Vanguard Personal Advisor Services

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trevor-b
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Vanguard Personal Advisor Services

Post by trevor-b » Sat Jul 30, 2016 1:25 pm

Hello:

I've been a lurker for over two years, this is my first post . Extremely grateful to read all the thoughtful advice being shared.

My portfolio (401k + other investments) has finally crossed the $1m mark, figured this might be a good time to get professional advice going forward (that and the recent Consumer Reports http://www.consumerreports.org/personal ... o-adviser/ got me thinking about going this route. Needless to say, Vanguard was #1 in their ratings!)

VPAS will cost me approx $100/month, wanted to see if this made sense (primarily to make sure I'm doing the right things, critique what I have/suggest alternatives, if any are needed) to get to the next $1m and beyond :happy

Ideally, I would like this to be on auto pilot for the most part … with periodic rebalancing.

Reworked to include additional details as requested.

Details

Debt: Mortgage $500k (15 years remaining @ 3.5%)
Tax Filing Status: Single
Tax Rate: 28% Federal, 9.3% State
State of Residence: CA
Age: 40
Desired Asset allocation: 70:30 (as suggested by another response on this thread). I would be ok with 80-20 as well.
Desired International allocation: TBD (open to suggestions)
Goal: Maximize retirement portfolio, grow 401k + taxable balances

Current retirement assets

Vanguard ($400k)

* Taxable account
* Vanguard Capital Opportunity 40% (exp ratio: 0.38%)
* LifeStrategy Growth 35% (exp ratio: 0.15%)
* MidCap Index 10% (exp ratio: 0.08%)
* Windsor Fund Investor: 15% (exp ratio: 0.39%)

401k ($600k)

* Vanguard Target 2040: 60% (exp ratio: 0.05%)
* Extended Market Index: 40% (exp ratio: 0.05%)

Contributions

* 401k: $18k + Company match $5k
* Taxable: $15k (invested in the same ratio as Vanguard holdings above)

Available Vanguard funds in 401k

* Target Retirement 2010-2060 + Retirement Income (exp ratio: 0.05% )
* Institutional Index Fund Institutional Plus (exp ratio: 0.02%)
* Total International Stock Index Fund Institutional Plus (exp ratio: 0.07%)
* Total Bond Market Index Fund Institutional Plus (exp ratio : 0.04%)

Cheers!
Last edited by trevor-b on Mon Aug 01, 2016 12:38 am, edited 7 times in total.

pkcrafter
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Re: Vanguard Personal Advisor Services

Post by pkcrafter » Sat Jul 30, 2016 6:45 pm

Welcome to the forum. I don't think there is anything magic about 1MM, but it is quite an achievement. I believe VPAS cost is 0.3%

I think you can continue to self manage, but when you say Vanguard holdings are you referring to a taxable account? How much are you putting into retirement savings?

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.

mhalley
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Re: Vanguard Personal Advisor Services

Post by mhalley » Sat Jul 30, 2016 7:08 pm

Vanguard PAS will probably put you in funds that are similar to its TR fund. No need to pay them the money just to do that imo. I didn't take the time to figure out exactly what your aa is, but the best thing to do for your retirement is come up with an investment policy statement, then stick with it.
https://www.bogleheads.org/wiki/Investm ... _statement
Boglehead thread with several users ips:
viewtopic.php?t=61915

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Yesterdaysnews
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Re: Vanguard Personal Advisor Services

Post by Yesterdaysnews » Sat Jul 30, 2016 9:05 pm

VPAS has the potential to prevent your from making bad decisions (panic selling) when things get choppy in the market which it will.

One bad panic selling decision could potentially cost you far more than the charge for VPAS, so in my estimation if using it helps you stay the course through thick and thin it is definitely worth the price.

imabeliever
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Re: Vanguard Personal Advisor Services

Post by imabeliever » Sat Jul 30, 2016 9:22 pm

what is it you think you are missing that they can provide? i mean look at what you have accomplished so far... i'd say just keep doing what you have been doing, stay on top of your allocation strategy and otherwise keep on "keeping on" as they say. or used to say? :P

unless you think you are missing something in your overall portfolio, i'm not sure what your motivation is for wanting "professional management". you've done a heck of a job already, i'd say you are just as "professional" as you're likely to find. :beer
yes you can do this!

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SeeMoe
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Re: Vanguard Personal Advisor Services

Post by SeeMoe » Sat Jul 30, 2016 9:36 pm

Yesterdaysnews wrote:VPAS has the potential to prevent your from making bad decisions (panic selling) when things get choppy in the market which it will.

