Over the years, the mutual fund giant the Vanguard Group has had no peer among financial companies when it comes to goodwill from customers and the media. It regularly dominates various “best” mutual fund lists put together by financial publications. Founder John C. Bogle is so celebrated for his focus on low costs and doing the right thing for the small investor that he’s frequently referred to as “Saint Jack.”
So why is a vocal collection of current and former employees putting so much energy into blasting the heralded operation? I address that question in my latest column for TheStreet, which you can read here.
The Vanguard Group, the world’s largest mutual fund company, has fired a whistleblower who shared information with TheStreet about deficiencies in the company’s customer account security.
Karen Brock, a client relationship administrator in Vanguard’s Scottsdale, Ariz., office, had told me that customers could access their Vanguard accounts even after entering typographical errors in their personal security answers. In my own account at Vanguard, I have repeatedly tested her assertions and found them to be true.
Brock also had detailed the complaints of a customer who said that he had asked his son to mimic his voice to test Vanguard’s “Voice Verification System.” Vanguard’s system allowed the son to gain access to the father’s account, Brock said. She also shared an internal training document where the names, email addresses, phone numbers and account numbers of several current or prospective clients had evaded the redaction process.
You can read my article about Brock’s firing here. You can see the original article that led to the firing here.
As if a turbulent day for stocks wasn’t problem enough for investors, glitches in the websites of many brokerage firms added to the public’s headaches today.
Testy customers took to Twitter to blast their brokerage firms and mutual fund companies for Web sites that had crashed, leaving them unable to execute trades in a volatile market.
As always, euphemisms abounded. Brokerage firm spokespeople said they had “a slowness issue,” or “a brief period of sporadic Web site inaccessibility,” and the like. But a crash? Not us.
Investors weren’t buying it. “@TDAmeritrade seriously? your servers are crashing today,” wrote one customer. And another: “What a disaster. Time for a new broker.”
You can read my article for TheStreet here.