Vanguard personal advisory service

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rramaswa
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Vanguard personal advisory service

Post by rramaswa »

Hello
If PAS uses few index funds leaves them for long-term growth with quarterly 0.3% fees. Is this worth it ?
Only service I get is quarterly rebalancing.

I will appreciate comments from the forum if I am wasting money.
Thanks you very much

I am new to the forum
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retired@50
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Re: Vanguard personal advisory service

Post by retired@50 »

rramaswa wrote: Mon Apr 19, 2021 6:32 pm Hello
If PAS uses few index funds leaves them for long-term growth with quarterly 0.3% fees. Is this worth it ?
Only service I get is quarterly rebalancing.

I will appreciate comments from the forum if I am wasting money.
It depends.

It can be worth it if you're an investor who tends to tinker with your portfolio more than you should. If paying a PAS adviser will prevent large mistakes, you could actually wind up better off by having an adviser.

However, if you're not prone to the long list of behavioral pitfalls, then it could be better to be a do-it-yourself investor.

Which kind of investor are you?

Behavioral pitfalls link: https://www.bogleheads.org/wiki/Behavioral_pitfalls

Regards,
This is one person's opinion. Nothing more.
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rramaswa
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Re: Vanguard personal advisory service

Post by rramaswa »

thank you for the response
I am not an emotional investor.
traveling_salesman
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Re: Vanguard personal advisory service

Post by traveling_salesman »

I use them, and I like them, mostly. If you’re just starting, I’d recommend them while you learn the ropes. For a sub $500k managed portfolio, I think they provide enough to justify their fee.

They do some very basic tax loss harvesting and rebalancing. They have promised me a daily TLH “next year” for the last three years. :?

They don’t really let you change your portfolio allocations. If you want to use REITs, Treasuries, TIPS, gold (why?) they don’t let you do any of that.

Their personal advice is not at all personal. Look elsewhere if you want that.

Given all this, why do I bother paying them?

1. Their effective cost was lower when I started (mutual fund ERs were about 20 basis points, and they let me buy into admiral shares at 3 bpp.) this has largely vanished since they switched customers to use ETFs.

2. They automate without complexity. I don’t want to end up with a 20 ETF portfolio like some other roboadvisers.

When I started, $150 a year (really more like $50 because of #1 above) seemed like a fair price to pay for basic TLH and automation. At $600 a year, the benefit is less clear. Eventually I know I will move away. Whether I will self service or find someone else, I don’t know.
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Re: Vanguard personal advisory service

Post by BeachPerson »

traveling_salesman wrote: Mon Apr 19, 2021 7:16 pm I use them, and I like them, mostly. If you’re just starting, I’d recommend them while you learn the ropes. For a sub $500k managed portfolio, I think they provide enough to justify their fee.

They do some very basic tax loss harvesting and rebalancing. They have promised me a daily TLH “next year” for the last three years. :?

They don’t really let you change your portfolio allocations. If you want to use REITs, Treasuries, TIPS, gold (why?) they don’t let you do any of that.

Their personal advice is not at all personal. Look elsewhere if you want that.

Given all this, why do I bother paying them?

1. Their effective cost was lower when I started (mutual fund ERs were about 20 basis points, and they let me buy into admiral shares at 3 bpp.) this has largely vanished since they switched customers to use ETFs.

2. They automate without complexity. I don’t want to end up with a 20 ETF portfolio like some other roboadvisers.

When I started, $150 a year (really more like $50 because of #1 above) seemed like a fair price to pay for basic TLH and automation. At $600 a year, the benefit is less clear. Eventually I know I will move away. Whether I will self service or find someone else, I don’t know.
How are they when asking questions about the best way to finance a car or sell investments and pay cash?

Asking about health care in retirement?
From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"
Topic Author
rramaswa
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Re: Vanguard personal advisory service

Post by rramaswa »

The PAS usually recommend less than 5 standard funds and rebalance quarterly. They dont provide advice on health care etc.
They have told me to talk to other experts like estate attorney and CPA.
traveling_salesman
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Re: Vanguard personal advisory service

Post by traveling_salesman »

BeachPerson wrote: Mon Apr 19, 2021 7:25 pm
traveling_salesman wrote: Mon Apr 19, 2021 7:16 pm I use them, and I like them, mostly. If you’re just starting, I’d recommend them while you learn the ropes. For a sub $500k managed portfolio, I think they provide enough to justify their fee.

They do some very basic tax loss harvesting and rebalancing. They have promised me a daily TLH “next year” for the last three years. :?