One bad panic selling decision could potentially cost you far more than the charge for VPAS, so in my estimation if using it helps you stay the course through thick and thin it is definitely worth the price.
You got that right! A rapid down market can do strange things to even seasoned investors. I have kept notes on my responses for over 30 years and did some odd stuff. Once , months after the fact, I sold when markets were recovering because of " a hunch "that another correction, aka second shock, was coming. ( It did Not occur! )
That said, VPAS claims to actually earn a bit more than one spends on fees over time and I tend to agree. What I really liked was the now defunct one time ,fee only analysis once offered by Vanguard. It made me big bucks when I received my analysis just before "9-11". Straightened out a poorly constructed folio and gave me confidence to hold on and " buy" in the days, weeks after 9-11...Vanguard says few clients ever follow1x advice, or only portions of the analysis I have heard.
That said, I think that I would sill spend a few hundred bucks for a one time, fee only CFP to analyze and recommend a portfolio for the long term,..Then FOLLOW the paid for advise! Maybe do a follow-up, or tune-up as the plan gradually drifts from it AA strategy over time. Plus " Stay The Course" in sudden, or prolonged, down markets. "Fear/Greed" are the deadly twins for little investors.
ALSO: $1,000,000.00 dollars is still a great accomplishment for a long term investor, even today!

SeeMoe.. :moneybag
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}

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BL
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Re: Vanguard Personal Advisor Services

Post by BL » Sat Jul 30, 2016 9:44 pm

Do you have any IRAs? If not, read about Backdoor Roths in the Wiki.

If your $400k at Vanguard is in a taxable account, it may be generating unnecessary taxable distributions each year. Check your 1099s for income not from your selling funds. You could, for instance, turn off reinvestments and buy tax-efficient funds like Total Stock Market and/or municipal bonds as one alternative. There is a Wiki page on tax-efficient funds. TSM gave off no CGs and about 2% qualified dividends (taxed at CG rate).

These are rather minor, compared to the funds that advisors have put their clients in. You have low-cost funds, unlike the funds we usually see from (non-Vanguard) advisors.

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Toons
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Re: Vanguard Personal Advisor Services

Post by Toons » Sat Jul 30, 2016 9:59 pm

Just Keep doing what you have been doing and,
You will keep getting what you have gotten....
Another million
:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

kenner
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Re: Vanguard Personal Advisor Services

Post by kenner » Sat Jul 30, 2016 10:49 pm

trevor-b wrote: This is my situation. My portfolio (401k + other investments) has finally crossed the $1m mark, figured this might be a good time to get professional advice going forward (that and the recent Consumer Reports http://www.consumerreports.org/personal ... o-adviser/ got me thinking about going this route. Needless to say, Vanguard was #1 in their ratings!)

Portfolio:

401k: 600k (Vanguard Target 2040: 60%, Extended Market Index: 40%)
Vanguard: 400k (Vanguard Capital Opportunity 40%, LifeStrategy Growth 35%, MidCap Index 10%, Windsor Fund Investor: 15%)

I find your investment portfolio to be a rather incoherent mess (although with the dollar value of your portfolio, it's a "good" mess), with funds that have overlapping stocks and overlapping investment characteristics. While all the funds you have are good funds in their own right, they do not combine to make a properly diversified, efficient portfolio.

A paramount key to successful long-term investing is to decide on the relative percentages of stocks and bonds that will match your need, willingness and ability to take risk. A solid portfolio for you may be something as simple to manage as 70% stocks/30% bonds. Do you know at a glance the relative percentages of stocks and bonds in your current overall portfolio? Is there a particular reason why you want to overweight mid-cap stocks?

Strongly suggest you read the brief introduction to the Bogleheads investment philosophy, especially the the section titled "Invest with Simplicity":

https://www.bogleheads.org/wiki/Boglehe ... philosophy

The simple three-fund portfolio has vast global diversification in both stocks and bonds (9,712 leading stocks in the US and globally plus 8,225 high quality bonds) and can be easily re-balanced in order to maintain the stock/bond asset allocation that ultimately meets your needs. It will improve your investment portfolio and simplify your life, all while helping you reach your investment goals. Most critically, it is extremely low-cost.

It is advisable to view the three-fund portfolio as a masterful starting point for any investor. After you study it, and if you believe you can improve upon it given your unique circumstances, that's fine. As an example, some investors find it advisable to include an international bond fund in their bond allocation (even though VG's Total Bond Fund typically contains about 7% international bonds that are denominated in US currency). VPAS may even recommend a separate international bond fund.

