Lorem ipsum dolor prumus versus lorem.

Forex&Stock

Lorem ipsum dolor prumus versus lorem.

Lorem ipsum dolor prumus versus lorem.

Bogleheads.org

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

User avatarBarry Barnitz
Wiki Admin
Posts: 2931
Joined: Mon Feb 19, 2007 10:42 pm
Contact:

Postby Barry Barnitz »Sat Mar 08, 2014 5:20 pm

Hi:

We have a new page on the blog, Vanguard Personal Advisor Services Manages Your Accounts At An Affordable Price | Bogleheads® Blog. This is interesting, and perhaps, important news for the investing public.

Many investors find both the asset minimum and the fee for Vanguard Asset Management Services out of reach. Good news, Vanguard now offers a new service with a lower minimum and a lower fee. It’s called Vanguard Personal Advisor Services (VPAS).

The minimum for accounts managed under the Vanguard Personal Advisor Services is $100,000. That’s for all accounts combined, not per account. The fee is a flat 0.3% per year.
There is no minimum time commitment. You can terminate the service whenever you want.

regards,

| blb | December Birthday Celebration: Ludwig van Beethoven
User avatarMel Lindauer
Moderator
Posts: 26423
Joined: Mon Feb 19, 2007 8:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Postby Mel Lindauer »Sat Mar 08, 2014 5:51 pm

Thanks to Harry for that article. That's a lot of service Vanguard is offering for 0.3%. I'm sure lots of advisors won't like it when Vanguard goes mainstream with this new service.

Best Regards - Mel | | Semper Fi

User avatarneurosphere
Posts: 2174
Joined: Sun Jan 17, 2010 1:55 pm
Location: NYC
Contact:

Postby neurosphere »Sun Mar 09, 2014 3:46 pm

Mel Lindauer wrote:Thanks to Harry for that article. That's a lot of service Vanguard is offering for 0.3%. I'm sure lots of advisors won't like it when Vanguard goes mainstream with this new service.

I agree that advisors won't like it. Competition is tough. But this is great news for the consumer/investor. It seems what is happening is that investment management is becoming a commodity, and this is going to put pricing pressures on investment management services. Which is relatively good news, because as the availability of low-fee management becomes more visible and accessible, the high(er)-fee advisors are going have to answer some tough questions about why their costs are so high.I also think advisors are going to have to work hard to find out just HOW they can add value. I still believe that some (few!) people need good paid financial planning services. Perhaps as AUM fees come down, there will be a shift towards more hourly or retainer-based planners. Their role might be to address the planning issues which a low-fee advisor like Vanguard might not be able to effectively address. For example, Harry's blog posts implies that communicating with a Vanguard advisor would be email based? Some folks might really want to have a "face-to-face" advisor. On the other hand, I think as time goes on, people are going to be very comfortable with remote financial planning. I find that almost all of the "younger" people I help would rather "meet" via video conference such as Skype and with screen sharing software where I can essentially "push information across the table", rather than have me travel to them, or make them travel to me. In any case, I hope Vanguard's 0.3% AUM fees become the baseline against which all other advisors will be judged. Similar to the way we now compare index funds with active funds. I.e. every client should ask "I can get X level of service for $Y a year at Vanguard, what can you give me that Vanguard can't and do those extra services justify your higher fees?"

Neurosphere

User avatartfb
Posts: 7552
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Postby tfb »Sun Mar 09, 2014 4:13 pm

neurosphere wrote:For example, Harry's blog posts implies that communicating with a Vanguard advisor would be email based?


Email and scheduled calls and/or web video conference. You will see the availability of your assigned advisor online. You then book a time slot. Sounds reasonable to me.

Harry Sit, taking a break from the forums.

User avatarneurosphere
Posts: 2174
Joined: Sun Jan 17, 2010 1:55 pm
Location: NYC
Contact:

Postby neurosphere »Sun Mar 09, 2014 4:27 pm

tfb wrote:

neurosphere wrote:For example, Harry's blog posts implies that communicating with a Vanguard advisor would be email based?