They don’t really let you change your portfolio allocations. If you want to use REITs, Treasuries, TIPS, gold (why?) they don’t let you do any of that.

Their personal advice is not at all personal. Look elsewhere if you want that.

Given all this, why do I bother paying them?

1. Their effective cost was lower when I started (mutual fund ERs were about 20 basis points, and they let me buy into admiral shares at 3 bpp.) this has largely vanished since they switched customers to use ETFs.

2. They automate without complexity. I don’t want to end up with a 20 ETF portfolio like some other roboadvisers.

When I started, $150 a year (really more like $50 because of #1 above) seemed like a fair price to pay for basic TLH and automation. At $600 a year, the benefit is less clear. Eventually I know I will move away. Whether I will self service or find someone else, I don’t know.
How are they when asking questions about the best way to finance a car or sell investments and pay cash?

Asking about health care in retirement?
I don’t know — haven’t asked them trick questions yet like the best way to finance a car ( us the answer don’t?)

They are good about selling/donating investments though so as to minimize tax.
anil686
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Re: Vanguard personal advisory service

Post by anil686 »

If you are not an emotional investor and do not tinker and just set it and forget it(I have become that type of investor although it took a while) - I don’t think they add much if anything. You can do those things yourself. I am not a big fan of daily TLH due to complexity with the record keeping and moving in and out of various positions but if they offered that, it may be of benefit. Frankly I use balanced funds in everything but my taxable account and just keep TSM and TISM in my taxable account in the proportions (+/- 5%) that I want. I check balances quarterly with the statements and normally do not need to do anything....
TheDDC
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Re: Vanguard personal advisory service

Post by TheDDC »

If you are the type to SELL SELL SELL when there's bad news, Go wtih VPAS.

If you are emotionally stable with your investing, no need to go with VPAS. It is an added fee, and it's BOILERPLATE advice. They apply an algorithm or three to your account and voila - added value I guess.

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks, minimize amount given to medical-industrial complex
bltn
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Re: Vanguard personal advisory service

Post by bltn »

Based on an interview I read with Jack Bogle several years ago, his idea of a good money manager was one who got a client s accounts set up properly, then spent the rest of the time not letting the client make any changes. In other words, stay the course.

At 0.3% , this is one of the cheapest advisory services, which provides a personal manager. One can drop the service when he understands the rules of the game.
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rramaswa
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Re: Vanguard personal advisory service

Post by rramaswa »

I have been having a cold feet to drop them but my logical mind tells me it is a waste of money for simply rebalancing every quarter for boiler plate advice. Anything complex they tell me to go to Tax advisor or estate attorney and they give you 30 minutes time to talk to them every quarter. In most cases they simply do transactions without a follow-up message on what they transacted on.
afan
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Re: Vanguard personal advisory service

Post by afan »

PAS essentially creates a balanced fund for you. Similar to a life strategy or target date fund. You can bypass PAS and directly buy such a fund. The fund expense ratio will be less than the combined expense ratios of the underlying funds plus the PAS fee.

Since all it does it put you in a simple portfolio, you can do this yourself and save the PAS fee and the fee for a balanced fund.
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
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Re: Vanguard personal advisory service

Post by retired@50 »

rramaswa wrote: Wed Apr 21, 2021 8:18 am I have been having a cold feet to drop them but my logical mind tells me it is a waste of money for simply rebalancing every quarter for boiler plate advice. Anything complex they tell me to go to Tax advisor or estate attorney and they give you 30 minutes time to talk to them every quarter. In most cases they simply do transactions without a follow-up message on what they transacted on.
If you've got complex questions, have you tried posting them to this forum?

I'm continually amazed at how many issues get solved (or at least set the user on a better course of action).

Regards,
This is one person's opinion. Nothing more.
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rramaswa
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Re: Vanguard personal advisory service

Post by rramaswa »

This forum has been incredibly helpful to me.
Thanks so much for all the comments and help.
I do agree with all the comments.
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Re: Vanguard personal advisory service

Post by tibbitts »

rramaswa wrote: Wed Apr 21, 2021 8:18 am I have been having a cold feet to drop them but my logical mind tells me it is a waste of money for simply rebalancing every quarter for boiler plate advice. Anything complex they tell me to go to Tax advisor or estate attorney and they give you 30 minutes time to talk to them every quarter. In most cases they simply do transactions without a follow-up message on what they transacted on.
People always make the "boiler-plate" or "cookie-cutter" comment without saying what they would like to not be boiler plate or cookie-cutter about advice, even in theory. We all remember when Vanguard advisers typically used mixes of active and passive funds, more funds than they use now, including even funds-of-funds like Diversified Equity. And Bogleheads complained about that. Now PAS uses perhaps four passive funds and Bogleheads are complaining about that.