It would be extremely helpful if you list all investment options in your 401k, including annual expense ratios for all options.

I assume your $400K Vanguard account is your individual taxable account - is that correct?

VPAS can easily improve your portfolio. So can the members of this forum. To a significant extent, it depends on the options in your 401k and a willingness to explore new ideas about constructing a more efficient investment portfolio.


Cheers!

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mickeyd
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Re: Vanguard Personal Advisor Services

Post by mickeyd » Sun Jul 31, 2016 1:42 pm

Well you are age 40 and already have your first million. You obviously have been successful up to this point on your own. Why do you think that you need an advisor?

If I thought I needed an advisor, I would sign up for PAS.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

trevor-b
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Re: Vanguard Personal Advisor Services

Post by trevor-b » Sun Jul 31, 2016 2:06 pm

Thanks for the feedback and suggestions, will read up on them.

Responses:

1. Re: why I think VPAS (or a peer review) will be helpful: To critique what I have and suggest alternatives, if any are needed.

2. Yes. The Vanguard holdings (approx $400k) are in a taxable account.

3. Currently maxing out on 401k contributions.

4. 401k is administered by Fidelity and has these other Vanguard investment options:

Target Retirement 2010-2060 + Retirement Income
Institutional Index Fund Institutional Plus
Total International Stock Index Fund Institutional Plus
Total Bond Market Index Fund Institutional Plus

Cheers.

retiredjg
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Re: Vanguard Personal Advisor Services

Post by retiredjg » Sun Jul 31, 2016 3:14 pm

trevor-b wrote:1. Re: why I think VPAS (or a peer review) will be helpful: To critique what I have and suggest alternatives, if any are needed.
You can do that here for free and might even get several people's opinion. See the link at the bottom of this message for how to do that. You have already included some of the information in your original post, but it is not enough to really give you the most reliable review.

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Yesterdaysnews
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Re: Vanguard Personal Advisor Services

Post by Yesterdaysnews » Sun Jul 31, 2016 11:20 pm

SeeMoe wrote:
Yesterdaysnews wrote:VPAS has the potential to prevent your from making bad decisions (panic selling) when things get choppy in the market which it will.

One bad panic selling decision could potentially cost you far more than the charge for VPAS, so in my estimation if using it helps you stay the course through thick and thin it is definitely worth the price.
You got that right! A rapid down market can do strange things to even seasoned investors. I have kept notes on my responses for over 30 years and did some odd stuff. Once , months after the fact, I sold when markets were recovering because of " a hunch "that another correction, aka second shock, was coming. ( It did Not occur! )
That said, VPAS claims to actually earn a bit more than one spends on fees over time and I tend to agree. What I really liked was the now defunct one time ,fee only analysis once offered by Vanguard. It made me big bucks when I received my analysis just before "9-11". Straightened out a poorly constructed folio and gave me confidence to hold on and " buy" in the days, weeks after 9-11...Vanguard says few clients ever follow1x advice, or only portions of the analysis I have heard.
That said, I think that I would sill spend a few hundred bucks for a one time, fee only CFP to analyze and recommend a portfolio for the long term,..Then FOLLOW the paid for advise! Maybe do a follow-up, or tune-up as the plan gradually drifts from it AA strategy over time. Plus " Stay The Course" in sudden, or prolonged, down markets. "Fear/Greed" are the deadly twins for little investors.
ALSO: $1,000,000.00 dollars is still a great accomplishment for a long term investor, even today!

SeeMoe.. :moneybag
Yes, I used to lurk on these same forums back in 2008 and there was widespread fear and panic. I would say this forum has some of the most seasoned DIY investors in the world on it, and there was widespread panic even here. Many posts about "Plan B" and other similar posts where people were panic selling.

Such a decision can be disastrous to a portfolio long-term performance, and if VPAS or any similar advisor can help avoid such behavioral mistake we are all programmed to make, seems like it would be worth the small fee.

When markets are at all time highs it is easy to forget what a crash feels like or judge how one would react in that sort of situation. Granted, some people did not panic and stuck to their guns during 2008 and bravo to them, but there was widespread panic even on this forum.

trevor-b
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Re: Vanguard Personal Advisor Services

Post by trevor-b » Mon Aug 01, 2016 12:16 am

retiredjg wrote: You can do that here for free and might even get several people's opinion. See the link at the bottom of this message for how to do that. You have already included some of the information in your original post, but it is not enough to really give you the most reliable review.
Thanks! Appreciate the help.

I have reworked my initial post, please let me know if more details are needed.

Cheers.

