Vanguard said to offer Digital Advisory Service [Robo-Advisor]

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Dinosaur Dad
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Vanguard said to offer Digital Advisory Service [Robo-Advisor]

Post by Dinosaur Dad » Wed Sep 18, 2019 2:24 pm

https://www.investmentnews.com/article/ ... ce-product

Vanguard to Offer Digital Advisory Service

From the article:

Vanguard Advisers have filed an initial disclosure brochure with the Securities and Exchange Commission signaling the company's plan to launch a new, digital-only financial planning and automated investing service it calls Vanguard Digital Advisor.
According to the brochure, retail clients and participants in employer-sponsored retirement plans can use Digital Advisor to create a personalized, goal-based financial plan. Users can set a standard goal, such as saving for retirement, or customized goals, such as making a large purchase in the future.
Like other planning tools on the markets, Vanguard Digital Advisor will collect information on things like an investor's risk tolerance, time horizon, current investments and tax filing status to recommend investments to help achieve the goal.
Users can then enroll in an account, and Digital Advisor will automatically make trades to build a portfolio that aligns with the goals, like any classic digital-only robo-adviser.
Vanguard will charge 15 basis points for the service, about half what it charges for its Personal Advisor Services, which combines automated advice with access to a human financial adviser.
Digital Advisor also has a lower account minimum, at $3,000, compared to the $50,000 minimum at Personal Advisor Services. And Digital Advisor can manage 401(k) accounts that have as little as $5 invested.

**

Well I guess they're trying to create a full product line...offer something for everyone in spaces they have not highlighted. For the right person, this could be helpful.
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Ob81
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Re: Vanguard said to offer Digital Advisory Service

Post by Ob81 » Wed Sep 18, 2019 2:32 pm

Thanks for sharing, and I will take it. The fee is comparable to industry leaders. I have also been searching for a robo account for my children, and wanted started settling on Fidelity, but keeping everything Vanguard is better for me.

retiredjg
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Re: Vanguard said to offer Digital Advisory Service

Post by retiredjg » Wed Sep 18, 2019 2:33 pm

Well that's interesting.

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nedsaid
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Re: Vanguard said to offer Digital Advisory Service

Post by nedsaid » Wed Sep 18, 2019 4:02 pm

This is good news as there are a lot of folks who need advice, even if it is from a robot. I still like a human touch though.
A fool and his money are good for business.

jocdoc
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Re: Vanguard said to offer Digital Advisory Service

Post by jocdoc » Wed Sep 18, 2019 4:56 pm

If this takes into account non vanguard accounts such as employer 401 K into consideration in the overall portfolio construction and give advice on those assets then it would be very useful.

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CyberBob
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Re: Vanguard said to offer Digital Advisory Service

Post by CyberBob » Wed Sep 18, 2019 10:29 pm

From the brochure: In particular, Digital Advisor will recommend varying combinations of Vanguard Total Stock Market ETF, Vanguard Total International Stock Market ETF, Vanguard Total Bond Market Index ETF, and Vanguard Total International Bond Index ETF (collectively referred to as the “Four Totals”) to RIG Clients.

While it may offer a bit more precision for your personal situation, it sounds like just a roundabout way to construct a Lifestrategy or Target Retirement fund.

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Vanguard pilots Digital Advisor @ 15bps

Post by 12thKnight » Thu Sep 19, 2019 10:02 am

[merged into existing topic - moderator prudent]

https://www.investmentnews.com/article/ ... ce-product

My initial thoughts on this:

- Hazards of PAS, such as not being able to speak to insurance and most taxation issues, risk being even more pronounced with VDA. There is no human to provide a check against client expectations.
- The great risk of having clients set their own goals is that those goals often have no basis in reality. Clients are often unaware of the actual costs, and opportunity costs, in financial decisionmaking. Education funding is one good example where asset location can be even more important than asset allocation.
- Despite this, VDA will be a quickly oversubscribed offering once it goes live.
- I suspect over the long term, as voice recognition and synthesis becomes even more human, PAS will eventually be largely or completely replaced by VDA. The time will soon come where the PAS advisor is not needed to put a human face on robo, because a digital simulacrum will do - and may well at some point be indistinguishable from a human while being programmed to not commit faults.

Interested to hear other people's insights.

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Re: Vanguard said to offer Digital Advisory Service

Post by azanon » Thu Sep 19, 2019 2:14 pm

nedsaid wrote:
Wed Sep 18, 2019 4:02 pm
This is good news as there are a lot of folks who need advice, even if it is from a robot. I still like a human touch though.
But that can be all over the place.