I do think most clients would like to have a single resource for advice, the problem being that would require a firm where you have a "team" approach with CPAs, tax attorneys, and estate planning attorneys. And you probably aren't going to get that for .3% AUM unless maybe you have a very, very large portfolio under management. Yet ultimately that's what most people really need advisers for - that integrated single resource that can address questions that have implications that overlap different areas in finance.
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rramaswa
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Re: Vanguard personal advisory service

Post by rramaswa »

Other actively managed financial advisors they too expect your CPA to provide advice. The actively managed funds do charge >1% fees.
I honestly think 0.3% for managing 5 passive funds with quarterly rebalancing is not worth the money.
PAS does not allow active funds nor do they allow anything other than 5 major index funds.
My question to the forum was is my PAS different from others. Am I the unlucky one?
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Re: Vanguard personal advisory service

Post by DWesterb2iz2 »

I appreciate the Flagship service. It is mostly a set up and rebalance service, but we also got tax loss harvesting (international), during the downturn. That was great, and ikm not sure during the quick turmoil, I would have done that on my own.

Mostly we have it because my wife (who would be great at personal finance) has no interest in investment, and we both feel better with a service for half the money all set up in case I get hit by a meteorite. She could easily move the rest of it to VG if she wanted, or just live off the VG money.

The downsides is the expense, of course, and that for a few years, we went through advisors pretty fast. We’ve had this one for a while tho.
afan
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Re: Vanguard personal advisory service

Post by afan »

I don't know how many bogleheads complain about a 4 fund portfolio. If they do, most of the complaints would prefer moving to 3 funds.

Portfolio's SHOULD be cookie cutter.

Everyone should be in the same domestic stock fund- Total Stock Market. People should either be in total bond, intermediate term Treasury if they are worried about credit quality, or intermediate term muni if tax considerations show that to be better. Same for total international stock and bond.

The only difference among clients should be the proportions.

So "cookie cutter" is very much a good thing. A highly desirable property of a portfolio.

Given that and the availability of funds that provide a balanced portfolio with no illusion of customization, is there a reason to pay for PAS? For most people, no. A balanced fund or a handful of index funds would provide the same result at lower cost.

If someone has an unusual financial picture for which a customized portfolio would be desirable, I don't know that PAS would offer that.

Consider for example an oil company executive who receives much of their compensation in company stock, who is expected to hold on to a large share of the stock they receive, and whose bonus depends on the profitability of the company. This person has a large exposure to the volatile fortunes of the oil industry and to one particular company. The oil industry is also a large part of the stock market.
Such a person would benefit from a portfolio that had much less than total stock exposure to oil. Although they may be prohibited from shorting their company stock, they may want a portfolio that is negatively correlated to oil and to their company.

Vanguard does not have a mix of funds to accomplish that, so PAS could not deliver. At least some advisers could create a portfolio like that, although I have no idea what they would charge. In this hypothetical, 1% of assets might be worth it.
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
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rramaswa
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Re: Vanguard personal advisory service

Post by rramaswa »

My question is one could manage assets DYI given the funds are passive and simple maximum 5 funds.
Why do I need to use a PAS who charges 0.3% to rebalance every quarter
The actively managed funds charge 1% fees which I think is huge given no one can predict market.
Is PAS worth spending 0.3% fees
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Re: Vanguard personal advisory service

Post by RickBoglehead »

rramaswa wrote: Thu Apr 22, 2021 10:00 am My question is one could manage assets DYI given the funds are passive and simple maximum 5 funds.
Why do I need to use a PAS who charges 0.3% to rebalance every quarter
The actively managed funds charge 1% fees which I think is huge given no one can predict market.
Is PAS worth spending 0.3% fees
In simple terms, you don't.

I used to think that Vanguard PAS would be good for my wife if I pass away first. Now, given that some holdings are not in index funds and would generate large capital gains if sold, and therefore would not be included by PAS in their rebalancing thinking or advice, it's not worth using. I wrote my wife simply instructions to follow.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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Re: Vanguard personal advisory service

Post by Tattarrattat »

Can buy a target or lifestrategy fund for .12% and essentially have the same portfolio for a fraction of the price. With the money you save, you can hire on a per hour basis an estate attorney, CPA, CFP or whatever other expert you need and in the long term come out way ahead, with fewer costs and superior specialized advice.
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Re: Vanguard personal advisory service

Post by afan »

Add in financial adviser, preferably on the "advice only" model. The few times I used Vanguard's "ask a CFP" service the advice was useless. Nowhere close to the quality of information from bogleheads. Always simplistic. Sometimes just wrong.

