Are Vanguard’s IT Systems At The Breaking Point?

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bobcat2
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Are Vanguard’s IT Systems At The Breaking Point?

Post by bobcat2 »

from Allan Roth -
Erin Arvedlund of the Philadelphia Inquirer stated the following in the book “The Bogle Effect,” by Eric Balchunas:

Vanguard has a ton of legacy computer systems. I talked to some IT guys who had recently retired and it is keeping some of these legacy systems together with bailing wire. It doesn’t have the money that Fidelity, Schwab, and Robinhood have to upgrade. Or it may have it, but it isn’t going to spend it. And it has a lot of technical problems. On big trading days, its website goes down regularly. I’ve had a lot of reader complaints of account values being wrong. That’s really serious.

Arvedlund recently wrote about Vanguard clients taking to social media over customer service mishaps. Many complaints can be found in the Bogleheads forum on both the website and new mobile app. These are among the most loyal Vanguard clients.

Now other financial firms also have IT issues, such as the recent Barclays ETN debacle. But my clients are consistently telling me that firms like Schwab and Fidelity have far greater reliability and are far easier to navigate. Arvedlund acknowledged to me that other firms have issues but “things are far worse at Vanguard.”
Link to article - https://www.etf.com/sections/index-inv ... newsletter

BobK
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jebmke
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by jebmke »

Vanguard is not unique with respect to having legacy systems lingering. This isn't uncommon in many large enterprises.

At some point, you reach a point in systems transition where you have to "cut bait," schedule an orderly shutdown of legacy systems and live with the consequences. I have no idea where Vanguard is on that continuum, but in my career I made these cut decisions more than once and there is no way to keep everybody happy.
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retired@50
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by retired@50 »

I suspect one of the challenges Vanguard faces is getting people to migrate to the (no longer new) brokerage platform.

We still see some Bogleheads talk about the mutual fund only platform as a source of pride, sort of as an homage to being stubborn.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by jebmke »

retired@50 wrote: Wed May 18, 2022 9:57 am I suspect one of the challenges Vanguard faces is getting people to migrate to the (no longer new) brokerage platform.

We still see some Bogleheads talk about the mutual fund only platform as a source of pride, sort of as an homage to being stubborn.

Regards,
I think they need to help themselves by deploying more features and benefits to the brokerage platform. Right now, when I look at the two, I usually conclude that they are equally "OK" for my needs (tbf, my needs are simple). I can usually come up with a few good reasons to make a transition or not depending on my mood. I have converted my IRAs and my individual taxable account to brokerage and haven't had any issues. Our joint account is still MF. On any given day I may conclude it makes sense to transition but I can always find something else to do with my time other than fiddle with VG [I think a transition would require both account holders to do something, although I'm not sure.]
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Tom_T »

It is obvious on their site that they are slowly replacing it, but that's a huge job. There's a new interface, but there are a number of places where you drill into a menu and you see the old interface (like IRA distributions or something like that.) And there have definitely been testing issues; nobody should log onto their account, or use the app, and see that the balances are completely wrong (or missing.)
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Kenkat »

I am a (soon to be retired) IT architect for a company in the financial services industry and I will say that the issue of legacy technologies has pushed many companies to a critical decision point. I don’t know Vanguard specifically but these are common issues many companies are struggling with. A very interesting article though.

A few comments based on the article:
I don’t consider being off by 10,000%percent and over $13.3 million in one account a minor error, so I immediately informed Vanguard, sending them an image similar to the one above. In fact, I sent the images to three different people at Vanguard and it still took well over two weeks to correct.

I am going to guess that the actual number in the back-end (probably legacy) system was correct. So this was not a matter of someone being able to go into the system and correct the numbers in some database. Those were probably right. What is more likely to have happened was that somewhere in the interface between the mobile app and the legacy system, some logic error occurred, leading to an incorrect amount being displayed. It takes time to correct these types of errors. Resources have to be assigned, the root problem has to be identified and corrected and then tested (to be sure the change doesn’t break something else) and then deployed to the live environment - usually on some type of schedule. So two weeks is actually not bad considering all of that.
I am not the first to express such concern. Erin Arvedlund of the Philadelphia Inquirer stated the following in the book “The Bogle Effect,” by Eric Balchunas:

Vanguard has a ton of legacy computer systems. I talked to some IT guys who had recently retired and it is keeping some of these legacy systems together with bailing wire. It doesn’t have the money that Fidelity, Schwab, and Robinhood have to upgrade. Or it may have it, but it isn’t going to spend it. And it has a lot of technical problems.
At some point, Vanguard is going to have to crack open the wallet and invest in upgrading their environment. They may have underinvested to keep costs down and that may be starting to negatively impact their service and capabilities. It will become a business threat / risk if it has not already become one.

