Let me start by saying that I have been a Vanguard customer for over a decade - and my granparents have been Vanguard customers for several more decades - and I feel their funds and ETFs are relatively unmatched in terms of quality and cost effectiveness. I also enjoy their website and its capabilities.
However their customer service needs some real work - not to mention their account opening process. I've called them three times over the past two weeks and have hung up the phone more frustrated and bewildered after each conversation. Each of the three representatives I spoke to seemed less informed and less savvy than the last.
I am simply trying to open a new brokerage account. This process should be so simple and straightforward that a phone call to customer service should rarely even be warranted - especially by someone like myself who a) is internet savvy, b) works at a financial institution and c) has opened dozens of personal financial accounts over the years without no problem.
Yet Vanguard has managed to make the process so complex and jumbled that I've had to call no less than three times already.
First I called over two weeks ago to see if business entities could open/own a Vanguard brokerage account. The online application only options included "individual" and "trust" accounts. The representative said he thought that maybe they could and put me on hold to find out. When he came back the answer was in the affirmative - so I asked how to go about it since the online app wouldn't let me select a business entity type. He put me on hold again. Then he came back and directed me to a "brokerage account kit" on their website.
Great. He should have probably known all that stuff without putting me on hold for so long after each of my questions, but I wasn't upset at that point.
The application was jumbled, but I am a financial professional and was able to read between the lines for the most part. I was surprised to observe several things though:
- The application had to mailed - there was no option listed for fax or online submission.
- The account could not be funded by a wire or electronic transfer - the only options listed included check, In-Kind brokerage transfer, and deposit of endorsed stock certificates
- In order to set up the ability for the account to accept wires or electronic transfers in the future, you had to provide a voided check and then wait three weeks for processing.
The timeline associated with just getting the account opened - not to mention setting up the ability to wire in money - is shocking and disappointing to me. But in an effort to comply I had no choice but to order checks on my entity's checking account and wait for them to arrive so that I could void one and send to Vanguard for account setup.
My checks finally arrived, I voided one and included with the pile of paperwork I needed to submit, and I decided to call again just to make sure I included everything necessary - since I was going to have to ship this fat envelope to Pennsylvania for processing.
The application listed several entity types to choose from as well as a blank for "other" so I first asked for confimration that LLCs could open business accounts. I was on hold for awhile so the confused rep could confirm that. I also asked whether I needed to include the Organization Resolution document; the application also said one "may be required" without explaining under what conditions and without including a copy of said form (though the convoluded 50+ page application "kit" includes copies of every other conceivable form along with descriptions of most of the investment options).
Apparently the poor rep had never heard of an LLC nor an Organization Resolution. He asked me what section and what page of the application I was looking at and explained that the last page had a note indicating that "other documentation" and an Organization resultion may be required. He found the section, made me confirm we were reading the same page, and then proceeded to read the whole section I had already quoted to him. He paused at the end as though that answered my question.
I was put on hold a few times and he finally managed to confirm that LLCs were OK, that an Operating agreement was the only entity doc I needed to include, and that the Organization Resolution was in fact required. He offered to email me the form and I agreed, though confirming my email address and describing all the options for receipt of that form took so long that I'd already found and downloaded it from Vanguard's website before he could finish his script.
He did manage to add one bit of value though, since he let me know I could fax the application in rather than mail it (though I couldn't fax the check to fund the account, he painfully explained - I'd have to mail that, or wait until wire capabilities were set up).
So I faxed the application and waited for email or phone confirmation of receipt. None came. So today I called AGAIN and got a third rep who seemed confused at the basic prospect of a business brokerage account. "You opened a business account?" he kept repeating, obviously confused. No, I am TRYING to open a business account. I'm trying to get confirmation of the fax receipt. Confused, he claimed they don't normally accept account applications by fax. UGH.
He asked for my name and SSN, and I explained again that the account would not be under my last name, that it was a business entity - did he want the business name instead. "The account is a business?" Seriously, it was like he'd never heard of such a thing. Annoyed, I outlined the various options for account structure and told him I'd already called to confirm that my LLC COULD open an account. "But do you have a personal Vanguard account? Let me look that up."
I finally let him. He of course found no reference to the account about which I was calling. Eventually he let me give him the business TIN and name and said he didn't see anything on the system yet. But he helpfully explained that it can take days for new applications to even get scanned into the system for review, then more days for them to actually be opened.
At this point I was pissed and decided to inform this kind older un-savvy gentleman how ridiculous I thought it was that it took so long and was so labor intensive to open a simple brokerage account. I also threw in the fact that the market was up by a long shot since I'd been trying to get this account open and funded, which of course only rubs salt in the wound.
All he could offer me was the opportunity to wait for a few more days and call back then to see if it had been scanned in yet.
I can't wait.