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Has Vanguard Lost Its Way?

Index tracking funds and ETFs
GeoffF100
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Has Vanguard Lost Its Way?

#467036

Postby GeoffF100 » December 18th, 2021, 1:10 pm

Has Vanguard Lost Its Way?:

https://www.morningstar.com/articles/10 ... st-its-way

Vanguard is now treading the same path in the UK.

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Re: Has Vanguard Lost Its Way?

#467133

Postby BT63 » December 18th, 2021, 8:34 pm

I can confirm the mediocre customer service.

Many months ago, Legal & General announced that they would be transferring their fund management to Fidelity.

With me being a client of both, I didn't want to have too much with any one provider due to compensation limits, so I looked at Vanguard.

I sent a clearly worded email query to Vanguard and the response I got, three days later, answered a completely different question.

First impressions count. I didn't open an account with them.

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Re: Has Vanguard Lost Its Way?

#467143

Postby GeoffF100 » December 18th, 2021, 9:18 pm

I have an account with Vanguard UK. I have always got helpful replies to queries that I have raised through secure messages within my account. They take a day or two to come back, but that is not a problem for me. I like a written response, so I have not tried phoning them. In my experience customer service is their strong point. The online system is not so great. With iWeb, it is the other way around.

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Re: Has Vanguard Lost Its Way?

#467174

Postby DrFfybes » December 18th, 2021, 11:12 pm

BT63 wrote:I can confirm the mediocre customer service.

Many months ago, Legal & General announced that they would be transferring their fund management to Fidelity.

With me being a client of both, I didn't want to have too much with any one provider due to compensation limits, so I looked at Vanguard.


I thought all brokers held their client money in ringfenced nominee accounts, so this was not an issue.

Am I missing something?

Paul

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Re: Has Vanguard Lost Its Way?

#467175

Postby Dod101 » December 18th, 2021, 11:19 pm

BT63 wrote:I can confirm the mediocre customer service.

Many months ago, Legal & General announced that they would be transferring their fund management to Fidelity.

With me being a client of both, I didn't want to have too much with any one provider due to compensation limits, so I looked at Vanguard.

I sent a clearly worded email query to Vanguard and the response I got, three days later, answered a completely different question.

First impressions count. I didn't open an account with them.


That is not true. What L & G has done is transferred their fund management admin to Fidelity not the fund management function itself I am glad to say.
I think that BT63 can relax. I suspect that his L & G funds are still with L & G.

Dod

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Re: Has Vanguard Lost Its Way?

#467177

Postby BT63 » December 18th, 2021, 11:25 pm

DrFfybes wrote:I thought all brokers held their client money in ringfenced nominee accounts, so this was not an issue.
Am I missing something?
Paul


I like to stay well within the Financial Services Compensation Scheme limits, which I believe is currently a maximum of £85k per person per provider.

There's also the possibility that for whatever reason I can't access investments with one of my providers. When my L&G investments transferred to Fidelity there was a problem which caused my combined account to be locked down for a few weeks until it was resolved.

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Re: Has Vanguard Lost Its Way?

#467179

Postby BT63 » December 18th, 2021, 11:29 pm

Dod101 wrote:
That is not true. What L & G has done is transferred their fund management admin to Fidelity not the fund management function itself I am glad to say.
I think that BT63 can relax. I suspect that his L & G funds are still with L & G.

Dod


Yes, that's what I meant, although not as clearly stated as it should have been.
Fidelity now perform the admin and L&G operate the funds in which I am invested.

In any case, Vanguard were disappointing because their reply answered a question that I didn't ask, while not answering the question that I needed answering.
As a result, I decided that I didn't want to be a Vanguard customer.

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Re: Has Vanguard Lost Its Way?

#467181

Postby Dod101 » December 18th, 2021, 11:35 pm

BT63 wrote:
Dod101 wrote:
That is not true. What L & G has done is transferred their fund management admin to Fidelity not the fund management function itself I am glad to say.
I think that BT63 can relax. I suspect that his L & G funds are still with L & G.

Dod


Yes, that's what I meant, although not as clearly stated as it should have been.
Fidelity now perform the admin and L&G operate the funds in which I am invested.

