Miriam2 wrote: ↑
Mon May 14, 2018 7:06 pm
LadyGeek wrote: ↑
This is what she presented: Vanguard's hybrid robo-advisor creates Amazon-like fear among competitors; Bogleheads say robo can be great training
The last part of the quote was a major discussion point at the local meeting
We asked financial analysts, Vanguard competitors, and Bogleheads — fans of Vanguard founder John Bogle — for their thoughts about the Vanguard Personal Advisor Services (PAS).
...PAS is “a lot like training wheels,” wrote one on Bogleheads.org, the website maintained by followers of Bogle.
...What Bogleheads don’t like about PAS? Being forced to sell their old funds to get into PAS’s new funds.
I'm interested in what your local Bogleheads had to say about this
At a South Florida local chapter meeting two years ago, we were fortunate to have a Vanguard PAS advisor come to our meeting and discuss what they do, and he engaged in a lively Q & A session with us. He said that he works with each client to create a portfolio for them, and that although Vanguard favors index funds, if the client owned actively managed funds - and we expressly discussed this in reference to Wellington and Wellesley - that the client wished to keep, the PAS would be able to fashion a portfolio around the client's interests, that PAS is not restricted to index funds.
Are we talking about the same company?
I hope I remember everything correctly. If not, anyone who attended the meeting is more than welcome to correct me.
First, there was a general consensus that Vanguard is going after the low-hanging fruit. IOW, anyone who's not a Boglehead.
If you have no idea what to do, it's a great solution. "Here Vanguard, I have no idea what to do, you just take care of it." Everyone is happy.
Vanguard is going to shoe-horn you into a 3-fund portfolio and rebalance quarterly. From a Boglehead perspective, why pay someone to do that?
Further, Vanguard will not invest in anything but
a 3-fund portfolio. It's a cookie-cutter solution with no room for tweaking. Suppose I want a different fund? You're out of luck.
What if you have existing funds and want to use the PAS service? Sell your funds, which is a taxable event. Wait, what? Sell my funds? Yup. No transfer-in-kind. Are you kidding? No. Do other advisory services allow you to transfer funds? Yes (but I don't remember who).
There was a discussion about Betterment and Wealthfront. Both of these advisors provide Tax loss harvesting
, but Vanguard does not. I brought up the point that tax loss harvesting has absolutely no - zero - effect on tax deferred (retirement) accounts. You can trade all day long from Fund A to Fund B in a retirement account, no taxes are paid on these transactions. In a taxable account, you need to be careful. Additionally, the theoretical benefits of tax loss harvesting may not be realized in practice.
There was also a discussion that you don't get your own personal advisor. You get whoever is available to help you at that time. (There was a discussion about getting a rep if you had Flagship status, but that's a customer rep - not an advisor.)