Email and scheduled calls and/or web video conference. You will see the availability of your assigned advisor online. You then book a time slot. Sounds reasonable to me.
Thanks for the clarification, I'm just now going through their web page and their ADV filing.I found this comment interesting in their brochure, related to their assumptions used for all investment holdings (whether at Vanguard or held elsewhere) when creating a financial plan and forecasting future balance for goals/balances:
Finally, the actual costs of investments held in the Portfolio and any non-Portfolio accounts are not factored into the projections. Instead, the Service assumes an annual 50-basis-point

(0.50%) expense for all accounts supporting a particular goal.

Also it seems they use "aft-casting" to stress-test withdrawals for retirement:
First, we analyze your income needs in retirement. Then we run simulations through all the time paths and assume you began taking withdrawals at a specific point in history (for example, 1960, 1970, or 1980). We then use the actual historical rates of return that occurred in each subsequent year from that point forward, applying them in sequence to your assets supporting this goal as time moves forward. If a path goes beyond the most recent year-end, we loop back to the returns of 1926 and cycle forward from there until either your assets are depleted or the end of your planning horizon is reached. Your estimated success rate is simply the fraction of these paths in which your balance is above

zero at the end of your planning horizon.

And that they use Monte Carlo analysis for goals forecasting:

Accumulator goals can focus upon saving a sum for a single lump distribution (such as saving for a home) or upon saving a sum to be drawn down over an extended period of time (such as saving for retirement). We’ll illustrate the process using an accumulator goal with an extended drawdown. The projections use a Monte Carlo analysis to simulate future market scenarios.

It's unclear to me if rebalancing can ONLY be done quarterly, and with a 5% threshold, or if one can specify a different schedule (i..e annually) or higher threshold. In addition, it's not clear to me yet if rebalancing is mandatory, and just how much tax considerations are taken into account in taxable accounts:
If during a quarterly review your Portfolio is found to deviate from the target asset allocation by more than 5% in any asset class, Vanguard Personal Advisor Services will rebalance your Portfolio. The overweighted sub-asset classes will be sold and the proceeds invested in underweighted sub-asset classes in accordance with your Financial Plan. The Service will attempt to minimize the tax costs associated with rebalancing your Portfolio. If the Portfolio consists of both taxable and tax-advantaged registrations, we’ll attempt to rebalance within the tax-advantaged accounts to limit tax costs as well as consider the tax implications

of repositioning investments within the taxable accounts

Anyway, overall it seems like a good service.

Neurosphere

steve_14
Posts: 1507
Joined: Wed Jun 20, 2012 12:05 am

Postby steve_14 »Sun Mar 09, 2014 6:09 pm

Looks like a solid service if your portfolio requires any more work that occasional rebalancing.

afan
Posts: 2358
Joined: Sun Jul 25, 2010 4:01 pm

Postby afan »Sun Mar 09, 2014 7:54 pm

Will Vanguard lower the fees for their Asset Management service? If not, how will they keep people from bailing out of Asset Management to Personal Advisor Services?

I think most bogleheads would say that few people need to pay for asset management, but if one really can't/does not want to do it themselves, then 0.3% per year seems like a decent deal. Certainly this will make it hard to justify paying anyone more than that.

We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

User avatartfb
Posts: 7552
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Postby tfb »Sun Mar 09, 2014 9:06 pm

afan wrote:Will Vanguard lower the fees for their Asset Management service? If not, how will they keep people from bailing out of Asset Management to Personal Advisor Services?

Maybe they will offer or already offered the Asset Management service customers to convert unless the customer needs the institutional trustee. Current Asset Management service customers should call to inquire.

afan wrote:I think most bogleheads would say that few people need to pay for asset management


I think most people, even current Vanguard customers, actually need it. Only Bogleheads themselves don't need it, depending on how you define Bogleheads. No shortage of "stayed in cash, what now?" type of posts here.

