Our Vanguard Personal Advisor Services Review: Have a Human Advisor Review Your Plan

 

Since John Bogle founded Vanguard in 1975, they’ve become one of the most trusted companies in the investing industry. They have over 20 million clients and manage over $5 trillion in assets.

Throughout their history, Vanguard has championed the idea that the average person can be a successful investor by implementing a buy and hold strategy and keeping their costs low. But even Vanguard realizes that not everyone wants to go it alone when it comes to investing for their retirement or other goals. That’s why, in 2015, they launched a new service, called Vanguard Personal Advisor Services.

Vanguard Personal Advisor Services provides customers with a goal-based financial plan that includes asset allocation, rebalancing, and tax-efficient investing and will then manage your plan towards those goals. Vanguard Personal Advisor Services has an account minimum of $50,000 and charges a 0.30% annual fee. In addition to the Personal Advisor Services recommendations and advice, you can talk to a human at any time. Vanguard’s advisors are fiduciaries and never receive commissions for the recommendations that they make.

Continue reading our full Vanguard Personal Advisor Services review to learn more.

Would Vanguard Personal Advisor Services be a Good Fit for You?

Vanguard Personal Advisor Services could be a great fit for Vanguard fans who have over $50,000 to invest. If you’re already a huge believer in Vanguard’s low-cost index fund investing strategy, you’re sure to love how affordably they’re able to offer Personal Advisor Services services and advice from registered advisors.

Even if you aren’t a current Vanguard customer, Vanguard Personal Advisor Services may be a service worth switching for. You’ll be hard-pressed to find an advice service that offers human advisor access for only a 0.30% fee and a $50,000 minimum deposit.

Betterment and Wealthsimple, for instance, require investments of at least $100,000 to get access to an advisor. And both charge a 0.40% annual fee at those tiers. And Wealthfront doesn’t offer access to human financial advisors whatsoever. Check out our full review of Betterment here.

But if you have less than $50,000, you’ll need an advice service that has lower account minimums. Betterment and Wealthsimple, for example, have $0 account minimums and Wealthfront’s account minimum is only $500.

Related: Betterment vs. Vanguard: Both Are Great, But Which is Best?

How to Get Started with Vanguard Personal Advisor Services

You can get started with Vanguard Personal Advisor Services online by filling out their questionnaire.

You’ll begin by telling Vanguard about your needs and goals. In order to choose an appropriate investing strategy for you, Vanguard needs to know whether you’re saving for retirement, a down payment on a home, your child’s college education, or any other expense.

After you’ve finished your questionnaire, you’ll schedule a phone call with an advisor. The advisor that you talk to will provide a customized plan based on your preferences. Your plan will also provide a likelihood of success if you implement it.

Vanguard Personal Advisor Services Review

Don’t think the plan is a good fit for you? No problem. There is absolutely no obligation.

Investments

As you would probably expect, the financial advisors at Vanguard Personal Advisor Services will mostly recommend Vanguard funds. And that’s a good thing because Vanguard’s index funds have some of the lowest fees on the market today.

Other companies have recently tried to jump on to the low-cost index fund train, but its what Vanguard has always done. And since they don’t have outside investors who need to get a cut of profits, their funds generally have only gotten cheaper over time.

Even in a more competitive landscape than 20 years ago, Vanguard says that their mutual funds and ETFs are still 84% less expensive than the industry average.* And they say that 88% of their mutual funds and ETFs have outperformed their direct competitors over the past 10 years.**

Custom Portfolios

The specific funds and bonds that will be recommended for your portfolio will depend on your investing track. Investing tracks range from very conservative, conservative, moderate, aggressive, and very aggressive.

Vanguard’s portfolio algorithms match your asset allocation to your risk appetite and the time remaining for each of your goals. But your portfolio will include some combination of Vanguard’s funds (and ETFs) across different asset types.

  • Stock funds: Meant to track the performance of a particular stock market benchmark
  • Bond funds: Serve to offset some of your risk
  • International funds: Expose you to investments from around the world

Socially Responsible Funds

There is a growing movement of investors who want to make sure that they’re money is being invested in “socially responsible” companies. People want to know that their money is helping to support businesses that protect the environment, follow ethical business practices, and have fair labor standards.

Some of the newer entrants to the advice service space, like Wealthsimple, heavily promote their socially responsible investment choices. But you may be surprised to learn that Vanguard offers socially responsible funds too. They call them ESG (Environmental, Social, and Governance) funds.

Vanguard Personal Advisor Services Review

Here are the four ESG funds that Vanguard offers.

  • Global ESG Select Stock Fund (VEIGX)
  • ESG U.S. Stock ETF (ESGV)
  • ESG International Stock ETF (VSGX)
  • FTSE Social Index Fund (VFTAX)

Do Vanguard Personal Advisor Service Portfolios Offer Automatic Rebalancing?

Yes, they do offer automatic rebalancing on a quarterly basis, as needed.

Account Minimums

To qualify for Vanguard Personal Advisor Services, you’ll need an account size of at least $50,000. And certain accounts do not count toward the required minimum. These include:

  • 401(k) accounts
  • 403(b) accounts
  • i401(k) accounts
  • 529 accounts, UGMA/UTMA accounts
  • Investment accounts held outside of Vanguard

Access to Registered Investment Advisers

If your account falls within the $50,000 to $500,000 range, you’ll have access to a team of investment advisors. If your account size is greater than $500,000, you’ll be assigned a dedicated advisor.

