Vanguard and several Wall Street brokerage firms reported online outages and technical problems on Monday, amid a stock split for both Apple and electric carmaker Tesla.
“Earlier today, Vanguard experienced intermittent connectivity issues impacting our websites, mobile apps, and phones,” spokesperson Dana Grosser said Monday.
“The issue has been resolved and we encourage clients to clear their internet cache and cookies, and recycle their web browser, before logging back on to our system. We apologize for the inconvenience and thank clients for their patience.”
Also, she said, “we have no reason to believe the issue was related to trading volumes. While we are still researching the root cause of the issue, we have no reason to believe this was due to an external party. Additionally, we are confident that the issues Vanguard experienced are not related to those experienced by other firms.”
Vanguard counted roughly 30 million customers and $6.3 trillion in assets as of July 31, 2020.
Trading problems began as soon as Wall Street opened for trading, after Apple Inc. completed a 4-for-1 stock split and Tesla Inc. also split its stock, 5-for-1, both effective Monday. Those public companies are the subject of intense speculative trading, particularly by new market investors on retail investor sites such as Robinhood.
A number of changes occurred Monday in the Dow Jones industrial average, including the addition of Amgen, Salesforce.com and Honeywell International. ExxonMobil, Pfizer and Raytheon were dropped from the index.
Bogleheads.org, an online education site run independently by Vanguard investors, confirmed Monday morning that customers were having trouble logging in to their accounts and making trades.
On social media and message boards, Vanguard clients complained that their balances were in error.
One poster named “TheTimeLord” wrote at 10:44 am: “I can log on but the Account Overview and Balance & Holdings pages get a ’The page you requested could not be found’ message.”
Vanguard wasn’t alone. Other financial firms also reported problems, including Charles Schwab, TD Ameritrade, Robinhood and Fidelity. According to the internet service tracker DownDetector, more than 2,600 users on the East Coast had reported problems with Robinhood. Vanguard, which resolved the problem, also received more than 2,600 reports. More than 1,300 users reported issues with Schwab, while more than 250 described problems with E-Trade.
By late afternoon, however, trading resumed normally. Customers of Vanguard said they experienced long wait times on the phone to speak with service representatives of the Malvern-based investment firm, but were able to resume buying and selling.
Over the weekend, “anyone with Apple in their account was seeing four times as many shares but no split on the price,” said Adviser Investments’ Dan Wiener, who invests in Vanguard funds for clients.
“Sounds like the computers got ahead of the pricing mechanism” for the stock splits in Apple shares, he said.
Vanguard’s explosive asset growth has continued amid record low interest rates, which have pushed more investors into the stock market as they search for sources of income.
In 2019, the average account balance for Vanguard participants was $106,478, versus $92,148 the prior year. That’s according to Vanguard data released in its most recent report on retirement, “How America Saves.”
Account balances also varied by industry. In 2019, savers employed in the agriculture, mining, and construction industries had average account balances multiples higher — $161,065 — than those employed in the wholesale and retail trade industries — averaging $71,795.
Two factors drove the increase in accounts: the rising adoption of automatic enrollment, which results in more saving but also leads to a growing number of smaller balances. The second factor was the 30% increase in the U.S. equity markets in 2019, the firm said.