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

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Toons
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Re: New fee for Vanguard mutual accounts

Post by Toons »

Good Idea
Keep Costs
Low
:happy
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Munir
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Re: New fee for Vanguard mutual accounts

Post by Munir »

A couple of factual clarifications. Not all Vanguard customers have received the infamous email threatening penalties if a transition is not made (which may still happen). When I requested a transition by phone, I was told that I have to wait until I receive an email advising me to do that.
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SmileyFace
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

Here is my 2 cents / read on what's happening:
This isn't really about "retiring the platform" as they won't be able to do that as a number of folks that fall under compliance may simply pay the $20 or $40 or $60 annually. And then you have older folks like my Father that don't want to change anything and will just pay the $20. And then you have a lot of folks with a high enough balance to have the fee waived. So we have three categories of folks that might stick to the platform for years to come. The fee is really about trying to move folks to a place where more products and services can be sold (or moving them off Vanguard entirely with the hopes they still buy Vanguard ETFs - but another brokerage deals with admin and customer service). My guess is in a few years time they will charge a similar fee for the brokerage platform which only gets waived for PAS customers or customers with very large balances. This is the natural next step Vanguard will take to pass on costs of administring accounts.
I noticed not to long ago on Vanguard's products page they change the order of products - Mutual Funds no longer listed first. Lots of other subtle changes like this.
Sad that Vanguard is no longer what Mr Bogle created. It used to be about Small DIY mutual fund investers. Now the focus is on large balances, other non-MF investments, and trying to move folks to Advisory Services. I packed it in a little while ago (all in at Fidelity now) myself but still miss the old Vanguard.
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Re: New fee for Vanguard mutual accounts

Post by Broken Man 1999 »

exodusNH wrote: Wed Aug 10, 2022 2:45 pm
sport wrote: Wed Aug 10, 2022 2:05 pm
exodusNH wrote: Wed Aug 10, 2022 12:03 pm
Random Poster wrote: Wed Aug 10, 2022 11:52 am I haven’t received the email (and may never receive it because I have holdings well above the $1M cutoff anyway), but my mother did.

As an “owner,” I sure didn’t vote for this, and Vanguard will likely end up losing 2 customers over this insane move.

I’m getting increasingly fed up with their non-customer service (lack of tax forms, increasing fees, bad website, no true “year to date” statements, etc), and I’m even more irritated that Vanguard has the gall to charge people for the alleged privilege of using Vanguard’s platform, especially when said platform was the only one that existed when the customer (err, “owner”) opened their account at Vanguard in the first place.

Vanguard can go jump off a high ledge for all I care at this point. I’m tired of supporting them and giving their executives money that they clearly don’t deserve, but I’ve got so much in capital gains in their funds that getting out of them would cost me too much. Aren’t they lucky?
They can't maintain the systems forever. It doesn't mean you have to be happy about it.
While they don't have to maintain the old system, they also don't have to eliminate functionality that people use. I find distributions directed to another account very useful for my needs. The brokerage platform does not offer this. Changing to the brokerage platform will cause some significant inconvenience for me.
It's a cost / benefit analysis. If only 2% of customers use it, it's probably not worth the effort. It sucks for those people, for sure, but makes business sense. The vlow take rate was what killed Vanguard's CMA accounts.

Before that happened I thought I could reduce the number of players, but instead the CMA account added another player, PNC was their banking partner.

A famous Microsoft programmer and author, Raymond Chen, sum it up like this: every feature starts 100 points in the hole. You only have so much time to dedicate to building a product. The lesser used features have to go to the bottom of the list.
Indeed, it is simply a cost/benefit decision.

The low take rate was what killed Vanguard's CMA accounts.

Before that happened I thought I could reduce the number of players, but instead the CMA account added another player, PNC was their banking partner. So, I continued investing at Vanguard, and banking at my credit union. No benefit for me to insert PNC in between my investments and the entities I needed to pay for goods and services when my credit union has worked since 1973.

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Northern Flicker
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

rkhusky wrote: Wed Aug 10, 2022 6:44 am
squirrel1963 wrote: Tue Aug 09, 2022 8:24 pm I converted to brokerage many years ago. It's so much better because:

You can buy anything you want, for instance individual treasury bonds.

You can convert many (most?) mutual funds to the ETF equivalent without impact on the cost basis and usuay ER is lower.
Neither of those is of interest to many. And the brokerage accounts provide less functionality in other areas than the mutual fund accounts. So, for many, no upside...
The upside is that retiring the mutual fund platform will enable Vanguard to concentrate its software support, maintenance, and operations on one platform, freeing up resources to use for other purposes, such as say adding Yubikey support to their app. This benefit more than offsets any of the minor differences in functionality between the platforms.

In the end, I'm sure that there will
be some recalcitrant users sufficiently resistant to the change that they will have to be shoehorned off the platform. I believe the reason Vanguard cannot just implement the conversion on their own is that they cannot just create a brokerage account without authorization.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

SmileyFace wrote: Wed Aug 10, 2022 3:09 pm Here is my 2 cents / read on what's happening:
This isn't really about "retiring the platform" as they won't be able to do that as a number of folks that fall under compliance may simply pay the $20 or $40 or $60 annually. And then you have older folks like my Father that don't want to change anything and will just pay the $20. And then you have a lot of folks with a high enough balance to have the fee waived. So we have three categories of folks that might stick to the platform for years to come. The fee is really about trying to move folks to a place where more products and services can be sold (or moving them off Vanguard entirely with the hopes they still buy Vanguard ETFs - but another brokerage deals with admin and customer service). My guess is in a few years time they will charge a similar fee for the brokerage platform which only gets waived for PAS customers or customers with very large balances. This is the natural next step Vanguard will take to pass on costs of administring accounts.
I noticed not to long ago on Vanguard's products page they change the order of products - Mutual Funds no longer listed first. Lots of other subtle changes like this.
Sad that Vanguard is no longer what Mr Bogle created. It used to be about Small DIY mutual fund investers. Now the focus is on large balances, other non-MF investments, and trying to move folks to Advisory Services. I packed it in a little while ago (all in at Fidelity now) myself but still miss the old Vanguard.
Possible but I still think it is the platform. They are using nudges that include the fees but also include gradual de-featuring of the MF platform. Eventually the lack of features will become more than a nuisance and the fees might become more than trivial. But to your point, I've seen some people who tolerate some pretty high fees because of inertia. I had a taxpayer whose fees were approximately equal to the dividends on her account -- it was approx a $200K holding, I think.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
tomd37
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Re: New fee for Vanguard mutual accounts

