Don’t Buy Stock Through Vanguard’s Brokerage Service

Don’t Buy Stock Through Vanguard’s Brokerage Service

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Transfer Your Stock To Vanguard’s Brokerage Service They Said…

Thinking about buying stocks right in Vanguard? Or you want to transfer your stocks to Vanguard?

If you keep your publicly traded stocks with one website, and have mutual funds through Vanguard, you might be juggling to remember all the login information, tax statements, etc.

From Vanguard’s “transfer of assets” page, they talk about how you can save time by transferring all your stocks from other brokerages over to Vanguard.

That way, you can see your Vanguard mutual funds, stocks, tax information, etc. all in one place.

And that way, come year end tax filing, you get one tax statement from them versus however many from all your other brokerages.

I understand the need to consolidate investment websites and accounts because at one point years ago, I had investments scattered across 6 different websites.

Now I’m down to 4.

Vanguard makes it easy to transfer your stocks from any of the big name online brokerage companies.

All you do is go to their “transfer assets” page, find your online brokerage name, click on it, log in, and Vanguard will start the transfer process automatically.

Vanguard said it would take about 7 days to finish the transfer.

In the meantime while waiting for the transfer, I thought, “Wouldn’t it be fun to try and buy one share of a Fortune 500 company using Vanguard’s stock buying feature in their brokerage service.

I was glad I did, because it immediately showed me glaring issues with buying stocks through Vanguard.

Here Were The 2 issues With Vanguard’s Brokerage Service

Even though Vanguard doesn’t charge any commission when buying or selling stocks, here are 2 major issues.

Issue #1. It was clunky and slow

I tried to buy one stock of a Fortune 500 company and it took 3 minutes for the order to be fulfilled.

THREE MINUTES.

In the trading world where things happen in milliseconds, that is a lifetime.

I currently use the Fidelity and Robinhood apps to hold majority of my stocks.

Whenever I buy stocks through their apps, it only takes a second or less when I place the order.

Vanguard I only use for their admiral shares of S&P500 index mutual fund.

When I tried buying stocks on Vanguard, I thought I was going to get the same fast and reliable purchasing speed as the others, but I was wrong.

I wouldn’t recommend using Vanguard’s brokerage service to buy stock if you’re dying to buy stocks at a certain price to lock in some gains at decent prices.

Use Robinhood app for that.

They’re faster.

But if you don’t mind the slower speed of Vanguard’s brokerage service, then go ahead and buy stocks through them.

It still helps to have all your stock and mutual fund investment information in one website.

As of right now though, I don’t mind having 3 accounts via Fidelity, Robinhood, and Vanguard.

It only takes a few extra minutes a year to go into the other non-Vanguard websites to get the 1099 year end tax forms.

Keep In mind Vanguard’s Meant For Passive Mutual Fund Investing

Vanguard wasn’t built for speed.

It was built for people who want to passively build wealth over decades with mutual funds versus fast minute to minute rapid trading.

That’s why if you try to put money into their mutual funds, they don’t put that money in till the end of the market day.

So if you try to buy some mutual fund shares at 10am EST, it won’t buy till end of market day 4pm EST.

They do this to dissuade people against minute by minute rapid trading, and also to foster a long term approach toward passive investing.

I think because Vanguard was built for slow passive investing, their infrastructure for high-speed trading isn’t as advanced as Fidelity, Robinhood, and, I’m sure, the other major brokerage companies like E*Trade, Scottrade, TD ameritrade.

Issue #2. Information was scattered across different pages

In Fidelity and Robinhood, usually the info I seek is either on the same page as the stock or in another section that was easy to find.

Not at Vanguard.

At Vanguard, I tried looking for basic information like my stock’s purchase price.

Could not find it.

I only found it after digging around and going back, sideways, and around.

Purchase price, transaction history, curren’t value, etc. most information sets and other data were scattered in different sections on Vanguard’s passive brokerage infrastructure.

This is not an issue if you don’t care for that stuff.

It’s also not an issue if you’re thinking REALLY long term, like decades out, and the currently speed and information don’t pertain to you.

But for data nerds who like to know every single detail about their stock, Vanguard isn’t the brokerage to use.

It Took 1 Day To Cancel The Transfer But Was A Lot Of Hassle

I called Vanguard to cancel my transfer of assets but after talking to the onboarding specialist, they said I had to call Fidelity to cancel the transfer.

I then called Fidelity to cancel the transfer and they asked me to write a letter asking them to cancel the transfer.

It’s called a “rescind letter” and I had to sign it before sending it in.

Luckily, if you don’t have access to a scanner or printer, etc. you can use the Genius scanner app.

You can also take a picture of the signed piece of paper with the statement, and email or airdrop it to yourself, download it to your computer, and attach it in the secure message to Fidelity reps.

Another way to do it to skip paper all together, is to type up the letter, and sign it digitally via your laptop’s built in document signer feature.

I did this second way.

Fidelity said they get back to me within 24-48 hours.

Instead, they got back to me within 1 hour and canceled the transfer.

Yay!

Can you imagine a world where it wasn’t such a hassle to cancel things?

That would be the day.

Conclusion: Don’t Transfer Your Stocks To Vanguard

The reason why I canceled my Vanguard transfer of assets from Fidelity was because I imagined a future where I tried to buy stocks at opportune prices on Vanguard but I would miss out on those prices from how slow Vanguard operated.

I’m sticking with my faster Fidelity and Robinhood for now.

If you have a decent fast brokerage company now, keep your stocks there.

I wouldn’t recommend moving stocks to Vanguard, no matter how sweet they make it sound about keeping everything under one roof for the sake of speed of access and tax consolidation.

Sometimes, spreading your eggs across different baskets will help make sure they don’t all break at once, even if it takes you a little longer to gather them all up.

The grass isn’t always greener on the other side.


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Jack The Dreamer

I'm a dreamer. But you know what? All the best people are. And if you're one too, join the revolution! My blog is about being financially independent and working towards that goal each and every single day so that we can all start living the life we've always dreamed of! Jack the Dreamer, over and out!

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