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January 05, 2022 at 02:18 PM
What You Need to Know
- Vanguard's lack of communication during the partial outage in December drew criticism.
- Customer service challenges have been a recurring theme in Vanguard's history, a Morningstar analyst says.
- But customers including Bill Winterberg are still drawn to the firm's unique shared ownership structure.
Although Vanguard’s recent website issues have been resolved, questions are being raised about the firm’s customer service, including client communications, and the outsourcing of back-office functions such as trade confirmations and account statements.
For at least a week in late December, investors were unable to access certain statements, transaction confirmations and tax forms because of a service interruption at a third-party technology vendor, who remains unidentified.
Affected customers took to social media and message boards like Bogleheads.org to air their complaints about the partial outage — which came just before year-end when they needed access to account information for tax purposes and required retirement account withdrawals.
Vanguard apologized for the website issues and assured customers it was working on a resolution. By Dec. 30, the issues were resolved and, according to a Vanguard spokesman, they “had no impact on the management of our funds or the holdings in client accounts.”
“I wish Vanguard would have been more proactive in investor communications and correspondence in resolving their matter rather than investors going to their own message boards,” said Bill Winterberg, founder and president of FPPad.com, a consulting firm that helps advisors adopt technology in their practices.
Vanguard did eventually alert investors about the problems when they logged into their accounts, but that was days after the problem arose. It did not email investors about the problems nor post an alert on social media like Facebook or Twitter or Instagram.
Investors calling into the firm’s customer service department were told of long wait times and the option to receive a call back.
“Customer services and the challenge of growing and serving customers has been a theme in Vanguard’s history,” added Lucas. “There have been technical glitches and Vanguard prioritizes trying to fix those, but obviously what happened right before the holiday is an indication by their own admission that they have room for improvement.”