Post by tomd37 »

We have not received any recent correspondence from Vanguard concerning our accounts. I have TIRA plus a Roth IRA (>$1M). My spouse has a small TIRA, and we jointly own a smallish taxable investment account. I am on the old system for the past 18 years. I did have an old brokerage account when I first moved some of my Dodge & Cox investments over to Vanguard and then eventually moved that money into my Vanguard TIRA. She has full agent authorization over my TIRA, and quarterly reports are addressed to her as agent with my name below.

I don't know what to expect in the future so any comments would be appreciated. Too old to grasp all this stuff easily unfortunately. :confused
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Re: New fee for Vanguard mutual accounts

Post by quietseas »

SmileyFace wrote: Wed Aug 10, 2022 3:09 pm Here is my 2 cents / read on what's happening:

Sad that Vanguard is no longer what Mr Bogle created. It used to be about Small DIY mutual fund investers. Now the focus is on large balances, other non-MF investments, and trying to move folks to Advisory Services. I packed it in a little while ago (all in at Fidelity now) myself but still miss the old Vanguard.
I'd say that Mr. Bogle's legacy of low cost investing is carrying forward, to the extreme that people who really don't want low cost are letting us know they've had enough. For some it was the end of Advantage bill pay, for others it was the end of named Flagship reps who actually responded with a good answer or took action when needed, for others it was 2-3 hour call center hold times, now for more it is a change in the IT platform.

Vanguard is owned by its funds, and it's pretty clear the fund managers who represent the funds don't really want to be in the business of providing no cost administration (brokerage) services. Fidelity is controlled by the Johnson family, and I have no idea what their business plan is other than keep the family business going to give more generations of Johnsons a career path. Schwab is publicly traded, and defaulting customers into low yielding cash balance holdings is consistent with what I'd expect their business motivations to be.
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Re: New fee for Vanguard mutual accounts

Post by Broken Man 1999 »

SmileyFace wrote: Wed Aug 10, 2022 3:09 pm Here is my 2 cents / read on what's happening:
This isn't really about "retiring the platform" as they won't be able to do that as a number of folks that fall under compliance may simply pay the $20 or $40 or $60 annually. And then you have older folks like my Father that don't want to change anything and will just pay the $20. And then you have a lot of folks with a high enough balance to have the fee waived. So we have three categories of folks that might stick to the platform for years to come. The fee is really about trying to move folks to a place where more products and services can be sold (or moving them off Vanguard entirely with the hopes they still buy Vanguard ETFs - but another brokerage deals with admin and customer service). My guess is in a few years time they will charge a similar fee for the brokerage platform which only gets waived for PAS customers or customers with very large balances. This is the natural next step Vanguard will take to pass on costs of administring accounts.
I noticed not to long ago on Vanguard's products page they change the order of products - Mutual Funds no longer listed first. Lots of other subtle changes like this.
Sad that Vanguard is no longer what Mr Bogle created. It used to be about Small DIY mutual fund investers. Now the focus is on large balances, other non-MF investments, and trying to move folks to Advisory Services. I packed it in a little while ago (all in at Fidelity now) myself but still miss the old Vanguard.
Would you really want the Vanguard that Mr Bogle left behind when he left Vanguard management in 1999? Businesses must adapt/adopt/advance or they become irrelevant. That need doesn't change reality or devalue Mr Bogle's accomplishments, or even the state of Vanguard when Mr Bogle left.

Few, if any, of my non-government services companies have been frozen in time, thank goodness.

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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

quietseas wrote: Wed Aug 10, 2022 3:27 pm
Vanguard is owned by its funds, and it's pretty clear the fund managers who represent the funds don't really want to be in the business of providing no cost administration (brokerage) services. Fidelity is controlled by the Johnson family, and I have no idea what their business plan is other than keep the family business going to give more generations of Johnsons a career path. Schwab is publicly traded, and defaulting customers into low yielding cash balance holdings is consistent with what I'd expect their business motivations to be.
I don't think this differentiation all that much matters - at least not in any positive way. "Owned by its funds" is meaningless. You still have a board and highly paid execs that get profit sharing bonuses like at any other company. Maybe lack of Johnson-Family/Wall-Street oversight is part of the problem at Vanguard. Not enough inspection/care for customers. Part of running a healthy business is assuring your customers are happy (and the 10 page Vanguard Customer Service megathread kind of tells me they aren't).
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

Broken Man 1999 wrote: Wed Aug 10, 2022 3:28 pm
SmileyFace wrote: Wed Aug 10, 2022 3:09 pm Here is my 2 cents / read on what's happening:
This isn't really about "retiring the platform" as they won't be able to do that as a number of folks that fall under compliance may simply pay the $20 or $40 or $60 annually. And then you have older folks like my Father that don't want to change anything and will just pay the $20. And then you have a lot of folks with a high enough balance to have the fee waived. So we have three categories of folks that might stick to the platform for years to come. The fee is really about trying to move folks to a place where more products and services can be sold (or moving them off Vanguard entirely with the hopes they still buy Vanguard ETFs - but another brokerage deals with admin and customer service). My guess is in a few years time they will charge a similar fee for the brokerage platform which only gets waived for PAS customers or customers with very large balances. This is the natural next step Vanguard will take to pass on costs of administring accounts.
I noticed not to long ago on Vanguard's products page they change the order of products - Mutual Funds no longer listed first. Lots of other subtle changes like this.
Sad that Vanguard is no longer what Mr Bogle created. It used to be about Small DIY mutual fund investers. Now the focus is on large balances, other non-MF investments, and trying to move folks to Advisory Services. I packed it in a little while ago (all in at Fidelity now) myself but still miss the old Vanguard.
Would you really want the Vanguard that Mr Bogle left behind when he left Vanguard management in 1999? Businesses must adapt/adopt/advance or they become irrelevant. That need doesn't change reality or devalue Mr Bogle's accomplishments, or even the state of Vanguard when Mr Bogle left.