I don’t know a lot about Schwab but it is a relatively newer firm so their legacy problem may be relatively smaller. I know a little about Fidelity; their annual IT spend is very very significant; a “wow” amount.
My original hypothesis was that Vanguard’s legacy systems made it more vulnerable to cybersecurity threats. While possible, one IT expert told me that those may actually be safer, as hackers may not know the legacy programming languages they were written in
Actually the legacy systems are probably less vulnerable because they are mostly “walled off” from the outside world. A significant challenge is that these legacy systems were not built for a world of 24/7 access from your phone or web browser anywhere in the world. There are ways to open them up to the outside world, but it is messy and complicated (hence the bailing wire) and you’ve got to be really really careful about security of opening these systems up to something they were never designed for. At some point, you just can’t do all of the things you want and need to do with these legacy systems. They just can’t support it.
Though I give Vanguard a lot of credit for admitting there is a problem, it has done so for years, and I see them falling further and further behind competitors. I think systems need a higher prioritization.
These legacy modernizations are hard. Really hard. And expensive. There has been years of functionality built into these systems and they are likely tightly integrated with other systems in the environment. Pulling it all apart and replacing it is very difficult. Often the new system has to be rolled out in stages, which means it takes awhile before the new system can even do everything the old system did. These old systems are functionally ok but technically deficient, so modernization can take years, not months.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by homebuyer6426 »

My organization serves the population of a small city using IT that largely originated 20+ years ago. We even still have some COBOL. It's very common. Not necessarily a problem if you have the right layers between the old stuff and the new stuff. I've been mostly happy with Vanguard's site.
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Diluted Waters
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Diluted Waters »

Vanguard has been migrating to the AWS cloud since at least five years ago. Here is a short presentation at a trade conference on their migration:

https://m.youtube.com/watch?v=8kzOj9cStGo

There are other videos in YouTube on aspects of the migration.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by BespokeBiker »

- Yesterday (5/17/22) -- I called Vanguard because their browser-based login page was broken ( for both Firefox & Chrome) and I couldn't access my account.
- Called VANG
- Selected login / access issues to be directed to the right person ==> Expected wait time 20 min.

- Today (5/18/22) -- Vanguard web login pages still broken.
- Called VANG
- Selected account help / representative ==> Expected wait time 10 - 20 min.

Ergo: You really, really gotta want it to speak to someone @ VANG to tell them that things are broken.
Diluted Waters
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Diluted Waters »

I was just able to sign in via browser-based login page.

MacOS Monterey on 2018 Mac Mini
Firefox 100.0.1
Yubikey token

I wasn't completely delighted with the balances I saw there after today market, but it's ok. It'll recover in due course.

That said, I agree it's poor customer service to make people who wait 20-30+ minutes on the phone when they need your company's help, no matter the reason.

The problem in your case may not be in Vanguard's systems, or at least entirely. I've had miserable problems signing into other all kinds of web sites, including Vanguard's via their web interfaces, from time to time. Sometimes, clearing all of the history, caches, cookies completely in any and all browsers actually did help despite my skepticism.

-DW
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by jebmke »

BespokeBiker wrote: Wed May 18, 2022 3:16 pm - Yesterday (5/17/22) -- I called Vanguard because their browser-based login page was broken ( for both Firefox & Chrome) and I couldn't access my account.
- Called VANG
- Selected login / access issues to be directed to the right person ==> Expected wait time 20 min.

- Today (5/18/22) -- Vanguard web login pages still broken.
- Called VANG
- Selected account help / representative ==> Expected wait time 10 - 20 min.

