Intrusive financial questionnaire from Vanguard

[Van6868]

I moved a couple of ISAs to Vanguard in the last year -- a stocks and shares one, and a cash one. My total investment was about £30,000. So a nice nest egg but hardly a huge sum of money compared to what some people might be investing.

They've now sent me a really intrusive financial questionnaire which they blame on anti money laundering legislation. They want to know the "source of my wealth", and not just this, but all my money, wherever it's invested!

As it happens, my parents have died over the last few years and as an only child I have inherited a substantial sum from them. I really don't see why it's any business of Vanguard's!

Can I refuse to fill in their intrusive questionnaire? I haven't had this from the bank or savings accounts.

You could refuse but they won’t set up the account for you. They’re following anti-money laundering legislation which keeps financial services safe and sound. Ultimately for customers’ protection.

Well if you don't provide the information they can, I believe, freeze your account until you do.

But I've already got an account with them and I've had it for a year or so. I provided them with all the ID info. The account was opened by transferring old ISAs to them so they know exactly where the money came from. They know want to know about all my money and they want me to document where it came from. It's really annoying.

I wouldn't be happy about that, sounds like sniffing around to see if you can invest more with them. Id close my accounts and move the money elsewhere.

Vanguard are very reputable. They are complying with financial services regulations.

Nothing you can do. If you were to move the funds elsewhere, you'd be faced with the same requirements.

It’s totally legitimate anti money laundering as PP said. If you’re investing a large amount of new money new money (rather than moving an existing ISA), and if it’s outside your normal pattern, they have a duty to ask.

You could close your accounts as another PP suggested, but a) you would screw up your Isa allowance and b) you’ll get the same Qs again.

Once you reach certain thresholds, there are questions they must have asked you by law to ensure you have legally gained the money you are spending.

Yes, it's intrusive & ridiculous, but they have to do it.

Some companies ask before you reach those thresholds, or when they anticipate you will in the near future because the second you reach one they face serious penalties for failing to do it.

It's the same if you buy & sell bullion or any other form of investment.

They have to know the source of wealth for money laundering regulations.

Yeah, you can refuse the information.
But you risk the freezing the account.
Your call.

You don’t want to tell the company who you trust enough to invest £30k where you got your wealth but you’re happy to start a thread on a parenting forum to announce it! Just fill in the form or move it to another provider.

How detailed is the information you need to provide? I've only come across the question on an application form for something and answering "Savings" was sufficient.

Are they asking for figures and documentary proof?

It’s totally normal. You’re making a fuss about nothing.

Standard money laundering questions.
We paid a mortgage off out of savings and I had to answer the question before the building society released their charge . We actually paid 3 mortgages off but only one building society questioned our source of funds so maybe they just take a sample.
Any cash deposits above £5000 paid in to a high street bank will generate the same question.If you complete the deposit slip they tend just to verbally confirm the
Source of funds otherwise it's a long form to complete.

You don't have to put a lot of detail, inheritance from parents is sufficient.

I've just had to do this and they accepted "sale of house from divorce" no documentation was required

Anti money laundering controls have been improving over the last few years so it might be a change in stance that’s filtered through since you opened the last account. It’s honestly ultimately about keeping the environment safe and sound for customers. You’d soon be kicking off if a company you invested in collapsed because they’d been found to be processing the proceeds of crime.

@Lovageandrose This is the investments board of a parenting forum. Do I need to ask your permission before posting?

MN is anonymous. The form isn’t.

I understand about the need for anti money laundering rules. What I’m questioning is why I’m being asked now, having had the account for a year; and why they need to know about all my finances, not just this account. Other family members with similar amounts in Vanguard haven’t been sent the same questionnaire.

They are asking for documentary evidence in the form of payslips, wills, bank statements, sale contracts for properties, solicitors letters etc. These are time consuming to assemble and, in the case of a solicitors letter, have to be paid for.

Anyway, I will obviously comply. I’d be interested to know if any of these things actually do catch criminals. I’m sure they have a way round it.

It may be as simple as a randomised selection of accounts have been reviewed and yours was selected for enhanced due diligence.

In my line of work (tax advisory) we will refresh client due diligence for every assignment or at least every 3 years. As part of our checks we do have questions regarding source of funds.

It's annoying but Vanguard are reputable and I wouldn't hesitate complying. There are very strict controls at the moment regarding AML and the penalties to get it wrong are severe

Thanks @Alarae