Few, if any, of my non-government services companies have been frozen in time, thank goodness.

Broken Man 1999
I am not saying they can't evolve - but they shouldn't do so at the detriment to their original customers.
The goodness is that what Mr. Bogle started is alive and well with Index Mutual Funds and ETFs you can buy through many businesses now. It's just unfortunate that Vanguard itself continues to move in an opposing direction.
Note the last emails I got from Vanguard as a customer there were for PAS services and some new managed bond fund. Why market those to an always index fund investor? Ironically I never get such marketing from Fidelity nor Schwab.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

I asked VG years ago to take me off their mailing list except for something required by law. They had no problem doing this.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: New fee for Vanguard mutual accounts

Post by Broken Man 1999 »

SmileyFace wrote: Wed Aug 10, 2022 3:32 pm
quietseas wrote: Wed Aug 10, 2022 3:27 pm
Vanguard is owned by its funds, and it's pretty clear the fund managers who represent the funds don't really want to be in the business of providing no cost administration (brokerage) services. Fidelity is controlled by the Johnson family, and I have no idea what their business plan is other than keep the family business going to give more generations of Johnsons a career path. Schwab is publicly traded, and defaulting customers into low yielding cash balance holdings is consistent with what I'd expect their business motivations to be.
I don't think this differentiation all that much matters - at least not in any positive way. "Owned by its funds" is meaningless. You still have a board and highly paid execs that get profit sharing bonuses like at any other company. Maybe lack of Johnson-Family/Wall-Street oversight is part of the problem at Vanguard. Not enough inspection/care for customers. Part of running a healthy business is assuring your customers are happy (and the 10 page Vanguard Customer Service megathread kind of tells me they aren't).
Customer surveys of Vanguard and Vanguard's peers paint a much different picture. Anecdotal info provides no context at all.

I could tell you of a positive call I made yesterday to Vanguard, chose the "call-back" option, waited for less than 5 minutes, but there is no context, and the experience is simply anecdotal. Not at all useful, IMHO. I certainly wouldn't determine Vanguard's level of service based on my post.

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Re: New fee for Vanguard mutual accounts

Post by jebmke »

Broken Man 1999 wrote: Wed Aug 10, 2022 4:03 pm
SmileyFace wrote: Wed Aug 10, 2022 3:32 pm
quietseas wrote: Wed Aug 10, 2022 3:27 pm
Vanguard is owned by its funds, and it's pretty clear the fund managers who represent the funds don't really want to be in the business of providing no cost administration (brokerage) services. Fidelity is controlled by the Johnson family, and I have no idea what their business plan is other than keep the family business going to give more generations of Johnsons a career path. Schwab is publicly traded, and defaulting customers into low yielding cash balance holdings is consistent with what I'd expect their business motivations to be.
I don't think this differentiation all that much matters - at least not in any positive way. "Owned by its funds" is meaningless. You still have a board and highly paid execs that get profit sharing bonuses like at any other company. Maybe lack of Johnson-Family/Wall-Street oversight is part of the problem at Vanguard. Not enough inspection/care for customers. Part of running a healthy business is assuring your customers are happy (and the 10 page Vanguard Customer Service megathread kind of tells me they aren't).
Customer surveys of Vanguard and Vanguard's peers paint a much different picture. Anecdotal info provides no context at all.

I could tell you of a positive call I made yesterday to Vanguard, chose the "call-back" option, waited for less than 5 minutes, but there is no context, and the experience is simply anecdotal. Not at all useful, IMHO. I certainly wouldn't determine Vanguard's level of service based on my post.

Broken Man 1999
The mega thread is not a data set. It is a landing spot. I suspect if there were a Fidelity forum of the scale of Bogleheads there would also be a mega thread of complaints. humans are natural complainers. Unfortunately there is no data on actual issues/performance, only feedback from customers.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

jebmke wrote: Wed Aug 10, 2022 4:06 pm
The mega thread is not a data set. It is a landing spot. I suspect if there were a Fidelity forum of the scale of Bogleheads there would also be a mega thread of complaints. humans are natural complainers. Unfortunately there is no data on actual issues/performance, only feedback from customers.
There may be as many Fidelity customers on Bogleheads as Vanguard customers. Not sure though but I really don't know what you mean. Most fidelity threads here, including the very long "Fidelity as one stop" thread aren't negative in nature. So many Vanguard threads tend to be. In any case - I do know Fidelity support is 24/7 while Vanguard is only business hours. Even banks are open Saturday morning. This is one comparison of support that is easily measured. I also know Vanguard is now charging for their Mutual Fund only platform while Fidelity does not. Another measure of service.
Last edited by SmileyFace on Wed Aug 10, 2022 4:38 pm, edited 1 time in total.
sycamore
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Re: New fee for Vanguard mutual accounts

Post by sycamore »

tomd37 wrote: Wed Aug 10, 2022 3:24 pm We have not received any recent correspondence from Vanguard concerning our accounts. I have TIRA plus a Roth IRA (>$1M). My spouse has a small TIRA, and we jointly own a smallish taxable investment account. I am on the old system for the past 18 years. I did have an old brokerage account when I first moved some of my Dodge & Cox investments over to Vanguard and then eventually moved that money into my Vanguard TIRA. She has full agent authorization over my TIRA, and quarterly reports are addressed to her as agent with my name below.