Ergo: You really, really gotta want it to speak to someone @ VANG to tell them that things are broken.
Log in with Firefox works fine. I suspect the issue is on your end, not Vanguard’s
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by retiringwhen »

jebmke wrote: Wed May 18, 2022 3:30 pm
BespokeBiker wrote: Wed May 18, 2022 3:16 pm - Yesterday (5/17/22) -- I called Vanguard because their browser-based login page was broken ( for both Firefox & Chrome) and I couldn't access my account.
- Called VANG
- Selected login / access issues to be directed to the right person ==> Expected wait time 20 min.

- Today (5/18/22) -- Vanguard web login pages still broken.
- Called VANG
- Selected account help / representative ==> Expected wait time 10 - 20 min.

Ergo: You really, really gotta want it to speak to someone @ VANG to tell them that things are broken.
Log in with Firefox works fine. I suspect the issue is on your end, not Vanguard’s
Clear caches's, passwords and make sure you try new links like directly to https://vanguard.com not some saved link. They are in the process of updating site alot right now and that is sign that crud in your browser can cause issues. We have seen it in the past with vanguard updates. I have also seen it on many many other sites that move to new app platforms.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by jebmke »

I dumped Firefox a few months ago and switched to Brave. It is a lot snappier on my system and doesn't seem to have as many issues.

I have always used this link to go straight to the log in screen.

https://personal.vanguard.com/us/TPView
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by BespokeBiker »

"Log in with Firefox works fine. I suspect the issue is on your end**, not Vanguard’s"

I flushed browser cache (in both FFx & Chrome) and tried several VANG URLs (personal investor, general, etc) that brought me to different flavors of "LOGIN" pages.
==> Still problem with login -- until I found one that worked fine

** possibly problem with my KeePassXC passwd manager ??
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Whakamole »

Kenkat wrote: Wed May 18, 2022 10:21 am I don’t know a lot about Schwab but it is a relatively newer firm so their legacy problem may be relatively smaller. I know a little about Fidelity; their annual IT spend is very very significant; a “wow” amount.
Schwab is older than Vanguard. Not by much, 1971 vs 1975.

Vanguard has a lot of tech debt that is getting more expensive to fix as time goes on. Many have suspected that Vanguard would like customers to go elsewhere so they can save on running a website, but I'm concerned about their backend systems. If those were at the breaking point, we wouldn't know.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Big Dog »

had no problem logging into Vanguard at 12:35 PDT today to execute a trade. (mac/safari)
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Makefile »

Whakamole wrote: Wed May 18, 2022 3:43 pm Schwab is older than Vanguard. Not by much, 1971 vs 1975.

Vanguard has a lot of tech debt that is getting more expensive to fix as time goes on. Many have suspected that Vanguard would like customers to go elsewhere so they can save on running a website, but I'm concerned about their backend systems. If those were at the breaking point, we wouldn't know.
Not working in the financial industry, I'm curious how much of a fund company/brokerage's software needs can be met with standard (commercial off-the-shelf) products, versus how much gets custom-written either internally or by contractors just for that brokerage's needs.

For example, most brokerage's 1099 forms look very similar, so I suspect 1099 generation is by a COTS product.

Their websites are very different, so I suspect websites are totally custom.

So what about the parts in between, like the nuts-and-bolts part that tracks exactly who owns how many shares of what.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by rkhusky »

retiringwhen wrote: Wed May 18, 2022 3:34 pm
... make sure you try new links like directly to https://vanguard.com not some saved link.
That happened to me. https://logon.vanguard.com/logon has stopped working for me on Firefox, but https://investor.vanguard.com/my-account/log-on, which is currently what is linked from vanguard.com works with my version of Firefox.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Kenkat »

Whakamole wrote: Wed May 18, 2022 3:43 pm
Kenkat wrote: Wed May 18, 2022 10:21 am I don’t know a lot about Schwab but it is a relatively newer firm so their legacy problem may be relatively smaller. I know a little about Fidelity; their annual IT spend is very very significant; a “wow” amount.
Schwab is older than Vanguard. Not by much, 1971 vs 1975.
Didn’t realize that. My perception is that Schwab’s growth came much later than Vanguard’s, but that could also be incorrect.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by ClevrChico »

I think people like to pick on Vanguard. This is any large firm, Vanguard does fine.
Last edited by ClevrChico on Wed May 18, 2022 10:11 pm, edited 3 times in total.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by DrChronzworth »

Part of the issue with Vanguard's IT is that Vanguard's website was originally built as one singular program so that if you need to update any part of the website, the whole entire website would have to be taken down and updated. This obviously is not ideal as even small updates of defects have to be scheduled far in advance or critical enough that you take the whole website down (which generally requires a large proportion of the IT staff to come in and do checks to make sure you didn't break anything else).