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BL
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Re: Vanguard Personal Advisor Services

Post by BL » Mon Aug 01, 2016 7:26 am

I don't see a Roth IRA or trad. IRA. Read up on the Backdoor Roth in the Wiki to save money in a Roth with no future tax or RMD.

Here is a suggestion on presenting your portfolio. Get each % as a % of the whole, not of each account. That makes it easier to suggest how much of each to get there. To make it simpler to distribute amounts, suggestions may be to break up balanced funds into components such as:
Total Stock Market (A 4/1 ratio of your Instit.S&P500 to Extended market = TSM)
Total International
Total Bond (or possibly muni if they must be in taxable)
(Vanguard's advisor would add int. bonds to the mix, as in your Target fund, and maybe have a variety of bonds.)

Look up the unrealized gains for each taxable fund on the Vanguard website, so you/we can determine the cost of selling some or all of those tax-inefficient funds.

Suggestions in blue. You will need to decide on % bonds, % of Stocks in international. I don't see much in bonds with your current portfolio, but balanced funds makes that difficult to see.

40% Vanguard ($400k)

* Taxable account
40% equities (US and International stock market)
* Vanguard Capital Opportunity 40% (exp ratio: 0.38%)
* LifeStrategy Growth 35% (exp ratio: 0.15%)
* MidCap Index 10% (exp ratio: 0.08%)
* Windsor Fund Investor: 15% (exp ratio: 0.39%)

60% 401k ($600k)
20-30% bonds
40-30% equities (US, Int. Stock)

* Vanguard Target 2040: 60% (exp ratio: 0.05%)
* Extended Market Index: 40% (exp ratio: 0.05%)

tibbitts
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Re: Vanguard Personal Advisor Services

Post by tibbitts » Mon Aug 01, 2016 7:44 am

Yesterdaysnews wrote:
SeeMoe wrote:
Yesterdaysnews wrote:VPAS has the potential to prevent your from making bad decisions (panic selling) when things get choppy in the market which it will.

One bad panic selling decision could potentially cost you far more than the charge for VPAS, so in my estimation if using it helps you stay the course through thick and thin it is definitely worth the price.
You got that right! A rapid down market can do strange things to even seasoned investors. I have kept notes on my responses for over 30 years and did some odd stuff. Once , months after the fact, I sold when markets were recovering because of " a hunch "that another correction, aka second shock, was coming. ( It did Not occur! )
That said, VPAS claims to actually earn a bit more than one spends on fees over time and I tend to agree. What I really liked was the now defunct one time ,fee only analysis once offered by Vanguard. It made me big bucks when I received my analysis just before "9-11". Straightened out a poorly constructed folio and gave me confidence to hold on and " buy" in the days, weeks after 9-11...Vanguard says few clients ever follow1x advice, or only portions of the analysis I have heard.
That said, I think that I would sill spend a few hundred bucks for a one time, fee only CFP to analyze and recommend a portfolio for the long term,..Then FOLLOW the paid for advise! Maybe do a follow-up, or tune-up as the plan gradually drifts from it AA strategy over time. Plus " Stay The Course" in sudden, or prolonged, down markets. "Fear/Greed" are the deadly twins for little investors.
ALSO: $1,000,000.00 dollars is still a great accomplishment for a long term investor, even today!

SeeMoe.. :moneybag
Yes, I used to lurk on these same forums back in 2008 and there was widespread fear and panic. I would say this forum has some of the most seasoned DIY investors in the world on it, and there was widespread panic even here. Many posts about "Plan B" and other similar posts where people were panic selling.

Such a decision can be disastrous to a portfolio long-term performance, and if VPAS or any similar advisor can help avoid such behavioral mistake we are all programmed to make, seems like it would be worth the small fee.

When markets are at all time highs it is easy to forget what a crash feels like or judge how one would react in that sort of situation. Granted, some people did not panic and stuck to their guns during 2008 and bravo to them, but there was widespread panic even on this forum.
I both agree and don't. You are completely correct about how emboldened the forum has become since the last downturn, in most cases probably subconsciously. It's almost as if people have concluded that "if we can survive this, we can survive anything, and recover in a few years." But in real life, invoking Plan B may not turn out to be the wrong decision, and your PAS person won't have any better perspective on that than you do. How much confidence will you feel when you're on your seventh PAS person in six months because the other six have been laid off due to the economy tanking?

retiredjg
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Re: Vanguard Personal Advisor Services

Post by retiredjg » Mon Aug 01, 2016 7:54 am

Thanks for the update.