I read an interesting review of Vanguard PAS just a few days ago (it's readily available on the net somewhere - forgot the link), where the adviser analyzed/critiqued what the client had (an 85/15). What did the adviser say? Something along the lines of her having "way too much bonds", and ended up putting her in a mix of total stock market/total international stock 100% (no bonds), dubbing that "diversified".

I'm just a hobbyist and not even a RIA, but I don't care who you are - if you have 85% stock and 15% bonds, you don't have "way too many bonds". Oh and I remember what the girl had now - the actual applicable Vanguard Target Date fund! so the VG adviser said/implied the Target Date fund was wrong! :oops: That'll be 30bp please in fees! (maybe the fee will be paid by the extra 15% stock?!?)

livesoft
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Re: Vanguard said to offer Digital Advisory Service

Post by livesoft » Thu Sep 19, 2019 2:20 pm

If it offers tax-aware asset class account location, then it will be interesting. Also, I wonder how it will prevent all the behavioral finance problems that abound on this forum as in "I don't mean to market time, but I am going to market time and not call it that."
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azanon
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Re: Vanguard said to offer Digital Advisory Service

Post by azanon » Thu Sep 19, 2019 2:27 pm

Ob81 wrote:
Wed Sep 18, 2019 2:32 pm
Thanks for sharing, and I will take it. The fee is comparable to industry leaders. I have also been searching for a robo account for my children, and wanted started settling on Fidelity, but keeping everything Vanguard is better for me.
It's actually considerably better (the fee). I believe the lowest was (current date) 25bp. So 15bp is 40% cheaper.

Betterment used to be 15bp, but that's long gone....

ronno2018
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Re: Vanguard said to offer Digital Advisory Service

Post by ronno2018 » Thu Sep 19, 2019 2:32 pm

I just think compared to a fee service many people in simple tax situations and with not too many assets can just read the wiki's here and use various online tools to get good enough portfolios. But many people are not interested in learning and understanding and would definitely benefit from a fairly priced and competent robo advisor, so more power to Vanguard if they move forward and market one.

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Re: Vanguard said to offer Digital Advisory Service

Post by rolandtorres » Thu Sep 19, 2019 3:10 pm

Reading this thread, one thing Vanguard could do would be to hire a social community manager to come on this forum or other places and explain to Bogleheads who these future offerings are for and implicitly not for. Here's a hint- based on what's been published so far about this, it's probably not for DIY, well-read folks with more than a passing interest in personal finance in their decumulation phase who are in the +90th percentile for those that have the time/interest in optimizing and customizing their finances. Keep doing what you're doing and respect that Vanguard is trying to serve a different retail customer than you and that this offering may be a godsend for others compared to what else is out there.

Now if you want to complain that Vanguard isn't serving someone like you as well by doing things like getting rid of the Advantage cash management service, that's beating a dead horse, but at least you're being honest about the concept of self-interest instead of inadvertently thinking that your use case is the only use case Vanguard should be designing offerings for.

If folks here want to serve as an ombudsman of sorts for Vanguard, perhaps a better approach would be to compare what is known about this offering to the competition. Vanguard seems to be putting up head to head offerings vs. Schwab's Intelligent Portfolios and Intelligent Portfolios Plus wherein both are mass-market, if slightly cookie-cutter "robo" portfolio managers with an option to pay more for somewhat limited human guidance. Vanguard's offerings cost more on paper for the vast majority of people (15 basis points vs. 0; 30 basis points vs. $300 + $30/mo for human guidance) but they seemingly don't force you into cash positions like Schwab for deposit revenue.

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Re: Vanguard said to offer Digital Advisory Service

Post by Northern Flicker » Thu Sep 19, 2019 3:26 pm

While it may offer a bit more precision for your personal situation, it sounds like just a roundabout way to construct a Lifestrategy or Target Retirement fund.
If all assets are in a tax-qualified account, it would be similar. The service should allow for splitting up the asset classes and holding them in tax-efficient locations. However, it may end up being a cookie cutter asset location mapping and not one where someone analyzes current and projected future tax brackets carefully.
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azanon
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Re: Vanguard said to offer Digital Advisory Service

Post by azanon » Thu Sep 19, 2019 3:37 pm

The more I think about it, this could potentially be a really neat thing. If they use the really dirt cheap index funds (the ~ 4bp ones), then the net cost over a comparable Lifestrategy fund might be just 4-5 basis points. Very tempting.....