Vanguard has been moving to a modular system where each page or service is its own program hosted on AWS which means in theory updates can be released whenever IT wants and with a much smaller team. However, that's been an on-going effort and I imagine they are still not done yet, which is why I'm guessing the site updates seem so piece-meal.

In addition, Vanguard in general just doesn't have enough developers (since devs are expensive) which means that teams can only devote so much time to technical debt and defect remediation. I remember my team had about 15-20 defects at any one time that hadn't been prioritized over our regularly scheduled work. Usually our rule of thumb was that unless it affected more than 100 people or was causing a monetary issue it was probably safe to ignore.

Almost everything on the website was Vanguard custom code - we didn't use off the shelf products for anything customer facing or on the back-end.

It's been a few years since I worked there but that's the general jist of what's going on behind the scenes.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by runninginvestor »

BespokeBiker wrote: Wed May 18, 2022 3:39 pm "Log in with Firefox works fine. I suspect the issue is on your end**, not Vanguard’s"

I flushed browser cache (in both FFx & Chrome) and tried several VANG URLs (personal investor, general, etc) that brought me to different flavors of "LOGIN" pages.
==> Still problem with login -- until I found one that worked fine

** possibly problem with my KeePassXC passwd manager ??
Maybe this will help in the future, but it always seems to get me out of jams when web pages don't seem to be working correctly. I just opened an incognito tab or whatever the browser you use calls it. I can usually get things to work for the time being doing that. I don't think I've had to use that on VG though, so it may or may not work for you.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by beyou »

Makefile wrote: Wed May 18, 2022 3:47 pm
Whakamole wrote: Wed May 18, 2022 3:43 pm Schwab is older than Vanguard. Not by much, 1971 vs 1975.

Vanguard has a lot of tech debt that is getting more expensive to fix as time goes on. Many have suspected that Vanguard would like customers to go elsewhere so they can save on running a website, but I'm concerned about their backend systems. If those were at the breaking point, we wouldn't know.
Not working in the financial industry, I'm curious how much of a fund company/brokerage's software needs can be met with standard (commercial off-the-shelf) products, versus how much gets custom-written either internally or by contractors just for that brokerage's needs.

For example, most brokerage's 1099 forms look very similar, so I suspect 1099 generation is by a COTS product.

Their websites are very different, so I suspect websites are totally custom.

So what about the parts in between, like the nuts-and-bolts part that tracks exactly who owns how many shares of what.
I have worked in the industry almost 40 years.
There are many systems involved, and the answer is mixed.
The front end of course is proprietary at most firms.
Backend shareholder recordkeeping is fairly generic, though note often the biggest, oldest firms run legacy proprietary. And there are many systems used by the portfolio managers of the funds. This too is a mix. Every effort is made to find OTS software, and in the end it never meets needs as-is. So customization is requested, which often takes a long time delaying moves to vendor sw. Then data migration and training at big firms take time. By the time these projects see light at the end of the tunnel, the train is coming for them (new management ready to make change for sake of change and abandon the project).
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Vulcan »

Betteridge's law of headlines: any headline that ends in a question mark can be answered by the word no.

https://en.wikipedia.org/wiki/Betteridg ... _headlines
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by 2pedals »

I'd guess the outsourcing isn't going smoothly.

https://www.forbes.com/sites/steveandri ... e3c6692672
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by HanSolo »

Personally, I wouldn't mind if Vanguard stopped spending money on making UI "improvements" to their website which don't actually make anything look better than before.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by TomatoTomahto »

Vulcan wrote: Wed May 18, 2022 10:53 pm Betteridge's law of headlines: any headline that ends in a question mark can be answered by the word no.

https://en.wikipedia.org/wiki/Betteridg ... _headlines
Thanks for that! I didn’t know it was a named Law, but I’ve noted it myself.

