Another Vanguard Rant

[RetMD21]

What's terrible about it ? I remember an old friend who really regretted divorcing his wife. As he aged he opened a joint account with the ex,without even telling her. He dies, his brother finds the account and tries to get the money from EverBank...claims brother forgot to remove ex wife from account..uh no because it was opened after the divorce. Brother finally tells ex about the money and offers to split it with her. Ex calls EverBank and even though she is listed on the account EverBank says get a lawyer because someone already disputes ownership.. So yes crap happens

That's interesting. I don't understand Vanguard's reasons but from what I can tell this applies to new beneficiary designations and not to existing joint accounts.

I was surprised to see how the PA statute divides joint accounts when there are more than 2 parties. Of course, being able to Google doesn't make me a lawyer and Vanguard likely has more insight than random folks on the internet.

link

I think if I wanted a hot dog, rather than getting angry that McDonalds doesn't serve them I would just go elsewhere. That's just me.

 

[RetiredAt55.5]

if I wanted a hot dog, rather than getting angry that McDonalds doesn't serve them I would just go elsewhere. That's just me.

If only switching investment companies was as trivial and uneventful as going somewhere else for a hot dog.

Just saying.

 

[RetMD21]

If only switching investment companies was as trivial and uneventful as going somewhere else for a hot dog.

Just saying.

It's not hard to switch. Can you explain why someone would post dozens of times about not liking Vanguard's beneficiary policy for joint accounts rather than just moving on?

 

[MichaelB]

Well, I just spent a 1/2 hour on the phone with Vanguard talking about account transition. My mum has 2 accounts (trust, IRA) both need to be transitioned. I am POA (of the IRA) and trustee of the trust but was unable to do the transition online. They won’t accept the POA for the transition and want separate documentation with both our signatures. If she can’t physically sign they want additional forms with physician certifications to support.

If we do not act, Vanguard will carry out the transition unilaterally and then “restrict access”. The rep insisted it was not a freeze (my term) but won’t allow any access or transaction.

I’m surprise, and disappointed with Vanguard.

 

[MarieIG]

Well, I just spent a 1/2 hour on the phone with Vanguard talking about account transition. My mum has 2 accounts (trust, IRA) both need to be transitioned. I am POA (of the IRA) and trustee of the trust but was unable to do the transition online. They won’t accept the POA for the transition and want separate documentation with both our signatures. If she can’t physically sign they want additional forms with physician certifications to support.

If we do not act, Vanguard will carry out the transition unilaterally and then “restrict access”. The rep insisted it was not a freeze (my term) but won’t allow any access or transaction.

I’m surprise, and disappointed with Vanguard.

That sounds awful Michael. That's exactly why you have the POA in place.

(I just transferred one of my accounts from Vanguard to Schwab - although as of today two small holdings, Vanguard money market funds, remain behind/ frozen.) I will see if anything happens with them in the upcoming week.

 

[ivinsfan]

Well, I just spent a 1/2 hour on the phone with Vanguard talking about account transition. My mum has 2 accounts (trust, IRA) both need to be transitioned. I am POA (of the IRA) and trustee of the trust but was unable to do the transition online. They won’t accept the POA for the transition and want separate documentation with both our signatures. If she can’t physically sign they want additional forms with physician certifications to support.

If we do not act, Vanguard will carry out the transition unilaterally and then “restrict access”. The rep insisted it was not a freeze (my term) but won’t allow any access or transaction.

I’m surprise, and disappointed with Vanguard.

POA is one thing sadly all POAs aren't completely honest. I see this as VG protecting your Mother

 

[MichaelB]

That sounds awful Michael. That's exactly why you have the POA in place.

That’s what I sad to the agent, who was unable to provide a reasonable response or explanation.

POA is one thing sadly all POAs aren't completely honest. I see this as VG protecting your Mother

The POA has been active and on the record for a decade. Over that period I have had many phone interactions with Vanguard as POA. I am also trustee for her other Vanguard account. Nothing has changed and this measure does nothing to increase protection of her assets, which I can still freely access without restriction.

The reason for this is still unclear to me, but it is not greater protection. This is an administrative measure.

 

[RetMD21]

What does transitioning the accounts mean?

 

[MichaelB]

What does transitioning the accounts mean?

Vanguard previously segregated brokerage and mutual fund investing into separate companies, and investors had different accounts for each. They (rightfully) decided to do away with that structure and have just one customer account. That was called “transitioning”.

 

[RetMD21]

It seems inexplicable that they would recognize you as POA for other matters and object now. FWIW if they want you to sign a limited agent authorization form it is pretty straightforward if she can make some sort of signature.

 

[Route246]

Or you can sift through this and decide for yourself. Does Fidelity pay or support Investopedia?

Vanguard vs. Fidelity: Which Should You Choose?

