Allan Roth: Vanguard’s Improving Digital Experience

Allan Roth: Vanguard’s Improving Digital Experience

Buying Vanguard ETFs now easier with revamped dashboard navigation.

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Reviewed by: Kent Thune
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Edited by: Ron Day

For about a decade and a half, I’ve given Vanguard feedback that their web and phone app capabilities lagged those of Fidelity and Schwab. And for about that same amount of time, they told me they were working on it, yet the gap continued to widen. It finally got so bad that I virtually gave up on depositing new money in Vanguard. The app didn’t work for me, and mailing checks proved unreliable. 

On the other hand, Fidelity’s phone app and website worked beautifully. I wasn’t alone in my disgruntlement as J.D. Power ranked Vanguard dead last in a 2022 wealth management digital experience satisfaction survey. The Bogleheads forum of Vanguard fans posted their dissatisfaction.

Revamped Dashboard Navigation and Purchasing Vanguard ETFs

The good news is I tried again a few months ago and was pleasantly surprised. Not only did making a mobile deposit work, but I found things both on the app and the website much more intuitive than in the past. I was also able to get the information I needed and make trades in a similar intuitive way as at Fidelity and Schwab. And I learned of a few new capabilities such as being able to purchase Vanguard ETFs in dollar amounts, meaning I could buy fractional shares.  

To learn more about these new capabilities as well as future plans, I interviewed Marco De Freitas, Vanguard’s retail head of client experience and digital. I was impressed with what he told me. De Freitas said both the app and web applications were built from scratch and are completely new, written on modern applications that allow flexibility to make future changes more efficiently. I was even more excited to hear what would soon be coming. 

De Freitas pointed out the revamped navigation from the dashboard, which allows the user to drill down for additional detail like cost basis and unrealized gains. I found it quite easy to navigate both on the app (IOS) and the website.  

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Vanguard vs. Fidelity and Schwab

De Freitas told me Vanguard regularly collects data on client satisfaction of their digital experiences and that satisfaction scores have never been higher, though he did not provide information to see the overall level of satisfaction or how much it had improved over time. 

While I found the improvement quite substantial and a major step in the right direction, the Vanguard digital experience is still far behind Fidelity and Schwab. For example, on the Fidelity website, I can download a spreadsheet that gives me data I can manipulate to analyze tax moves.

By comparison, Vanguard’s download center doesn’t give all of this information, making any analysis much more difficult and time consuming. De Freitas noted Vanguard was working on an improved download center.  

Fidelity has a feature called Fidelity Full View that allows me to link outside accounts such as Vanguard and Schwab to get a wholistic view of a portfolio with multiple custodians. Schwab has something similar as well. Though the feature is on Vanguard’s web site, it didn’t work for me. De Freitas said Vanguard was working on developing a new application from scratch that would aggregate accounts but declined to give an estimated timeframe.  

Both Fidelity and Schwab also allow the user to nickname accounts that can help the user more easily recognize which account they are viewing and transacting. That’s a feature I find critical as taxes and estate planning can complicate things and cause one to have many accounts, as I do. De Freitas said we heard from clients that this was important and will introduce via the website and app before year-end. 

Vanguard’s Future Digital Capabilities

De Freitas stated that, while a lot had been accomplished, there is more work to do. I was quite encouraged that Vanguard was working on some of the features I previously mentioned. In addition, he said that, by the end of the year, clients will have the option of automated ETF investing.  

A Vanguard media spokesperson told me:

Of the Vanguard mobile app, we continue to update and refine the app based on industry best practices, leading technology updates, and client feedback. Throughout 2023, we oversaw 20 app store releases, underscoring our commitment to continuous iteration and new features based on client feedback (e.g. research stocks, detailed performance tables, download and print tax forms). We also recently rolled out our Watchlist Feature, allowing clients to add securities to a list where they can monitor their performance before ultimately deciding whether or not to invest.  

I’m impressed with the progress Vanguard has made and hopeful Vanguard will completely close the gap. Not only is it critical for investors but the past digital experience has been a cost competitive disadvantage for Vanguard. When investors can’t accomplish tasks digitally, they are more likely to need to call in and get help from a Vanguard rep, requiring Vanguard to have more reps manning the phones. Though automation may require some high upfront costs, it should be less expensive in the long run. 

Conclusion: This Time Might Be Different 

As I previously mentioned, it’s been about 15 years that Vanguard has been telling me they were working on closing the digital shortfalls vs. competitors. But they would not give me specifics and I saw very little improvements. Now, they have already made substantial improvements and told me some specific capabilities they were working on, as well as some timeframes for their plans to launch. It’s quite possible that in a year the Vanguard digital experience may be similar to that of Fidelity, Schwab, and others.  

The phrase “this time is different” may be very costly in investing, though in this instance I’m very hopeful it means lower costs for Vanguard and, more importantly, makes it easier for investors to get the information they need to make appropriate investment transactions. Only time will tell but this time really does seem different.  

Allan Roth is founder of Wealth Logic, an hourly based financial planning and investment advisory firm. He also benchmarks portfolio performance for foundations and other business concerns. Roth's website is www.DareToBeDull.com. You can reach him at [email protected] or follow him on Twitter at Allan Roth (@Dull_Investing) · Twitter