should I keep a Vanguard personal advisor?

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RubyK
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should I keep a Vanguard personal advisor?

Post by RubyK »

Hello,
I am new to Vanguard and I started with a personal advisor in order to create my plan. I would now like to learn how to manage my own portfolio without an advisor. When last I spoke with an advisor, he indicated I would need to know how to rebalance my portfolio quarterly to match my investment plan. He also stated I would perhaps need to know about taxes and, when I turned 72, how to most effectively withdraw my money. I currently am still saving monthly in Vanguard which does increase my advisor fee, but I have no idea how to educate myself on the tasks I have mentioned above. Question: Should I continue to use the advisor service for a fee OR, if not, how do I become financially educated on rebalancing, taxes and the most cost effective way to draw my money when I turn 72?
Thank you for your suggestions.
Ruby K
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arcticpineapplecorp.
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Re: should I keep a Vanguard personal advisor?

Post by arcticpineapplecorp. »

in order to know, we'd need to know that funds you're invested in and how much of your portfolio is taxable vs retirement. If you have portfolio questions, you'd get better answers posting according to:

asking portfolio questions
Last edited by arcticpineapplecorp. on Wed Jun 23, 2021 1:49 pm, edited 1 time in total.
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sport
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Re: should I keep a Vanguard personal advisor?

Post by sport »

You can probably learn about all of those things by asking questions on Bogleheads. You just have to be willing to put in the time to learn the answers.
Jack FFR1846
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Re: should I keep a Vanguard personal advisor?

Post by Jack FFR1846 »

Also, how old are you. Learning about how to handle things when you're 72, if you're currently 70 does make sense. If you're 40, there's no reason to get into it as it's 32 years away and there's about a zero percent chance that things planned now will make sense with future changes that we can't predict right now.

Rebalance quarterly? You don't have to do that. Plenty of people (here) rebalance once a year. With (at most) 4 funds, how hard is that anyways?

Boy....it used to be that Vanguard PAS were unique in the industry in that they mainly helped and provided advice. Sounds like they're now pedaling FUD (fear, uncertainty, doubt) to scare you that you, a mere mortal can't possibly do these extraordinarily difficult things. In reality, I spend 15 minutes a year doing what they're talking about. And I am not Zeus.
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delamer
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Re: should I keep a Vanguard personal advisor?

Post by delamer »

Try reading a couple of the books in this forun’s Suggested Reading section: https://www.bogleheads.org/RecommendedReading.php

The one on Retirement Planning would be a good start.

Your comfort level with that material should give you a good idea as to whether you are comfortable going it alone.
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investuntilimrich
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Re: should I keep a Vanguard personal advisor?

Post by investuntilimrich »

Personally, I don't like the idea of a random advisor being assigned to me. How much background information do you have on this person. Is it even someone you trust? I certainly think many people are capable of managing their own investments, but not all, especially those that learn just enough to be dangerous with a tendency to gamble. My core investments I rarely change, certainly not quarterly. Time to get out a sheet of paper, right down what you would have done without their advice versus any input you accepted from them. Did they earn their keep? If the answer is no over a long period of time it probably makes sense to fire them. If you find you do better with their advice, then maybe they are worth your while.
Last edited by investuntilimrich on Wed Jun 23, 2021 2:49 pm, edited 1 time in total.
afan
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Re: should I keep a Vanguard personal advisor?

Post by afan »

The things you need to know are so simple that you will be amazed that people pay others to provide this service.

If you are 71.5, still working and have little time to devote to this in the 6 months before you retire, then have your PAS advisor lay out a plan for how to spend your money in retirement. Then drop the service.
If you are 70, you have ample time to learn and do the planning yourself, even if you are very busy at work. So drop the service.

There is just not that much to it.
You can get all the advice you need on here for free.
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OpenMinded1
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Re: should I keep a Vanguard personal advisor?

Post by OpenMinded1 »

RubyK wrote: Wed Jun 23, 2021 1:35 pm Hello,
I am new to Vanguard and I started with a personal advisor in order to create my plan. I would now like to learn how to manage my own portfolio without an advisor. When last I spoke with an advisor, he indicated I would need to know how to rebalance my portfolio quarterly to match my investment plan. He also stated I would perhaps need to know about taxes and, when I turned 72, how to most effectively withdraw my money. I currently am still saving monthly in Vanguard which does increase my advisor fee, but I have no idea how to educate myself on the tasks I have mentioned above. Question: Should I continue to use the advisor service for a fee OR, if not, how do I become financially educated on rebalancing, taxes and the most cost effective way to draw my money when I turn 72?
Thank you for your suggestions.
Ruby K
As I think some others have mentioned, you don't need to rebalance quarterly, and would probably be better off not doing that. Like many others I check my allocation to see if I need to rebalance once a year. Seems like most do it once or twice a year. (Sometimes the checkup reveals that you don't need to rebalance.)

Also, you could just go with target date funds if you don't want to bother with rebalancing. Target date or lifecycle funds do it for you, and most people get pretty good results with target date funds. In general, they probably do better than people that tinker with their portfolios a lot.

The part of investing that has to do with taxes isn't real complicated either, at least until you retire. Before you retire it's mainly just deciding whether to put retirement contributions in Roth, Traditional, or taxable accounts, or a combination of the three.

The only somewhat complicated one is "how to most effectively withdraw your money." Primarily this has to do with how much to withdraw each year, and what type of account to take it from - Traditional, Roth, or Taxable (if you have a variety of account types). This is the part that I plan to get help with a few years before I need to start using my retirement savings for income. There are threads in this forum on what type of financial advisor to use, if you decide to use one.