Harry Sit, taking a break from the forums.

sarahjane
Posts: 178
Joined: Tue Jan 21, 2014 5:18 pm

Postby sarahjane »Sun Mar 09, 2014 9:33 pm

I've been promised responses from Asset Management which were never forthcoming. No follow up. I don't think this is a Vgd. strength.

User avatartfb
Posts: 7552
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Postby tfb »Mon Mar 10, 2014 11:46 am

sarahjane wrote:I've been promised responses from Asset Management which were never forthcoming. No follow up. I don't think this is a Vgd. strength.


I wouldn't write off an institution just because one person failed to follow up. Now that the price is cut in half for up to $1.4 million, maybe it's worth a second look if you haven't found another solution.

Harry Sit, taking a break from the forums.

VennData
Posts: 568
Joined: Mon Feb 26, 2007 5:52 pm

Postby VennData »Wed Mar 12, 2014 7:07 am

Watch for the ad campaign.

Sarahjane, I have never had a question to Vanguard go unanswered. Probably sent over fifty emails and a couple dozen calls over the years. Communication is a Vanguard strength.

bgscms
Posts: 39
Joined: Sun Oct 13, 2013 11:18 am

Postby bgscms »Wed Mar 12, 2014 7:23 am

Great news! Thanks for sharing.

sarahjane
Posts: 178
Joined: Tue Jan 21, 2014 5:18 pm

Postby sarahjane »Wed Mar 12, 2014 10:32 am

These were not questions. I had inquired about advisory services for our Flagship accounts, was called by a manager and had a phone conversation with an adviser. I was promised some detail about specific recommendations for our accounts and never heard another word. This strikes me as poor business practice.

Watertree
Posts: 26
Joined: Sat Mar 10, 2007 8:37 pm

Postby Watertree »Wed Mar 12, 2014 11:36 am

When will Personal Advisor client service become available? I am on the fence with staying with Schwab or moving to Vanguard. Schwab advisor client service is .90% and is not very good. A .30% AUM from Vanguard for personal advisor client is a great value.

Watertree

User avatartfb
Posts: 7552
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Postby tfb »Wed Mar 12, 2014 12:35 pm

Watertree wrote:When will Personal Advisor client service become available? I am on the fence with staying with Schwab or moving to Vanguard. Schwab advisor client service is .90% and is not very good. A .30% AUM from Vanguard for personal advisor client is a great value.


It is available now. Call 866-734-4531 to get started.

Harry Sit, taking a break from the forums.

User avatarabuss368
Posts: 11070
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Postby abuss368 »Wed Mar 12, 2014 2:01 pm

Mel Lindauer wrote:Thanks to Harry for that article. That's a lot of service Vanguard is offering for 0.3%. I'm sure lots of advisors won't like it when Vanguard goes mainstream with this new service.

Good for Vanguard! This profession / industry is long overdue.

John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

Magruder
Posts: 63
Joined: Sun Mar 04, 2007 1:30 am
Location: White Mtns of NH

Postby Magruder »Tue Apr 01, 2014 2:21 pm

Surprised no one has chimed in with comments after "test flying" this new service. Anyone?

letsgobobby
Posts: 9762
Joined: Fri Sep 18, 2009 1:10 am

Postby letsgobobby »Tue Apr 01, 2014 3:22 pm

How is this new service different from the "Ask a CFP" service (free for Voyager Select $500k+) or the "Financial Plan service" ($1000 or less, free for Voyager Select and up)?

User avatarObliviousInvestor
Posts: 3153
Joined: Tue Mar 17, 2009 9:32 am
Contact:Contact ObliviousInvestor

Postby ObliviousInvestor »Tue Apr 01, 2014 4:58 pm

letsgobobby wrote:How is this new service different from the "Ask a CFP" service (free for Voyager Select $500k+) or the "Financial Plan service" ($1000 or less, free for Voyager Select and up)?