It appears that you may have have been collecting "a few good funds" rather than following any sort of plan. What you've ended up with is not exactly a bad portfolio, but it is nowhere near 30% in bonds. (Not near 20% either. :D) It is not tax-efficient at all. This is causing you to pay more tax than you need to. And it is somewhat light in international stocks.

Here's a breakdown of what you currently have showing what percentage of the portfolio each fund is.

Taxable 40%
16% Vanguard Capital Opportunity (0.38%) mid cap growth fund; not tax efficient
14% LifeStrategy Growth (0.15%) 2.8% bonds, 4.5% international, 6.7% US stocks; not tax efficient, but not too bad
4% MidCap Index 10% (exp ratio: 0.08%)
6% Windsor Fund Investor:(exp ratio: 0.39%) large cap value; not tax efficient

401k 60%
36% Vanguard Target 2040: (0.05%) 4.3% bonds, 12.6% international, 19% US stocks
24% Extended Market Index: (0.05%) all mid and small caps

Your portfolio appears to be about 76% US stocks (heavily weighted toward mid and small cap), 17% international stocks, 7% bonds.


The question is what you want to do with this. I feel sure that you are attached to both Capital Opportunity and Windsor (the most in-efficient funds tax-wise) and you have no place else to put them. The Boglehead approach would be for you to sell those funds and replace them with total stock index and total international index. I'm not sure you want to do that.

What are your thoughts?

What type of portfolio do you want to have?

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mickeyd
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Re: Vanguard Personal Advisor Services

Post by mickeyd » Wed Aug 03, 2016 2:23 pm

Granted, some people did not panic and stuck to their guns during 2008 and bravo to them, but there was widespread panic even on this forum.
I was around here in 2008 and recall no widespread panic at all. On the contrary, it was pretty calm.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

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Re: Vanguard Personal Advisor Services

Post by blevine » Wed Aug 03, 2016 8:46 pm

Personally I only have thought about PAS for a spouse who has no interest at all in managing their money,
to keep out of the hands of the true sharks in this industry. Maybe when I am old and feeble, and if I feel
she would outlive me, I would consider this, maybe. But as long as I am healthy, no need.
Managing 1MM is not that much different than 500k or 2MM.

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Re: Vanguard Personal Advisor Services

Post by trevor-b » Wed Aug 17, 2016 12:55 am

Sorry for the delay in replying, been traveling on work.
BL wrote:
Look up the unrealized gains for each taxable fund on the Vanguard website, so you/we can determine the cost of selling some or all of those tax-inefficient funds.
Unrealized gains

Vanguard Capital Opportunity: $40k
Windsor Fund Investor: $7.2k
LifeStrategy Growth: $30k
MidCap Index: $1k
retiredjg wrote: I feel sure that you are attached to both Capital Opportunity and Windsor (the most in-efficient funds tax-wise) and you have no place else to put them. The Boglehead approach would be for you to sell those funds and replace them with total stock index and total international index. I'm not sure you want to do that.

What are your thoughts?

What type of portfolio do you want to have?
I'm here to listen and learn, so I'm open to suggestions ... including replacing my existing funds if that positions me better in the long term.

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Re: Vanguard Personal Advisor Services

Post by tfb » Wed Aug 17, 2016 1:31 am

mickeyd wrote:
Granted, some people did not panic and stuck to their guns during 2008 and bravo to them, but there was widespread panic even on this forum.
I was around here in 2008 and recall no widespread panic at all. On the contrary, it was pretty calm.
I remember the panic. A "Plan B" theory came to surface: if it drops sufficiently low, you sell everything and quit playing. There was a rule to the effect of "Equity exposure = maximum tolerable loss x 2." And then a "< 50%" was quietly appended, which became "Equity exposure = maximum tolerable loss x 2 < 50%."
Harry Sit, taking a break from the forums.

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Re: Vanguard Personal Advisor Services

Post by nedsaid » Wed Aug 17, 2016 2:05 am

Trevor-b, using the Vanguard Advisory service is a great idea. You will have somebody look things over and they might bring some things up that you hadn't thought of. You will learn something and have peace of mind that you will have a better though not perfect plan. The interaction with a live human being that knows more than you on investing will be a great experience. Go for it.

Think of it as training wheels. At some point you might learn enough to do it all yourself again. $100 per month is pretty low tuition.
A fool and his money are good for business.