I don't know what to expect in the future so any comments would be appreciated. Too old to grasp all this stuff easily unfortunately. :confused
If you look at Vanguard's Account Fees page, it says (for Mutual fund-only accounts)
We'll waive the fee if you have at least $1 million in qualifying Vanguard assets.
So that explains why you probably didn't get an email.

Maybe someday Vanguard will raise the threshold from $1 million to $2 million and then you'll get hit with the fees? Who knows what'll happen in the future. Some people were previously said the MF only platform would be actually be shut down in 2022 but it looks like Vanguard merely added a fee. Again, who knows what they'll do in the future.

I upgraded my MF accounts to a brokerage account six or so years ago. No problems, and I recommend anyone to do the same.
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Re: New fee for Vanguard mutual accounts

Post by PersonalFinanceJam »

jebmke wrote: Wed Aug 10, 2022 4:06 pm ...
The mega thread is not a data set. It is a landing spot. I suspect if there were a Fidelity forum of the scale of Bogleheads there would also be a mega thread of complaints. humans are natural complainers. Unfortunately there is no data on actual issues/performance, only feedback from customers.
1. This isn't supposed to be a Vanguard forum.
2. There are at least 2 good fidelity forums on the internet in reddit. The unofficial reddit is a little crazy with people talking about crypto and stonks. However the official one is moderated by Fidelity employees and an extension of their support system where you can ask questions and get help. It's honestly kind of nice. I have used it in the past and find it a pretty decent support channel for certain things:

Unofficial Fidelity Reddit:
https://www.reddit.com/r/Fidelity/
Official Fidelity Customer Care Reddit:
https://www.reddit.com/r/fidelityinvestments/
MadHungarian
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Re: New fee for Vanguard mutual accounts

Post by MadHungarian »

I wonder why i didn't get a fee email yet from Vanguard?
I don't have a whole ton of money in my personal Vanguard accounts (most of it is in my 401k which is non-Vanguard), so the $1 million thing doesn't apply.
I have been with them for about 30 years, but that doesn't seem to be a factor.

I'm guessing that they would want to stagger the fee emails, so that everyone doesn't try to migrate all at once and overload the system and the support folks. At least that's what i would do, if i were them.

At any rate, my migration is now in progress. I'm not anticipating any major problems, since with Vanguard i always try to keep things simple. Vanguard has a long history of trying to keep their costs down and not rewarding folks who drive up their costs.

But i do have Full Authorization on my elderly parent's Vanguard account, and i'm wondering whether that authorization will migrate over to my new brokerage account. It was rather a pain to set up the first time, and i'd prefer not to have to go through that whole process all over again.
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Re: New fee for Vanguard mutual accounts

Post by Nate79 »

I'm surprised the fee is so low. Perhaps it's just low to give a more gentle nudge before they break out the big guns.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Munir wrote: Wed Aug 10, 2022 3:03 pm A couple of factual clarifications. Not all Vanguard customers have received the infamous email threatening penalties if a transition is not made (which may still happen). When I requested a transition by phone, I was told that I have to wait until I receive an email advising me to do that.
Interesting. I think someone posted several pages back that they'd been informed by Vanguard that the emails were being dispatched on a rolling basis with 8/12 being the last stated date (going from memory).
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Re: New fee for Vanguard mutual accounts

Post by squirrel1963 »

rkhusky wrote: Wed Aug 10, 2022 6:44 am
squirrel1963 wrote: Tue Aug 09, 2022 8:24 pm I converted to brokerage many years ago. It's so much better because:

You can buy anything you want, for instance individual treasury bonds.

You can convert many (most?) mutual funds to the ETF equivalent without impact on the cost basis and usuay ER is lower.
Neither of those is of interest to many. And the brokerage accounts provide less functionality in other areas than the mutual fund accounts. So, for many, no upside, with minor annoying downsides (no annual statement, no reinvestment of dividends in other funds, no auto exchange between funds, chance for errors on conversion). Others have/had more major issues involving beneficiaries, trusts, compliance.
I see, thanks. In my case the change was for the better, but as always the answer is "it depends"
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

Nate79 wrote: Wed Aug 10, 2022 5:08 pm I'm surprised the fee is so low. Perhaps it's just low to give a more gentle nudge before they break out the big guns.
Probably. I would also expect the feature set in MF to continue to decline. They will continue to defer to largest accounts as long as they can. I’m above the fee cutoff and have a couple of MF accounts but just haven’t gotten around to converting. One of these days I’ll just do it and get it done. Just have to make a mental note that I’ll get two sets of tax docs.

It would help if they had better communication on their intentions. When I pulled the plug on some legacy systems at my employer we made our intentions known well in advance.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

Northern Flicker wrote: Wed Aug 10, 2022 3:12 pm
rkhusky wrote: Wed Aug 10, 2022 6:44 am
squirrel1963 wrote: Tue Aug 09, 2022 8:24 pm I converted to brokerage many years ago. It's so much better because:

You can buy anything you want, for instance individual treasury bonds.

You can convert many (most?) mutual funds to the ETF equivalent without impact on the cost basis and usuay ER is lower.
Neither of those is of interest to many. And the brokerage accounts provide less functionality in other areas than the mutual fund accounts. So, for many, no upside...
The upside is that retiring the mutual fund platform will enable Vanguard to concentrate its software support, maintenance, and operations on one platform, freeing up resources to use for other purposes, such as say adding Yubikey support to their app. This benefit more than offsets any of the minor differences in functionality between the platforms.