Someone who does not pay attention to personal finance is more likely to need financial advice, which PAS essentially does not provide, than they are to need investment advice. For investments 3-4 funds and ignore the markets may be all the advice they need but when to claim SS, choosing Medicare plans, how much and what kind of insurance, strategies for gifting to kids and a dozen other questions could arise. If the partner who used to handle them has passed on, the survivor may need help.

Based on my experience with the CFPs, who apparently are the same as who work for PAS, they were worse than saying they did not know. It became clear that they did not know but they would claim they did. To someone who does not follow this stuff it could send them off on the wrong track.
Last edited by afan on Thu Apr 22, 2021 3:24 pm, edited 1 time in total.
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
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rramaswa
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Re: Vanguard personal advisory service

Post by rramaswa »

I completely agree with all the comments I see on the forum.
My gut was right I am wasting money on PAS every quarter while I can manage DYI with help from CPA, estate attorney and paid financial advisor.
PAS told me to go to CPA and estate attorney anyway.
Their management is standard 5 funds and quarterly rebalancing and they don't talk to you either when they sell or buy.
they are slow when it comes to making changes if requested. They have layers of approvals they need to go through
Fortune
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Re: Vanguard personal advisory service

Post by Fortune »

afan wrote: Thu Apr 22, 2021 11:55 am Add in financial adviser, preferably on the "advice only" model.
Can you pl suggest how to find a good "advice only" financial advisor. What advice they can provide.
And how much it costs.

Thanks
afan
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Re: Vanguard personal advisory service

Post by afan »

The finance buff has a service that will identify advice-only advisers.
People say good things about the Garrett Planning Network as well.
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
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Re: Vanguard personal advisory service

Post by Sage16 »

rramaswa wrote: Wed Apr 21, 2021 11:55 am
PAS does not allow active funds nor do they allow anything other than 5 major index funds.
Not true at least for us. We turned our IRA's over to PAS. PAS added a few active funds although the base is indexed. I told them I didn't want a lifecycle fund look a like. They reviewed all our outside investments and designed an IRA portfolio we are happy with. Your mileage will vary.
Bogle on investing: Diversify, focus on low costs, invest for the long term. Don't speculate and don't be distracted by volatility.
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Re: Vanguard personal advisory service

Post by MikeG62 »

rramaswa wrote: Thu Apr 22, 2021 10:00 am My question is one could manage assets DYI given the funds are passive and simple maximum 5 funds.
Why do I need to use a PAS who charges 0.3% to rebalance every quarter
The actively managed funds charge 1% fees which I think is huge given no one can predict market.
Is PAS worth spending 0.3% fees
In your case, I'd say it's not worth it. As long as you have the stomach to stay the course when things get rough and know enough to periodically rebalance, it appears you are good to go on your own.
Real Knowledge Comes Only From Experience
Topic Author
rramaswa
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Re: Vanguard personal advisory service

Post by rramaswa »

MikeG62 wrote: Fri Apr 23, 2021 8:10 am
rramaswa wrote: Thu Apr 22, 2021 10:00 am My question is one could manage assets DYI given the funds are passive and simple maximum 5 funds.
Why do I need to use a PAS who charges 0.3% to rebalance every quarter
The actively managed funds charge 1% fees which I think is huge given no one can predict market.
Is PAS worth spending 0.3% fees
In your case, I'd say it's not worth it. As long as you have the stomach to stay the course when things get rough and know enough to periodically rebalance, it appears you are good to go on your own.
I was told for 4 million dollar net worth most people use professional advisors and they don't self manage?
I used PAS before for 3 years I did not see much value given 4 basic funds being used and quarterly rebalancing.
My PAS would have used the same formula whether it is for 50k or for 10 million dollars net worth.
Most my friends with this net worth are using professional advisors who charge >=1% or more fees.
I am impressed with this forum who have such knowledge and I am hoping get some motivation and confidence in myself to do DYI
MikeG62
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Re: Vanguard personal advisory service

