Vanguard Advisory Service

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Duffydog1
Posts: 54
Joined: Sat Dec 03, 2016 1:42 pm

Vanguard Advisory Service

Post by Duffydog1 » Sat Mar 18, 2017 7:31 am

I am considering using Vanguard Advisory service even though my AA is relatively simple and based on 4 funds. I have a complex issue as I own individual shares of stock and bonds some of which could be liquidated and we have 2 IRA accounts and a personal account. Liquidating stock and allocating to the correct AA in 3 accounts might best be done by Vanguard. I could do this myself with the advice of my accountant for tax purposes, but thought Vanguard could do better for alt least a year or two. I would appreciate any comment from persons who have used this service.

RYD
Posts: 114
Joined: Tue Feb 27, 2007 5:44 pm
Location: California

Re: Vanguard Advisory Service

Post by RYD » Sat Mar 18, 2017 8:57 am

Hi DuffyDog1

We made the decision to go with Vanguard Advisory Services a few years back and have been quite happy with the results.

As with anything, it is probably not for all. Many on the board very much like DIY investing and management. My choice was based on wanting help for my wife in the event I passed first, second I could re-balance but to be painfully honest I did not. There are a handful of other reasons but these are the key ones. They were a great help in planning our SS strategy. Frankly, the increased income the plan they suggested has more than covered the fees for many years to come. They also work with our accountant in helping to plan tax issues with us. Fair to say I am quite satisfied.

Could I have accomplished all of the above on my own? Most likely the answer is yes. Do I want to dedicate that much time to it? For us, the answer is no. A personal decision each investor needs to make.

bloom2708
Posts: 4634
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Vanguard Advisory Service

Post by bloom2708 » Sat Mar 18, 2017 9:03 am

Take the value of your portfolio and multiply by .3% to find out the cost. Is that number worth it? $300, $3,000?

I think you can do it yourself. Each decision you have to make has answers that you will both like and not like. Do you sell and pay capital gains tax in taxable? Vanguard will have no additional information. Sell or do not sell. Each question you have for Vanguard can be asked here.

I will try to replicate the PAS service in 60 seconds for free. Choose your asset allocation based on your personal risk profile. I recommend 70/30.

Go with a 4 fund portfolio. Total US, Total International, Total US Bond, Total International Bond. Total International stock should be 30-50% of your stock allocation. I recommend 30%. You can use International bonds, but many skip them and stick with US bonds. Less is more.

If you have a taxable account and want to have bonds in taxable, substitute Int-Term Tax-Exempt bond index for Total US bonds. Assuming you are in the 25% or higher tax bracket. Vanguard has state specific tax-exempt bond funds for CA, NY, Pennsylvania and a few other states. That would also get you state tax exempt interest if you live in one of those states. You can mix Limited-Term and Intermediate-Term to shorten your duration.

Good luck!
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cockersx3
Posts: 163
Joined: Sun Apr 17, 2016 3:55 pm

Re: Vanguard Advisory Service

Post by cockersx3 » Sat Mar 18, 2017 9:47 am

bloom2708 wrote:Take the value of your portfolio and multiply by .3% to find out the cost. Is that number worth it? $300, $3,000?

I think you can do it yourself. Each decision you have to make has answers that you will both like and not like. Do you sell and pay capital gains tax in taxable? Vanguard will have no additional information. Sell or do not sell. Each question you have for Vanguard can be asked here.

I will try to replicate the PAS service in 60 seconds for free. Choose your asset allocation based on your personal risk profile. I recommend 70/30.

Go with a 4 fund portfolio. Total US, Total International, Total US Bond, Total International Bond. Total International stock should be 30-50% of your stock allocation. I recommend 30%. You can use International bonds, but many skip them and stick with US bonds. Less is more.

If you have a taxable account and want to have bonds in taxable, substitute Int-Term Tax-Exempt bond index for Total US bonds. Assuming you are in the 25% or higher tax bracket. Vanguard has state specific tax-exempt bond funds for CA, NY, Pennsylvania and a few other states. That would also get you state tax exempt interest if you live in one of those states. You can mix Limited-Term and Intermediate-Term to shorten your duration.

