Alternative to Vanguard PAS (dreadful service)

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lgs88
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Alternative to Vanguard PAS (dreadful service)

Post by lgs88 » Mon Oct 16, 2017 3:59 pm

A family member is looking for an alternative to Vanguard PAS. She is with an AUM-fee financial advisor at the moment, whose fee (75 bp) was not all that bad but whose service was poor -- unsuccessful market timing, extremely complex portfolio, and failure to communicate any sort of strategy or make my family member comfortable with the way her money was being managed. The consequence has been massive underperformance (several percent) against a comparable stock/bond/cash benchmark. She can't afford not to have her share of the market's return, whatever that may be, and it's been anxiety-inducing for her to watch her holdings fail to partake in the last 18 months of stock-market performance.

I spoke to her about Vanguard PAS, and she decided to move her assets (low-mid seven figures) over from the financial advisor.

I'm embarrassed for having recommended Vanguard PAS, because the service has been downright atrocious. Months on from the initial conversation, Vanguard has botched and bobbled the transfer. I've sat in on numerous phone calls as they told her they couldn't tell her how she'd be invested until they got the money and declined to discuss strategy; she kept having the same phone call in which they told her which of her holdings she had to sell before transfer, even though she'd already done so. They were not responsive to e-mails, she never got the same person on the phone twice, and throughout she pressed on -- until today, when it was revealed that despite her having completed all the steps a month ago and directed them to do so, Vanguard had failed to initiate the transfer.

So she's looking for a Plan B. She'd like a Boglehead-style portfolio (3-5 funds) with a little hand-holding for matters like whether to pay cash for a house or take out a mortgage. She'd be happy to just let me set it up for her, but I'm cautious about this -- I want a professional who can encourage her to stay the course when the markets get rocky. I also worry about cybersecurity and would not like emptying these accounts (lion's share in taxable, 4-5% in an IRA) to be as easy as logging into an online account and selling it all. She is nearing retirement -- say, 5 years or so. She already has an accountant.

What are my options here? I looked at Fidelity Go (she likes Fidelity, which helps), but they seem to be pure robo rather than robo-assisted (like Vanguard) and so she's not going to be able to talk to somebody on the phone. Another problem with Fidelity GO is that contributions are cash-only. She has baked-in capital gains in the taxable account, although her advisor's underperformance has made this less of an issue than we might like it to be. Are there other decent options out there?

EDIT: She has decided to go with Fidelity, and they've been terrific thus far. Everything that took 8 weeks with Vanguard, Fidelity has accomplished in an afternoon. The question remains of what to do with the funds once they reach Fidelity -- it looks as if there are a number of services on offer:

https://www.fidelity.com/managed-accoun ... es-pricing

Hard to tell which of these might be worth it, as the fee bands are quite wide. Will report back after meeting with them.
Last edited by lgs88 on Mon Oct 16, 2017 5:16 pm, edited 2 times in total.
merely an interested amateur

Philly_fan
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Re: Alternative to Vanguard PAS

Post by Philly_fan » Mon Oct 16, 2017 4:41 pm

Very scary that Vanguard PAS was so bad. I have recommended that to a bunch of people who have no financial clue. Hope it works better for them.

daveydoo
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Re: Alternative to Vanguard PAS

Post by daveydoo » Mon Oct 16, 2017 4:43 pm

With a portfolio that size, she should be able to get VG PAS-like AUM fee from plenty of good places (almost anywhere), based upon a recent Barrons article. This person would give you or her the time of day and would be willing to put you in a three- or five-fund ETF model and would be happy as a clam to just watch the cash roll in. And would provide any needed hand-holding/good "phone" in crisis times. I would think almost any asset manager would jump at the chance to do this. Just need to clearly spell out expectations at the outset and make sure that this is a no-funny-business person. I can think of no better "substrate" for this type of arrangement -- rich, wants BH portfolio, but needs hand-holding. There's no worrisome "accountability" for the advisor (all passive, jus' doin' what you told me to do) and the fees keep coming.
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FBN2014
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Re: Alternative to Vanguard PAS

Post by FBN2014 » Mon Oct 16, 2017 4:48 pm

Thank you for posting this. I had chosen Vanguard Trust Services to be my successor trustee at my demise but I will be looking elsewhere after reading your post. I imagine the trust service is using the same advisors as PAS.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

schachtw
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Re: Alternative to Vanguard PAS (dreadful service)

Post by schachtw » Mon Oct 16, 2017 7:20 pm

You're correct.