Post by MikeG62 »

rramaswa wrote: Thu May 06, 2021 12:06 pm
MikeG62 wrote: Fri Apr 23, 2021 8:10 am
rramaswa wrote: Thu Apr 22, 2021 10:00 am My question is one could manage assets DYI given the funds are passive and simple maximum 5 funds.
Why do I need to use a PAS who charges 0.3% to rebalance every quarter
The actively managed funds charge 1% fees which I think is huge given no one can predict market.
Is PAS worth spending 0.3% fees
In your case, I'd say it's not worth it. As long as you have the stomach to stay the course when things get rough and know enough to periodically rebalance, it appears you are good to go on your own.
I was told for 4 million dollar net worth most people use professional advisors and they don't self manage?
I don't think there are such rules of thumb. Many/most (nearly all) people who participate on this forum with a net worth above (to way above) that level manage their own portfolio.
rramaswa wrote: Thu May 06, 2021 12:06 pm I used PAS before for 3 years I did not see much value given 4 basic funds being used and quarterly rebalancing.
My PAS would have used the same formula whether it is for 50k or for 10 million dollars net worth.
Most my friends with this net worth are using professional advisors who charge >=1% or more fees.
I am impressed with this forum who have such knowledge and I am hoping get some motivation and confidence in myself to do DYI
You are correct, VPAS is largely going to recommend/use the same portfolio whether they are managing $500K for you or $10 million.

Some people seem to believe that professional money managers bring specialized knowledge or are able to get them into investments whose performance way more than offsets the fees. In some cases this turns out to be true, in other cases not so much. Problem is, it is hard to know in advance who will outperform and who will not (and typically outperformance in one year is not necessarily followed by outperformance in another). It's why most of us index, at least with the lions share of our portfolio.
Real Knowledge Comes Only From Experience
reln
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Re: Vanguard personal advisory service

Post by reln »

rramaswa wrote: Mon Apr 19, 2021 6:32 pm Hello
If PAS uses few index funds leaves them for long-term growth with quarterly 0.3% fees. Is this worth it ?
Only service I get is quarterly rebalancing.

I will appreciate comments from the forum if I am wasting money.
Thanks you very much

I am new to the forum
0.300% is the annual fee.

Payable quarterly, that is 0.075% per quarter.

Yes it's worth it.
Tattarrattat
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Re: Vanguard personal advisory service

Post by Tattarrattat »

Fortune wrote: Thu Apr 22, 2021 6:29 pm
afan wrote: Thu Apr 22, 2021 11:55 am Add in financial adviser, preferably on the "advice only" model.
Can you pl suggest how to find a good "advice only" financial advisor. What advice they can provide.
And how much it costs.

Thanks
Finding a fixed or hourly fee financial advisor is surprisingly difficult. There is so much easy money to be made with assets under management, that few competent advisers want to work on an hourly basis. It's just much harder to make a living that way. That being said, they are out there. I've poked around and found a few promising firms, but haven't used them myself, as I've decided there is no better advice than what you get on the BH forums. But if you lack the confidence for DIY, the following may be worth a look:

Timothy Financial
MainStreetFinancial
Sensible Money
Allan Roth
Also, Harry Sit referral service, someone mentioned.
Garrett Network, someone mentioned.

The fee can vary widely depending on your complexity and scope of services but I think anywhere from 3000-7000 $ would not be a surprising bill. It sounds like a lot but it's a tiny fraction compared to what AUM invisibly costs you. And can also be cheap compared to potential mistakes. Plus, it may be worth it to you for peace of mind.
Tattarrattat
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Re: Vanguard personal advisory service

Post by Tattarrattat »

rramaswa wrote: Thu May 06, 2021 12:06 pm
MikeG62 wrote: Fri Apr 23, 2021 8:10 am
rramaswa wrote: Thu Apr 22, 2021 10:00 am My question is one could manage assets DYI given the funds are passive and simple maximum 5 funds.
Why do I need to use a PAS who charges 0.3% to rebalance every quarter
The actively managed funds charge 1% fees which I think is huge given no one can predict market.
Is PAS worth spending 0.3% fees
In your case, I'd say it's not worth it. As long as you have the stomach to stay the course when things get rough and know enough to periodically rebalance, it appears you are good to go on your own.
I was told for 4 million dollar net worth most people use professional advisors and they don't self manage?
I used PAS before for 3 years I did not see much value given 4 basic funds being used and quarterly rebalancing.
My PAS would have used the same formula whether it is for 50k or for 10 million dollars net worth.
Most my friends with this net worth are using professional advisors who charge >=1% or more fees.
I am impressed with this forum who have such knowledge and I am hoping get some motivation and confidence in myself to do DYI
Tattarrattat
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Re: Vanguard personal advisory service