In the end, I'm sure that there will
be some recalcitrant users sufficiently resistant to the change that they will have to be shoehorned off the platform. I believe the reason Vanguard cannot just implement the conversion on their own is that they cannot just create a brokerage account without authorization.
Do we really expect that Vanguard will completely retire the old platform? If not, does it take a significantly different amount of resources to maintain the platform for 1,000 vs 10,000 vs 100,000 users?
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Re: New fee for Vanguard mutual accounts

Post by retiredjg »

MadHungarian wrote: Wed Aug 10, 2022 5:07 pm But i do have Full Authorization on my elderly parent's Vanguard account, and i'm wondering whether that authorization will migrate over to my new brokerage account. It was rather a pain to set up the first time, and i'd prefer not to have to go through that whole process all over again.
I would imagine that authorization is on the parent's account, not yours. So I don't see how it could migrate with your account. Wouldn't it migrate with the parent's account (if migration is necessary)?
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Re: New fee for Vanguard mutual accounts

Post by rob »

jebmke wrote: Wed Aug 10, 2022 5:24 pm
Nate79 wrote: Wed Aug 10, 2022 5:08 pm I'm surprised the fee is so low. Perhaps it's just low to give a more gentle nudge before they break out the big guns.
Probably. I would also expect the feature set in MF to continue to decline. They will continue to defer to largest accounts as long as they can. I’m above the fee cutoff and have a couple of MF accounts but just haven’t gotten around to converting. One of these days I’ll just do it and get it done. Just have to make a mental note that I’ll get two sets of tax docs.

It would help if they had better communication on their intentions. When I pulled the plug on some legacy systems at my employer we made our intentions known well in advance.
What small fee? $20 PER fund PER account.... If you have one acct with total mkt index & bond idx ok I guess your golden... but with various rollover, roth, trad, utma's and taxable pairs for TLH and having odd sized buckets with duplicate funds... the fees are far higher.
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Re: New fee for Vanguard mutual accounts

Post by Cheez-It Guy »

Northern Flicker wrote: Wed Aug 10, 2022 3:12 pm I believe the reason Vanguard cannot just implement the conversion on their own is that they cannot just create a brokerage account without authorization.
Maybe they should talk to Wells Fargo?
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Re: New fee for Vanguard mutual accounts

Post by exodusNH »

Cheez-It Guy wrote: Wed Aug 10, 2022 5:45 pm
Northern Flicker wrote: Wed Aug 10, 2022 3:12 pm I believe the reason Vanguard cannot just implement the conversion on their own is that they cannot just create a brokerage account without authorization.
Maybe they should talk to Wells Fargo?
It's more than just opening the account, though. The funds get transferred from direct registration to street name with you having a contractual benefit of the funds rather than you outright owning them. If they could force you over, they would, in a sense, be stealing your property.
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Re: New fee for Vanguard mutual accounts

Post by jebmke »

rob wrote: Wed Aug 10, 2022 5:37 pm
jebmke wrote: Wed Aug 10, 2022 5:24 pm
Nate79 wrote: Wed Aug 10, 2022 5:08 pm I'm surprised the fee is so low. Perhaps it's just low to give a more gentle nudge before they break out the big guns.
Probably. I would also expect the feature set in MF to continue to decline. They will continue to defer to largest accounts as long as they can. I’m above the fee cutoff and have a couple of MF accounts but just haven’t gotten around to converting. One of these days I’ll just do it and get it done. Just have to make a mental note that I’ll get two sets of tax docs.

It would help if they had better communication on their intentions. When I pulled the plug on some legacy systems at my employer we made our intentions known well in advance.
What small fee? $20 PER fund PER account.... If you have one acct with total mkt index & bond idx ok I guess your golden... but with various rollover, roth, trad, utma's and taxable pairs for TLH and having odd sized buckets with duplicate funds... the fees are far higher.
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Re: New fee for Vanguard mutual accounts

Post by BigJohn »

retiringwhen wrote: Wed Aug 10, 2022 10:36 am
scrabbler1 wrote: Wed Aug 10, 2022 10:26 am
lakpr wrote: Mon Aug 08, 2022 1:03 pm Are there any other firms that offer a "Mutual Fund" only platform? Otherwise I think we will switch over to Schwab (they have an office within 5 miles from my home).
Fidelity has mutual fund accounts. I have had one for more than 30 years. It is very handy not having to deal with that annoying cash account when I transfer money to or from my local bank account. That includes monthly distributions which work like a paycheck with direct deposit.

But Fidelity has become increasingly lazy when it comes to allowing mutual fund account owners to use all of Fidelity's website features. Over the years, I have discovered several bugs in the website which don't allow me to do certain routine tasks because I have a mutual fund account. Fidelity won't fix their system bugs if they apply only to mutual fund account owners. I can still get the tasks done, but I have to go through a rep, either through online chat or on the phone. I have mentioned this to various Fidelity staff over the years, compiling a rather lengthy list, but they won't budge. I get the "we're sorry, but thank you for being a long-time Fidelity client. Or switch to a brokerage account."

I hope Fidelity doesn't start trying to charge me to keep this account. I do have over $1M with them, so that should be good with getting a fee waived.
This is strong evidence in support of the thesis that Mutual Fund only platforms are on their way out. Fidelity basically told you the same thing that Vanguard has been saying. If you want quality service, upgrade to our current product. Things move slow in the Fund industry but it is pretty clear to me that direct fund company investing is a dinosaur that has absolutely no future except extinction. The industry may have to wait for the last recalcitrant investor to die, but they aren't going make it comfortable.

My suggestion to anyone still on the Vanguard Mutual Fund platform is to decide which brokerage platform they want to embrace. Staying is only going to get harder and less comfortable.
I agree, very interesting to hear from an actual Fidelity customer on their MF platform. Given the above, I’d give point to VG for at least being open and transparent about what’s happening. It sounds like Fidelity is just silently administering the “death of 1000 cuts”.
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Re: New fee for Vanguard mutual accounts

Post by LadyGeek »

This thread is now in the Investing - Theory, News & General forum (Vanguard fees).
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

rkhusky wrote: Wed Aug 10, 2022 5:25 pm
Northern Flicker wrote: Wed Aug 10, 2022 3:12 pm
rkhusky wrote: Wed Aug 10, 2022 6:44 am
squirrel1963 wrote: Tue Aug 09, 2022 8:24 pm I converted to brokerage many years ago. It's so much better because:

You can buy anything you want, for instance individual treasury bonds.