I have a similar answer to threads of the form “Talk Me Out Of xxxxx,” although my response is longer, something like “[expletive] No! Why Should I?”
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by HippoSir »

ClevrChico wrote: Wed May 18, 2022 7:13 pm I think people like to pick on Vanguard. This is any large firm, Vanguard does fine.
Eh, I disagree. Having used Schwab/others, Vanguard is by far the worst. It's clear they are in a bad place techwise.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by starboi »

ClevrChico wrote: Wed May 18, 2022 7:13 pm I think people like to pick on Vanguard. This is any large firm, Vanguard does fine.
I still cannot make trades on the app. I can on Fidelity and IBKR.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by H-Town »

bobcat2 wrote: Wed May 18, 2022 9:37 am from Allan Roth -
Erin Arvedlund of the Philadelphia Inquirer stated the following in the book “The Bogle Effect,” by Eric Balchunas:

Vanguard has a ton of legacy computer systems. I talked to some IT guys who had recently retired and it is keeping some of these legacy systems together with bailing wire. It doesn’t have the money that Fidelity, Schwab, and Robinhood have to upgrade. Or it may have it, but it isn’t going to spend it. And it has a lot of technical problems. On big trading days, its website goes down regularly. I’ve had a lot of reader complaints of account values being wrong. That’s really serious.

Arvedlund recently wrote about Vanguard clients taking to social media over customer service mishaps. Many complaints can be found in the Bogleheads forum on both the website and new mobile app. These are among the most loyal Vanguard clients.

Now other financial firms also have IT issues, such as the recent Barclays ETN debacle. But my clients are consistently telling me that firms like Schwab and Fidelity have far greater reliability and are far easier to navigate. Arvedlund acknowledged to me that other firms have issues but “things are far worse at Vanguard.”
Link to article - https://www.etf.com/sections/index-inv ... newsletter

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lol yeah, next.

I have account at major brokerage houses (Fidelity, ML, Schwab, and Vanguard). I prefer Vanguard over other firms and we have a sizeable assets at Vanguard.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by ClevrChico »

HippoSir wrote: Thu May 19, 2022 2:07 pm
ClevrChico wrote: Wed May 18, 2022 7:13 pm I think people like to pick on Vanguard. This is any large firm, Vanguard does fine.
Eh, I disagree. Having used Schwab/others, Vanguard is by far the worst. It's clear they are in a bad place techwise.
I've used a few non-Vanguard brokerages for employer retirement plans. They both have their quirks and frustrations. One has regular weekend maintenance and planned outages, the other requires paper forms for everything. (Problems Vanguard doesn't have.)
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by LMK5 »

HanSolo wrote: Thu May 19, 2022 4:42 am Personally, I wouldn't mind if Vanguard stopped spending money on making UI "improvements" to their website which don't actually make anything look better than before.
I thought Vanguard's website was just fine before they started fiddling with it very recently. They requested my feedback, which I shared. In a nutshell, the new web pages are harder to read (terrible mix of font sizes and faint lines), and I don't see any new functionality. One of the things they need to do, which I asked for a long time ago, was to let the investor classify asset classes in Portfolio Watch that Vanguard classifies as "other." This seems trivial to pull off but for some reason it never gets done.

The app seems almost like a toy. I can't even look into my external accounts detail on it, and Portfolio Watch is totally absent. I'm not sure what their goal is with this. I always thought that the purpose of an app is to give increased functionality over the company web site but I often find that the app has less, so what's the purpose of it?

All that said, between TD Ameritrade, Fidelity, and Vanguard, I feel that Vanguard gives individual investors the best overall package.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by backpacker61 »

LMK5 wrote: Thu May 19, 2022 5:04 pm One of the things they need to do, which I asked for a long time ago, was to let the investor classify asset classes in Portfolio Watch that Vanguard classifies as "other." This
When adding external accounts, I would like to add an external account that has type 'Health Savings Account'. That isn't one of the available categories, but has become a pretty common brokerage account type. They do have 'Education Savings Account', so I use that.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by PersonalFinanceJam »

The headline is a bit over the top like most headlines. Designed to grab attention. That said I think the actual story has merit. My spouse and I moved away from Vanguard primarily because of IT. She absolutely hated using the web site and app, and would point out all the ways she believed the Fidelity site was better. I couldn’t really argue with her because I agreed. Ultimately after doing more research I came to the belief that for an indexer it doesn’t matter as much as it used to where the assets are held. It also doesn’t matter as much whose index funds you use. My opinion is Fidelity offers better digital tools than those from Vanguard. As far as I know Vanguard doesn’t have an equivalent to Fidelity’s planning and guidance center.