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Re: Vanguard Personal Advisor Services

Post by retiredjg » Wed Aug 17, 2016 12:16 pm

trevor-b wrote:I'm here to listen and learn, so I'm open to suggestions ... including replacing my existing funds if that positions me better in the long term.
Well, it's kind of tough to tell someone "you should pay cap gains tax on $77k in order to improve your tax-efficiency because that will be a "better" portfolio." I assume your bottom line is long term pay off and I certainly cannot make a prediction about that. You might get some ideas by reading this link.

https://www.bogleheads.org/wiki/Paying_ ... itch_funds


  • Unrealized capital gains

    Vanguard Capital Opportunity: $40k
    Windsor Fund Investor: $7.2k
    LifeStrategy Growth: $30k
    MidCap Index: $1k
Here are some thoughts.

1) I'd keep the MidCap Index. It is low cost and tax-efficient and not hurting you any. At worst, it is a little nuisance holding.

2) I'd keep the LifeStrategy Growth too. It is pretty low cost and it has only 20% bonds in it and bonds are the reasons that fund should not be in a taxable account. I would not buy more and I would turn off reinvestment of dividends in this fund.

3) If you want to improve the portfolio, concentrate on the Capitial Opportunity and the Windsor. Both are excellent funds, but neither is very tax-efficient. They are paying you distributions each year that you must pay tax on. If that same money were in an index fund, the distributions sould be very small.

Also, their expense ratios may be good for actively managed funds, but they are significantly higher than total stock index (.38% vs .05%). The difference of .33% costs you $726 a year at the current portfolio size if I did the math right. Of course, $726 is not that important, but multiply that by a number of years and consider that you also lose the earnings that would eventually stream from this $726 a year and the earnings on the earnings. Over time, unless those funds consistently outperform the total stock market, it is not worth it to pay the higher ER.

I don't know what you should do with these funds but here are the options I can think of.
  • 1) Keep buying them cause you like them and don't mind the extra taxes.

    2) Keep them but not buy any more, continue to reinvest the dividends and cap gains distributions.

    3) Keep them, don't buy any more, turn off reinvestment of dividends and cap gains distributions.

    4) Sell some.

    5) Sell all, over time.

    6) Sell all, in one fell swoop.
I don't think any of these decisions would be "wrong" and certainly none will ruin your portfolio. Give some thought to what makes sense to you.

retiredjg
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Re: Vanguard Personal Advisor Services

Post by retiredjg » Wed Aug 17, 2016 12:30 pm

Let's assume you keep the taxable account just as it is. In order to get your portfolio near 30% in bonds (a reasonable number), you need to make some changes in your 401k. You would change what you currently have to what is below:


Taxable 40%
16% Vanguard Capital Opportunity (0.38%)
14% LifeStrategy Growth (0.15%) [2.8% bonds, 4.5% international, 6.7% US stocks]
4% MidCap Index 10% (exp ratio: 0.08%)
6% Windsor Fund Investor:(exp ratio: 0.39%)

401k 60%
18% Institutional Index Fund Institutional Plus
15% Total International Stock Index Fund Institutional Plus
27% Total Bond Market Index Fund Institutional Plus

This would be a reasonable portfolio to keep long term.

Or if you prefer, you could put a target fund in the 401k. It would need to have a low stock to bond ratio for the bonds to amount to 30% of your portfolio.

Or you could put some tax-exempt bonds in the taxable account and have a target fund in the 401k that is about 70% stocks and 30% bonds.

You said you are maxing out your 401k each year. How much are you adding to taxable each year?

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Re: Vanguard Personal Advisor Services

Post by retiredjg » Wed Aug 17, 2016 12:31 pm

PS. If you do consult Vanguard or decide to use their VPAS, I'd be interested in hearing how they suggest handling your taxable account with the large capital gains.

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Re: Vanguard Personal Advisor Services

Post by azanon » Wed Aug 17, 2016 3:03 pm

trevor-b wrote:Hello:

I've been a lurker for over two years, this is my first post . Extremely grateful to read all the thoughtful advice being shared.

My portfolio (401k + other investments) has finally crossed the $1m mark, figured this might be a good time to get professional advice going forward (that and the recent Consumer Reports http://www.consumerreports.org/personal ... o-adviser/ got me thinking about going this route. Needless to say, Vanguard was #1 in their ratings!)
Trevor,

I'm similar age as you and haven't made quite as much progress (I'm 50-70% of where you are), but I also decided it was time for me to use an advisor from this point on, and continuing into retirement (distribution). The main reason I went with one was due to behavior investing issues, specifically I was changing my allocation/strategy too often, and the higher my "pot" got, the more prone to this behavior I was becoming.