Many also get help determining if they have enough saved to retire. Not sure if I'll do this or not, but seems like it could be fairly complicated also.
Last edited by OpenMinded1 on Wed Jun 23, 2021 3:43 pm, edited 4 times in total.
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Re: should I keep a Vanguard personal advisor?

Post by Grt2bOutdoors »

Spend a few weeks on here, read a few books, then go through a hypothetical scenario on your own of rebalance and initiate required minimum distributions (if required in the near future) - ask a few or a lot of questions here on the forum. If you fee comfortable then you can take the training wheels off and try it on your own.
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Topic Author
RubyK
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the "how to rebalance" steps on the Vanguard site

Post by RubyK »

Thank you for the advice regarding keeping a personal advisor. How exactly do I rebalance? Is there somewhere on the Vanguard site which allows Vanguard investors to rebalance? Could someone point me to the rebalance choice on the Vanguard site?
Thank you,
RubyK
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Cheez-It Guy
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Re: should I keep a Vanguard personal advisor?

Post by Cheez-It Guy »

Essentially, rebalancing is selling one thing and buying another to keep percentages of asset allocation on target. Selling in a taxable account has tax consequences that you should understand, but this isn't all that hard. It's elementary school math, and this time calculators, spreadsheets, and computers are all allowed!
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Re: should I keep a Vanguard personal advisor?

Post by Cheez-It Guy »

Jack FFR1846 wrote: Wed Jun 23, 2021 1:48 pm Boy....it used to be that Vanguard PAS were unique in the industry in that they mainly helped and provided advice. Sounds like they're now pedaling FUD (fear, uncertainty, doubt) to scare you that you, a mere mortal can't possibly do these extraordinarily difficult things. In reality, I spend 15 minutes a year doing what they're talking about. And I am not Zeus.
Maybe. Or maybe it was just factual transmission of relevant information to someone they perceived did not know these things and also did not know that they needed to know in order to effectively manage their accounts themselves. I didn't see any suggestion from them that it was overly difficult.
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Re: the "how to rebalance" steps on the Vanguard site

Post by bertilak »

RubyK wrote: Wed Jun 23, 2021 4:26 pm Thank you for the advice regarding keeping a personal advisor. How exactly do I rebalance? Is there somewhere on the Vanguard site which allows Vanguard investors to rebalance? Could someone point me to the rebalance choice on the Vanguard site?
Thank you,
RubyK
To rebalance: Sell what you have too much of and use the proceeds to buy what you don't have enough of. Easy Peasy. BUT you may not even even need to do that!

When buying (investing new money) or selling (paying expenses), buy or sell what will nudge you towards your target AA.

Note that a target AA is a pretty broad brush. 65/35 isn't much different from 60/40. Since nobody really knows if 65/35 better or worse than 60/40 (or 70/30), high precision isn't justified so don't fret over it.

It's all just common sense.
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dbr
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Re: should I keep a Vanguard personal advisor?

Post by dbr »

RubyK wrote: Wed Jun 23, 2021 1:35 pm Hello,
I am new to Vanguard and I started with a personal advisor in order to create my plan. I would now like to learn how to manage my own portfolio without an advisor. When last I spoke with an advisor, he indicated I would need to know how to rebalance my portfolio quarterly to match my investment plan. He also stated I would perhaps need to know about taxes and, when I turned 72, how to most effectively withdraw my money. I currently am still saving monthly in Vanguard which does increase my advisor fee, but I have no idea how to educate myself on the tasks I have mentioned above. Question: Should I continue to use the advisor service for a fee OR, if not, how do I become financially educated on rebalancing, taxes and the most cost effective way to draw my money when I turn 72?
Thank you for your suggestions.
Ruby K
I would be happier if the language were that those are things Vanguard assists you with rather than that you would "need to know . . ." to be able to get along without them. That is just sleazy to put a word on it.

These are legitimate things but are not necessarily very complicated. You certainly do not have to rebalance your portfolio quarterly. The last time I had to rebalance until just recently was ten years ago. I'm would not credit the suggestion that VPAS actually does all you need to do about taxes. Some of what they do has to do with tax efficient investing, but in fact they are not qualified at or allowed to be tax advisors, so everyone has that anyway. A person with tax questions should consult a tax accountant.

The process to learn starts at "getting started" in the Wiki: https://www.bogleheads.org/wiki/Getting_started and includes reading for example the Boglehead books on investing and maybe a beginners tax book or so. Many questions can be resolved simply by posting here.

On the other hand you may find VPAS to be just the match for you and well worth the modest fee. I would certainly not say you should or shouldn't save the fee.

I would say learning the rudiments is much assisted by having an interest in this sort of stuff and enjoying learning about it. If it turns out to be a frustrating chore, then VPAS is a reasonable alternative. I think you should peruse the forum and see how the flavor of the discussions here sits with you and go from there.
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Re: the "how to rebalance" steps on the Vanguard site

Post by Doctor Rhythm »

RubyK wrote: Wed Jun 23, 2021 4:26 pm Thank you for the advice regarding keeping a personal advisor. How exactly do I rebalance? Is there somewhere on the Vanguard site which allows Vanguard investors to rebalance? Could someone point me to the rebalance choice on the Vanguard site?
Thank you,
RubyK
I don’t think Vanguard has a rebalancing primer, but it’s just arithmetic. You need to know your desired allocation to each fund/asset; this is a personal choice and is expressed as percentages of your portfolio. You also need to know how much you actually own itthese funds/assets, as expressed in dollars. You would compare these actual $ amount to what they should be if your portfolio was already balanced. Some of these amounts will be above and others below your desired allocation. You sell some of the overrepresented funds and use the proceeds to buy underrepresented funds to achieve the desired balance.

