Author Topic: Vanguard will no longer be in charge of their own Variable Annuities.  (Read 1012 times)

radram

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I thought I would share what I have learned so far.

First of all, I agree that Annuities are not technically investments, but still feel this is the best place for this post. Please move if appropriate.

For several reasons beyond the scope of this post(mostly tax related), I am the owner of some Vanguard Variable Annuities, along with other investments through Vanguard.

A few days ago while logging into Vanguard, I received the following message:

"Upcoming administrative changes to your Vanguard Variable Annuity
Vanguard will be transitioning the client service and account administration for the Vanguard Variable Annuity to Transamerica within the next 12 to 18 months. The underlying investments in your annuity are not changing, and there is no action you need to take."

Vanguard has different levels of service, based on assets under management(AUM). I was wondering whether this change would lower my AUM, and therefore effect my level of service, so I sent a request for more details. Here was their reply:

"At this point in time, there will be no changes prior to the actual
transition, which will occur in the next 12 to 18 months. As we move
through the transition process, more information will be available on how
this could impact your client group status. We will update you once that
information is available."

The message I WANTED was "your level will not be effected", but clearly that was not their message at this time. It is clear to me that my status MIGHT change as a result. I will post updates as I receive them.

Has anyone worked directly with Transamerica before? How was your experience?

I feel a little abandoned by Vanguard. Anyone else feel the same?

Zamboni

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Now that Jack Bogel is buried, I expect we'll see a lot of outsourcing and other changes at Vanguard that are more geared at lining the pockets of the very people making those decisions than helping folks like us.

Just my $0.02.

Indexer

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My understanding was that Vanguard was the custodian for the annuities but Vanguard isn't an annuity provider. Their annuities were always through Transamerica. I don't know a whole lot about dealing with Transamerica, but they are a big annuity provider.


Now that Jack Bogel is buried, I expect we'll see a lot of outsourcing and other changes at Vanguard that are more geared at lining the pockets of the very people making those decisions than helping folks like us.

Just my $0.02.

Luckily Vanguard isn't set up like other firms. They are client owned and operate at cost so any extra money goes back to investors. Jack set it up that way on purpose to avoid the very things you are describing.

Buffaloski Boris

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I kind of like the move. Annuities are more of an insurance product to me and insurance really isnít Vanguardís core business. Iíd rather they focus instead on putting out more specialized index funds.

jinga nation

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My Vanguard Variable Annuities (transferred/exchanged from NW Mutual, long story) have been handled by TransAmerica from the get go, I'm guessing since 2015.
Mine just go 70/30 VVA-Ttl Stock Market Idx/VVA-Total Bond Market Idx

I'm going to pull out the funds in the near future, I think, probably.

CorpRaider

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Yeah, there are some potential signals going on that might paint a picture when we look back in a few years.  Starting an active commodities fund.  Going into private equity.  People need to be vigilant.  State Farm and TIAA are mutual organizations too, it's not a panacea.

radram

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Thanks to all who have provided their $0.02. So far I am up a dime.

I am aware Transamerica was always the annuity company Vanguard sold annuities for. I have no issues with the product. Not the best place for money without strings, but that was not this case. Ours is also a complicated purchase, and selling them just is not a realistic option, so Vanguard will wipe there hands and when they say pound sand, there is nothing I can do.

As I think about it a little more, I guess I could think of it like a refrigerator purchase from Best Buy. They supply the purchase, coordinate delivery, and stand by the product for a small period of time (30-90 days). The manufacturer takes over at some point and Best Buy is a distant memory.

I am reminded of buying an assembly required box from a department store. There is a note in all of them that says if parts are missing, do not return to store. Instead call the manufacturer.

When I get down to it, I guess I believe when I purchased the annuities, I believed I was also entering into a relationship with Vanguard. It feels like a breakup. Funny, when my mortgage was sold 35 years ago, I didn't feel this way. I just changed the name on the check.

jinga nation

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@radram nothing is permanent

radram

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@radram nothing is permanent

How true. It is a good reminder to check in once in a while to see if how you always do something is still the best way to do it. XYZ company is the best until they are not anymore. Now where did I put my Sears catalog?

Blueberries

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Yeah, there are some potential signals going on that might paint a picture when we look back in a few years.  Starting an active commodities fund.  Going into private equity.  People need to be vigilant.  State Farm and TIAA are mutual organizations too, it's not a panacea.

I agree.  I was especially surprised by the possible private equity push.  Odd.