Good luck!
LOL! Yup, this is exactly what PAS recommended to us when we did our consult with them.

Keep in mind that PAS generally only works with accounts at Vanguard. In my case, I also had a sizeable 401k account at Fidelity (in addition to Vanguard taxable), which they would not manage directly...they offered general advice for it but I needed to do any rebalancing.

The other advantage to PAS is that they can serve as as a"speed bump" to any rash investing decisions on your part. If the market does take a dip, they will at least try to talk you out of selling if you go that route. May be useful depending on your ability to manage your own risk.

Overall, I think PAS is good for the money, but in my case I felt that I could do the same job myself for the 0.3%. Of course YMMV...

woodedareas
Posts: 40
Joined: Mon Aug 20, 2012 6:55 pm

Re: Vanguard Advisory Service

Post by woodedareas » Sat Mar 18, 2017 11:33 am

Does 30-50% international seem rather high? I am still considering doing it myself and that is why I posed the question. At the age of 77 I agree with AA you suggested The service is attractive because I felt it would give my wife a source of advice when I am not here. On the other hand I do not want them to make a lump sum allocation as I prefer to ladder monthly over 12 months. I don't know if they will do it monthly and I failed to ask but will do so.
bloom2708 wrote:Take the value of your portfolio and multiply by .3% to find out the cost. Is that number worth it? $300, $3,000?

I think you can do it yourself. Each decision you have to make has answers that you will both like and not like. Do you sell and pay capital gains tax in taxable? Vanguard will have no additional information. Sell or do not sell. Each question you have for Vanguard can be asked here.

I will try to replicate the PAS service in 60 seconds for free. Choose your asset allocation based on your personal risk profile. I recommend 70/30.

Go with a 4 fund portfolio. Total US, Total International, Total US Bond, Total International Bond. Total International stock should be 30-50% of your stock allocation. I recommend 30%. You can use International bonds, but many skip them and stick with US bonds. Less is more.

If you have a taxable account and want to have bonds in taxable, substitute Int-Term Tax-Exempt bond index for Total US bonds. Assuming you are in the 25% or higher tax bracket. Vanguard has state specific tax-exempt bond funds for CA, NY, Pennsylvania and a few other states. That would also get you state tax exempt interest if you live in one of those states. You can mix Limited-Term and Intermediate-Term to shorten your duration.

Good luck!

Lafder
Posts: 3765
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: Vanguard Advisory Service

Post by Lafder » Sat Mar 18, 2017 3:37 pm

I would not sign up the PAS. That is an ongoing management fee.

Vanguard can help you simplify your holdings without paying them the ongoing management fee.

If you need more help than they can give you, come here for folks to talk you through it all :)

On the other hand, if a 0.3% ongoing annual fee will make no difference in your finances, for the fee, they will keep a closer eye on your holdings and contact you if they get out of balance.

lafder

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Sandtrap
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Re: Vanguard Advisory Service

Post by Sandtrap » Sat Mar 18, 2017 4:06 pm

Perhaps depends on the complexity of your portfolio and if it involves substantial wealth.
My experience with VPAS consultation, twice, has been a "drive through window" "one size fits all" 4 fund portfolio not unlike I could get with a Target Retirement Fund, etc. Also, in both instances, there was no conversation, only a sort of take it or leave it delivery of information within an allotted time. My experience was that I should be having more of a "conversation" given Flagship Select status. But this is only my experience and many here have had good encounters with VPAS.
IMHO I presently have a 30/70 allocation with Wellesley, Balanced Index, and Total Bond, for the most part and it's simple enough that I don't feel that an AUM fee is needed. However, your needs are unique to you and so you may find VPAS services valuable. IMHO the "Boglehead" "senior" experts have given me more actionable portfolio help, and ongoing help, than anyone I've consulted with thusfar (many). . . . and it is greatly appreciated.
This is only my personal experience and response to your query.

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