That said, if this description sounds kind of complicated, and you worry you’ll make a mistake doing it, then I would recommend against self-managing your portfolio at this time. Nothing wrong with that. You might want to consider using a target date fund if you don’t want to pay for Vanguard’s advisor service. If you post your portfolio, we can suggest the target date fund that most closely mimics it.
OpenMinded1
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Re: the "how to rebalance" steps on the Vanguard site

Post by OpenMinded1 »

RubyK wrote: Wed Jun 23, 2021 4:26 pm Thank you for the advice regarding keeping a personal advisor. How exactly do I rebalance? Is there somewhere on the Vanguard site which allows Vanguard investors to rebalance? Could someone point me to the rebalance choice on the Vanguard site?
Thank you,
RubyK
Like some others have suggested, you might want to educate yourself a little bit more on investing before delving into analyzing your portfolio and rebalancing. As suggested before, you might want to consider using target date or lifecycle funds, at least until you learn a little bit more about investing.

However to answer your question....

There is a tool on the Vanguard site designed to help investors evaluate their current portfolios, and rebalance (change the asset allocation) if they think it's prudent. I can't think of exactly what it's called at the moment, but you can get to it by making just a few clicks starting on the homepage. (You don't need to do a search.) It can help you evaluate your current portfolio, and also the results of any changes you might be considering making. It's handy because you can see what the effect of changes to your portfolio will be on asset allocation before actually making them by buying and selling.

The Morningstar website also has a tool you can use for the same thing. It's called Portfolio X-ray. However to get the fairly detailed analysis provided by the X-ray feature, you will need to pay for a premium membership. I usually get the membership for just one month each year when I do my annual checkup and rebalance, if I think rebalancing is necessary.

I also use my own spreadsheets to help determine what the allocation should be, what the current allocation is, and what the allocation will be after I make certain changes.
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Re: the "how to rebalance" steps on the Vanguard site

Post by mkc »

OpenMinded1 wrote: Wed Jun 23, 2021 8:15 pm

There is a tool on the Vanguard site designed to help investors evaluate their current portfolios, and rebalance (change the asset allocation) if they think it's prudent. I can't think of exactly what it's called at the moment, but you can get to it by making just a few clicks starting on the homepage.
Portfolio Watch and Portfolio Tester. However there is a very long thread in "Theory" that discusses how this tool is currently broken, especially for asset allocation and outside investment analysis.

viewtopic.php?f=10&t=345383

It is quite incorrect for our investments (definitely more than 5% out of whack), does not have correct composition for much of our non-VG funds, and I would not recommend using it at this time.
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Re: should I keep a Vanguard personal advisor?

Post by tibbitts »

I do believe that many Bogleheads greatly underestimate the huge amount of time they've spent educating themselves to whatever point they're at with investing. And yet even after thousands of hours I made a pretty basic mistake over a period of several years that cost me money. More than PAS would have cost for my entire portfolio over all those years? Maybe, but maybe they wouldn't have caught the problem either. Sometimes just having somebody else looking over what you do can help. Helping to the point of .3% is more difficult to say. But there are issues that are difficult to frame into a question for the forum, or sometimes you should have a question you don't even know you should have. So I think it's dangerous to tell somehow that with relatively little effort they can necessarily do as well by themselves as with an adviser. Maybe, maybe not.
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Re: the "how to rebalance" steps on the Vanguard site

Post by tibbitts »

mkc wrote: Wed Jun 23, 2021 8:25 pm
OpenMinded1 wrote: Wed Jun 23, 2021 8:15 pm

There is a tool on the Vanguard site designed to help investors evaluate their current portfolios, and rebalance (change the asset allocation) if they think it's prudent. I can't think of exactly what it's called at the moment, but you can get to it by making just a few clicks starting on the homepage.
Portfolio Watch and Portfolio Tester. However there is a very long thread in "Theory" that discusses how this tool is currently broken, especially for asset allocation and outside investment analysis.

viewtopic.php?f=10&t=345383

It is quite incorrect for our investments (definitely more than 5% out of whack), does not have correct composition for much of our non-VG funds, and I would not recommend using it at this time.
This post somewhat illustrates my point about how much knowledge you sometimes need to determine, in this case, not only the type of tool to use, but that the tool provided by one of the largest financial services providers leaves a lot to be desired. This one item happened to come up in the thread, but how many other points that someone would want to know haven't?
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Re: should I keep a Vanguard personal advisor?