Sounds like it's the same thing as the financial planning service they've had, plus portfolio management (i.e., they handle the rebalancing etc.).

Mike Piper, author/blogger

User avatartfb
Posts: 7552
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Postby tfb »Tue Apr 01, 2014 5:23 pm

letsgobobby wrote:How is this new service different from the "Ask a CFP" service (free for Voyager Select $500k+) or the "Financial Plan service" ($1000 or less, free for Voyager Select and up)?

If you have less than $500k, you can't get the "Ask a CFP" service. Financial plan is just a one-shot deal. Updating the plan requires another payment. The new service gives you a plan, plus "Ask a CFP" service, plus portfolio management, plus annual review, plus updating the plan when necessary.

If you have more than $500k, you can already get a plan once a year and the "Ask a CFP" service. The new service gives portfolio management as extra.

Harry Sit, taking a break from the forums.

kd2008
Posts: 463
Joined: Sun Feb 15, 2009 6:19 pm

Postby kd2008 »Tue Apr 01, 2014 6:00 pm

Consider a 60/40 Portfolio like below:40% Vanguard Total Stock Market Adm 0.05% ER20% Vanguard Total International Stock Market Adm 0.14% ER40% Vanguard Total Bond Market Adm 0.08% ERWould have a weighted ER of 0.08%Add 0.3% for Portfolio Management service - you get all this - a plan, plus "Ask a CFP" service, plus portfolio management, plus annual review, plus updating the plan when necessary - you get an awesome deal at less than 0.4% ER.

All in all it is an excellent value proposition, I think.

User avatarjoe8d
Posts: 4165
Joined: Tue Feb 20, 2007 8:27 pm
Location: Buffalo,NY

Postby joe8d »Tue Apr 01, 2014 8:20 pm

Sounds great. Definitely will recommend to the majority of people who need help.

All the Best, | Joe

User avatartfb
Posts: 7552
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Postby tfb »Sun Apr 13, 2014 1:39 pm

Vanguard has gone public with this. Although it's still not linked from the website navigation, they were featured and quoted in the

New York Times article Financial Advice for People Who Aren’t Rich. There's also a new, much more elaborate landing page that rivals one produced by the startups.

Harry Sit, taking a break from the forums.

Fallible
Posts: 5712
Joined: Fri Nov 27, 2009 4:44 pm
Contact:

Postby Fallible »Sun Apr 13, 2014 2:06 pm

tfb wrote:Vanguard has gone public with this. Although it's still not linked from the website navigation, they were featured and quoted in the New York Times article Financial Advice for People Who Aren’t Rich. There's also a new, much more elaborate landing page that rivals one produced by the startups.
Thanks for the update and link to the article, of which I liked the last graf about even lower fees and justifying existing ones:"Not all of these players will survive, but their sheer number will probably bring prices down even further or force established advisers to do more to justify their existing fees. As long as nobody runs off with the money, consumers stand to gain over the long term from all of the people now clamoring to do the best job of helping them out."

Thanks also to Barry for this Blog.

Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

maxim81
Posts: 47
Joined: Sat Apr 19, 2008 7:03 pm

Postby maxim81 »Mon May 19, 2014 9:50 am

This is great.. highly considering it.

asif408
Posts: 884
Joined: Sun Mar 02, 2014 8:34 am
Location: Florida

Postby asif408 »Mon Jun 16, 2014 11:26 am

I am bumping this thread because I am curious if anyone has had any recent experience (good or bad) with VPAS? I suggested the service to my parents because they are right at retirement age and have a complicated portfolio that needs some simplifying and consolidating.