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Re: Vanguard said to offer Digital Advisory Service

Post by bluquark » Thu Sep 19, 2019 4:26 pm

The functionality offered sounds most similar to Betterment's roboadvisor, which comes at a cost of 25 basis points. This undercuts their pricing by 10bp and comes from a more trusted brand. This is good news: the competition should cause the industry to lower their fees.
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Re: Vanguard said to offer Digital Advisory Service

Post by Northern Flicker » Thu Sep 19, 2019 4:48 pm

azanon wrote:
Thu Sep 19, 2019 3:37 pm
The more I think about it, this could potentially be a really neat thing. If they use the really dirt cheap index funds (the ~ 4bp ones), then the net cost over a comparable Lifestrategy fund might be just 4-5 basis points. Very tempting.....
It would work well for some. But many people who need an advisor may already have some portfolio of various assets in a taxable account with embedded capital gains. A 1-sized-fits-all strategy likely will not work well for them. What if someone holds a perfectly reasonable investment like VLCAX (large-cap index fund) in a taxable account? Will the robot just gratuitously move it to VTSAX and realize all of the gain? Hopefully not. If all assets are in tax-qualified funds just use a LifeStrategy fund or target retirement fund.
Index fund investor since 1987.

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Re: Vanguard said to offer Digital Advisory Service

Post by abuss368 » Thu Sep 19, 2019 4:55 pm

Thank you for the update. I can only speculate that perhaps market demand may be driving the decision. I am curious what the impact (in terms of additional assets under management) will be.
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Re: Vanguard said to offer Digital Advisory Service

Post by tj » Thu Sep 19, 2019 6:22 pm

From the SEC Filing - https://www.adviserinfo.sec.gov/IAPD/Co ... _ID=593916
Vanguard Brokerage Account Users
RIG Clients who are considering enrollment in Digital Advisor must hold at least $3,000 in Vanguard
money market funds, including your settlement funds and/or any positions ("investable cash
alternatives").

For enrolled Vanguard Brokerage accounts, Digital Advisor uses ETFs as the core building blocks
investments due to their low investment minimums and expense ratios, as well as their ability to help
facilitate future investment strategies, such as tax loss harvesting, in Client’s Portfolios. Our investment
recommendations to RIG Clients will not include recommendations to purchase individual securities or
bonds, CDs, options, derivatives, annuities, third-party mutual funds, closed-end funds, unit investment
trusts, partnerships, or other non-Vanguard securities. In particular, Digital Advisor will recommend
varying combinations of Vanguard Total Stock Market ETF, Vanguard Total International Stock Market
6ETF, Vanguard Total Bond Market Index ETF, and Vanguard Total International Bond Index ETF
(collectively referred to as the “Four Totals”) to RIG Clients.

Each of the Four Totals is a share class of mutual funds that are used or are substantially similar to the
mutual funds used to meet the allocations underlying certain Vanguard single fund solutions, such as
Vanguard’s Target Retirement Funds. In certain circumstances, the recommended Digital Advisor
portfolio will contain identical allocations to the four Total Funds that would have been used as the
underlying investments in a Vanguard single fund solution purchased by that investor. Users should
consider the Digital Advisor advisory fees and Vanguard ETFs expense ratios they will incur upon
enrollment as well as the personalized features and additional services available to Digital Advisor
Clients in comparison to the lower costs and absence of personalized services of Vanguard single fund
solutions when considering the managed offer.

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Re: Vanguard said to offer Digital Advisory Service

Post by nedsaid » Thu Sep 19, 2019 6:32 pm

azanon wrote:
Thu Sep 19, 2019 2:14 pm
nedsaid wrote:
Wed Sep 18, 2019 4:02 pm
This is good news as there are a lot of folks who need advice, even if it is from a robot. I still like a human touch though.
But that can be all over the place.

I read an interesting review of Vanguard PAS just a few days ago (it's readily available on the net somewhere - forgot the link), where the adviser analyzed/critiqued what the client had (an 85/15). What did the adviser say? Something along the lines of her having "way too much bonds", and ended up putting her in a mix of total stock market/total international stock 100% (no bonds), dubbing that "diversified".