In any case, Vanguard were disappointing because their reply answered a question that I didn't ask, while not answering the question that I needed answering.
As a result, I decided that I didn't want to be a Vanguard customer.


The trouble with loose comments is that people get the wrong idea. I am invested in L & G because I believe in their long term culture and way of doing business. If they were to outsource their fund management function that would change the entire outlook so it is important to get it right. Sorry to be what may sound like a pedant, but I regard getting facts right as fundamental.

Dod

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Re: Has Vanguard Lost Its Way?

#467187

Postby GeoffF100 » December 19th, 2021, 7:03 am

DrFfybes wrote:
BT63 wrote:I can confirm the mediocre customer service.

Many months ago, Legal & General announced that they would be transferring their fund management to Fidelity.

With me being a client of both, I didn't want to have too much with any one provider due to compensation limits, so I looked at Vanguard.

I thought all brokers held their client money in ringfenced nominee accounts, so this was not an issue.

It should not be. The FSCS comes into operation if the platform goes but, and the ring fenced accounts have to be raided to pay the administrator's fees, or have already been raided illegally. You are probably safe in all events if you have less than £1 million per platform. If you have more than that, stick to the safer ones.

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Re: Has Vanguard Lost Its Way?

#467194

Postby Dod101 » December 19th, 2021, 9:02 am

GeoffF100 wrote:
DrFfybes wrote:
BT63 wrote:I can confirm the mediocre customer service.

Many months ago, Legal & General announced that they would be transferring their fund management to Fidelity.

With me being a client of both, I didn't want to have too much with any one provider due to compensation limits, so I looked at Vanguard.

I thought all brokers held their client money in ringfenced nominee accounts, so this was not an issue.

It should not be. The FSCS comes into operation if the platform goes but, and the ring fenced accounts have to be raided to pay the administrator's fees, or have already been raided illegally. You are probably safe in all events if you have less than £1 million per platform. If you have more than that, stick to the safer ones.


Why do you use £1 million? What significance has that? I have less than £1 million with each of my two providers but I am very anxious that they are both what I would consider 'safe'. To me, irrespective of the amounts involved, that is fundamental.

Dod

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Re: Has Vanguard Lost Its Way?

#467235

Postby NotSure » December 19th, 2021, 12:15 pm

Dod101 wrote:
GeoffF100 wrote:
DrFfybes wrote:I thought all brokers held their client money in ringfenced nominee accounts, so this was not an issue.

It should not be. The FSCS comes into operation if the platform goes but, and the ring fenced accounts have to be raided to pay the administrator's fees, or have already been raided illegally. You are probably safe in all events if you have less than £1 million per platform. If you have more than that, stick to the safer ones.


Why do you use £1 million? What significance has that? I have less than £1 million with each of my two providers but I am very anxious that they are both what I would consider 'safe'. To me, irrespective of the amounts involved, that is fundamental.

Dod


So, has Vanguard lost its way, or merely this thread...... :)

I have a small (but growing) Vanguard ISA - the vast bulk of my equities are in a company pension scheme, but I have recently begun to save via equities (and a few bonds) as I am now in a position to do so. So long as Vanguard continue offer really cheap service (for modest sums, at least), I am not personally concerned if they choose to grow their business along other lines in parallel, especially, if these higher margin divisions are partly used to subsidise their 'core' business, as seems to be the case with their competitors.

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Re: Has Vanguard Lost Its Way?

#467242

Postby BT63 » December 19th, 2021, 12:28 pm

NotSure wrote:So, has Vanguard lost its way, or merely this thread...... :)


Yes. :D

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Re: Has Vanguard Lost Its Way?

#467410

Postby GeoffF100 » December 19th, 2021, 9:09 pm

Dod101 wrote:
GeoffF100 wrote:
DrFfybes wrote:I thought all brokers held their client money in ringfenced nominee accounts, so this was not an issue.

It should not be. The FSCS comes into operation if the platform goes but, and the ring fenced accounts have to be raided to pay the administrator's fees, or have already been raided illegally. You are probably safe in all events if you have less than £1 million per platform. If you have more than that, stick to the safer ones.