I read that "us vs them" comparison and there was nothing there of substance for me (I'm a set-and-forget customer).

I have never had a long wait time as long as I use my cell phone which is probably registered as a Flagship Select customer or something like that. I called once from a different number and I did have a little wait time and phone screening that went on.

I just realized I have accounts with 5 brokerages, Va, Fi, Sc, Et and Me (merrill edge). Va is my primary account, Fi, Sc, Et are/were work-related and were setup for me, Me was for the promo they offered when I was offloading assets and they were handing out free money in $600 chunks.

That said, they are all mostly the same. Sc actually has the highest balance but it is all in a single stock and I have never contacted them.

I trust Va mainly because of their size and focus on low expenses. The others all came late to that party and were forced into by Va so slight undercuts don't really affect my judgement. Fi was always more expensive, perhaps because they are for profit, and have only recently caught up to their competition. I don't give them any credit for that.

 

[nwsteve]

Well, I just spent a 1/2 hour on the phone with Vanguard talking about account transition. My mum has 2 accounts (trust, IRA) both need to be transitioned. I am POA (of the IRA) and trustee of the trust but was unable to do the transition online. They won’t accept the POA for the transition and want separate documentation with both our signatures. If she can’t physically sign they want additional forms with physician certifications to support.

If we do not act, Vanguard will carry out the transition unilaterally and then “restrict access”. The rep insisted it was not a freeze (my term) but won’t allow any access or transaction.

I’m surprise, and disappointed with Vanguard.

No surprise here I had POA for my mom's accounts. V decided everyone should have TOD not POD accounts and unilaterally made changes. Only problem, half her positions were left without beneficiaries! Only discovered by accident when doing some "housekeeping"

 

[Morgan22]

Well, I just spent a 1/2 hour on the phone with Vanguard talking about account transition. My mum has 2 accounts (trust, IRA) both need to be transitioned. I am POA (of the IRA) and trustee of the trust but was unable to do the transition online. They won’t accept the POA for the transition and want separate documentation with both our signatures. If she can’t physically sign they want additional forms with physician certifications to support.

If we do not act, Vanguard will carry out the transition unilaterally and then “restrict access”. The rep insisted it was not a freeze (my term) but won’t allow any access or transaction.

I’m surprise, and disappointed with Vanguard.

I saw a post (last year?) on Bogleheads about someone moving their mother's assets to Fidelity from Vanguard because of a POA issue. I believe it was the moderator LadyGeek that posted about it. IIRC she had issues with Vanguard accepting her long standing POA, so moved all assets to Fidelity. Fidelity accepted the POA paperwork with no issues.
Maybe give Fidelity a call to see if they can accept your POA and transfer everything? (Of course if your mom is fine with re-signing paperwork it may not be an issue for you.)

I tried to find the bogleheads thread to link but can't find it now.

 

[Texas Proud]

That sounds awful Michael. That's exactly why you have the POA in place.

(I just transferred one of my accounts from Vanguard to Schwab - although as of today two small holdings, Vanguard money market funds, remain behind/ frozen.) I will see if anything happens with them in the upcoming week.

You have to sell out of the MM fund... it is a Vanguard only fund... I had this happen to me when I moved an account...

 

[MarieIG]

You have to sell out of the MM fund... it is a Vanguard only fund... I had this happen to me when I moved an account...

It won't let me sell. When I try, I get a message to call a phone number. (No, I haven't called yet. I'm going to wait to the end of the week to see if Vanguard liquidates these funds. Vanguard previously liquidated partial shares and the cash then meandered over to Schwab. )

It's odd. I was able to transfer the Vanguard MM fund to Fidelity (and set it to reinvest), but Fidelity couldn't bring over a treasury. Schwab was able to quickly transfer the treasuries.

 

[Rianne]

It seems saying one has Power of Attorney over someone else is more complicated than it looks.

Power of Attorney (POA): Meaning, Types, and How and Why to Set One Up

A power of attorney (POA) is legal authorization for a designated person to make decisions about another person's property, finances, or medical care.

www.investopedia.com

 

[Healthy Lifestyle]

I recently tried to move ~5% from my Vanguard Treasury MMF back to my Vanguard Settlement Acct.
Could not do, because a message stated that a 7 day hold period for fraud possibility.

 

[MarieIG]

My one "memorable" POA experience I had was when DF received a letter from one of his banks that it was being torn down and to come remove his items from his safety deposit box. I took the original (durable) POA and a copy down to the bank. There was no way I could have brought DF to the bank. At that point in time he needed an ambulance (not ambulette - ambulance for transport for medical appointments as he could no longer sit due to paralysis).