VG trust services utilizes VPAS. As I understand,
the annual fee is .05%.
.02% for trust services + .03% for VPAS

MikeG62
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Re: Alternative to Vanguard PAS

Post by MikeG62 » Tue Oct 17, 2017 6:52 am

FBN2014 wrote:
Mon Oct 16, 2017 4:48 pm
Thank you for posting this. I had chosen Vanguard Trust Services to be my successor trustee at my demise but I will be looking elsewhere after reading your post.
Similar position as you - VG as co (corp) trustee. Also will not be using VG or VPAS based upon the countless disappointing experiences well documented on this forum.
Real Knowledge Comes Only From Experience

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HueyLD
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Re: Alternative to Vanguard PAS

Post by HueyLD » Tue Oct 17, 2017 7:06 am

Philly_fan wrote:
Mon Oct 16, 2017 4:41 pm
Very scary that Vanguard PAS was so bad. I have recommended that to a bunch of people who have no financial clue. Hope it works better for them.
It appears that Vanguard PAS is not for those who require personal service.

There are many others who provide more personal service for higher fees. After all, there is no free lunch and TLC does cost money.

livesoft
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Re: Alternative to Vanguard PAS (dreadful service)

Post by livesoft » Tue Oct 17, 2017 7:07 am

It doesn't seem this person ever was a Vanguard PAS client. The money never got to Vanguard. This thread seems to be more a critique of Vanguard's Onboarding process.
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Jack FFR1846
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Re: Alternative to Vanguard PAS (dreadful service)

Post by Jack FFR1846 » Tue Oct 17, 2017 7:23 am

I love Fidelity for their low cost index funds. I hate Fidelity because if you want some help, they are going to want to put you into high cost, actively managed funds. I have had similar good experiences moving many accounts into Fidelity in no time and with no hassle.

What I'd recommend: Find a Fidelity Target Date INDEX fund and put everything into it. The end. This helps to keep from being tempted to buy/sell/move. Yes, it's more expensive than building a 3 fund at Fidelity but it sounds like she doesn't have the fortitude to "just stand there" when market things happen. When you don't have alternate funds to move things to, you have to just stand there.
Bogle: Smart Beta is stupid

beehappy
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Re: Alternative to Vanguard PAS

Post by beehappy » Tue Oct 17, 2017 8:03 am

HueyLD wrote:
Tue Oct 17, 2017 7:06 am
Philly_fan wrote:
Mon Oct 16, 2017 4:41 pm
Very scary that Vanguard PAS was so bad. I have recommended that to a bunch of people who have no financial clue. Hope it works better for them.
It appears that Vanguard PAS is not for those who require personal service.

There are many others who provide more personal service for higher fees. After all, there is no free lunch and TLC does cost money.
It's not a free lunch. Vanguard PAS charges a fee, and if the service is "not for those who require personal service", why did they put "Personal" and "Service" in their name? This defense of clearly atrocious service borders on the absurd.

sschoe2
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Re: Alternative to Vanguard PAS (dreadful service)

Post by sschoe2 » Tue Oct 17, 2017 8:07 am

Why would you need PAS? I'd just go to an hourly fee based financial planner once or maybe once every few years to setup a plan for you then just implement and maintain it yourself.

retiredjg
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Re: Alternative to Vanguard PAS (dreadful service)

