Is a Vanguard Financial Plan worth the fee?

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Is a Vanguard Financial Plan worth the fee?

Postby BigMike » Sat Sep 11, 2010 2:43 pm

I am considering using the Vanguard Financial Planning, which at the Voyager level would cost me $250. Has anyone used this service, and were you happy with the results and recommendations?
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Postby livesoft » Sat Sep 11, 2010 2:47 pm

I hope to see some responses to this, but would like to add my own question:

Is the Vanguard financial plan really a financial plan or just an investment plan?

To me a financial plan would review insurance, how to minimize taxes, short term goals like saving for college, long term goals like retirement, and would include some kind of advice about wills, trusts, and an estate plan as well. Other common questions asked are how to sequence withdrawals from which accounts in retirement and whether/how to convert IRAs to Roth IRAs.
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Re: Is a Vanguard Financial Plan worth the fee?

Postby DA » Sat Sep 11, 2010 2:51 pm

BigMike wrote:I am considering using the Vanguard Financial Planning, which at the Voyager level would cost me $250. Has anyone used this service, and were you happy with the results and recommendations?

Mike, I used it. It was free for me, and in general I think it was OK.

Save yourself the $250 and just post your situation here according to the posting guidelines in the Wiki. You'll do better.
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Postby GammaPoint » Sat Sep 11, 2010 3:17 pm

I would imagine it would be worth the $250 if this forum didn't exist. But I do believe you will get better advice here for free.
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Postby mickeyd » Sat Sep 11, 2010 6:02 pm

I have had a few VG FPs over the years at no cost. I would not pay $250 for the results. That is not to say that it is not a great value to someone else. I used the plans to validate what I thought I knew and enjoyed the free process.
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Re: Is a Vanguard Financial Plan worth the fee?

Postby Norris » Sat Sep 11, 2010 6:31 pm

DA wrote:
BigMike wrote:I am considering using the Vanguard Financial Planning, which at the Voyager level would cost me $250. Has anyone used this service, and were you happy with the results and recommendations?

Mike, I used it. It was free for me, and in general I think it was OK.

Save yourself the $250 and just post your situation here according to the posting guidelines in the Wiki. You'll do better.


I too have received it free and could continue to do so each year. I used it for a while but found the forum advice here to either correlate with or, in some cases, be better than the financial planning advice. That is not to say I didn't benefit from and appreciate the planning service. Just saying that you could, with relative little effort, come up with an excellent plan (for free) as a result of this forum.
"...and we benefited broadly, from our investment accounts to our personal lives. Thank you, Jack Bogle." Quote from Jeremy Duffield on page 362 of "The Man in the Arena".
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Re: Is a Vanguard Financial Plan worth the fee?

Postby bearwolf » Sat Sep 11, 2010 6:37 pm

BigMike wrote:I am considering using the Vanguard Financial Planning, which at the Voyager level would cost me $250. Has anyone used this service, and were you happy with the results and recommendations?

It is more of an asset allocation plan that a financial planning session. They only deal with Vanguard assets. No questions about insurance or other issues. In my plan They recommended some actively managed funds so I could hope for them to outperform the market. I opted to just go with indexes and they said that would be OK too. I don't know that I would want to pay for it though. I agree with the others, post your situation here and see what recommendations you get first. You should probably start with some of the recommended reading material as well.

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Postby Steelersfan » Sat Sep 11, 2010 7:17 pm

I did one for free and thought it was useful. But their advice is similar to what you can get here for free if you post using the guidelines.

Actually the advice here is probably even better.
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Postby EMSmith » Sat Sep 11, 2010 7:32 pm

Just curious as to how everyone got it for free? Just random accounts within Vanguard? Have a certain amount of money with Vanguard? Survey compensation?
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Re: Is a Vanguard Financial Plan worth the fee?

Postby SpringMan » Sat Sep 11, 2010 7:42 pm

bearwolf wrote:
BigMike wrote:I am considering using the Vanguard Financial Planning, which at the Voyager level would cost me $250. Has anyone used this service, and were you happy with the results and recommendations?

