Vanguard Goes Outside for new Leadership

Investment Analysis Clubs Macro Economic Trends and Risks
1

New guy says he wants to focus on charging Vanguard shareholders for financial advice.

https://www.wsj.com/business/c-suite/vanguard-preparing-to-tap-former-blackrock-executive-as-ceo-77508e2b?page=1

{{ At Vanguard, Ramji will take over a colossus in its own right, second only to his former employer. It has excelled at collecting new assets but experienced growing pains along the way, including technology issues and customer-service complaints on its brokerage platform.

The firm is attempting to expand beyond its core business of managing ultracheap funds tracking stock and bond indexes by pushing into the more lucrative business of charging customers for financial advice. }}

Maybe Vanguard can start a hedge fund? – That’s where the real “skim” is.

intercst

3 Likes
2

Dishonesty considering what their track record will be well in advance of the subpar BULL they will serve the public.

3

Fees for “wealth management” services are nothing new. Many firms find it profitable. And it gives you someone to talk to about reaching your financial goals.

1 Like
4

Correct, but Vanguard built it’s empire catering to people who wanted to avoid financial advisor fees. I suspect the new business model is going to be that they’ll only answer the phone for their “wealth manager” clients, and everyone else will wait for a bot.

Vanguard customer service has already degraded considerably from Jack Bogle’s rule that, “The phones get answered by the 3rd ring”.

intercst

3 Likes
5

It invites agents who churn accounts.

Schwab is doing it as a service without the fees. Vanguard has done it for years without the fees.

The difference is a pretend world where the same folks are told to label themselves as knowledgeable in the markets. It is lying.

Granted the clients are generally even less knowledgeable.

6

I wonder how that will play out for me? I have an automatic monthly transfer from savings into a vanguard etf roughly equal to my monthly Social Security deposit, but I have not called customer service in years. What does customer service do and why would I call it?

7

I had to call them a few times when they bounced a check for a few hundred dollars that was written against an account with a $90,000 balance.

intercst

8

Was the experience bad enough to cause you to move your account?

9

Vanguard is well known for its mutual funds especially index funds with low expense ratios. They do offer brokerage services these days letting you buy and sell a wide range of securities.

By wealth management I expect them to learn your investment goals and risk tolerance and suggest an appropriate mix of their mutual funds to address the situation. Yes, some services engage in churning but I would be surprised to see Vanguard accused of that. They are low cost, service oriented.

I don’t use their wealth management service but I think we know John Q Public likes some handholding when it comes to investment. A broker will do that for you for a fee. Vanguard will likely do that by phone or internet. Fidelity has local offices where you can meet with your advisor if you like. I’m not aware of any Vanguard storefront offices.

10

I went with Fidelity for my 401(k) for that reason.

2 Likes
11

Not at that point, but I’m considering it now.

I abandoned writing checks against my Vanguard accounts and now do an ETF transfer to my credit union checking account and write checks from there.

intercst

2 Likes