Why do you use £1 million? What significance has that? I have less than £1 million with each of my two providers but I am very anxious that they are both what I would consider 'safe'. To me, irrespective of the amounts involved, that is fundamental.

If a loss is allocated in proportion to account size, 8.5% of £1 million is £85K, i.e. the FSCS compensation limit. If 8.5% or less goes missing and/or is gobbled up in administrators fees, a £1 million account should be fine. That would equate to £85 million going missing with a small broker like Fastrade with £1 billion AUM. That looks pretty safe to me. With Beaufort, the administrators fees were allocated equally, which is more favourable to larger investors. In an interview, the FSCS chief said that ordinary investors should not lose out, but investors with millions might do.

I do not think that you need to worry. If you want to worry, worry about a stock market crash. :o

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Re: Has Vanguard Lost Its Way?

#467439

Postby Dod101 » December 19th, 2021, 11:07 pm

GeoffF100 wrote:
Dod101 wrote:
GeoffF100 wrote:It should not be. The FSCS comes into operation if the platform goes but, and the ring fenced accounts have to be raided to pay the administrator's fees, or have already been raided illegally. You are probably safe in all events if you have less than £1 million per platform. If you have more than that, stick to the safer ones.

Why do you use £1 million? What significance has that? I have less than £1 million with each of my two providers but I am very anxious that they are both what I would consider 'safe'. To me, irrespective of the amounts involved, that is fundamental.

If a loss is allocated in proportion to account size, 8.5% of £1 million is £85K, i.e. the FSCS compensation limit. If 8.5% or less goes missing and/or is gobbled up in administrators fees, a £1 million account should be fine. That would equate to £85 million going missing with a small broker like Fastrade with £1 billion AUM. That looks pretty safe to me. With Beaufort, the administrators fees were allocated equally, which is more favourable to larger investors. In an interview, the FSCS chief said that ordinary investors should not lose out, but investors with millions might do.

I do not think that you need to worry. If you want to worry, worry about a stock market crash. :o


I am not worried. The fact is though not so much the loss at the end of the day but the inconvenience of having your account frozen for a long while. Even if my loss was ultimately zero, I would not want to have no access for long and anyway I do not altogether agree with the logic. |I hope that people reading this do not rely on your assurance.

Dod

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Re: Has Vanguard Lost Its Way?

#467478

Postby GeoffF100 » December 20th, 2021, 8:49 am

Dod101 wrote:
GeoffF100 wrote:
Dod101 wrote:Why do you use £1 million? What significance has that? I have less than £1 million with each of my two providers but I am very anxious that they are both what I would consider 'safe'. To me, irrespective of the amounts involved, that is fundamental.

If a loss is allocated in proportion to account size, 8.5% of £1 million is £85K, i.e. the FSCS compensation limit. If 8.5% or less goes missing and/or is gobbled up in administrators fees, a £1 million account should be fine. That would equate to £85 million going missing with a small broker like Fastrade with £1 billion AUM. That looks pretty safe to me. With Beaufort, the administrators fees were allocated equally, which is more favourable to larger investors. In an interview, the FSCS chief said that ordinary investors should not lose out, but investors with millions might do.

I do not think that you need to worry. If you want to worry, worry about a stock market crash. :o

I am not worried. The fact is though not so much the loss at the end of the day but the inconvenience of having your account frozen for a long while. Even if my loss was ultimately zero, I would not want to have no access for long and anyway I do not altogether agree with the logic. |I hope that people reading this do not rely on your assurance.

Yes, your account may be frozen for a while, particularly if the broker is not owned by a larger financial services group. You can mitigate that risk by making sure that you can get by without the account for the duration. There is a limit to the number of accounts that I can manage conveniently, and I would soon run out of safe reasonably priced platforms anyway. The main risk is that your investments will lose money, not that you will lose investments. Nonetheless, I would not recommend putting £millions with an obviously dodgy broker.

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Re: Has Vanguard Lost Its Way?