I'm just a hobbyist and not even a RIA, but I don't care who you are - if you have 85% stock and 15% bonds, you don't have "way too many bonds". Oh and I remember what the girl had now - the actual applicable Vanguard Target Date fund! so the VG adviser said/implied the Target Date fund was wrong! :oops: That'll be 30bp please in fees! (maybe the fee will be paid by the extra 15% stock?!?)
There is supposed to be consistency with Vanguard Personal Advisory Service as there is an algorithm behind the scenes and I think the human advisor can tweak things a bit. I have seen portfolios with 4-6 funds normally and mostly the extra funds beyond Total Stock, Total Bond, Total International Stock, and Total International Bond tend to be on the bond side. I think on occasion they will throw in a low cost active fund. But the VPAS portfolios I have seen look a lot like their Target Date or LifeStrategy Funds.

I am surprised at this apparent inconsistency, the only thing I can think might have happened is that the investor might have been very young, in their twenties. I would have to read the review.

To the contrary, the biggest criticism of VPAS here is that it is too cookie cutter and folks have said that they might as well be in a Target Date Fund and bypass the advisory fees. There is also supposed to be comprehensive financial advice beyond just constructing a portfolio.

As far as the digital service, you have to provide accurate information for it to work. As they say, garbage in, garbage out.
A fool and his money are good for business.

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Re: Vanguard said to offer Digital Advisory Service

Post by Barry Barnitz » Thu Sep 19, 2019 6:41 pm

Hi:

You can download the brochure regarding Vanguard Digital Advisors at the SEC. Here is the link to the IAPD-Part 2 filings page: Vanguard Advisers Inc..

As of 9/19/2019, the download file is the first file listed, having been submitted on 9/16/2019. The 31 page brochure Table of Contents

Code: Select all

Table of Contents Advisory business ............................................................2 
Fees and compensation ..........................................................................10 
Performance-based fees and side-by-side management .............................................13 
Types of clients ...............................................................................13 
Methods of analysis, investment strategies, and risk of loss ...................................14 
Disciplinary information .......................................................................23 
Other financial industry activities and affiliations ...........................................23 
Code of ethics, participation or interest in client transactions, and personal trading .........24 
Brokerage practices ............................................................................25 
Review of accounts .............................................................................25 
Client referrals and other compensation ........................................................27 
Custody ........................................................................................27 
Investment discretion ..........................................................................27 
Voting client securities .......................................................................28 
Financial information ..........................................................................28 
Requirements for state-registered advisors .....................................................28 
Investment risks ...............................................................................28
regards
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Re: Vanguard said to offer Digital Advisory Service

Post by tj » Thu Sep 19, 2019 6:45 pm

azanon wrote:
Thu Sep 19, 2019 2:14 pm
nedsaid wrote:
Wed Sep 18, 2019 4:02 pm
This is good news as there are a lot of folks who need advice, even if it is from a robot. I still like a human touch though.
But that can be all over the place.

I read an interesting review of Vanguard PAS just a few days ago (it's readily available on the net somewhere - forgot the link), where the adviser analyzed/critiqued what the client had (an 85/15). What did the adviser say? Something along the lines of her having "way too much bonds", and ended up putting her in a mix of total stock market/total international stock 100% (no bonds), dubbing that "diversified".

I'm just a hobbyist and not even a RIA, but I don't care who you are - if you have 85% stock and 15% bonds, you don't have "way too many bonds". Oh and I remember what the girl had now - the actual applicable Vanguard Target Date fund! so the VG adviser said/implied the Target Date fund was wrong! :oops: That'll be 30bp please in fees! (maybe the fee will be paid by the extra 15% stock?!?)

Here is the review you referenced. The guy wants to retire in 5 years.

https://millennialmoney.com/vanguard-pe ... es-review/

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Re: Vanguard said to offer Digital Advisory Service

Post by nedsaid » Thu Sep 19, 2019 6:52 pm

tj wrote:
Thu Sep 19, 2019 6:45 pm
azanon wrote:
Thu Sep 19, 2019 2:14 pm
nedsaid wrote:
Wed Sep 18, 2019 4:02 pm
This is good news as there are a lot of folks who need advice, even if it is from a robot. I still like a human touch though.
But that can be all over the place.

I read an interesting review of Vanguard PAS just a few days ago (it's readily available on the net somewhere - forgot the link), where the adviser analyzed/critiqued what the client had (an 85/15). What did the adviser say? Something along the lines of her having "way too much bonds", and ended up putting her in a mix of total stock market/total international stock 100% (no bonds), dubbing that "diversified".