Post by Outer Marker »

RubyK wrote: Wed Jun 23, 2021 1:35 pm When last I spoke with an advisor, he indicated I would need to know how to rebalance my portfolio quarterly to match my investment plan. He also stated I would perhaps need to know about taxes and, when I turned 72, how to most effectively withdraw my money. I currently am still saving monthly in Vanguard which does increase my advisor fee, but I have no idea how to educate myself on the tasks I have mentioned above.
Very disappointed to hear that from Vanguard. As others have said, fear mongering and scare tactics. You can learn everything you need by reading the wiki and posting your entire situation in the "asking portfolio questions" format. We'll do the work for you. If it's not a particularly large or complex portfolio, you can likely accomplish nearly same thing as your advisor without the fee by buying one of Vanguard's Target Date or LifeStrategy funds with the same asset allocation. Vanguard is very cookie cutter in that respect. Those funds rebalance themselves daily and automatically. No need for you to do anything but take your distributions when needed, or according to your RMD schedule (which the Vanguard website will calculate for you.)
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Re: the "how to rebalance" steps on the Vanguard site

Post by Eagle33 »

RubyK wrote: Wed Jun 23, 2021 4:26 pm Thank you for the advice regarding keeping a personal advisor. How exactly do I rebalance? Is there somewhere on the Vanguard site which allows Vanguard investors to rebalance? Could someone point me to the rebalance choice on the Vanguard site?
Thank you,
RubyK
It sounds as if you need to spend some time educating yourself before stopping your Vanguard PAS service. Let your advisor continue for the near term as you self educate as other posters have already provided prudent guidance in the methods. Great info on this forum and in the wiki - such as Rebalancing.

Regarding taxes I recommend you look at your last 2 tax returns and get to understand the various lines that you personally have used and focus on those applicable parts of the tax law.

Once you stop having doubts about your ability to find the answers about your retirement accounts and general overall finance plan, then it is time to let your advisor move onto a less financially confident individual.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
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Re: should I keep a Vanguard personal advisor?

Post by ivgrivchuck »

RubyK wrote: Wed Jun 23, 2021 1:35 pm Hello,
I am new to Vanguard and I started with a personal advisor in order to create my plan. I would now like to learn how to manage my own portfolio without an advisor. When last I spoke with an advisor, he indicated I would need to know how to rebalance my portfolio quarterly to match my investment plan. He also stated I would perhaps need to know about taxes and, when I turned 72, how to most effectively withdraw my money. I currently am still saving monthly in Vanguard which does increase my advisor fee, but I have no idea how to educate myself on the tasks I have mentioned above. Question: Should I continue to use the advisor service for a fee OR, if not, how do I become financially educated on rebalancing, taxes and the most cost effective way to draw my money when I turn 72?
Thank you for your suggestions.
Ruby K
You probably should stay with PAS. After 70, the risk of rapid mental capacity decline increases, and one may not even realize this while making serious mistakes. My hunch is that the risk is higher if one is new to investing.

So I would view PAS as an insurance policy.
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livesoft
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Re: should I keep a Vanguard personal advisor?

Post by livesoft »

One way to learn about taxes is to prepare your own Form 1040 tax return. Presumably, you have filed a 2020 Form 1040. If you prepared it by hand while reading the instructions to the forms that you submitted, then you already know a lot about taxes. However, if someone else prepared your Form 1040 for you, then you may not know as much as you could even if you prepared your Form 1040 yourself in the past. If you used tax prep software such as TurboTax, HRBlock, or TaxAct, then you know quite a bit, but such tax prep software tries very very hard to keep you from reading the IRS instructions to the forms that the software is filling out for you.

It is also very likely that in the past, that you did prepare your Form 1040 by hand before computers were common, but that may have been ages ago. There is no reason not to brush up on those past skills except perhaps the annoyance of learning something new.

So take your 2020 Form 1040 and try to duplicate it from the tax documents and information that you already have on hand without using tax prep software. It will take some effort and some time, but I think you will also be teaching yourself about income taxes and especially taxes on your investments. And once you have taught yourself, then you will not have to prepare your tax return by hand, but can use tax prep software more effectively in the future.

Besides, Vanguard and its people will not prepare your taxes for you anyways, so whether you keep your personal advisor or not will not matter too much as far as your future Form 1040 tax returns go.
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Re: should I keep a Vanguard personal advisor?

Post by Outer Marker »

I generally agree with livesoft, but would not go back to the stone ages to learn to do taxes with paper and pencil. Turbotax at most. My dad taught mathmatics, and was meticulous on taxes. He slowly lost the ability to do his taxes into his mid to late 70s when I took over. Hire a good accountant (not an H&R temp worker) if you need tax help and planning advice. It's not that complicated for most retirees. And, AARP volunteers will do them for you as a senior.
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Re: should I keep a Vanguard personal advisor?

Post by backpacker61 »

There are two facets to considering using an advisor (or going on your own)
  • Knowing what you need to know for a successful outcome (or making use of the expertise of the advisor)
  • Behaving in the way you need to behave for a successful outcome (or accepting financial coaching from an advisor)
Lots of comments here about how superfluous the first bullet item is and how you can acquire all you need to know reading the Boglehead wiki or a book or two.

But I suggest that much (even most) of the value that an advisor brings to the table is related to the second bullet item; helping you navigate your feelings and emotions to make objective decisions for a successful retirement, funding children's education expenses, etc. Making a plan and sticking to it, even in the face of market turbulence. In March last year (during the COVID 19 downturn), we even saw some Boglehead posters panic, "cut and run" in the face of the extreme market turbulence. They might perhaps have benefited from an advisory relationship to maintain an even keel, or even rebalance into the declining asset value.
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Re: should I keep a Vanguard personal advisor?

Post by TomatoTomahto »

I am not going to recommend keeping PAS or quitting PAS, but just wanted to say that IMO the necessity to rebalance is overblown. If you’re adding money or dividends have accumulated, apply them where the balance is lower than desired. Rinse and repeat every now and then.
I get the FI part but not the RE part of FIRE.
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Re: should I keep a Vanguard personal advisor?