You can convert many (most?) mutual funds to the ETF equivalent without impact on the cost basis and usuay ER is lower.
Neither of those is of interest to many. And the brokerage accounts provide less functionality in other areas than the mutual fund accounts. So, for many, no upside...
The upside is that retiring the mutual fund platform will enable Vanguard to concentrate its software support, maintenance, and operations on one platform, freeing up resources to use for other purposes, such as say adding Yubikey support to their app. This benefit more than offsets any of the minor differences in functionality between the platforms.

In the end, I'm sure that there will
be some recalcitrant users sufficiently resistant to the change that they will have to be shoehorned off the platform. I believe the reason Vanguard cannot just implement the conversion on their own is that they cannot just create a brokerage account without authorization.
Do we really expect that Vanguard will completely retire the old platform? If not, does it take a significantly different amount of resources to maintain the platform for 1,000 vs 10,000 vs 100,000 users?
If 1,000 users decide to stay because they use logic that the platform will never go away anyway, they would be implementing a self-fulfilling prophecy. It probably is to most users advantage to migrate on their own terms.

Legacy systems were implemented when secure coding practices were the furthest thing from developer's minds. They typically are less secure than mote current systems.

Do you want your bank account ACH credentials stored in a legacy platform?
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

Cheez-It Guy wrote: Wed Aug 10, 2022 5:13 pm
Munir wrote: Wed Aug 10, 2022 3:03 pm A couple of factual clarifications. Not all Vanguard customers have received the infamous email threatening penalties if a transition is not made (which may still happen). When I requested a transition by phone, I was told that I have to wait until I receive an email advising me to do that.
Interesting. I think someone posted several pages back that they'd been informed by Vanguard that the emails were being dispatched on a rolling basis with 8/12 being the last stated date (going from memory).
Your memory is correct:
viewtopic.php?p=6816037#p6816037

We got the email today, $80 in our case for one account with 4 funds. It'll be going to a brokerage account, but not at Vanguard.
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm
Do you want your bank account ACH credentials stored in a legacy platform?
If you don't feel Vanguard has the proper cybersecurity controls in place to protect the legacy platform you shouldn't feel safe in the new platform either. With this remark I assume you are no longer with Vanguard.
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm Do you want your bank account ACH credentials stored in a legacy platform?
Perhaps they will make the mutual fund accounts really old school and remove the web interface. Go back to the days of mailed-in deposits and hardcopy statements, with appropriate charges for the latter.
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

rkhusky wrote: Wed Aug 10, 2022 7:51 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm Do you want your bank account ACH credentials stored in a legacy platform?
Perhaps they will make the mutual fund accounts really old school and remove the web interface. Go back to the days of mailed-in deposits and hardcopy statements, with appropriate charges for the latter.
Would you prefer that to having your account on the more modern platform?
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Re: New fee for Vanguard mutual accounts

Post by Lionel Hutz »

PersonalFinanceJam wrote: Wed Aug 10, 2022 4:52 pm Unofficial Fidelity Reddit:
https://www.reddit.com/r/Fidelity/
Official Fidelity Customer Care Reddit:
https://www.reddit.com/r/fidelityinvestments/
7 seconds on the official Fidelity thread and I find "I mostly trade MicroCap (only official OTC Pink companies)".

Really, thank God for John Bogle.
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Re: New fee for Vanguard mutual accounts

Post by UpperNwGuy »

SmileyFace wrote: Wed Aug 10, 2022 7:32 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm
Do you want your bank account ACH credentials stored in a legacy platform?
If you don't feel Vanguard has the proper cybersecurity controls in place to protect the legacy platform you shouldn't feel safe in the new platform either. With this remark I assume you are no longer with Vanguard.
Why do you think that? I used to manage an organization that ran multiple processing systems and they did not all have the same level of security just because they were run by the same organization. The older systems had the security problems.
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

UpperNwGuy wrote: Wed Aug 10, 2022 8:32 pm
SmileyFace wrote: Wed Aug 10, 2022 7:32 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm
Do you want your bank account ACH credentials stored in a legacy platform?
If you don't feel Vanguard has the proper cybersecurity controls in place to protect the legacy platform you shouldn't feel safe in the new platform either. With this remark I assume you are no longer with Vanguard.
Why do you think that? I used to manage an organization that ran multiple processing systems and they did not all have the same level of security just because they were run by the same organization. The older systems had the security problems.
If someone wants to spread FUD about Vanguard not properly securing ACH data - they shouldn't trust them - period.
Do you even know if ACH data is stored in the legacy platform or a separate platform that is also accessed by the VBA platform?
I would trust Vanguard's cybersecurity - if you don't you shouldn't be with them. Sorry to hear you worked at a place that had security problems.
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Re: New fee for Vanguard mutual accounts

Post by UpperNwGuy »

SmileyFace wrote: Wed Aug 10, 2022 8:39 pm
UpperNwGuy wrote: Wed Aug 10, 2022 8:32 pm
SmileyFace wrote: Wed Aug 10, 2022 7:32 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm
Do you want your bank account ACH credentials stored in a legacy platform?
If you don't feel Vanguard has the proper cybersecurity controls in place to protect the legacy platform you shouldn't feel safe in the new platform either. With this remark I assume you are no longer with Vanguard.
Why do you think that? I used to manage an organization that ran multiple processing systems and they did not all have the same level of security just because they were run by the same organization. The older systems had the security problems.
If someone wants to spread FUD about Vanguard not properly securing ACH data - they shouldn't trust them - period.
Do you even know if ACH data is stored in the legacy platform or a separate platform that is also accessed by the VBA platform?
I would trust Vanguard's cybersecurity - if you don't you shouldn't be with them. Sorry to hear you worked at a place that had security problems.
I am not the poster who asked if you want your bank account ACH credentials stored in a legacy platform. I am simply challenging your assumption that if a legacy system has a security flaw, then the newer system must also have that flaw.