Post by Tattarrattat »

Tattarrattat wrote: Thu May 06, 2021 2:30 pm
rramaswa wrote: Thu May 06, 2021 12:06 pm
MikeG62 wrote: Fri Apr 23, 2021 8:10 am
rramaswa wrote: Thu Apr 22, 2021 10:00 am My question is one could manage assets DYI given the funds are passive and simple maximum 5 funds.
Why do I need to use a PAS who charges 0.3% to rebalance every quarter
The actively managed funds charge 1% fees which I think is huge given no one can predict market.
Is PAS worth spending 0.3% fees
In your case, I'd say it's not worth it. As long as you have the stomach to stay the course when things get rough and know enough to periodically rebalance, it appears you are good to go on your own.
I was told for 4 million dollar net worth most people use professional advisors and they don't self manage?
I used PAS before for 3 years I did not see much value given 4 basic funds being used and quarterly rebalancing.
My PAS would have used the same formula whether it is for 50k or for 10 million dollars net worth.
Most my friends with this net worth are using professional advisors who charge >=1% or more fees.
I am impressed with this forum who have such knowledge and I am hoping get some motivation and confidence in myself to do DYI
The person who would tell you that most people with assets over 4 million don't self manage is likely a salesman trying to collect your assets. People with way bigger net worth than that self manage. If you really want professional help, get it, but pay a fixed or hourly fee. It's the same amount of work to make a financial plan for someone with 1 million net worth as for 10 or 20 million, given similar complexity, so a fixed fee plan should cost roughly the same for either. Once a good plan is in place, there should be little to do, year to year. AUM is so profitable for advisors because for the same amount of work, they get to collect 10 or hundred times that fee, year in and year out. As a rule, an AUM manager will generally extract more value than they add.
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Re: Vanguard personal advisory service

Post by galawdawg »

Jack Bogle said, "cost matters." I believe there is only a limited subset of investors for whom Vanguard PAS is a wise choice.

I am personally of the opinion that for those investors who are capable of managing their own finances and willing to learn and put into practice the Bogleheads investing philosophy1, the best option is a DIY approach consisting of the two2 or three3 fund portfolio. That is the lowest-cost option at 0.04% to 0.05% annually. For a $1 million portfolio, that equals an expense of about $400-$500 annually.

The next best option for investors who don't want to actually manage their portfolio or worry too much about asset allocation and rebalancing is a balanced index fund, such as VBIAX4, a LifeStrategy fund5 or a Target Date Fund6. That comes at a slightly higher cost than a two or three fund portfolio; between 0.07% and 0.15% annually. For a $1 million portfolio, those expenses are between $700 and $1500 a year.

Then there is Vanguard PAS which costs 0.3% annually to create and manage your portfolio (four to six funds on average) and be available for questions and very basic investing advice, including behavioral coaching for those who may be unable to "stay the course." Essentially, if you call them to sell positions during a market plummet, they'll try to talk you out of it! An investor with a $1 million portfolio will pay a cost of $3,000 year for that.

1https://www.bogleheads.org/wiki/Boglehe ... philosophy
2https://www.bogleheads.org/wiki/Two-fund_portfolio
3https://www.bogleheads.org/wiki/Three_fund_portfolio
4https://investor.vanguard.com/mutual-fu ... file/vbiax
5https://investor.vanguard.com/mutual-fu ... estrategy/
6https://investor.vanguard.com/mutual-fu ... irement/#/

Hope that helps give you food for thought! :beer
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Re: Vanguard personal advisory service

Post by abuss368 »

rramaswa wrote: Mon Apr 19, 2021 6:32 pm Hello
If PAS uses few index funds leaves them for long-term growth with quarterly 0.3% fees. Is this worth it ?
Only service I get is quarterly rebalancing.

I will appreciate comments from the forum if I am wasting money.
Thanks you very much

I am new to the forum
I have family and friends who use it and could not be happier. They essentially review the current portfolio, interview you, develop a plan, implementation, review with you, and manage.

The Vanguard Four Fund Portfolio of Total Stock, Total International, Total Bond, and Total International Bond is the strategy.

If that strategy works for you I would recommend it.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Vanguard personal advisory service

Post by bertilak »

rramaswa wrote: Mon Apr 19, 2021 6:32 pm Hello
If PAS uses few index funds leaves them for long-term growth with quarterly 0.3% fees. Is this worth it ?
Only service I get is quarterly rebalancing.