Mathguy74
Posts: 3
Joined: Thu Jun 19, 2014 7:13 pm

Postby Mathguy74 »Thu Jun 19, 2014 7:25 pm

As a Flagship member at Vanguard, I inquired in early June 2014 about my annual financial review and plan coupled with a VAMS sales pitch. My connection this time was to VPAS this time. It appears as of mid June 2014 they are in the test rollout of VPAS and that the intent is to replace VAMS with VPAS given time. My advisor indicates the services are the same, with the only difference being the pricing structure. I am seriously considering this new service at .3%. My only question concerning the pricing structure is why it is asset based rather than a flat fee. The amount of effort required for someone with half my assets is the same number of hours, but currently they would pay half the fee that I would. I am surprised Vanguard did not move to a flat fee service, but I am very pleased to see a substantial lowering of the VAMS fee structure to that in VPAS.

Mathguy74
Posts: 3
Joined: Thu Jun 19, 2014 7:13 pm

Postby Mathguy74 »Mon Jun 23, 2014 9:44 am

Hello,

I did get my annual financial plan from being Flagship level at Vanguard and am considering the VPAS management. Just out of interest for the readers, the portfolio consisted of total US stock market index, total intl. stock market index, total bond market, total intl. bond market, intermediate investment grade bond fund, and short term investment grade bond fund. I believe this is somewhat in line with Jack Bogel's recent thinking that the Total Bond Market does not give the representation he would like and that investgrade bonds should supplement it - I would be interested in confirmation of this from others. I will have my third meeting later this week and I have a few hard questions to ask such as which source (protected, unprotected, allocation neutral, etc.) they favor for withdrawal of living expenses if there is a choice. Also, are the withdrawals of living expenses allocation neutral, or will regular withdrawals impact the allocation and rebalancing decisions ( rebalancing should be the result of the market movements, not human actions). Their projections are always to age 100 which makes it very difficult to achieve a good outcome, but perhaps it is wise to plan for longevity. And, even if I get all the correct answers, there is still the question of whether I should do it myself as it is not that difficult.

Mathguy74
Posts: 3
Joined: Thu Jun 19, 2014 7:13 pm

Postby Mathguy74 »Fri Jul 04, 2014 11:22 am

Hello!

I have decided to partake of the VPAS management program. Here is the rationale in case it would assist anyone. First, if I continued to manage it myself, I would continue using the Target Retirement funds. Clearly, this is suboptimal and less tax efficient, but I was always rethinking the rebalancing on the stock/bond level and within the stock side and the bond side and had trouble pulling the trigger to rebalance with market collapses. In contrast, there are five reasons VPAS is a better choice for me. 1) The fund management fees over the portfolio will be roughly .08% lower using admiral shares of individual funds versus the Target Retirement. 2) Once one is in individual funds, the portfolio can be managed for tax efficiency in the taxable side. 3) The quarterly AND 5% rebalancing plan of VPAS performs as well as the Target Retirement daily rebalancing, but it generates far lower capital gains distributions (see Vanguard report from 2010 entitled Best Rebalancing Strategies) (Retirement 2010 generated nearly 1.5% in LT capital gains last year, largely from rebalancing activity.) . 4) The portion of the .3% fee exceeding 2% of income is tax deductible if paid from taxable funds. 5) I like the bond fund choices of VPAS better than those in the Target Retirement Funds at age 65 and older as it augments the TBM with investment grade bonds and international bonds, much as Jack Bogle has suggested in recent years. As a result, the VPAS should slightly outperform what I would have done using Target Retirement Funds, and the fee should be roughly asset neutral with the inherent tax efficiency, fund management fee reductions, and the more tax efficient algorithm.

steve_14
Posts: 1507
Joined: Wed Jun 20, 2012 12:05 am

Postby steve_14 »Fri Jul 04, 2014 11:30 am

@Mathguy74 I think you made a wise choice. With most financial planning options, you're paying for a Mercedes but getting a Yugo. At Vanguard, it's quite the opposite. For the reasons you mention, the choice makes a lot more sense at .3% per year than .7% (their old rate, which I would not recommend paying) for folks who don't want to do it themselves.

letsgobobby
Posts: 9762
Joined: Fri Sep 18, 2009 1:10 am

Postby letsgobobby »Fri Jul 04, 2014 12:46 pm

Will VPAS be useable with a trust, or otherwise lower the management fees to use Vanguard trust services?