I'm just a hobbyist and not even a RIA, but I don't care who you are - if you have 85% stock and 15% bonds, you don't have "way too many bonds". Oh and I remember what the girl had now - the actual applicable Vanguard Target Date fund! so the VG adviser said/implied the Target Date fund was wrong! :oops: That'll be 30bp please in fees! (maybe the fee will be paid by the extra 15% stock?!?)

Here is the review you referenced. The guy wants to retire in 5 years.

https://millennialmoney.com/vanguard-pe ... es-review/
Not sure I would recommend a 100% stock portfolio but although the article provided a lot of detail, there was also a lengthy phone conversation. I don't want to be an armchair advisor and second guess the advice but the review was an enthusiastic endorsement.
A fool and his money are good for business.

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Re: Vanguard said to offer Digital Advisory Service

Post by azanon » Thu Sep 19, 2019 7:08 pm

tj wrote:
Thu Sep 19, 2019 6:45 pm
azanon wrote:
Thu Sep 19, 2019 2:14 pm
nedsaid wrote:
Wed Sep 18, 2019 4:02 pm
This is good news as there are a lot of folks who need advice, even if it is from a robot. I still like a human touch though.
But that can be all over the place.

I read an interesting review of Vanguard PAS just a few days ago (it's readily available on the net somewhere - forgot the link), where the adviser analyzed/critiqued what the client had (an 85/15). What did the adviser say? Something along the lines of her having "way too much bonds", and ended up putting her in a mix of total stock market/total international stock 100% (no bonds), dubbing that "diversified".

I'm just a hobbyist and not even a RIA, but I don't care who you are - if you have 85% stock and 15% bonds, you don't have "way too many bonds". Oh and I remember what the girl had now - the actual applicable Vanguard Target Date fund! so the VG adviser said/implied the Target Date fund was wrong! :oops: That'll be 30bp please in fees! (maybe the fee will be paid by the extra 15% stock?!?)

Here is the review you referenced. The guy wants to retire in 5 years.

https://millennialmoney.com/vanguard-pe ... es-review/
Thanks tj - yeah, this is the one I was referencing...

What they probably should have spent more time discussing, is how he intended to retire in 5 years at the age of 35 with ~ 65K dollars saved. 100% stocks isn't going to fix that issue....

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Re: Vanguard said to offer Digital Advisory Service

Post by azanon » Thu Sep 19, 2019 7:13 pm

nedsaid wrote:
Thu Sep 19, 2019 6:52 pm
tj wrote:
Thu Sep 19, 2019 6:45 pm
azanon wrote:
Thu Sep 19, 2019 2:14 pm
nedsaid wrote:
Wed Sep 18, 2019 4:02 pm
This is good news as there are a lot of folks who need advice, even if it is from a robot. I still like a human touch though.
But that can be all over the place.

I read an interesting review of Vanguard PAS just a few days ago (it's readily available on the net somewhere - forgot the link), where the adviser analyzed/critiqued what the client had (an 85/15). What did the adviser say? Something along the lines of her having "way too much bonds", and ended up putting her in a mix of total stock market/total international stock 100% (no bonds), dubbing that "diversified".

I'm just a hobbyist and not even a RIA, but I don't care who you are - if you have 85% stock and 15% bonds, you don't have "way too many bonds". Oh and I remember what the girl had now - the actual applicable Vanguard Target Date fund! so the VG adviser said/implied the Target Date fund was wrong! :oops: That'll be 30bp please in fees! (maybe the fee will be paid by the extra 15% stock?!?)

Here is the review you referenced. The guy wants to retire in 5 years.

https://millennialmoney.com/vanguard-pe ... es-review/
Not sure I would recommend a 100% stock portfolio but although the article provided a lot of detail, there was also a lengthy phone conversation. I don't want to be an armchair advisor and second guess the advice but the review was an enthusiastic endorsement.
I wouldn't want to arm-chair it either, with the exception of knowing that Vanguard (the institution) doesn't recommend 100% stocks to anyone. Their Target Retirement 2065 has 10% stocks. I've watched more Vanguard videos and read more Vanguard articles that I can count, and I've never seen that recommendation.