Post by galawdawg »

RubyK wrote: Wed Jun 23, 2021 1:35 pm Hello,
I am new to Vanguard and I started with a personal advisor in order to create my plan. I would now like to learn how to manage my own portfolio without an advisor. When last I spoke with an advisor, he indicated I would need to know how to rebalance my portfolio quarterly to match my investment plan. He also stated I would perhaps need to know about taxes and, when I turned 72, how to most effectively withdraw my money. I currently am still saving monthly in Vanguard which does increase my advisor fee, but I have no idea how to educate myself on the tasks I have mentioned above. Question: Should I continue to use the advisor service for a fee OR, if not, how do I become financially educated on rebalancing, taxes and the most cost effective way to draw my money when I turn 72?
Thank you for your suggestions.
Ruby K
Hmmm. Sounds like the kind of "you need me so don't leave" pitch (aka scare tactics) that one might expect from Edward Jones or other less reputable brokerages. And some here say they won't leave Vanguard because they trust them not to take advantage of a surviving spouse, unlike the vultures at Fidelity and Schwab! :oops:

First, you DON'T need to rebalance quarterly. You can rebalance annually or when your allocation gets out-of-alignment to an undesired level (such as when a desired 60/40 allocation becomes 65/35 due to market performance). And if you don't want to DIY rebalancing, for fraction of what you pay Vanguard PAS you could invest in a Vanguard balanced fund (such as one of the LifeStrategy funds) which automatically rebalances as needed to maintain the fund's stated asset allocation.

Second, as far as taxes and withdrawal strategies in retirement, many here on Bogleheads can provide much, much better advice that you are likely to get from the randomly assigned (and sometimes inexperienced) advisor that you get at Vanguard PAS. If you feel like some expertise in taxation of retirement withdrawals is needed, paying a trusted and experienced tax professional will still be much less costly than the annual PAS fee (depending on the size of your portfolio).

If you'd like more informed advice, I'd recommend you use the link in articpineapplecorp's reply to ask about your portfolio. You will likely find some outstanding feedback from your fellow Bogleheads!
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Re: should I keep a Vanguard personal advisor?

Post by galawdawg »

Jack FFR1846 wrote: Wed Jun 23, 2021 1:48 pm Boy....it used to be that Vanguard PAS were unique in the industry in that they mainly helped and provided advice. Sounds like they're now pedaling FUD (fear, uncertainty, doubt) to scare you that you, a mere mortal can't possibly do these extraordinarily difficult things. In reality, I spend 15 minutes a year doing what they're talking about. And I am not Zeus.
Considering the huge profits that the Vanguard Group reaps from PAS (which are kept by the Vanguard Group, rather than being shared with fund "client-owners") and the level of aggressive marketing that they devote to PAS, I can't say I am surprised.
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Re: should I keep a Vanguard personal advisor?

Post by SmileyFace »

My parents are both in their 80's and have gotten much of the advice the OP is talking about without PAS - help setting up RMDs, help rebalancing (they don't do anything online - just call general support line and ask for help transfering a few funds), and help withdrawing money from the right accounts. Maybe Vanguard is now pushing people to PAS when they ask for help on these items but I recently learned my parents have gotten this help from Vanguard for free thru their years (and their account size is relatively small - actually that might be why Vanguard doesn't push them to PAS).
Regarding tools/help without an advisor - ironically Fidelity seems to have much better tools for planning for the DIY investor than Vanguard does (and in many of our cases Fidelity gives us free access to a named advisor - not sure what the parameters are to get this).
dbr
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Re: should I keep a Vanguard personal advisor?

Post by dbr »

Lets be clear that VPAS does not do people's tax returns for them nor supply tax advice beyond tax efficient investing and perhaps some process on what to withdraw from what. Does anyone know if VPAS manages such operations as Roth conversions? My guess is that they don't and if they do they shouldn't be doing that. Does anyone know what they advise on tax loss harvesting, again an area that may well be out of their competence.

Or, am I mistaken and Vanguard is now in the tax accounting business?
backpacker61
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Re: should I keep a Vanguard personal advisor?

Post by backpacker61 »

RubyK wrote: Wed Jun 23, 2021 1:35 pm Question: Should I continue to use the advisor service for a fee OR, if not, how do I become financially educated on rebalancing, taxes and the most cost effective way to draw my money when I turn 72?
Thank you for your suggestions.
Ruby K
Vanguard's web site has some information on rebalancing here.

https://investor.vanguard.com/investing ... /rebalance

and they have relevant content about using your retirement savings for income here

https://investor.vanguard.com/retirement/income/

and

https://retirementplans.vanguard.com/we ... ngBroc.pdf

The other subjects you asked about, you will find that they have similar content explaining these concepts; it can just be difficult for many of us to have the time and discipline to follow through on them. My dental hygienist buttonholes me about my lack of discipline for flossing my teeth, and that's a valuable service, frankly. It's not fun for her, but I need to hear it anyway.

I don't use it, but I think PAS is a reasonable value at 0.3% AUM.
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
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Re: should I keep a Vanguard personal advisor?

Post by sport »

galawdawg wrote: Thu Jun 24, 2021 6:41 am Hmmm. Sounds like the kind of "you need me so don't leave" pitch (aka scare tactics) that one might expect from Edward Jones or other less reputable brokerages. And some here say they won't leave Vanguard because they trust them not to take advantage of a surviving spouse, unlike the vultures at Fidelity and Schwab!
I would rather that my surviving spouse gets talked into Vanguard's PAS (0.30%) with low cost Vanguard funds than into a managed account with a fee of 1.0% which would include high cost funds (ie.1.2% ER) and perhaps annuities and life insurance products they don't need.
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Re: should I keep a Vanguard personal advisor?