Post by retiredjg » Tue Oct 17, 2017 8:17 am

lgs88 wrote:
Mon Oct 16, 2017 3:59 pm
EDIT: She has decided to go with Fidelity, and they've been terrific thus far. Everything that took 8 weeks with Vanguard, Fidelity has accomplished in an afternoon. The question remains of what to do with the funds once they reach Fidelity -- it looks as if there are a number of services on offer:

https://www.fidelity.com/managed-accoun ... es-pricing

Hard to tell which of these might be worth it, as the fee bands are quite wide. Will report back after meeting with them.
A word of caution. DIY Bogleheads love Fidelity because of the excellent service, website, and wide choice of index funds and ETFs.

Unfortunately, many of the reports we've had from the people who have used advisors are not glowing. Service and website are still good, but the funds that some people have ended up with are not that great - most are actively managed and not low cost. And the AUM costs not so low. And the portfolios can be very complex and not very tax efficient.

I'd be particularly cautious of the SAI, or Strategic Advisor funds. If she decides to move the money, she cannot keep those funds.

It's a shame Vanguard botched this so badly because it seems their service is the kind she needs.

kmurp
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Re: Alternative to Vanguard PAS (dreadful service)

Post by kmurp » Tue Oct 17, 2017 8:38 am

Maybe Evanson Asset? I have no experience.
https://www.evansonasset.com/fees-and-services-11.htm

staythecourse
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Re: Alternative to Vanguard PAS (dreadful service)

Post by staythecourse » Tue Oct 17, 2017 9:03 am

sschoe2 wrote:
Tue Oct 17, 2017 8:07 am
Why would you need PAS? I'd just go to an hourly fee based financial planner once or maybe once every few years to setup a plan for you then just implement and maintain it yourself.
Agreed. What is the difficulty of managing the portfolio? Should be piece of cake. The OP looks to be willing to help and more important the family member trusts the person doing the helping. Just sell everything and transfer to a target retirement fund or a 60/40 (TSM/ bond) and just go from there. Have you or the semi annual meeting with the hourly FA just move the money over to a bank account for living expenses if needed and if not just have it set on reinvesting option for dividends.

The BIGGEST issue is going to be the taxes (unless all in tax deferred) when going from a FA to a self managed passive portfolio.

At this level of wealth I would simple focus on expenses and a FA of any sort is the BIGGEST one.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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HueyLD
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Re: Alternative to Vanguard PAS

Post by HueyLD » Tue Oct 17, 2017 9:12 am

beehappy wrote:
Tue Oct 17, 2017 8:03 am
HueyLD wrote:
Tue Oct 17, 2017 7:06 am
Philly_fan wrote:
Mon Oct 16, 2017 4:41 pm
Very scary that Vanguard PAS was so bad. I have recommended that to a bunch of people who have no financial clue. Hope it works better for them.
It appears that Vanguard PAS is not for those who require personal service.

There are many others who provide more personal service for higher fees. After all, there is no free lunch and TLC does cost money.
It's not a free lunch. Vanguard PAS charges a fee, and if the service is "not for those who require personal service", why did they put "Personal" and "Service" in their name? This defense of clearly atrocious service borders on the absurd.
You misunderstood my comments.

I said that personal service requires "higher" fees and that appears to be the problem. It appears that PAS is more of a robo service than a personal service regardless of the name.

Certain clients prefer hand holding over a mostly robo approach. And Vanguard's charge may not include hand holding.

EHEngineer
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Re: Alternative to Vanguard PAS (dreadful service)

Post by EHEngineer » Tue Oct 17, 2017 10:20 am

Is anyone still using or recommending portfolio solutions, formerly rick ferri's shop?
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius

FBN2014
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Re: Alternative to Vanguard PAS (dreadful service)

Post by FBN2014 » Tue Oct 17, 2017 11:33 am

EHEngineer wrote:
Tue Oct 17, 2017 10:20 am
Is anyone still using or recommending portfolio solutions, formerly rick ferri's shop?
I have several trust accounts there as trustee.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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