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Re: Vanguard said to offer Digital Advisory Service

Post by azanon » Thu Sep 19, 2019 7:24 pm

Northern Flicker wrote:
Thu Sep 19, 2019 4:48 pm
azanon wrote:
Thu Sep 19, 2019 3:37 pm
The more I think about it, this could potentially be a really neat thing. If they use the really dirt cheap index funds (the ~ 4bp ones), then the net cost over a comparable Lifestrategy fund might be just 4-5 basis points. Very tempting.....
It would work well for some. ............ If all assets are in tax-qualified funds just use a LifeStrategy fund or target retirement fund.
I don't fault that approach, and certainly plenty of people do it, but there might be some willing to pay that extra 5bp where the investment decision will actually consider more than just how old someone is, or how many years they plan to retire (that's the VG Target Retirement approach - nothing else is considered). If you're trying to save 1... maybe 2 million for retirement, maybe it's worth looking at that at least a little bit closer?

Also, from a behavioral finance standpoint, it might be just the mental edge someone needs to feel like something else made the investment decision (whatever algorithm they use) instead of you personally picking your target date fund or lifestrategy fund.

I haven't pulled up that detailed brocheure that someone linked yet, but I guess I'm just assuming they'll offer more than just picking a target date fund otherwise, as you say, why pay for it.

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Re: Vanguard said to offer Digital Advisory Service

Post by Nthomas » Thu Sep 19, 2019 8:09 pm

It's interesting that one of the criticisms of VPAS is that it's basically a target date fund and this brochure explicitly states that the allocation is often what you would find in their target date fund.

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Re: Vanguard said to offer Digital Advisory Service

Post by tj » Thu Sep 19, 2019 9:37 pm

Nthomas wrote:
Thu Sep 19, 2019 8:09 pm
It's interesting that one of the criticisms of VPAS is that it's basically a target date fund and this brochure explicitly states that the allocation is often what you would find in their target date fund.
The brochure is for Digital Advisor not VPAS.

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Re: Vanguard said to offer Digital Advisory Service

Post by tj » Thu Sep 19, 2019 9:37 pm

azanon wrote:
Thu Sep 19, 2019 7:13 pm
nedsaid wrote:
Thu Sep 19, 2019 6:52 pm
tj wrote:
Thu Sep 19, 2019 6:45 pm
azanon wrote:
Thu Sep 19, 2019 2:14 pm
nedsaid wrote:
Wed Sep 18, 2019 4:02 pm
This is good news as there are a lot of folks who need advice, even if it is from a robot. I still like a human touch though.
But that can be all over the place.

I read an interesting review of Vanguard PAS just a few days ago (it's readily available on the net somewhere - forgot the link), where the adviser analyzed/critiqued what the client had (an 85/15). What did the adviser say? Something along the lines of her having "way too much bonds", and ended up putting her in a mix of total stock market/total international stock 100% (no bonds), dubbing that "diversified".

I'm just a hobbyist and not even a RIA, but I don't care who you are - if you have 85% stock and 15% bonds, you don't have "way too many bonds". Oh and I remember what the girl had now - the actual applicable Vanguard Target Date fund! so the VG adviser said/implied the Target Date fund was wrong! :oops: That'll be 30bp please in fees! (maybe the fee will be paid by the extra 15% stock?!?)

Here is the review you referenced. The guy wants to retire in 5 years.

https://millennialmoney.com/vanguard-pe ... es-review/
Not sure I would recommend a 100% stock portfolio but although the article provided a lot of detail, there was also a lengthy phone conversation. I don't want to be an armchair advisor and second guess the advice but the review was an enthusiastic endorsement.
I wouldn't want to arm-chair it either, with the exception of knowing that Vanguard (the institution) doesn't recommend 100% stocks to anyone. Their Target Retirement 2065 has 10% stocks. I've watched more Vanguard videos and read more Vanguard articles that I can count, and I've never seen that recommendation.
Yeah - he probably has cash and bonds in other accounts.

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Re: Vanguard said to offer Digital Advisory Service

Post by Nthomas » Thu Sep 19, 2019 11:03 pm

tj wrote:
Thu Sep 19, 2019 9:37 pm
Nthomas wrote:
Thu Sep 19, 2019 8:09 pm
It's interesting that one of the criticisms of VPAS is that it's basically a target date fund and this brochure explicitly states that the allocation is often what you would find in their target date fund.
The brochure is for Digital Advisor not VPAS.
I realize that but it sounds like the asset allocation is going to essentially be what is offered with VPAS. Kind of like Schwab Intelligent portfolios vs. SIP Premium with advisor - same allocation just with an advisor. So basically, they are offering target date funds in both offerings VPAS and VDA.