I personally decided to go with Betterment, and current total costs are 0.25% (.15% for the fee, and the portfolio is weighted cost of 0.10%), comprised of mostly Vanguard ETFs. So it's an algorithm instead of a human that decides the portfolio, but depending on what makes you more comfortable, I decided I was more comfortable with an emotionless "computer" than a random actual human being that'd be assigned to me. And being half the fee of VPAS of course helps as well.

So, anyway, not sure if you considered a robo as well, but I'm liking them so far. The rollover to them went smoothly. And that same consumer reports was favorable towards them and had a rough guide as to which cases where they might be appropriate.

pennywise
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Re: Vanguard Personal Advisor Services

Post by pennywise » Wed Aug 17, 2016 3:20 pm

nedsaid wrote:Trevor-b, using the Vanguard Advisory service is a great idea. You will have somebody look things over and they might bring some things up that you hadn't thought of. You will learn something and have peace of mind that you will have a better though not perfect plan. The interaction with a live human being that knows more than you on investing will be a great experience. Go for it.

Think of it as training wheels. At some point you might learn enough to do it all yourself again.
+1000

I literally just got off a phone call with my Vanguard advisor during which I was pleasantly astonished to realize that after hours of useful direction and advice and many helpful email exchanges, I haven't even yet committed myself to pay for PAS! Obviously many folks won't need or want advisory help but for example, my advisor just walked me through a very clear explanation, with good graphical support, of why international is helpful to have as part of the portfolio. I've had help at every step including assistance in transferring a set of inherited Roth and IRA accounts which needed to be handled correctly to avoid tax complications. I've gotten a really solid analysis that included reviewing all our resources, not just what Vanguard will handle, and how Vanguard recommends we allocate the funds we are putting with them. And once everything is in place the advisor confirmed he can take care of placing the orders for me to ensure the allocations are on track.

I may not use advising services forever but it's been a uniformly positive and pleasant experience and I'm really glad to have them there for me as I work my way up to being a full fledged Boglehead :D

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cfs
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Re: Vanguard Personal Advisor Services

Post by cfs » Wed Aug 17, 2016 4:42 pm

. . . it's been a uniformly positive and pleasant experience and I'm really glad to have them there for me as I work my way up to being a full fledged Boglehead . . .
Thanks.

Thanks to our shipmate Pennywise for your comments. This is one [of the very few] positive comments about Vanguard services I have read in months. Good luck with your investments.

Thanks for reading.
~ Member of the Active Retired Force since 2014 ~

printer86
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Re: Vanguard Personal Advisor Services

Post by printer86 » Wed Aug 17, 2016 10:11 pm

cfs wrote:
. . . it's been a uniformly positive and pleasant experience and I'm really glad to have them there for me as I work my way up to being a full fledged Boglehead . . .
Thanks.

Thanks to our shipmate Pennywise for your comments. This is one [of the very few] positive comments about Vanguard services I have read in months. Good luck with your investments.

Thanks for reading.
I guess I should also jump in here. I added the VPAS service sometime in late 2014 or early 2015. I have been very happy with the advisory service and the execution of our plan. In fact, I too had my quarterly review call with my advisor today. We spoke about the recent changes to my assets ( :moneybag :moneybag :moneybag ) and my revised retirement goals. We ended up modifying my AA based on this discussion.

I've been on this forum for most of this year, but I'm still sticking with VPAS because I still don't know what I don't know.

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cfs
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Re: Vanguard Personal Advisor Services

Post by cfs » Wed Aug 17, 2016 10:50 pm

printer86 wrote:
cfs wrote:
. . . it's been a uniformly positive and pleasant experience and I'm really glad to have them there for me as I work my way up to being a full fledged Boglehead . . .
Thanks.

Thanks to our shipmate Pennywise for your comments. This is one [of the very few] positive comments about Vanguard services I have read in months. Good luck with your investments.

Thanks for reading.
I guess I should also jump in here. I added the VPAS service sometime in late 2014 or early 2015. I have been very happy with the advisory service and the execution of our plan. In fact, I too had my quarterly review call with my advisor today. We spoke about the recent changes to my assets ( :moneybag :moneybag :moneybag ) and my revised retirement goals. We ended up modifying my AA based on this discussion.

I've been on this forum for most of this year, but I'm still sticking with VPAS because I still don't know what I don't know.
Another happy customer !!!!

Thanks for your input and good luck with your investments.