I worked for the United States Government.
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

For the record I fully trust Vanguard's cybersecurity as much as anyone else's (even though I am no longer using them). I don't believe fear of an issue should be used to decide to change systems or change brokers.
Oftentimes the newest software rollouts are the ones that are actually hacked.
Last edited by SmileyFace on Wed Aug 10, 2022 9:01 pm, edited 1 time in total.
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Re: New fee for Vanguard mutual accounts

Post by SmileyFace »

UpperNwGuy wrote: Wed Aug 10, 2022 8:43 pm
SmileyFace wrote: Wed Aug 10, 2022 8:39 pm
UpperNwGuy wrote: Wed Aug 10, 2022 8:32 pm
SmileyFace wrote: Wed Aug 10, 2022 7:32 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm
Do you want your bank account ACH credentials stored in a legacy platform?
If you don't feel Vanguard has the proper cybersecurity controls in place to protect the legacy platform you shouldn't feel safe in the new platform either. With this remark I assume you are no longer with Vanguard.
Why do you think that? I used to manage an organization that ran multiple processing systems and they did not all have the same level of security just because they were run by the same organization. The older systems had the security problems.
If someone wants to spread FUD about Vanguard not properly securing ACH data - they shouldn't trust them - period.
Do you even know if ACH data is stored in the legacy platform or a separate platform that is also accessed by the VBA platform?
I would trust Vanguard's cybersecurity - if you don't you shouldn't be with them. Sorry to hear you worked at a place that had security problems.
I am not the poster who asked if you want your bank account ACH credentials stored in a legacy platform. I am simply challenging your assumption that if a legacy system has a security flaw, then the newer system must also have that flaw.

I worked for the United States Government.
I was challenging the assumption that just because the platform is older, it shouldn't be trusted with ACH data.
Last edited by SmileyFace on Thu Aug 11, 2022 9:43 am, edited 1 time in total.
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Re: New fee for Vanguard mutual accounts

Post by rkhusky »

Northern Flicker wrote: Wed Aug 10, 2022 8:06 pm
rkhusky wrote: Wed Aug 10, 2022 7:51 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm Do you want your bank account ACH credentials stored in a legacy platform?
Perhaps they will make the mutual fund accounts really old school and remove the web interface. Go back to the days of mailed-in deposits and hardcopy statements, with appropriate charges for the latter.
Would you prefer that to having your account on the more modern platform?
It worked fine for me in the past.

And it might curb the inclination for watching the markets too closely. And the temptation to market time.
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Re: New fee for Vanguard mutual accounts

Post by Munir »

jeffyscott wrote: Wed Aug 10, 2022 7:23 pm
Cheez-It Guy wrote: Wed Aug 10, 2022 5:13 pm
Munir wrote: Wed Aug 10, 2022 3:03 pm A couple of factual clarifications. Not all Vanguard customers have received the infamous email threatening penalties if a transition is not made (which may still happen). When I requested a transition by phone, I was told that I have to wait until I receive an email advising me to do that.
Interesting. I think someone posted several pages back that they'd been informed by Vanguard that the emails were being dispatched on a rolling basis with 8/12 being the last stated date (going from memory).
Your memory is correct:
viewtopic.php?p=6816037#p6816037

We got the email today, $80 in our case for one account with 4 funds. It'll be going to a brokerage account, but not at Vanguard.
Do you interpret Vanguard's comments in the link above to mean that if I don't receive the infamous email by 8/12/22, then I will not receive it all in the near future?
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Re: New fee for Vanguard mutual accounts

Post by jeffyscott »

Munir wrote: Wed Aug 10, 2022 10:13 pm
jeffyscott wrote: Wed Aug 10, 2022 7:23 pm
Cheez-It Guy wrote: Wed Aug 10, 2022 5:13 pm
Munir wrote: Wed Aug 10, 2022 3:03 pm A couple of factual clarifications. Not all Vanguard customers have received the infamous email threatening penalties if a transition is not made (which may still happen). When I requested a transition by phone, I was told that I have to wait until I receive an email advising me to do that.
Interesting. I think someone posted several pages back that they'd been informed by Vanguard that the emails were being dispatched on a rolling basis with 8/12 being the last stated date (going from memory).
Your memory is correct:
viewtopic.php?p=6816037#p6816037

We got the email today, $80 in our case for one account with 4 funds. It'll be going to a brokerage account, but not at Vanguard.
Do you interpret Vanguard's comments in the link above to mean that if I don't receive the infamous email by 8/12/22, then I will not receive it all in the near future?
Who knows, maybe there are delays? The fact that no one posted about receiving this until August 8, when they supposedly started the notifications on July 26, makes me wonder about their claimed timing.

The message indicated that they are mailing letters, too.
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Re: New fee for Vanguard mutual accounts

Post by beyou »

SmileyFace wrote: Wed Aug 10, 2022 4:27 pm
jebmke wrote: Wed Aug 10, 2022 4:06 pm
The mega thread is not a data set. It is a landing spot. I suspect if there were a Fidelity forum of the scale of Bogleheads there would also be a mega thread of complaints. humans are natural complainers. Unfortunately there is no data on actual issues/performance, only feedback from customers.
There may be as many Fidelity customers on Bogleheads as Vanguard customers. Not sure though but I really don't know what you mean. Most fidelity threads here, including the very long "Fidelity as one stop" thread aren't negative in nature. So many Vanguard threads tend to be. In any case - I do know Fidelity support is 24/7 while Vanguard is only business hours. Even banks are open Saturday morning. This is one comparison of support that is easily measured. I also know Vanguard is now charging for their Mutual Fund only platform while Fidelity does not. Another measure of service.
You are remembering good old days that never existed. Vanguard had always found ways to keep costs overall low, but lower for larger customers. Annual flat fees have been waived for large customers for as long as I can recall. Admiral funds were created to give lower fees to larger customers, keeping higher fees to less profitable smaller customers. So adding more fees for a service they view as costly is a logical evolution of past practice.