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Re: Vanguard said to offer Digital Advisory Service

Post by abuss368 » Thu Sep 19, 2019 11:32 pm

I would think they will recommend the same four total market index funds as they do with PAS.
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Re: Vanguard said to offer Digital Advisory Service

Post by Gleevec » Thu Sep 19, 2019 11:38 pm

If it doesn’t auto-TLH, or reinvest fractional ETF shares, I fail to see point of this service

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Re: Vanguard said to offer Digital Advisory Service

Post by bluquark » Thu Sep 19, 2019 11:50 pm

Auto-TLH benefits are overwhelmed by roboadvisor fees; that's mostly a marketing bullet point to make it sound to people who haven't done the math that it's worth the cost. The 10bp savings compared to Betterment/Wealthfront here are a much better value than that feature.

For us hobbyists, it has no point, sure. But human advisers equally don't.
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Re: Vanguard said to offer Digital Advisory Service

Post by Gleevec » Fri Sep 20, 2019 12:00 am

bluquark wrote:
Thu Sep 19, 2019 11:50 pm
Auto-TLH benefits are overwhelmed by roboadvisor fees; that's mostly a marketing bullet point to make it sound to people who haven't done the math that it's worth the cost. The 10bp savings compared to Betterment/Wealthfront here are a much better value than that feature.

For us hobbyists, it has no point, sure. But human advisers equally don't.
I would hope Vanguard would disrupt autoTLH robo fees the way it disrupted ER. Otherwise just buy target date or lifestrategy fund

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Re: Vanguard said to offer Digital Advisory Service

Post by Scooter57 » Fri Sep 20, 2019 2:20 pm

What are the credentials of the VPAS advisors? Are they professionally certified, or are they just running the software the digital service provides? The lack of relating to tax consequences I experienced when talking with a Vanguard advisor, and the lack of any questions about my plans for heirs, non-stock and bond investments or business income, made me wonder how trained the advisor was.

I hate how Vanguard is getting pushier and grabbier with every passing year. I've invested with them since the 1980s and used to love their approach. But they are pestering me about their paid services my rep can never answer any question I send him, and I really miss Mr. Bogle's way of doing business.

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Re: Vanguard said to offer Digital Advisory Service

Post by tj » Fri Sep 20, 2019 3:34 pm

Scooter57 wrote:
Fri Sep 20, 2019 2:20 pm
What are the credentials of the VPAS advisors? Are they professionally certified, or are they just running the software the digital service provides? The lack of relating to tax consequences I experienced when talking with a Vanguard advisor, and the lack of any questions about my plans for heirs, non-stock and bond investments or business income, made me wonder how trained the advisor was.

I hate how Vanguard is getting pushier and grabbier with every passing year. I've invested with them since the 1980s and used to love their approach. But they are pestering me about their paid services my rep can never answer any question I send him, and I really miss Mr. Bogle's way of doing business.
www.vanguard.com/brochuresupplement
www.vanguard.com/brochuresupplement2


See the links above. Many of them have the CFP credential. Some don't. Their prior Vanguard and other experience is listed under their name.

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Re: Vanguard said to offer Digital Advisory Service

Post by Silence Dogood » Fri Sep 20, 2019 10:10 pm

rolandtorres wrote:
Thu Sep 19, 2019 3:10 pm
Reading this thread, one thing Vanguard could do would be to hire a social community manager to come on this forum or other places and explain to Bogleheads who these future offerings are for and implicitly not for. Here's a hint- based on what's been published so far about this, it's probably not for DIY, well-read folks with more than a passing interest in personal finance in their decumulation phase who are in the +90th percentile for those that have the time/interest in optimizing and customizing their finances. Keep doing what you're doing and respect that Vanguard is trying to serve a different retail customer than you and that this offering may be a godsend for others compared to what else is out there.
If it's not for me then why send me postcards in the mail?

Why the weekly email? Or the pop-up when signing in? Or the prominent banner ad?

I don't mind that they offer the service, I just wish they'd leave me alone about it.

I'm 100% invested in one of their own Target Retirement funds, by the way.

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Re: Vanguard said to offer Digital Advisory Service

Post by Silence Dogood » Fri Sep 20, 2019 10:14 pm

azanon wrote:
Thu Sep 19, 2019 3:37 pm
The more I think about it, this could potentially be a really neat thing. If they use the really dirt cheap index funds (the ~ 4bp ones), then the net cost over a comparable Lifestrategy fund might be just 4-5 basis points. Very tempting.....
Unless the LifeStrategy fund also gets cheaper.