It is more of an asset allocation plan that a financial planning session. They only deal with Vanguard assets. No questions about insurance or other issues. In my plan They recommended some actively managed funds so I could hope for them to outperform the market. I opted to just go with indexes and they said that would be OK too. I don't know that I would want to pay for it though. I agree with the others, post your situation here and see what recommendations you get first. You should probably start with some of the recommended reading material as well.

BearWolf

I mostly agree with you. Exception is the part where they only deal only with Vanguard assets. In our case, Vanguard did consider our outside accounts with Fidelity and my wife's 401(k) with Transamerica. Maybe because they were linked in as outside investments on Vanguard's website. They also considered the non Vanguard ETFs we held with both VBS and Fidelity. As you mentioned, they try to sprinkle in some active funds, like Diversified Equity fund. The asset allocation seemed somewhat cookie cutter IMO. Worth the price only if it is free.
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Postby SpringMan » Sat Sep 11, 2010 7:49 pm

EMSmith wrote:Just curious as to how everyone got it for free? Just random accounts within Vanguard? Have a certain amount of money with Vanguard? Survey compensation?

Flagship clients (accounts > 1M) can get them for free. There may be other ways like transferring large amounts to VG.

edit: Voyager Select clients get this free too, as pointed out by posters below. My bad :cry: .
Last edited by SpringMan on Sun Sep 12, 2010 9:31 am, edited 1 time in total.
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Postby Norris » Sat Sep 11, 2010 8:29 pm

Voyager Select, i.e. assets of 500K or more, get the free Financial plan.
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Postby Steelersfan » Sat Sep 11, 2010 9:50 pm

I was Vanguard Select and that's how I got mine free.

I agree that they considered my outside investments. The only suggestion they made about them was to reduce my concentration in a single company stock.
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Postby Adrian Nenu » Sun Sep 12, 2010 3:54 am

No.

For instance, the advisors pick index and active funds for a proposed portfolio. Doesn't make any sense.

Risk of loss and diversification are not addressed. If they can't determine risk of loss, they can't determine suitability.

What more can I say?!

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Postby celia » Sun Sep 12, 2010 4:22 am

Vanguard says
Your planner will tailor a financial plan to fit your situation and preferences. You'll get answers to important questions, such as:

* When can I afford to retire?
* Will I have enough saved by retirement?
* How much can I spend in retirement?
* Which investments are best for me?

I answered the first 3 questions for the planner (we were within a few years of retirement at the time), but he proposed a different asset allocation for us, primarily using index funds. It appears they use software to do the "re-balancing" recommendations for him. In the last 2 minutes, he asked if we had life insurance, medical insurance, an estate plan, etc.

The time spent on this process was useful for both of us to see where we stood and confirm what we were basically doing already, but I wouldn't have paid for it, but that's probably because I'm a boglehead.
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Depends

Postby TimDex » Sun Sep 12, 2010 9:18 am

The financial planning session I had was worthwhile, but I think mainly because I asked a lot of questions and what-ifs.

The planner told me that 99% of his Vanguard clients don't ask much in the way of questions, and most end up just doing what he advises, which is a simple investment plan.

WBernstein is right. This is an unusual forum.

I think you have to ask not how good a Vanguard planner is compared to what bogleheads consider proper investing, and instead ask how good it is compared to the shark tank where most investors find themselves swimming. If they figure it out at all before being eaten.

Which means it serves a real purpose.

Tim
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Postby RadAudit » Sun Sep 12, 2010 9:52 am

A free financial plan from Vanguard? I think the word we're looking for is included.

If you give them $1 million to invest at an ER of 0.12% - they charge you $1200 / year (if the math is correct). That gives you the option of using one of their relatively fixed costs - an advisor - who may be slightly under utilized at the moment. It also give the advisor a chance to practice his sale pitch.
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Postby bearwolf » Sun Sep 12, 2010 9:55 am

RadAudit wrote:A free financial plan from Vanguard? I think the word we're looking for is included.

If you give them $1 million to invest at an ER of 0.12% - they charge you $1200 / year (if the math is correct). That gives you the option of using one of their relatively fixed costs - an advisor - who may be slightly under utilized at the moment. It also give the advisor a chance to practice his sale pitch.

Wow, only $1200/year. I hadn't done the math recently. There are lots of folks who wish they were only paying $1200 for a million dollars of invested assets. And they run the company on that. :D

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