I contrast this article with a recent one about fidelity continuing its hiring spree including for technology talent. Maybe it’s time for Vanguard to loosen the purse strings just a bit:
https://riabiz.com/a/2022/5/12/fidelit ... -two-years
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by HippoSir »

PersonalFinanceJam wrote: Fri May 20, 2022 6:55 am I contrast this article with a recent one about fidelity continuing its hiring spree including for technology talent. Maybe it’s time for Vanguard to loosen the purse strings just a bit:
https://riabiz.com/a/2022/5/12/fidelit ... -two-years
I think this is what it comes down to. Vanguard has severely underfunded their internal tech teams compared to Schwab/Fidelity, and it's beginning to show.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Tom_T »

PersonalFinanceJam wrote: Fri May 20, 2022 6:55 am The headline is a bit over the top like most headlines. Designed to grab attention. That said I think the actual story has merit. My spouse and I moved away from Vanguard primarily because of IT. She absolutely hated using the web site and app, and would point out all the ways she believed the Fidelity site was better. I couldn’t really argue with her because I agreed.
I've been thinking about this a bit. I've used Vanguard for many years, and I still forget where to find certain information especially when it comes to IRA-related actions. If my wife needed to get on a site in my absence (voluntary or otherwise!), would she find it easier to navigate Vanguard or Fidelity? Would my son prefer the Fidelity site/app to Vanguard? Probably.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by Diluted Waters »

2pedals wrote: Wed May 18, 2022 10:56 pm I'd guess the outsourcing isn't going smoothly.

https://www.forbes.com/sites/steveandri ... e3c6692672
I read the article and could not see anywhere suggesting the outsourcing is not going smoothly. It discussed the many significant risks of outsourcing in general but didn’t discuss Vanguard’s specific experience.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by arcticpineapplecorp. »

TomatoTomahto wrote: Thu May 19, 2022 7:14 am
Vulcan wrote: Wed May 18, 2022 10:53 pm Betteridge's law of headlines: any headline that ends in a question mark can be answered by the word no.

https://en.wikipedia.org/wiki/Betteridg ... _headlines
Thanks for that! I didn’t know it was a named Law, but I’ve noted it myself.

I have a similar answer to threads of the form “Talk Me Out Of xxxxx,” although my response is longer, something like “[expletive] No! Why Should I?”
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by tunafish »

Tom_T wrote: Wed May 18, 2022 10:11 am There's a new interface, but there are a number of places where you drill into a menu and you see the old interface (like IRA distributions or something like that.)
Thank God. I think it's a requirement when replacing stuff that the IT people have a degree in screwing up user interfaces.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by lws »

There is still a need for Cobol programmers.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by beyou »

2pedals wrote: Wed May 18, 2022 10:56 pm I'd guess the outsourcing isn't going smoothly.

https://www.forbes.com/sites/steveandri ... e3c6692672
This was for their 401k functionality, that most of us do not use. Not at all related to the common discussions about taxable accts and IRAs at Vanguard.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by 2pedals »

Diluted Waters wrote: Fri May 20, 2022 10:59 am
2pedals wrote: Wed May 18, 2022 10:56 pm I'd guess the outsourcing isn't going smoothly.

https://www.forbes.com/sites/steveandri ... e3c6692672
I read the article and could not see anywhere suggesting the outsourcing is not going smoothly. It discussed the many significant risks of outsourcing in general but didn’t discuss Vanguard’s specific experience.
Yes, you are correct, I have no information to suggest that this is what is truly happening, I guess time will tell what is really happening. Just a hunch I have based on real-life engineering experiences on how complicated things can get when outsourcing is involved. In my experience, outsourcing can cause many more problems that didn't exist beforehand. What seems like a smart idea on paper can amount to a huge failure. If significant resources are not spent on engineers, managers, and contracts they usually end up in a big confused and/or disorganized situation.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by 2pedals »

beyou wrote: Fri May 20, 2022 6:17 pm
2pedals wrote: Wed May 18, 2022 10:56 pm I'd guess the outsourcing isn't going smoothly.

