Former manager- here's the truth you need to know.
Pros
Paid licensing, training, will pay for your CFP and MBA if you can get into program. Great non-salary benefits package. 10% contribution to your 401k in addition to standard company match. 401k grows quickly. For health benefits, few people know that VG is actually self insured, meaning our provider is just a record keeper and Vanguard decides what claims they are going to pay and how much. Crew have had severe medical bills (cancer, pre-mature babies) ringing up hundreds of thousands of $, from what I hear, the company has covered most, if not all of them, crew were very grateful. Company has a strong brand, money flows in at will.
Cons
Here's everything you need to know that your managers wont tell you. This is not Jack Bogle's Vanguard anymore. They used to be a great place to work, a family type atmosphere that cared about its crew, showed it in terms of support, growth, and pay, it was common for crew to work 25+ years and retire. Sadly, under Bill McNabb, this has eroded and I only saw it getting worse, that's why I got out. The hundreds of posts on this blog about pay, performance management, and career pathing are true, and I'll explain why so you all can make an informed decision. Let's start with pay- here's the truth. Vanguard has grown exponentially over the last 7 years, mainly on the notion that they're the "low cost provider", and they are. But their dominance in the industry has caused competitors like Schwab and Blackrock to lower their fees as well. They can't compete with Vanguard on average, so they smartly undercut Vanguard on certain individual products. So if you look at a lineup of 20 different funds or ETF's, Vanguard will probably only be the lowest cost on half of them. This is terrifying to the Vanguard brass because although money is flowing in hand over fist, Vanguard has a serious revenue problem. 90% of its cash flow has been into its least expensive (or profitable for the business) product, index funds. So while its great for the clients, its not good for the business. The result is this intensely focused effort to further cut costs to compete, "bend the cost curve" is the common expression. So they have no overhead, and have cut operating costs as low as they can for a $3 trillion company, those cost cuts have to come from somewhere, so you guessed it, they come from employee pay, and that's what you've seen. Vanguard has a company bonus called "Partnership" that is paid out every June. When I first got there, tenured employees got up to 30%of their salary, a nice chunk of change that made up for the lower range salaries comparably to other firms. Well in 2010 they restructured that, and as a result partnership payouts were cut in half for most crew. When they rolled it out they said crew were going to benefit because more money was being allocated to year end performance bonuses. What crew got in bonus was far less than what was taken for them in partnership. And now, it just came out that they re-classified all their jobs, and as a result, 2000 crew who used to be bonus eligible will now be hourly and no longer be eligible for a bonus. So thousands of crew have the double whammy of reduced partnership, and no more bonus. Add in the paltry 2% merit crew get even if they perform well, that's the sentiment you see on so many of these posts. In summary, the trend is clear. Still a great place to invest if you're a client, but it will always be at the expense (literally) of the crew. Now on to performance management. There is a forced rank system where each manager has to rate their crew's yearly performance in one of four buckets (Distinguished, fully successful, further development needed, does not meet expectations). The scary thing here is that its all based on subjective "soft skill' competencies. Business results matter very little, its all at the discretion of your manager. Depending on who's telling the story at year end, anyone at the company can either be Fully Successful for FDN. I've seen leaders rate crew who are exceeding all their goals get FDN because they have a "bad attitude". You ask them to explain, and they give one example of one ten second exchange from one closed door conversation, without context, and that's all it takes for a "negative" perception to be formed, and you are sunk. That's why the "play the game, be a yes man" comments are so prevalent. What's worse, the dirty secret managers don't want you to know is that behind closed doors they force rankings to fit into a "normal distribution" so that only a certain percentage of crew are distinguished, and a certain percentage of crew have to fall out FDN. As a manager I was forced to change rankings on more than one occasion. I assessed my people in my best judgment, sent it up the chain for approval, and it came back with a "request" to "take a closer look" because we either had too many distinguished, or not enough FDNs. If you stood your ground, you risked your own performance because you are held accountable for "accurately assessing performance", which is code for "agreeing with your boss". Very ugly system, full of inaccuracy, stress, and corruption, and all the employees hate it. But senior managers brag about the pay for performance system as if its a badge of honor..... Lastly, let's talk career pathing. Vanguard assesses "talent" much like they assess performance. Very little attention is paid to track record, actual results, or experience. Instead, 'talent" is assessed very early on in your tenure, based on if you look the part, present well in group settings, use Vanguard jargon, and network. Most crew don't know this, but senior managers actually have a "talent list' they keep and update. They keep this secret form the crew. You never know who's on, or who's off, or why. And as a common rule of thumb (most managers wont tell the crew this), they won't promote you unless they see you as two levels higher in the future. This is why you see so many managers in their 20's, and why so many 40+ crew complain they can't get promoted. So, if there is a senior manager position open and you have a 45 yr. old line manager with a great track record over several years, even if they're the most qualified, he/she will lose out to a 28 year old line manager with two years of experience because the 28 yr old will be considered "talented", ie: has more time to grow, thus, a better chance to take the next step up to officer. That's consistent at all levels of management. Good, tenured, team leaders can rarely move laterally to other leadership positions because they lose out to "talented crew" who have no experience leading people or leading a business. Again, this explains the negative sentiment about leaders on this site. Google "Vanguard discrimination claims" and you'll see dozens of examples. Vanguard blows these claims off with the excuse that its just the result of being a global company. But do the same search for other companies, and although you see some isolated instances, you don't see the multitude of them like Vanguard has.Vanguard doesn't lay people off, and they like to brag about that,. but here's what they don't tell you. Once you reach a certain point in tenure, they find ways to manage you out. You may have gotten good ratings for years, then all of the sudden a new leader comes along and you're told you're not performing in your job (note above point about leader judgment). So although they don't throw you out in the street, they give you bad ratings and then suggest "finding a different role in the company". So you then have to interview for positions lower than your current level as if you're a stranger coming in from the outside. No attention is paid to your track record, even if you've been a top performer for years, it's all about how you answer a few behavioral based questions in the interview. If you can't find a role on your own, the managers will work with their buddies to place you in a role, usually on the phones, to make you so embarrassed and miserable that you quit. I've seen this happen dozens of times, and honestly, I've done it myself although I'm not proud of it. You did what you had to do to survive, even as a manager you feel the same pressures and are subject to the same biases and performance management flaws. So Vanguard doesn't chop your head off in one swoop like other companies may, but they will poke you with a butter knife until you slowly bleed to death over a longer period of time. You decide what is worse. The worst part, when they're committing all these atrocities, the culture is to smile at you and act like they actually care. This "nice to your face, but cut your throat behind your back" notion permeates every aspect of Vanguard's leadership culture. I saw so many example of leaders giving speeches about what good leaders should do, but when they run their teams they do the exact opposite, and astonishingly, they don't see it. Every single time there is a change or a big announcement, the management team has endless meetings trying to craft the most positive spin possible, sometimes choosing to leave out details they think the crew won't be able to handle, rather than just tell the crew the truth. Then they'll brag about how transparent they are. This is all predicated on the culture of surface level looks over results, as noted previously. Senior managers have been drinking the kool aid so long they're delusional. There's this quiet arrogance that they never do anything wrong, and if they make decisions against the crew, well, crew just don't understand how business is run. Ugh, so glad I'm out. I feel awful for the thousands of crew who are still there, and are growing increasingly miserable, but stay because they remember the way Vanguard used to be. My advice- Don't let Vanguard brainwash you. Its not the company it used to be. No matter what they say, there are better opportunities out there. You don't have to put up with it.