User avatarfriar1610
Posts: 783
Joined: Sat Nov 29, 2008 9:52 pm
Location: MA South Shore

Postby friar1610 »Fri Jul 04, 2014 1:24 pm

Mathguy74 wrote:Hello,

I did get my annual financial plan from being Flagship level at Vanguard and am considering the VPAS management. Just out of interest for the readers, the portfolio consisted of total US stock market index, total intl. stock market index, total bond market, total intl. bond market, intermediate investment grade bond fund, and short term investment grade bond fund. I believe this is somewhat in line with Jack Bogel's recent thinking that the Total Bond Market does not give the representation he would like and that investgrade bonds should supplement it - I would be interested in confirmation of this from others. I will have my third meeting later this week and I have a few hard questions to ask such as which source (protected, unprotected, allocation neutral, etc.) they favor for withdrawal of living expenses if there is a choice. Also, are the withdrawals of living expenses allocation neutral, or will regular withdrawals impact the allocation and rebalancing decisions ( rebalancing should be the result of the market movements, not human actions). Their projections are always to age 100 which makes it very difficult to achieve a good outcome, but perhaps it is wise to plan for longevity. And, even if I get all the correct answers, there is still the question of whether I should do it myself as it is not that difficult.

I just finished the process as well and basically got the same recommendations (although possibly in different proportions than what you got as our goals may be different.) I am a bit torn on how to proceed. Here's why and here's why my fund selection is intertwined with my potential interest in VPAS:- At present I have something close to a 4-fund portfolio. (I also have a Vanguard Variable Annuity that has a few other things in it, so it gets a little complicated.) I'm generally happy with it and am perfectly capable of managing it on my own. If I were to follow the advice in the plan, I'd add a few funds, but it wouldn't be anything so complicated I couldn't still continue to manage it myself. But it would make the portfolio a little more complicated.- When I first heard about VPAS I thought this would be great for my wife after my demise as she really has no interest in this sort of thing. But, in the course of getting the plan done, I learned that:-- When VG does the plan it doesn't consider non-VG assets and we have both I-Bonds and a CD ladder in addition to the VG holdings.-- They don't even factor in a Vanguard Variable Annuity as that is presumably already under management and the VPA folks are unable to manage it.

So, since the VPA service is not applicable to the totality of one's financial assets, I'm not sure it would be as valuable for my wife as I originally thought it might be. Given that, it seems like I ought to keep the portfolio as simple as possible (try to get it down to a 3-fund portfolio and move the variable annuity into a single "fund of funds" holding and just let that sit.) That would be easier to deal with for my wife if she didn't go the VPAS route than the plan-recommended 5 or 6 fund portfolio would be. (Indeed, my wife would probablyrequiremanagement help if the portfolio got that complex.)

So I'm still thinking this through and know I don't have to do anything this week. With respect to the plan recommendations, I can buy off on the recommendation to supplement the Total Bond Fund with and Investment Grade Fund per the John Bogle recommendation. I'm less sanguine about getting into International Bonds.A couple of final points just to make sure that what VG said about VPAS is on the table as well:

- Although they can'tmanagethe non-VG assets, they said they could talk about them. Presumably that means they would be aware of one's other holdings and take those into consideration to some degree in the management of the VG assets.


- The .3% fee is, of course, not assessed on the non-VG assets they can't manage. So I guess you couldn't expect them to put a lot of time and effort into them.