The POA was extremely comprehensive with authority for all finacial transactions. The bank staff advised that they could not honor it. I told them that I wanted the manager, and told the manager to fax the copy to their legal department while I waited. This was done and the legal department confirmed the validity of the POA, and I was able to empty the box.

 

[Gumby]

I recently tried to move ~5% from my Vanguard Treasury MMF back to my Vanguard Settlement Acct.
Could not do, because a message stated that a 7 day hold period for fraud possibility.

I did exactly the same transfer a little over a month ago. As I recall, the money in my settlement account was almost immediately available for trading. Maybe a day's delay. Maybe two. Certainly not seven.

 

[RetMD21]

My one "memorable" POA experience I had was when DF received a letter from one of his banks that it was being torn down and to come remove his items from his safety deposit box....... I told them that I wanted the manager, and told the manager to fax the copy to their legal department while I waited. This was done and the legal department confirmed the validity of the POA, and I was able to empty the box.

That's a good story. Before trying to use a DPOA for DM I didn't understand the potential resistance. I took the form and DM to a bank that refused to recognize it. We closed the account. Edward Jones faxed a copy to their legal department and gave me access to her account. Her credit union said that they could put it on file but suggested we sign their form. It was easy for us to do although I don't think DM understood. She just signed where I told her. Although it seemed very questionable to me they were satisfied. I thought a DPOA signed and witnessed at her attorney's office when she was fully competent would have been better. I get the impression that nobody wanted to read it.

 

[Route246]

I did exactly the same transfer a little over a month ago. As I recall, the money in my settlement account was almost immediately available for trading. Maybe a day's delay. Maybe two. Certainly not seven.

I recently tried to move ~5% from my Vanguard Treasury MMF back to my Vanguard Settlement Acct.
Could not do, because a message stated that a 7 day hold period for fraud possibility.

Fidelity and Vanguard have similar policies. From Fidelity:

What is a hold period?​

The hold period is the temporary hold Fidelity places on your funds to help reduce the risk of fraud. Hold times often vary based on the amount you are transferring. After the hold time is complete, your funds will be fully available to transfer or withdraw. Your personalized hold periods are displayed in the Transfer experience at the time you start a transfer.

 

[SecondCor521]

I think the 7-day and longer hold times at Vanguard are related to adding / changing the attached bank accounts and are aimed at preventing attempted fraud from succeeding.

Of course most of the time (?) it isn't fraud and is just normal activity.

But if it someone got access to your Vanguard account and added their own bank account and then attempted to sell your assets and transfer them out to their bank account, you'd probably be happy that Vanguard (or Fidelity or Schwab) put a 7-day or 14-day restriction on the account.

Just in the normal course of business, I've never seen any of the big three take more than a day or two for transfers in and out to happen.

 

[Texas Proud]

It won't let me sell. When I try, I get a message to call a phone number. (No, I haven't called yet. I'm going to wait to the end of the week to see if Vanguard liquidates these funds. Vanguard previously liquidated partial shares and the cash then meandered over to Schwab. )

It's odd. I was able to transfer the Vanguard MM fund to Fidelity (and set it to reinvest), but Fidelity couldn't bring over a treasury. Schwab was able to quickly transfer the treasuries.

Interesting... IIRC I was able to sell mine and the money was then moved over... it took awhile as I had not noticed the money not going... now, this is the MM where you buy it, not the sweep account... correct?

 

[MarieIG]

Interesting... IIRC I was able to sell mine and the money was then moved over... it took awhile as I had not noticed the money not going... now, this is the MM where you buy it, not the sweep account... correct?

That is correct. The sweep swept right out lol. I had / have a small amount in two separate Vanguard MMs, one being a NY (mostly) tax exempt muni fund.

Had I sold the MM funds prior to putting in the transfer request, as long as the sell order had been put in before 4:00 p.m., per past experience, the proceeds would have been in the sweep account the next morning. That probably would have been the most expeditious choice, but as I was able to transfer the Vanguard NY MM fund to Fidelity, I did not suspect that there would be a problem transferring Vanguard MM funds to Schwab.

I suspect the delay may have to do with a few cents of interest circling the drain and that the funds will eventually shuffle off to Schwab - although as cash or MMs I don't know. More speculation - I further suspect that can't sell them now as they are already slotted to take a trip over to Schwab.

 

[Gumby]

I recently tried to move ~5% from my Vanguard Treasury MMF back to my Vanguard Settlement Acct.
Could not do, because a message stated that a 7 day hold period for fraud possibility.

After mulling this over, it occurs to me to ask precisely how and why you tried to effect this transfer? In my Vanguard account, if I sell something, such as a stock or VUSXX, the proceeds are automatically put in my settlement account, which is VMFXX. So the last time I wanted to deploy cash, I just sold VUSXX and as soon as the proceeds appeared in my settlement account (one or two days IIRC), I bought the stock I wanted.