https://www.forbes.com/sites/steveandri ... e3c6692672
This was for their 401k functionality, that most of us do not use. Not at all related to the common discussions about taxable accts and IRAs at Vanguard.
Okay, this sounds good to me but how do we know what is really going on? Did qualified software engineers and managers get pulled to oversee Infosys? Was there any cross-contamination between systems?
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by beyou »

2pedals wrote: Fri May 20, 2022 7:13 pm
beyou wrote: Fri May 20, 2022 6:17 pm
2pedals wrote: Wed May 18, 2022 10:56 pm I'd guess the outsourcing isn't going smoothly.

https://www.forbes.com/sites/steveandri ... e3c6692672
This was for their 401k functionality, that most of us do not use. Not at all related to the common discussions about taxable accts and IRAs at Vanguard.
Okay, this sounds good to me but how do we know what is really going on? Did qualified software engineers and managers get pulled to oversee Infosys? Was there any cross-contamination between systems?
I worked in the industry, and have spoken to peers at Vanguard, Fidelity and others many times. Usually the persons working on one major application are not working on another, very decentralized teams. And I read numerous articles that the people on the Vanguard 401k team all became Infosys employees, and likely would be replaced by persons in India over time.

This outsourcing event itself should be no concern.
That said, Vanguard is one of the least lucrative places to work in this industry. They do NOT attract the best nor brightest staff, nor run their projects in a productive manner. We get what we pay for, low ER, low cost provider. Note other fund providers such as Fidelity, are offering packages to get rid of their most experienced staff. Others are moving to low cost states, and not giving sufficient incentives to move, losing lots of key staff. All the firms in this industry have been outsourcing work to Indian IT firms, for many years. The fact is that the financial execs that run these firms do not understand technology and think the people are interchangeable parts. Most are run poorly and without regard for continuity. There really is no escaping this.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by whodidntante »

retired@50 wrote: Wed May 18, 2022 9:57 am We still see some Bogleheads talk about the mutual fund only platform as a source of pride, sort of as an homage to being stubborn.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by AQ »

bobcat2 wrote: Wed May 18, 2022 9:37 am from Allan Roth -
Erin Arvedlund of the Philadelphia Inquirer stated the following in the book “The Bogle Effect,” by Eric Balchunas:

I’ve had a lot of reader complaints of account values being wrong. That’s really serious.
Account values being wrong? Seriously? So we're not sure the account values reported by Vanguard is even right any longer???
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by rkhusky »

AQ wrote: Fri May 20, 2022 9:40 pm
bobcat2 wrote: Wed May 18, 2022 9:37 am from Allan Roth -
Erin Arvedlund of the Philadelphia Inquirer stated the following in the book “The Bogle Effect,” by Eric Balchunas:

I’ve had a lot of reader complaints of account values being wrong. That’s really serious.
Account values being wrong? Seriously? So we're not sure the account values reported by Vanguard is even right any longer???
No more than any other firms. They all have temporary glitches, which especially show up in the evening or the weekend, while the firms are updating prices or updating their web sites. I think someone reported Schwab had an issue on a Sunday recently. Everything was fixed by Monday morning.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by whodidntante »

Stop poking fun, y'all! Vanguard got the 128k RAM expander for their back-office Commodore 64 just last week.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by lostdog »

whodidntante wrote: Sat May 21, 2022 7:30 am Stop poking fun, y'all! Vanguard got the 128k RAM expander for their back-office Commodore 64 just last week.
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Re: Are Vanguard’s IT Systems At The Breaking Point?

Post by arf30 »

I have a friend who's a developer there (although leaving soon due to their back-to-office policy) and they don't sound any better or worse than any other IT org at a large corp. They're investing mostly in rebuilding their customer facing UIs (website, mobile apps) and saddled with crumbling legacy systems on the backend that are difficult to replace and don't easily scale. Pretty typical.
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