Friar1610

bsteiner
Posts: 2306
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Postby bsteiner »Fri Jul 04, 2014 6:48 pm

letsgobobby wrote:Will VPAS be useable with a trust, or otherwise lower the management fees to use Vanguard trust services?

If Vanguard is a trustee, they have other duties and responsibilities besides managing the assets. Trustees have to decide on discretionary distributions, keep records, and file fiduciary income tax returns. Their trustee's commissions (fees) have to reflect that.

If Vanguard isn't a trustee, but the trustees want to hire them to manage the assets, they should be willing to manage the assets for the same fee that they would charge an individual for managing an individual's personal assets, since they wouldn't have any responsibility for any of the other duties of a trustee. However, I don't know if they're willing to do so.

JVT
Posts: 25
Joined: Sun Feb 23, 2014 11:40 am

Postby JVT »Sat Jul 05, 2014 11:29 am

Linked Blog Post wrote:If you have money in employer sponsored plans, such as a 401k not managed by Vanguard, the advisor will also tell you how to invest your 401k money. If you have other financial questions such as when to claim Social Security or how much to save for college, your financial advisor can help with those too. All these are free, included as part of the service.

friar1610 wrote:- When I first heard about VPAS I thought this would be great for my wife after my demise as she really has no interest in this sort of thing. But, in the course of getting the plan done, I learned that:-- When VG does the plan it doesn't consider non-VG assets and we have both I-Bonds and a CD ladder in addition to the VG holdings.-- They don't even factor in a Vanguard Variable Annuity as that is presumably already under management and the VPA folks are unable to manage it.

So, since the VPA service is not applicable to the totality of one's financial assets, I'm not sure it would be as valuable for my wife as I originally thought it might be. Given that, it seems like I ought to keep the portfolio as simple as possible (try to get it down to a 3-fund portfolio and move the variable annuity into a single "fund of funds" holding and just let that sit.) That would be easier to deal with for my wife if she didn't go the VPAS route than the plan-recommended 5 or 6 fund portfolio would be. (Indeed, my wife would probablyrequiremanagement help if the portfolio got that complex.)

Are they not considering specific external assets or have they changed since the blog was written in May when they explicitly included external asset types? Not including external accounts (at least in the plan) makes this significantly less useful. I wonder if they decided that the complexities of trying to track and either get your login to re-balance the external accounts or tell you to re-balance them was not worth the hassle?

gordshe
Posts: 1
Joined: Sun Aug 10, 2014 11:12 am

Postby gordshe »Sun Aug 10, 2014 12:09 pm

Lets say an investor wants to invest in 12 ETFs in His Roth IRA with $110,000 cash balance. 7 are Vanguard ETFs. The other 5 ETFs would cost $35 each time shares are bought. If buys are made 10 times a year (total $350) where is the savings? How will Vanguard Personal Advisory Service then compete with online services like Motif Investing?
Gordshe

ASUGrad
Posts: 259
Joined: Sun Oct 20, 2013 8:09 pm

Postby ASUGrad »Sun Aug 10, 2014 2:41 pm

gordshe wrote:Lets say an investor wants to invest in 12 ETFs in His Roth IRA with $110,000 cash balance. 7 are Vanguard ETFs. The other 5 ETFs would cost $35 each time shares are bought. If buys are made 10 times a year (total $350) where is the savings? How will Vanguard Personal Advisory Service then compete with online services like Motif Investing?
Gordshe

If any investor already knew he wanted 12 ETFs(why on earth would you need 12 anyway) why would he be using the service? Its meant for people who want vanguard to manage it for them, not for people who want to manage their own accounts.

I won't use it, but I think it is a great service for the people who need it. It gives all the people who won't manage their own accounts somewhere to go where they can be safe from the vultures. It looks like they will also get great service for a very low cost. All in costs will probably be less than half a percent which is less than just the ER on most mutual funds.

Return to “Investing - Theory, News & General”

Jump to


Category: Advisor

Similar articles: