage accounts to two different brokers. Not only did I not need a medallion signature, there was no signature at all required other than agreeing to something on the screen. These accounts were 7 figures in total. Perhaps choose a brokerage whose language is more clear on when you would need a medallion signature.

[ruralavalon]

I had no idea a Medallion guarantee could be such trouble for some people or circumstances. It was always a complete no hassle under 5 minute transaction for me.