Investments

Vanguard Personal Advisor Services Review

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In 2015, Vanguard launched a new service to help clients get the answers they need to maximize their investments. Vanguard Personal Advisor Services combines the experience of human advisors with the precision of investment algorithms to reduce costs while providing investment advice tailored to each client’s unique circumstances.

Service Overview

Each client interested in Personal Advisor Services has an initial meeting with a Vanguard Advisor to discuss their financial goals and provide an overview of their current investment strategy. The advisor uses this information to develop a customized investment plan and create a well-balanced portfolio of stocks and bonds.

Once the client’s portfolio has been set up, Vanguard’s investing software manages day-to-day activities such as updating investment outlooks. Human advisors also are available to help clients stay on track to meet their financial goals. If necessary, an advisor periodically rebalances the portfolio by selling or buying assets to maintain the client’s desired level of investment risk. Clients use Vanguard’s mobile app and other tools to monitor their investments and determine if they’re projected to be on track to reach their long-term financial goals.

Vanguard Personal Advisor Services requires a minimum deposit of $50,000, but that’s less than the minimums required by some services. For example, Personal Capital requires a minimum investment of $100,000, and the service is completely automated. With an account minimum of just $50,000 and advice from human advisors, Vanguard Personal Advisor Services is a good value for investors.

Personal Advisor Services vs. Robo Advisors

Although Vanguard Personal Advisor Services uses investment algorithms for asset allocation and other activities, the service is different from traditional robo advising services in several ways. First, a human advisor provides oversight over the portfolio, including rebalancing decisions. With traditional robo advising, all investment decisions are made by software, with little to no human input. Second, human advisors also provide investment advice tailored to each client’s financial situation. Many robo-advisors don’t provide that level of customized investment advice. Therefore, Vanguard Personal Advisor Services gives investors the best of both worlds: the benefits of technology combined with the knowledge and expertise of human investment professionals.

Vanguard Personal Advisor Service Fees & Account Features At-a-Glance

 

Amount minimum to open account
  • $50,000
Management fees
  • 0.30% for accounts with assets below $5 million
  • 0.20% for accounts with assets from $5 million to below $10 million
  • 0.10% for accounts with assets above $10 million

*Note: Only the assets above these thresholds receive the lower fees and are not subject to the entire account balance.

Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $0 full account transfer fee
  • $0 partial account transfer fee
  • $0 yearly inactivity fee
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
Mobile app iOS, Android, Fire OS
Customer support Phone, Email


Portfolio Management

When a client signs up with Vanguard Personal Advisor Services, an algorithm processes data related to current investments, financial goals and the amount of time the client has to reach a specific goal. Based on this information, the robo advisor recommends an investment approach with a level of risk ranging from very conservative to very aggressive. After developing an investment plan, the robo advisor tracks asset allocation and engages in portfolio rebalancing based on changing risk levels and the client’s time horizon.

Vanguard Personal Advisor client portfolios can include stocks, bonds, and other investments, but the service only recommends a diversified portfolio of ETFs and other low-cost funds. The recommendations are based on the client’s financial goals, not market conditions.

Account Features

Clients benefit from a variety of helpful account features when they choose Vanguard Personal Advisor Services to manage their assets. One of the main benefits of this service is that clients are given a dedicated telephone number to call with questions about their accounts. Calling this number instead of the general Vanguard customer service number reduces wait times and helps clients get fast answers to their questions. For clients with more than $500,000 in assets under management, Vanguard assigns a dedicated advisor.

Vanguard also offers a wide range of tools to help clients track their assets. Mobile apps are available for both Android and iOS devices, giving clients instant access to account balances and other helpful data. Vanguard employs two-factor authentication to protect each account from unauthorized access. For clients who prefer to manage their accounts on a desktop or laptop computer instead of a mobile device, Vanguard also offers a robust account-management website. The website contains a list of frequently asked questions about Vanguard Personal Advisor Services to help clients take advantage of every available feature.

Account Protection

SIPC insurance only covers brokerage accounts up to $500,000, but Vanguard Personal Advisor Services looks out for clients’ best interests by providing an extra layer of protection in the form of excess coverage. This coverage protects up to $50 million in assets.

Pros and Cons

One of the major advantages of Vanguard Personal Advisor Services is the access to human advisors who have the experience to provide guidance that’s tailored to each client’s individual needs. Although Vanguard charges a 0.3% management fee, this fee is still lower than the fees charged by many traditional advisors. The account minimum of $50,000 may discourage some investors from using Vanguard Personal Advisor Services; however, some services have higher minimums, making Vanguard a good choice for many investors. One of the major drawbacks is that Vanguard Personal Advisor Services doesn’t provide automated tax-loss harvesting, which is when investors sell some of their assets at a loss to reduce their tax burdens. Investors relying on tax-loss harvesting as an essential component of their tax strategies may be better-served by choosing another advising service. Overall, Vanguard Personal Advisor Services rates an 9 out of 10 for its hybrid approach to investment advising and personalized investment advice.

Bottom Line: Should You Use Vanguard Personal Advisor Services?

For those that are comfortable managing their own investments, there is still tremendous value in speaking with an advisor because they offer a complimentary consultation & plan that is tailored to you and your needs. That seems like a no-brainer even if just for the plan.

For the majority of us others that prefer to let a professional manage their investments, the low management fee (0.30%) coupled with the reputation of Vanguard makes this a recommended service. Plus I love the fact that their advisors don’t make commissions on pushing products and are instead focused on keeping you as a client.

Overall Rating: 4.5/5

 

 

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.

The services provided to clients who elect to receive ongoing advice will vary based upon the amount of assets in a portfolio. Please review the Vanguard Personal Advisor Services Brochure [https://personal.vanguard.com/pdf/ vpabroc.pdf] for important details about the service, including its asset-based service levels and fee breakpoints.

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