Also note your marketing of products from Vanguard are just not valid complaints at all. PAS, really ? Pretty much EVERY broker out there sells something like PAS at higher cost, compared to Vanguard, including Fidelity. And bond active funds ? Bonds are much tougher to operate index funds compared to stocks, and as a result most bond funds yes are active, but Vanguard’s active bond funds are among the lowest cost bond funds out there. Nobody beats Vanguard at low cost bond funds.

The only valid knock is customer service, which is lacking in comparison, but this resulted from fast growth, which resulted from having the best value in fund products of all in the industry.

As far as 24x7 service, not something I highly value anyway. Many companies have their best staff on the calls during normal business hours in their own time zone, then overseas poorly trained reps off hours. I simply do not call certain companies nights and weekends so as to not waste time talking to the wrong persons. I just wish the hold times were shorter at Vanguard, and many common processes were handled better than the complaints we see documented here (I have had no problems myself for last 20 years of being a customer). I have nothing against Fidelity, but note their history was high cost funds to which they added zero funds that cannot be held outside Fidelity (so gotcha). The closest major broker branch to my home is a new Fidelity branch, but I have not set foot in there yet, and as long as Vanguard has the best lineup of funds and Fidelity charges $75 to buy some (and does not offer others at all), I see no reason to move.
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

SmileyFace wrote: Wed Aug 10, 2022 7:32 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm
Do you want your bank account ACH credentials stored in a legacy platform?
If you don't feel Vanguard has the proper cybersecurity controls in place to protect the legacy platform you shouldn't feel safe in the new platform either.
This is false. I have no reason to think the legacy platform is inherently insecure, but how code is written has a significant impact on how vulnerable a system will be if the perimeter is breached and attackers find a path to the system. A classic example is that the generation of a database query from a search string in a search box on a web page may be secure or susceptible to SQL injection attacks depending on how the code is designed and implemented.

But even if both platforms are equally secure, having only one reduces the footprint and security resources can be concentrated on the retained system.
Last edited by Northern Flicker on Thu Aug 11, 2022 12:43 am, edited 2 times in total.
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

rkhusky wrote: Wed Aug 10, 2022 9:17 pm
Northern Flicker wrote: Wed Aug 10, 2022 8:06 pm
rkhusky wrote: Wed Aug 10, 2022 7:51 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm Do you want your bank account ACH credentials stored in a legacy platform?
Perhaps they will make the mutual fund accounts really old school and remove the web interface. Go back to the days of mailed-in deposits and hardcopy statements, with appropriate charges for the latter.
Would you prefer that to having your account on the more modern platform?
It worked fine for me in the past.

And it might curb the inclination for watching the markets too closely. And the temptation to market time.
You can have Vanguard lock down your on line access and do everything by phone and with paper.
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

SmileyFace wrote: Wed Aug 10, 2022 8:39 pm
UpperNwGuy wrote: Wed Aug 10, 2022 8:32 pm
SmileyFace wrote: Wed Aug 10, 2022 7:32 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm
Do you want your bank account ACH credentials stored in a legacy platform?
If you don't feel Vanguard has the proper cybersecurity controls in place to protect the legacy platform you shouldn't feel safe in the new platform either. With this remark I assume you are no longer with Vanguard.
Why do you think that? I used to manage an organization that ran multiple processing systems and they did not all have the same level of security just because they were run by the same organization. The older systems had the security problems.
If someone wants to spread FUD about Vanguard not properly securing ACH data - they shouldn't trust them - period.
Do you even know if ACH data is stored in the legacy platform or a separate platform that is also accessed by the VBA platform?
I would trust Vanguard's cybersecurity - if you don't you shouldn't be with them. Sorry to hear you worked at a place that had security problems.
I did not claim that Vanguard stores ACH data in an insecure manner. I was just using it as an example when pointing out that older, legacy systems were often implemented with less secure techniques than more recently implemented systems. I don't even know if VG stores ACH data in the platform. And for all I know the newer brokerage platform is less secure than the legacy mutual fund platform, but I think that is unlikely.
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Re: New fee for Vanguard mutual accounts

Post by Northern Flicker »

SmileyFace wrote: Wed Aug 10, 2022 8:39 pm
UpperNwGuy wrote: Wed Aug 10, 2022 8:32 pm
SmileyFace wrote: Wed Aug 10, 2022 7:32 pm
Northern Flicker wrote: Wed Aug 10, 2022 6:36 pm
Do you want your bank account ACH credentials stored in a legacy platform?
If you don't feel Vanguard has the proper cybersecurity controls in place to protect the legacy platform you shouldn't feel safe in the new platform either. With this remark I assume you are no longer with Vanguard.
Why do you think that? I used to manage an organization that ran multiple processing systems and they did not all have the same level of security just because they were run by the same organization. The older systems had the security problems.
If someone wants to spread FUD about Vanguard not properly securing ACH data - they shouldn't trust them - period.
Do you even know if ACH data is stored in the legacy platform or a separate platform that is also accessed by the VBA platform?
No, I don't, nor did I claim otherwise. I think you should not read more into my question about ACH and post in general than the words it contains.

Legacy systems tend to be more costly to maintain, more prone to bugs, and less secure than more recent systems. Whether a particular one is any of those things can only be evaluated on a case-by-case basis.

I would assume also that the bulk of the platform is an internal-use platform.
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Re: New fee for Vanguard mutual accounts

Post by Munir »

Thank you, Northern Flicker, for being a reasonable and thoughtful voice in this conversation.
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