Vanguard snafu’s website – possibly an unforced error, according to a CTO – doesn’t have an ETA for a fix, but it led CEO Tim Buckley to read the automated message script to desperate callers.
Malvern, Pa., Giant’s mistake may have been to cause notoriously dangerous code change in December, computer expert says, though Vanguard names third party
Vanguard customers have been deprived of statements, confirmations and other forms at a critical time of the year due to website issues that have persisted for six days with no end in sight.
Company CEO Tim Buckley personally stepped into the fray – it’s his voice over a recorded message that frustrated customers hear on the call with questions.
In early 2021, Buckley pledged his company would invest $ 1 billion to improve the company’s website and technology.
But that’s just a drop in the bucket compared to the resources other companies are spending, says Dan Wiener, president of Newton, Mass., RIA Adviser Investments, which has $ 7 billion in assets under management.
“First of all, Fidelity spends more than that. I know a billion dollars sounds like a lot, but it isn’t when you’re the size of Vanguard.”
The Malvern, Pa., Mutual fund giant with $ 8 trillion in assets, points to a third-party provider.
He declined to disclose the name of the company and also did not offer a timeline when the tech issue is resolved.
Call waiting
Tech failure may be due to a third party and it may be the sort of thing that happens to virtually every business, but the timing – right before Christmas and until now, until December 29 – looks like an unforced error, says Doug Fritz, president of F2 Strategy and former chief technology officer of First Republic Bank.
|
Recorded message from Tim Buckley to clients “This is Tim Buckley, President and CEO of Vanguard. Thank you for calling. We are currently receiving an exceptionally high number of calls. Your call is very important to us and we will be with you as soon as possible. You can get it. immediate access to account and fund information at vanguard.com Thank you for your patience, a Vanguard associate will be with you as soon as possible. |
“There is the holy grail in the great land of financial technology. Number one is not to touch any codes from the beginning of December until the end of January.
People need access to year-end information and if it breaks, no one can fix it. You must have a year-end code freeze or it invariably happens. You have to change the code for that to happen, ”he says. See: Why the Vanguard Group has been unresponsive to a “$ 34.6 billion” whistleblower lawsuit and why no one is suggesting Vanguard executives should breathe easy
Timing is a challenge as many investors often check account confirmations before the end of the year, Wiener says.
“People maybe want to make sure their transaction is completed before the end of the year and want to see the statement. But they’re in the dark.”
Many investors who are trying to open accounts or check confirmations online are advised to call the main number.
Next thing they hear is the voice of CEO Buckley delivering the mind-numbing one-size-fits-all script of businesses with low phone capacity to deal with computer failures.
“This is Tim Buckley, President and CEO of Vanguard. Thank you for calling. We are currently receiving an exceptionally high number of calls. Your call is very important to us and we will be with you as soon as possible. immediate access to account and fund information at avant-garde.com We appreciate your patience. A Vanguard associate will be with you as soon as possible.
Calculation error
The snafu affects access to certain declarations, confirmations or forms on the site. Customers can log into accounts and transact “as usual,” spokesman Charles Kurtz said in a statement.
“Vanguard customers and pension plan members may experience delayed mailings or not be able to access certain statements, confirmations or forms through our website,” he explained.
Wiener says Vanguard may have miscalculated when it hired a third party to handle the routine service delivery that customers routinely expect.
“What amazes me is that Vanguard clearly owns all the data. They send it to a third party. How come they don’t have the ability to print the PDF and retrieve it on their website ?” he questions.
Screw up
Fritz says managing these departments in-house can be “a cybersecurity nightmare.”
“Vanguard’s technology is good. It’s not a company that takes shortcuts. Someone obviously messed up,” he noted.
They don’t handle it well, and it’s going to hurt them. These guys are talking about launching the RIA’s emerging guard. “
Wiener says his company owns around $ 2 billion in Vanguard funds, but uses Fidelity as a custodian.
As a result, his accounts receivable are doing well and he can see all the confirmations. But he says when looking at his own personal Vanguard account, he can’t see any confirmations either.
“It’s bad. They have to panic,” he said.
Technological deficits
On Twitter, customers growl and wonder if the site will be up and running by the end of the year. Markets are open Thursday, December 30 but close at 2 p.m. EST on Friday, December 31.
“Our teams have been working on this issue around the clock and our customer service representatives are available to assist customers who need immediate assistance,” said Kurtz.
“While our teams are actively working on a resolution, Vanguard is taking steps to minimize disruption to customers, such as working with our other vendors. We apologize for the inconvenience,” he added.
Wiener, who also writes for the Independent Adviser for Vanguard Investors, says the phones are ringing off the hook of anxious investors who call to confirm information.
Other large companies have experienced similar technology shortcomings. Schwab, the Robinhood consumer investment app, and even consumer-centric Facebook all suffered outages this year.
An outage prevented Vanguard customers from completing certain types of transactions in March, according to Ignites.
In January, the oversized trading volume of GameStop stocks caused problems for various companies, including Robinhood and Schwab.
Longer term, there is hope for the broader challenges of Vanguard’s software systems after hiring Tara Bunch, Chief Operating Officer of AirbNb, to its Board of Directors. See: Vanguard mocks ‘digital’ myth by grossing $ 1.3 trillion after new mobile app debuts – then makes Tara Bunch a director
Comments are closed.