RIABiz

News, Vision & Voice for the Advisory Community

RIABiz

Vanguard Group restores check writing and printable PDFs, gets Tim Buckley off voicemail and preserves its funds' pristine reputation, yet also reignited investors predisposed to label it a digital bumbler

The Malvern, Pa.-based manager's glitches will mostly go down as no-harm, no-foul, yet fuels Vanguard's critics who find its high fiduciary standards for investing don't extend to service and software

Thursday, January 6, 2022 – 2:34 AM by Lisa Shidler
0 Comments
Vanguard is working to modernize without taking its eyes off old-fashioned values

Vanguard Group is cutting checks like mad and exhaling after its website made for an un-Merry Christmas for some investors, but perhaps a Happy New Year because the glitch was fixed just in time for 2022.

The Malvern, Pa., mutual-fund giant, with $8 trillion in assets, finally sounded the all-clear, though it only removed CEO Tim Buckley's recorded phone apology today (Jan. 4). It played for clients who were put into a dreaded call-waiting queue. 

Dan Wiener
Dan Wiener: 'You should own Vanguard funds and ETFs through other brokerages, not Vanguard.'

Though Vanguard won't specify the duration of the glitches, reports seem to pinpoint Dec. 24 as the start and Dec. 31 as the all-clear -- with some capabilities returning sooner.

Vanguard clients couldn't receive checks and were locked out of statements and confirmations for the better part of seven days--a big annoyance to clients that blew back on the company.

Vanguard bore the brunt of the bad PR related to its software and systems failures that led clients to overwhelm call centers. See: Vanguard's website snafu -- perhaps an unforced error, a CTO says -- has no ETA for a fix but it led to CEO Tim Buckley to read the automated message script to desperate callers

Team effort

Vanguard waived fees that would have traditionally been charged to ensure that clients received documents in an expedited way, spokesman Charles Kurtz said in a statement.

"While teams worked to restore service, we notified clients whose checks may have been delayed and waived wire fees and expedited delivery fees to help clients avoid potential mail delays.

"It is important to note that issues affecting the ability to deliver certain statements, confirmation messages, and tax forms had no impact on the management of our funds or the holdings in client accounts."

Vanguard also apologized for the inconvenience the situation has caused. 

But the company blamed an unnamed third party outsourcer for the snafu, according to a release. Vanguard blunted the impact of the glitches by calling in staff to work over the holiday, Kurtz said. 

"Vanguard teams worked through the holidays to minimize the impact of a third-party vendor’s service interruption affecting some clients’ ability to download PDFs of certain statements, confirmations, and tax forms, as well as Vanguard’s ability to print and deliver certain mailings and checks by mail," Kurtz stated. 

In its statement, Vanguard said it got the problems cleared up in time to allow clients to meet end-of-year deadlines.

"Vanguard has resumed printing and mailing checks and documents and all previously requested checks were printed before the New Year and mailed to clients. Additionally, the ability to download PDFs of statements, confirmations, and tax forms has been restored."

A reporter asked Kurtz if the third-party vendor fixed the problem or if Vanguard itself made the fix. He has only stated that "teams" worked through the holidays. 

Strong response

Despite the fact that Vanguard remedied the situation Dec. 31, Buckley's message was still greeting investors -- presumably because of a backlog in answering calls--as late as Tuesday (Jan. 4) afternoon.

Dan Wiener was greeted with this message on his personal accounts. It disappeared Tuesday. (Click to enlarge) 

The message stated: "This is Tim Buckley, president, and CEO of Vanguard. Thank you for calling.  We are receiving an exceptionally high number of calls right now. Your call is very important to us and we will be with you as soon as we can. You can get immediate access to account and fund information at vanguard.com We appreciate your patience. A Vanguard associate will be with you as soon as possible.”

By Wednesday morning (Jan. 5), Buckley's message had been replaced with a standard greeting by an anonymous voice.

RIABiz reported the story Dec. 29 and sparked a strong response from some readers. 

"Hands down, the most frustrating consumer experience in my life," wrote one, who said he was forced to spend "hours and hours" on call waiting.

"The phone system is a cave era type setup. It is the most frustrating experience for anyone to put up with. I have been with Vanguard for 23 years," wrote another. 

Inferior technology

Dan Wiener, editor of a newsletter titled "The Independent Adviser for Vanguard Investors," says his divided view of the company remains unchanged -- its service remains a work in progress, hence avoided, but its funds are still the best and should be sought through competitive platforms.

Wiener was a major voice for inconvenienced Vanguard investors during the systems malfunction and call center backups.

Wiener had an answer for those affected by the glitches. "You should own Vanguard funds and ETFs through other brokerages, not Vanguard," he says.

Wiener adds that RIAs who are tempted to custody with Vanguard should reconsider.

"I decided a long time ago that their technology was far inferior and their service to RIAs far inferior. They tried to get out of the business then got back in, but I can’t imagine you’ll find too many RIAs custodying with Vanguard,"he added. 


Related Moves

Vanguard Group shows up as 'alpha' disciple with two new fixed-income fund launches as it surpasses PIMCO's $2 trillion with ex-Goldman Sachs partner now calling the shots

The $8 trillion Malvern, Pa. manager owns beta investing, but RIAs are demanding higher income -- hence market timing and cherry picking -- from their fixed-income allocation.

August 10, 2021 – 11:46 PM

Jason Wenk raises $50 million from Vanguard Group and others, and Altruist may soon overtake Pershing's No. 3 RIA custodian spot, the Altruist founder asserts

The Los Angeles founder's disruption blitz involves a mobile-first Robinhood feel and a plug-and-play outsourcing one-stop-shop -- a sweet combination, except that it may not lure many big RIAs, analysts say.

May 20, 2021 – 3:22 AM

Into the PIMCO void, Vanguard re-applies itself to active fixed-income funds and Bond Kings get a bitter taste of what the Peter Lynches of yesteryear learned the hard way

The Malvern, Pa. giant has only 24% of assets invested in bonds but nearly 40% of its portfolio staff are bond-directed as it seeks to exploit a world of high fees driven by fiefdoms and petty monarchs.

January 3, 2020 – 1:33 AM

Tim Hockey leaves baffled analysts (and everyone else) probing for answers to explain abrupt departure plan as TD Ameritrade CEO; It's about... nothing!

Discount brokers are facing myriad issues as trading fees continue sliding to zero, causing TD's board to seek a more RIA friendly CEO

August 8, 2019 – 6:32 PM

See more related moves



Submit your comments:

Register on Gravatar.com for your photo to be included.
(It’s fast and free, and your photo will also show on all of your existing comments.)

RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING


RIABiz Directory sponsored by:

Directory Sponsor Logo