Post by RadAudit »

RubyK wrote: Wed Jun 23, 2021 1:35 pm how do I become financially educated on rebalancing, taxes and the most cost effective way to draw my money when I turn 72?
Thank you for your suggestions.
Well, I'd suggest https://www.bogleheads.org/wiki/Getting_started. Read the articles; watch the videos; read a few of the recommended books. Then I'd post my portfolio and ask few (numerous [?]) questions. viewtopic.php?f=1&t=6212
I would now like to learn how to manage my own portfolio without an advisor.
You can construct a portfolio that's easy to manage. If you use more than three different funds, you may be doing it wrong.

We're here to help.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
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Re: should I keep a Vanguard personal advisor?

Post by bertilak »

sport wrote: Thu Jun 24, 2021 9:00 am
galawdawg wrote: Thu Jun 24, 2021 6:41 am Hmmm. Sounds like the kind of "you need me so don't leave" pitch (aka scare tactics) that one might expect from Edward Jones or other less reputable brokerages. And some here say they won't leave Vanguard because they trust them not to take advantage of a surviving spouse, unlike the vultures at Fidelity and Schwab!
I would rather that my surviving spouse gets talked into Vanguard's PAS (0.30%) with low cost Vanguard funds than into a managed account with a fee of 1.0% which would include high cost funds (ie.1.2% ER) and perhaps annuities and life insurance products they don't need.
Ditto.

I see PAS as the best of the alternatives, all of which, including PAS, are undesirable. Never the less, I recommend it as the most convenient and safest way to deal with investments when I am gone.
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: should I keep a Vanguard personal advisor?

Post by galawdawg »

bertilak wrote: Thu Jun 24, 2021 11:42 am
sport wrote: Thu Jun 24, 2021 9:00 am
galawdawg wrote: Thu Jun 24, 2021 6:41 am Hmmm. Sounds like the kind of "you need me so don't leave" pitch (aka scare tactics) that one might expect from Edward Jones or other less reputable brokerages. And some here say they won't leave Vanguard because they trust them not to take advantage of a surviving spouse, unlike the vultures at Fidelity and Schwab!
I would rather that my surviving spouse gets talked into Vanguard's PAS (0.30%) with low cost Vanguard funds than into a managed account with a fee of 1.0% which would include high cost funds (ie.1.2% ER) and perhaps annuities and life insurance products they don't need.
Ditto.

I see PAS as the best of the alternatives, all of which, including PAS, are undesirable. Never the less, I recommend it as the most convenient and safest way to deal with investments when I am gone.
I see the best of the alternatives in that stage of life as moving one's portfolio to an "all-in-one" fund, such as one of the LifeStrategy funds, setting up automatic RMDs, setting up any other automatic withdrawals as desired and leaving it alone. With all of that done, I don't think it should be any more difficult or complex than having a checking account.

If a surviving spouse is unable to even handle that, a trusted financial POA is going to be necessary anyway to pay the bills and so on. Vanguard PAS won't handle your day to day financial affairs. And if you can't trust the person you designate as your POA...you've got bigger issues that what the expense ratio is!
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Re: should I keep a Vanguard personal advisor?

Post by tibbitts »

I don't agree that the comments from PAS regarding what the OP would have to learn to manage investments is an inappropriate sales pitch. It's a reasonable answer to the OP asking about what would be involved, although admittedly we don't know the tone it was said with, and that might matter a lot in how it was intended and/or would be interpreted.

The OP is new to Bogleheads, and may not realize the extent to which d-i-y in all aspects of life is emphasized here, and how really impractical that is for a large percentage of the population. There are some extraordinarily talented Bogleheads who actually do accomplish an amazing variety of tasks on their own, but most of us have to, or choose to, tackle a few and leave some to others. After reading the forum for a while, the OP will discover that some people manage their own investments, do their own taxes, prepare their own estate-planning documents, change their vehicle's oil and replace brake system components, plug punctures in tires, replace the windows in their house, apply the correct variety of chemicals to their lawn at the correct times, and tile their bathrooms, while simultaneously working a full-time job plus at least one side gig, completing an MBA (obviously in a top-10 program, otherwise why bother?), and of course trying to figure out how to fit CFA and CFP exams in on the same day. Seriously I think some Bogleheads are actually doing all those things, and honestly don't understand why everyone else can't, or wouldn't want to even try.

Certainly it would be reasonable for the OP to take on managing investments, but there's no rush. Maybe the OP should try out PAS for a year or two, while learning a little more and seeing what PAS actually does or doesn't do.
Last edited by tibbitts on Thu Jun 24, 2021 2:45 pm, edited 1 time in total.
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Re: should I keep a Vanguard personal advisor?

Post by Vanguard User »

How do the fees compare to Fidelity? I may need one near retirement and/or in retirement?
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nedsaid
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Re: should I keep a Vanguard personal advisor?

