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Sunday, 22 November 2020

Vanguard new website access finally working - and it still sucks

After almost one month, half a dozen online messages with various photos of ID, a selfie of myself holding the ID, and then the back of the ID, and two phone calls to customer service (to get action done within one day, rather than the usual 10-day wait for someone to get around to responding to an online message), I finally got my online access to the new Vanguard website. Well, for ONE of my accounts (our SMSF investment). My other Vanguard account is collateral on one of my margin lending accounts, so I will no longer have ANY online access to that account. Why? Because the new, improved website lets you apply for and redeem units online, with funds going automatically to your linked bank account. So, as the margin lender has the units as security for a loan, they can't permit you to transact online and have the funds transferred straight into your personal bank account.

Makes absolutely no sense to me, as all they need to do was disable access to the online transaction page for any accounts where that are on a margin loan. Or, simply set the bank account details to be the cash account that is linked to your margin loan account, and disable online changing of bank details (which would probably be a good idea, as if your online Vangard account was hacked (or they have a data breach), then a hacker could log in, change the bank account details, and then redeem off your entire investment.

The website also doesn't really offer any new functionality aside from being able to make online purchases and redemptions of units. And even that looks problematic, as it seems that if you sold units the funds would go automatically to your linked bank account. Which doesn't seem a sensible way to do things if you want to move funds from one Vanguard investment to another, to change asset allocation or do a rebalancing.

The whole website redesign seems mostly geared towards making the UI specific for use on mobile devices such as a phone. Which is fine, except that the website lacks rudimentary OS detection (so when viewed on a laptop the display looks like it was designed for Kindergarten kids to use, with hardly any data on the screen and everything in a massive font).

Moving to the new website also meant that the existing (paper based) retail funds are now 'closed' to new investors (existing investors can still add to their holdings in these funds - for the moment). That meant that they were no longer listed in the fund unit price lists under 'products', and I had to make another phone call (and wait for the CSR to seek advice from her supervisor) to find out that the old funds unit prices were buried on back page of the website, which was not easy to find without specific instructions (I've now saved those price data pages as 'bookmarks' on my browser).

The other problem with the old funds being 'closed' to new investors is that this usually means that those funds eventually get would up entirely (in my past experience this usually happens after 12-24 months), which will then mean having to move our current investments into the equivalent, new ETF fund. Great, except that this will mean and sell/buy transactions, so we'll get some realised capital gains while I'm still in accumulation mode (paying 10% tax within our SMSF on long term capital gains), rather than the 0% tax rate that would apply in a few years' time when my super account is in 'pension mode'.

Unfortunately there's no way to avoid that, as closing our existing Vanguard investments to move them to another product provider (eg. Dimensional Funds) would also result in a CGT event.

The CGT implications probably aren't all that dire however, as we already switched investments around within Vanguard in February and then again in June as we moved from 100% High Growth to 50% bond and 50% conservative funds back in Feb, and then moved to our current allocation of around 50% Conservative and 50% Growth (with monthly new investment going into the High Growth Fund) in June.

I was thinking about moving us back into our long term 100% High Growth asset allocation back in October, as it appeared that the markets might improve in the long term, but there was a bit of a dip due to the 'second wave' (or 'third wave' in the case of the USA) of Covid-19. However, as I couldn't access the new website I didn't have an opportunity to do the transactions online, and with the significant market gain over the past month or so, it looks like I missed our chance to rebalance at a 'low'.

At this time I'm undecided whether to switch the 50% that is currently sitting in Conservative into the High Growth Fund, or wait a bit longer and see if there is a market correction/buying opportunity during the US/European winter when Covid-19 deaths might peak before vaccinations get rolled out in significant numbers during 2021.

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