Thanks for reading.
~ Member of the Active Retired Force since 2014 ~

trevor-b
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Re: Vanguard Personal Advisor Services

Post by trevor-b » Thu Aug 18, 2016 12:09 am

Really? I didn't quite get that impression ...
cfs wrote: Thanks to our shipmate Pennywise for your comments. This is one [of the very few] positive comments about Vanguard services I have read in months. Good luck with your investments.
Thanks for reading.

azanon
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Re: Vanguard Personal Advisor Services

Post by azanon » Thu Aug 18, 2016 7:54 am

trevor-b wrote:Really? I didn't quite get that impression ...
cfs wrote: Thanks to our shipmate Pennywise for your comments. This is one [of the very few] positive comments about Vanguard services I have read in months. Good luck with your investments.
Thanks for reading.
Same here. I don't doubt they're great. I would pay the extra cost myself if I could somehow see how I needed the human interaction on top of being locked into a goal-based portfolio.

Pay what you need to, to get the results that you need. I imagine that there are many others out there that were like the old me, who's trying to do it as cheaply as possible, and changing the strategy every couple of years. Classic penny-wise, pound-foolish behavior in other words.

retiredjg
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Re: Vanguard Personal Advisor Services

Post by retiredjg » Thu Aug 18, 2016 8:59 am

trevor-b wrote:Really? I didn't quite get that impression …
There have been complaints the last few months about customer service in general, not much specifically about VPAS though. It appears that Vanguard is just overwhelmed with too many customers and ramping up a competent staff takes time.

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cfs
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Re: Vanguard Personal Advisor Services

Post by cfs » Thu Aug 18, 2016 9:27 am

Correct.

Our shipmate retiredjg is correct, I was talking about complaints about Vanguard's customer service in general [in this forum, and in the Morningstar's discussion forums]. Already then, closing, hitting the road on my daily LUng Distance Workout. Good luck with your investments.

Thanks for reading.
~ Member of the Active Retired Force since 2014 ~

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mickeyd
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Re: Vanguard Personal Advisor Services

Post by mickeyd » Sat Aug 20, 2016 1:24 pm

printer86 wrote:
cfs wrote:
. . . it's been a uniformly positive and pleasant experience and I'm really glad to have them there for me as I work my way up to being a full fledged Boglehead . . .
Thanks.

Thanks to our shipmate Pennywise for your comments. This is one [of the very few] positive comments about Vanguard services I have read in months. Good luck with your investments.

Thanks for reading.
I guess I should also jump in here. I added the VPAS service sometime in late 2014 or early 2015. I have been very happy with the advisory service and the execution of our plan. In fact, I too had my quarterly review call with my advisor today. We spoke about the recent changes to my assets ( :moneybag :moneybag :moneybag ) and my revised retirement goals. We ended up modifying my AA based on this discussion.

I've been on this forum for most of this year, but I'm still sticking with VPAS because I still don't know what I don't know.
Just how does VPAS work? Can you enroll today and decide in a month (after using the service) that you no longer need the advice? Or, are you locked in for a certain amount of time?
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

WhyNotUs
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Re: Vanguard Personal Advisor Services

Post by WhyNotUs » Sat Aug 20, 2016 5:09 pm

I got one for free a few years ago and thought it was a great check in.

For me, it was a way to get my wife bought into plan and part of the discussion rather than just saying "I trust you, you handle it".

Thinking through tax situations was helpful. I cannot say that I followed the advice exactly as I still have not sold Wellesley and did not buy as much Intl as we discussed. But generally aligned and a much better informed wife.

If Trevor had all of his investments with VG, then the advice would be free as I understand it. However, the Fido Spartan funds are great too.
I own the next hot stock- VTSAX

printer86
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Re: Vanguard Personal Advisor Services

Post by printer86 » Sat Aug 20, 2016 8:25 pm

mickeyd wrote:
printer86 wrote:
cfs wrote:
. . . it's been a uniformly positive and pleasant experience and I'm really glad to have them there for me as I work my way up to being a full fledged Boglehead . . .
Thanks.

Thanks to our shipmate Pennywise for your comments. This is one [of the very few] positive comments about Vanguard services I have read in months. Good luck with your investments.

Thanks for reading.
I guess I should also jump in here. I added the VPAS service sometime in late 2014 or early 2015. I have been very happy with the advisory service and the execution of our plan. In fact, I too had my quarterly review call with my advisor today. We spoke about the recent changes to my assets ( :moneybag :moneybag :moneybag ) and my revised retirement goals. We ended up modifying my AA based on this discussion.

I've been on this forum for most of this year, but I'm still sticking with VPAS because I still don't know what I don't know.
Just how does VPAS work? Can you enroll today and decide in a month (after using the service) that you no longer need the advice? Or, are you locked in for a certain amount of time?

As I understand it, you can drop VPAS at any time.

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