Post by nedsaid »

What I would caution is that while Bogleheads is a great place to gather information, debate investment topics, and receive general advice; don't let anonymous avatars on the internet run your financial life. For one thing, the expertise of the posters here varies and frankly the quality of the posts varies as well. There are folks whose comments you can just take to the bank and others whose posts show various levels of knowledge concerning various topics. For example, there certainly are things that I know a lot about but I will post in threads concerning topics that I don't know much about because I am trying to learn. Sometimes, I think aloud on the forum, floating ideas here on the forum though I might not actually do those things in real life. So you have to take the posts in their proper context.

While most of the advice given here is very good, keep in mind that we can advise only upon the information provided, one additional detail can greatly change the advice given. For example, if person A and person B have identical life and financial situations in every respect except for one thing. Suppose person A has a special needs child and person B does not. That one detail would make the advice given to person A much different than advice given to person B. A big problem with giving advice here on the forum is that the person seeking help doesn't always tell us everything.

What I would say is that if you learn enough here on the forum, you can probably manage the portfolio and your required minimum distribution withdrawals by yourself. But I cringe when people say to just get all their advice from the Bogleheads forum. I do believe that people can learn this stuff and make a lot of these decisions on their own but I also believe it is prudent to seek advice. No way that I or anyone else on the forum will know everything.

The reason for going to an advisor is that the advisor knows more than you on certain topics. An advisor might be able to raise issues that a person on their own might not have thought of. An advisor also has seen what multiple other people have done in similar situations and might be able to steer you towards better decisions. Experience is a lot of what you are paying for. An advisor can discuss things in detail in person in a way that is more difficult to do on a forum.

Like everything else, even if you hire an advisor, you need to do due diligence. Just like the forum, advisors vary in knowledge, skill, and competence. There are also different schools of thought out there. So unfortunately, the advisory world isn't perfect either and has its flaws.

The forum can provide a similar function to an advisor but the best it can do is to provide information and a variety of perspectives on your problem. But we are individually responsible for our own decisions, you can't let anonymous people make your decisions for you. The best we can do is provide options for you to consider.

So based upon what you learn here, you can better make financial and investment decisions. Even if you seek an advisor, you are better equipped to ask the right questions and get better value for the dollar spent.
A fool and his money are good for business.
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Re: the "how to rebalance" steps on the Vanguard site

Post by teniralc »

RubyK wrote: Wed Jun 23, 2021 4:26 pm Thank you for the advice regarding keeping a personal advisor. How exactly do I rebalance? Is there somewhere on the Vanguard site which allows Vanguard investors to rebalance? Could someone point me to the rebalance choice on the Vanguard site?
Thank you,
RubyK
I have had the Personal Advisor Service for about a year now. I plan to keep it probably at least another year. I have periodic conversations with the advisor and periodically message him. The service has been extremely informative for me. Additionally, the rebalancing only takes place quarterly, but only when the overall allocation changes by 5%. That 5% is something that we discussed and settled upon. I know people on this site like to do everything themselves but it is very comforting to have someone to speak to periodically and confirm my thoughts and questions. Also, the primary reason I tried this service is that I wanted my wife to have someone to work with, should I not be there. That is a big comfort to me. Here are a couple of helpful articles. Good luck

https://www.nerdwallet.com/reviews/inve ... r-services

https://clark.com/personal-finance-cred ... es-review/
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beyou
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Re: should I keep a Vanguard personal advisor?

Post by beyou »

Look into Planvision as a less expensive way to get advice and learn to DIY.

https://www.bogleheads.org/blog/2021/04 ... son-lynch/
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Wiggums
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Re: should I keep a Vanguard personal advisor?

Post by Wiggums »

beyou wrote: Thu Jun 24, 2021 4:46 pm Look into Planvision as a less expensive way to get advice and learn to DIY.

https://www.bogleheads.org/blog/2021/04 ... son-lynch/
This presentation was very informative. Thanks for the post.
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Re: should I keep a Vanguard personal advisor?

Post by drzzzzz »

Rebalancing is over-rated and the brokerage firm tells you how much you need to take out each year from your traditional IRA/401K/403B account. And if you need more, take out more from taxable accounts or your retirement account - get rid of the service and save the money.
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Re: should I keep a Vanguard personal advisor?

Post by heyyou »

I have been using a financial advisor due to my current and future medical risks. My flat fee advisory service costs less than Vanguard's percentage-based fee for my portfolio size, and I have had the same certified financial planner there for 15 years. That advisory business does not ever boost the initial fee which makes sense with most of the work being the initial setup of the mutual funds.

For Ruby K, I would suggest one mutual fund per account, of a mix of a stock index fund plus a bond index fund, but the proportion of stocks to bonds in each account (taxable, traditional IRA, and Roth IRA) could vary according to the future tax that will come due. In retirement, my traditional IRA has almost all bond funds in it, to slow its growth since the Required Minimum Distributions are taxable events. My Roth IRA account has all stock funds in it for its future tax free growth, while the taxable account still has a mixture of stock index and bond index funds in it. Note that rebalancing the stock to bond ratios within the two types of IRA accounts, are not taxable events. Ruby would be selling then buying different mixed index funds when rebalancing.
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Re: should I keep a Vanguard personal advisor?