I will appreciate comments from the forum if I am wasting money.
Thanks you very much

I am new to the forum
Unless I have gone off the rails, it is an ANNUAL 0.3%, not quarterly. Big difference.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: Vanguard personal advisory service

Post by rramaswa »

bertilak wrote: Fri May 07, 2021 9:20 am
rramaswa wrote: Mon Apr 19, 2021 6:32 pm Hello
If PAS uses few index funds leaves them for long-term growth with quarterly 0.3% fees. Is this worth it ?
Only service I get is quarterly rebalancing.

I will appreciate comments from the forum if I am wasting money.
Thanks you very much

I am new to the forum
Unless I have gone off the rails, it is an ANNUAL 0.3%, not quarterly. Big difference.
I used PAS for 3.5 years I thought 0.3% was not that much at first. PAS sets your portfolio and rebalances every quarter.
The portfolio mix is cookie cutter I think target fund mix is better. One can simply copy one of the target funds depending on the risk tolerance to add more independence and do DYI rebalancing or use target funds.
I think $3000 dollars for 1 year for 1 million is expensive for this service.
I discontinued the service will either use target fund or do DYI rebalancing.
I found the trading reps are very helpful if help is needed and many tools are available.
By the way PAS is not available to talk if you call them. One needs to schedule a meeting at least ahead of week given they are busy. The reps are always available if needed.
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Re: Vanguard personal advisory service

Post by rramaswa »

Thank you for this forum I am learning a lot being a newbie in self management of funds.
Much appreciated all the wisdom
Thank you
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Re: Vanguard personal advisory service

Post by jimkinny »

rramaswa wrote: Tue May 11, 2021 12:02 pm Thank you for this forum I am learning a lot being a newbie in self management of funds.
Much appreciated all the wisdom
Thank you
You can do what the PAS does, it is not complex or difficult. From you comments it seems you have it figured.
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Re: Vanguard personal advisory service

Post by bertilak »

rramaswa wrote: Fri May 07, 2021 10:40 am I used PAS for 3.5 years I thought 0.3% was not that much at first. PAS sets your portfolio and rebalances every quarter.
The portfolio mix is cookie cutter I think target fund mix is better. One can simply copy one of the target funds depending on the risk tolerance to add more independence and do DYI rebalancing or use target funds.
I think $3000 dollars for 1 year for 1 million is expensive for this service.
I discontinued the service will either use target fund or do DYI rebalancing.
I found the trading reps are very helpful if help is needed and many tools are available.
By the way PAS is not available to talk if you call them. One needs to schedule a meeting at least ahead of week given they are busy. The reps are always available if needed.
I do not use PAS myself, for pretty much the same reasons: no need to pay the expense for a simple DIY job.

But I have an IPS that is primarily for my wife, or anyone else that takes over the responsibility of managing my investments. In it I recommend PAS as a convenient way to deal with the responsibility in a way that doesn't require much understanding by whoever that turns out to be. PAS is safe, simple, and requires no deep understanding of the principles involved.

Those principles may seem simple to those of us who hang out here but to most it is a mysterious world, with lots of pitfalls. Thee are forces out there that will push the unwary towards those pitfalls -- and not much in the way of guardrails. Vanguard PAS protects from that. Even though it is somewhat expensive it is much less expensive than the alternatives.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: Vanguard personal advisory service

Post by Wiggums »

I include my DW on investment and financial matters. She is very skilled in Quicken, and using the Vanguard/Fidelity web portals. She would prefer not to do the rebalancing. I thought about directing her to PAS, but she felt like written instructions would be fine. We only rebalance once a year, so she will do the next one. Things will be easier as we reduce the accounts. For now, we use a spreadsheet to calculate the AA even though she can get the same info from Quicken once we move her 401k to reduce the fees and proprietary funds which Quicken cannot decode the fund composition.
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Re: Vanguard personal advisory service

Post by bertilak »

Wiggums wrote: Tue May 11, 2021 12:42 pm I include my DW on investment and financial matters. She is very skilled in Quicken, and using the Vanguard/Fidelity web portals. She would prefer not to do the rebalancing. I thought about directing her to PAS, but she felt like written instructions would be fine. We only rebalance once a year, so she will do the next one. Things will be easier as we reduce the accounts. For now, we use a spreadsheet to calculate the AA even though she can get the same info from Quicken once we move her 401k to reduce the fees and proprietary funds which Quicken cannot decode the fund composition.
If there was ever any question, we do have very different wives!