Vanguard’s advisors not only help you build your portfolio, but they serve as investing coaches all along the way. If the market is down and you’re tempted to sell all your investments, your advisor can help calm your fears, address your concerns, and help determine what the next step should be.

Sometimes it’s helpful to just have someone in your corner saying “Hang in there, it’s going to be ok.” That little bit of encouragement may be all you need to avoid making a bad decision.

This kind of access to human financial advisors is a huge plus of Vanguard Personal Advisor Services. And it’s something that very few advice services offer to account sizes lower than $100,000. Ellevest is one of the few that is able to match Vanguard’s $50,000 account minimum for investment advisor access. But you’ll pay a higher 0.50% annual fee.

Sofi does offer investment advisor access on their Sofi Invest platform (which charges no fee whatsoever.) But it’s important to point out that Sofi became a household name for refinancing student loans and they’re very new to the advice service industry.

Are Vanguard Personal Advisors Fiduciaries?

Yes, all of Vanguard’s personal advisors are held to a fiduciary standard. And they don’t receive any commissions for selling specific products.

It’s also important to point out that Vanguard’s advisors will want to look at your full financial picture–even accounts that aren’t with Vanguard. So if you have a 401k or a 529 account that’s held outside of Vanguard, make sure you let your advisor know so that they can make sure that’s taken into consideration when he or she is calculating the success rate of your financial plan.

How Much Does Vanguard Personal Advisor Services Cost?

As mentioned before, the annual fee for Vanguard Personal Advisor Services begins at 0.30%.

Vanguard Personal Advisor Services Review

* Source: PriceMetrix. Average fees are based on data contained in PriceMetrix’s proprietary database, representing more than 20 North American wealth management firms that service more than 12 million retail investors. PriceMetrix’s data set covers over one-third of retail assets managed by full-service financial advisors. The average fees are based on households with assets of $1 million to $1.5 million. PAS clients at the same asset level will be assessed a 30bps advisory fee. Note that full-service advisors, including PAS, may provide a tiered-fee structure based on the level of assets being managed, and may require a minimum asset level to manage the accounts. The average fees do not consider other costs, including underlying product costs, transaction costs, or other account costs. Unless otherwise noted, all data is reported as of December 31, 2017.

Account sizes that are $5 million or greater are eligible for discounts as shown below.

  • 0.30%: Less than $5 million
  • 0.20%: $5 million to less than $10 million
  • 0.10%: $10 million to less than $25million
  • 0.05%: Greater than $25 million

In addition to the annual fee for Vanguard Personal Advisor Services, the funds in your portfolio will have an expense ratio. Thankfully, you’ll typically be recommended the same low-cost Vanguard index funds and ETFs that customers have come to know and love.

VTI (Vanguard’s Total Market ETF), for instance, currently has an expense ratio of 0.03%, as of December 6th, 2019.

The Bottom Line

Vanguard is known as the “do it yourself” brokerage company. But you don’t have to do it yourself. If you have over $50,000 to invest and you’re in the market for advice, don’t overlook Vanguard Personal Advisor Services. It has a lot to offer.

With Vanguard Personal Advisor Services, you’ll get a custom financial plan, tax savings, automatic rebalancing, and access to human advisors–all for a 0.30% annual fee.

That’s a lot of value for a low price. And, since this is a Vanguard service, that’s exactly what we should have all expected.

* Vanguard average mutual fund and ETF expense ratio: 0.10%. Industry average mutual fund and ETF expense ratio: 0.58%. All averages are asset-weighted. Industry averages exclude Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2018.

** For the ten-year period ending September 30, 2019, 9 of 9 Vanguard money market funds, 49 of 62 bond funds, 22 of 23 balanced funds, and 130 of 146 stock funds, or 210 of 240 Vanguard funds, outperformed their peer-group averages. Results will vary for other time periods. Only mutual funds and ETFs (exchange-traded funds) with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company. The competitive performance data shown represent past performance, which is not a guarantee of future results. Visit vanguard.com for updated Vanguard fund performance.

***Source: PriceMetrix. Average fees are based on data contained in PriceMetrix’s proprietary database, representing more than 20 North American wealth management firms that service more than 12 million retail investors. PriceMetrix’s data set covers over one-third of retail assets managed by full-service financial advisors. The average fees are based on households with assets of $1 million to $1.5 million. Personal Advisor Services clients at the same asset level will be assessed a 30bps advisory fee. Note that full-service advisors, including Personal Advisor Services, may provide a tiered-fee structure based on the level of assets being managed, and may require a minimum asset level to manage the accounts. The average fees do not consider other costs, including underlying product costs, transaction costs, or other account costs. Unless otherwise noted, all data is reported as of December 31, 2017.

Vanguard is client-owned, meaning the company is owned by its funds, which in turn are owned by their shareholders.

All investing is subject to risk, including the possible loss of the money you invest. Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited‐purpose trust company.

For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

Our Vanguard Personal Advisor Services Review: Have a Human Advisor Review Your Plan
About Clint Proctor

Clint Proctor is the founder of the Wallet Wise Guy and a freelance writer. You can find his work at Business Insider, US News, Forbes, Yahoo Finance, Credit Karma, Student Loan Planner, and many other news sites and blogs.

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