Post by Markeinnc »

tibbitts wrote: Wed Jun 23, 2021 8:59 pm I do believe that many Bogleheads greatly underestimate the huge amount of time they've spent educating themselves to whatever point they're at with investing. And yet even after thousands of hours I made a pretty basic mistake over a period of several years that cost me money. More than PAS would have cost for my entire portfolio over all those years? Maybe, but maybe they wouldn't have caught the problem either. Sometimes just having somebody else looking over what you do can help. Helping to the point of .3% is more difficult to say. But there are issues that are difficult to frame into a question for the forum, or sometimes you should have a question you don't even know you should have. So I think it's dangerous to tell
somehow that with relatively little effort they can necessarily do as well by themselves as with an adviser. Maybe, maybe not.
My wife and I have 75% of our retirement funds in Vanguard using the PAS at 0.3%. While I enjoy reading Bogleheads and articles from the Wall Street Journal about investing, I like the peace of mind of having our money managed for what I consider a reasonable amount. We have funds deposited into our savings account quarterly and that comes from the fund that has done the best over the last quarter and then the total portfolio is re-balanced yearly. I can call, text or email my advisor anytime. We have the remainder of our savings with a local advisor whom we trust .

Everyone is different in risk tolerance , knowledge,etc. I'm sure many Bogleheads are better at investing than many advisors that charge 1%. I would suggest that you use the PAS for a year or so, and then evaluate whether you could do it yourself confidently.
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Re: should I keep a Vanguard personal advisor?

Post by Markeinnc »

I meant to type "0.03". you can see why I use PAS. :)
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Re: should I keep a Vanguard personal advisor?

Post by pkcrafter »

RubyK wrote: Wed Jun 23, 2021 1:35 pma
Hello,
I am new to Vanguard and I started with a personal advisor in order to create my plan. I would now like to learn how to manage my own portfolio without an advisor. When last I spoke with an advisor, he indicated I would need to know how to rebalance my portfolio quarterly to match my investment plan. He also stated I would perhaps need to know about taxes and, when I turned 72, how to most effectively withdraw my money. I currently am still saving monthly in Vanguard which does increase my advisor fee, but I have no idea how to educate myself on the tasks I have mentioned above. Question: Should I continue to use the advisor service for a fee OR, if not, how do I become financially educated on rebalancing, taxes and the most cost effective way to draw my money when I turn 72?
Thank you for your suggestions.
Ruby K
Welcome to the Bogleheads. If you stick around, you will become knowledgeable and will begin to help others. :happy

I believe every investor has a responsibility to learn how to invest and protect themselves from high and unnecessary expenses. You may want to use PAS for now, but you will become knowledgeable and confident enough to take control. The first thing you need to do is post according to these instructions--

viewtopic.php?f=1&t=6212

You have the link to rebalancing. I am retired and I check my portfolio (40/60) in March and October, but rarely adjust more than once a year. The rebalance trigger is +/-5% from target.

The three fund portfolio

viewtopic.php?f=10&t=88005

Emotions play a very big role in investing and you have to control urges and panic. Perhaps the biggest challenge in self-management.

https://www.bogleheads.org/wiki/Behavioral_pitfalls

Once you post your portfolio (a new thread) we can help with modifications if needed. I'm guessing Vanguard has you in total stock market, about 40% of total equities in total international stock, total bond and total international bond.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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Eagle33
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Re: should I keep a Vanguard personal advisor?

Post by Eagle33 »

Markeinnc wrote: Fri Jun 25, 2021 3:10 pm I meant to type "0.03". you can see why I use PAS. :)
I believe you got it right the first time. Vanguard PAS fee is 0.30% (or 0.003) AUM, at least for the first $5 million.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
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Re: should I keep a Vanguard personal advisor?

Post by shysue »

We had this exact same question. We've invested with Vanguard for quite a few years and were DIY'ers, but we made a rather expensive mistake that cost us thousands over the last two years. I won't go into the why, but we just had too much in bonds and not enough in stocks and missed a good part of the huge growth in stocks the last couple of years. Hindsight is always 20/20.

Anyway, we recently consulted with a VPAS because hubby just retired and we are nervous about outliving our savings. We had an on-phone meeting with this VPAS a couple of weeks ago, and after answering his direct questions regarding our spending, income, and savings, he sent us a proposed financial plan for the next 37 years. Reading the plan, we saw right off the bat that he didn't seem to listen to anything we told him as he had the totally wrong amount for our annual expenses and ignored that we had stated we'd like to withdraw 4-5% a year to supplement our Social Security. He also had in the plan that we would withdraw $7,200 a year, or .6% of our assets. These basic errors created an unrealistic financial plan, to say the least.

I don't know if he just jotted the numbers down and gave them to his assistant who misinterpreted them, or if he actually generated the financial plan himself and screwed it up. But it just left us with the feeling that he wouldn't be of much help to us and shook our early confidence in his ability to advise us.

He did have some solid recommendations on where to move our assets, but I think we could just do that ourselves, especially after reading the posts in this forum. Doing it ourselves would save us about $3,300 a year in PAS fees, but we're still trying to decide if we should go this route. We talk to him again this upcoming Tuesday. Should be an interesting conversation since we sent him an e-mail asking him to regenerate the plan with the correct numbers.

Decisions, decisions.
jebwc
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Re: should I keep a Vanguard personal advisor?

Post by jebwc »

I am using PlanVision and am very satisfied with the cost/benefit proposition. But given the low cost, I think there's a limit to how much time they or anyone could be expected to spend. That said, I'm leery of PAS and other institutional advisors where a percentage of assets is charged. And the fee-only planners that I've looked at are hardly inexpensive either. I wish there were a middle ground where I could pay up a little more for something like a fee-only online advisor who would perform the kind of portfolio reviews we see here on Bogleheads, but with consultation via video-conf, periodic check-ins, room for follow-up questions, etc. Depending on the size of your portfolio, even .003 can be a chunk of change.
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