I often have glitches/problems with Quicken that I know my wife couldn't deal with.
  • Things like some institutions' downloads just stop working. For example my credit union discontinued Direct Connect and required a change to Express Web Connect. No warning; you just had to figure out what happened and how to make the change in Quicken.
  • Things like Quicken changing the way to initiat bill payment. That introduced both outright bugs and (more importantly) the need to change one's paradigm in how to use it. (No more just typing "send" next to payments 30 days in the future.)
  • Things like outright Quicken bugs you had to wait for a fix.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: Vanguard personal advisory service

Post by HENRYGRUGER »

jimkinny wrote: Tue May 11, 2021 12:08 pm
rramaswa wrote: Tue May 11, 2021 12:02 pm Thank you for this forum I am learning a lot being a newbie in self management of funds.
Much appreciated all the wisdom
Thank you
You can do what the PAS does, it is not complex or difficult. From you comments it seems you have it figured.
How does one do Tax loss Harvesting? When do you know it is time to do it? That is the primary reason I use PAS. If I can truly do it myself, I will.
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Re: Vanguard personal advisory service

Post by abuss368 »

HENRYGRUGER wrote: Thu May 13, 2021 1:10 pm
jimkinny wrote: Tue May 11, 2021 12:08 pm
rramaswa wrote: Tue May 11, 2021 12:02 pm Thank you for this forum I am learning a lot being a newbie in self management of funds.
Much appreciated all the wisdom
Thank you
You can do what the PAS does, it is not complex or difficult. From you comments it seems you have it figured.
How does one do Tax loss Harvesting? When do you know it is time to do it? That is the primary reason I use PAS. If I can truly do it myself, I will.
I would ask the Vanguard PAS advisor. I know with my family they did not offer to provide that. I could be wrong so I would definitely ask the question.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Vanguard personal advisory service

Post by retired@50 »

HENRYGRUGER wrote: Thu May 13, 2021 1:10 pm How does one do Tax loss Harvesting? When do you know it is time to do it? That is the primary reason I use PAS. If I can truly do it myself, I will.
Maybe this wiki page will help.
https://www.bogleheads.org/wiki/Tax_loss_harvesting

Regards,
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Re: Vanguard personal advisory service

Post by sabrina.blue »

traveling_salesman wrote: Mon Apr 19, 2021 7:16 pm 2. They automate without complexity. I don’t want to end up with a 20 ETF portfolio like some other roboadvisers.
This is no joke. When I moved some accounts from Betterment to Vanguard more than a year ago, I was left with a taxable account full of about that many ETFs. No exaggeration. :(

As a result, my grand plan to simplify to a three-fund portfolio is still stymied by this account unless I want to trigger significant capital gains. I have strategically sold a handful of them over these past two tax years, but still am holding nine of them, waiting to slowly distribute the capital gains over time.

I look forward to the future year when my 12-fund account finally gets to live free as a 3-fund account!
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Re: Vanguard personal advisory service

Post by abuss368 »

sabrina.blue wrote: Fri May 14, 2021 2:49 pm
traveling_salesman wrote: Mon Apr 19, 2021 7:16 pm 2. They automate without complexity. I don’t want to end up with a 20 ETF portfolio like some other roboadvisers.
This is no joke. When I moved some accounts from Betterment to Vanguard more than a year ago, I was left with a taxable account full of about that many ETFs. No exaggeration. :(

As a result, my grand plan to simplify to a three-fund portfolio is still stymied by this account unless I want to trigger significant capital gains. I have strategically sold a handful of them over these past two tax years, but still am holding nine of them, waiting to slowly distribute the capital gains over time.

I look forward to the future year when my 12-fund account finally gets to live free as a 3-fund account!
That is surprising! And this was going to Vanguard? Not to Betterment?

Were the capital gains a reason why Vanguard PAS did not sell?

Generally they place you in a Four Fund Portfolio of Total Stock, Total International, Total Bond, and Total International Bond.

They shy away from any of their sector funds.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Vanguard personal advisory service

Post by sabrina.blue »

Sorry to confuse, Tony. No, this wasn't about PAS. This was just a comment on what your portfolio can end up looking like at some roboadvisors, or at least Betterment. It never was a problem to me at Betterment, but once I transferred the account in-kind to Vanguard, I was surprised to discover what a long list of assets I was dealing with.

And yes, the reason I still have nine of them is because the gains are such that I don't want to trigger that full taxation event in one year.
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