#467484

Postby Dod101 » December 20th, 2021, 9:35 am

GeoffF100 wrote:
Dod101 wrote:
GeoffF100 wrote:If a loss is allocated in proportion to account size, 8.5% of £1 million is £85K, i.e. the FSCS compensation limit. If 8.5% or less goes missing and/or is gobbled up in administrators fees, a £1 million account should be fine. That would equate to £85 million going missing with a small broker like Fastrade with £1 billion AUM. That looks pretty safe to me. With Beaufort, the administrators fees were allocated equally, which is more favourable to larger investors. In an interview, the FSCS chief said that ordinary investors should not lose out, but investors with millions might do.

I do not think that you need to worry. If you want to worry, worry about a stock market crash. :o

I am not worried. The fact is though not so much the loss at the end of the day but the inconvenience of having your account frozen for a long while. Even if my loss was ultimately zero, I would not want to have no access for long and anyway I do not altogether agree with the logic. |I hope that people reading this do not rely on your assurance.

Yes, your account may be frozen for a while, particularly if the broker is not owned by a larger financial services group. You can mitigate that risk by making sure that you can get by without the account for the duration. There is a limit to the number of accounts that I can manage conveniently, and I would soon run out of safe reasonably priced platforms anyway. The main risk is that your investments will lose money, not that you will lose investments. Nonetheless, I would not recommend putting £millions with an obviously dodgy broker.


To be quite honest I am not sure why you are writing this. It gets none of us (certainly not me) any further forward.

Dod

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Re: Has Vanguard Lost Its Way?

#467591

Postby genou » December 20th, 2021, 5:02 pm

Dod101 wrote:
To be quite honest I am not sure why you are writing this. It gets none of us (certainly not me) any further forward.

Dod


I think the point that is trying to be made is that advising people to hold less than 85k with any single broker ( which I appreciate did not come from you ) is, for the demographic here, futile. And that you worrying about a decent broker failing and costing you money, or locking you out of your money, is a misunderstanding of risk. Damn serious if it happens, but really? Do you take precautions against catching anthrax ?

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Re: Has Vanguard Lost Its Way?

#467600

Postby Alaric » December 20th, 2021, 5:22 pm

genou wrote: And that you worrying about a decent broker failing and costing you money, or locking you out of your money, is a misunderstanding of risk.



It's also a misunderstanding of the rules and legal position. If you place deposits, the deposit taking institution can potentially pocket the lot. Hence the need for the FSCS. With investments it's not theirs to walk off with.

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Re: Has Vanguard Lost Its Way?

#467602

Postby Dod101 » December 20th, 2021, 5:40 pm

genou wrote:
Dod101 wrote:
To be quite honest I am not sure why you are writing this. It gets none of us (certainly not me) any further forward.

Dod


I think the point that is trying to be made is that advising people to hold less than 85k with any single broker ( which I appreciate did not come from you ) is, for the demographic here, futile. And that you worrying about a decent broker failing and costing you money, or locking you out of your money, is a misunderstanding of risk. Damn serious if it happens, but really? Do you take precautions against catching anthrax ?


I am not particularly worried and I do not think I was the one who deflected the discussion on Vanguard to the security of your platform. I have quite a lot split between II and HSBC. They both have flat fees and both seem reasonably secure. I would not want 100% of my investment assets with either on of them however secure they are though. That is like an item in this morning's newspaper writing about the risk when Prince William takes his entire family on board one helicopter. The risk is there however remote and can be quite easily mitigated at least to some extent. Why not do that?

Dod

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Re: Has Vanguard Lost Its Way?

#467668

Postby MrFoolish » December 20th, 2021, 10:34 pm

Dod101 wrote:The trouble with loose comments is that people get the wrong idea. I am invested in L & G because I believe in their long term culture and way of doing business. If they were to outsource their fund management function that would change the entire outlook so it is important to get it right. Sorry to be what may sound like a pedant, but I regard getting facts right as fundamental.Dod


I've had the hassle of L&G shifting my ISA admin to Fidelity. But not many years before that they began proceedings to shift my stakeholder pension to another provider - so I transferred into a SIPP before they got chance.

I do like L&G and I hold shares in them. But it has to be said they mess their customers around.


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