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Re: Vanguard said to offer Digital Advisory Service

Post by smectym » Fri Sep 20, 2019 10:29 pm

I suppose the “Four Totals” (which sounds like the sort of slogan Chairman Xi might dream up) message that “clients who don’t want international can go elsewhere, we have nothing for you” is just too obvious to merit comment. Or am I missing something, is there an opt-out available?

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Re: Vanguard said to offer Digital Advisory Service

Post by smectym » Fri Sep 20, 2019 10:33 pm

Silence Dogood wrote:
Fri Sep 20, 2019 10:10 pm
rolandtorres wrote:
Thu Sep 19, 2019 3:10 pm
Reading this thread, one thing Vanguard could do would be to hire a social community manager to come on this forum or other places and explain to Bogleheads who these future offerings are for and implicitly not for. Here's a hint- based on what's been published so far about this, it's probably not for DIY, well-read folks with more than a passing interest in personal finance in their decumulation phase who are in the +90th percentile for those that have the time/interest in optimizing and customizing their finances. Keep doing what you're doing and respect that Vanguard is trying to serve a different retail customer than you and that this offering may be a godsend for others compared to what else is out there.
If it's not for me then why send me postcards in the mail?

Why the weekly email? Or the pop-up when signing in? Or the prominent banner ad?

I don't mind that they offer the service, I just wish they'd leave me alone about it.

I'm 100% invested in one of their own Target Retirement funds, by the way.
Wait a sec, I never get postcards from Vanguard, and I’ve been invested with them for a period which spans two millenia

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Re: Vanguard said to offer Digital Advisory Service

Post by ksJoe » Fri Sep 20, 2019 10:43 pm

I read that they'll be sticking to Vanguard funds. That's understandable, but it makes me skeptical of their tax loss harvesting.

I have some taxable funds at Wealthfront and they are aggressive on tax loss harvesting. Wealthfront rotates between a variety of similar but not identical low cost funds to do it. When limited to a smaller set of funds, it seems like Vanguard's tax loss harvesting will be at a disadvantage. I love to be proven wrong on this though.

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Re: Vanguard said to offer Digital Advisory Service

Post by leeks » Fri Sep 20, 2019 10:44 pm

smectym wrote:
Fri Sep 20, 2019 10:33 pm
Silence Dogood wrote:
Fri Sep 20, 2019 10:10 pm
rolandtorres wrote:
Thu Sep 19, 2019 3:10 pm
Reading this thread, one thing Vanguard could do would be to hire a social community manager to come on this forum or other places and explain to Bogleheads who these future offerings are for and implicitly not for. Here's a hint- based on what's been published so far about this, it's probably not for DIY, well-read folks with more than a passing interest in personal finance in their decumulation phase who are in the +90th percentile for those that have the time/interest in optimizing and customizing their finances. Keep doing what you're doing and respect that Vanguard is trying to serve a different retail customer than you and that this offering may be a godsend for others compared to what else is out there.
If it's not for me then why send me postcards in the mail?

Why the weekly email? Or the pop-up when signing in? Or the prominent banner ad?

I don't mind that they offer the service, I just wish they'd leave me alone about it.

I'm 100% invested in one of their own Target Retirement funds, by the way.
Wait a sec, I never get postcards from Vanguard, and I’ve been invested with them for a period which spans two millenia
I also get no postcards and no weekly email. Thankfully.

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Re: Vanguard said to offer Digital Advisory Service

Post by tj » Fri Sep 20, 2019 10:46 pm

ksJoe wrote:
Fri Sep 20, 2019 10:43 pm
I read that they'll be sticking to Vanguard funds. That's understandable, but it makes me skeptical of their tax loss harvesting.

I have some taxable funds at Wealthfront and they are aggressive on tax loss harvesting. Wealthfront rotates between a variety of similar but not identical low cost funds to do it. When limited to a smaller set of funds, it seems like Vanguard's tax loss harvesting will be at a disadvantage. I love to be proven wrong on this though.
Vanguard has never done automated TLH.

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Re: Vanguard said to offer Digital Advisory Service

Post by ksJoe » Fri Sep 20, 2019 10:50 pm

tj wrote:
Fri Sep 20, 2019 10:46 pm
ksJoe wrote:
Fri Sep 20, 2019 10:43 pm
I read that they'll be sticking to Vanguard funds. That's understandable, but it makes me skeptical of their tax loss harvesting.

I have some taxable funds at Wealthfront and they are aggressive on tax loss harvesting. Wealthfront rotates between a variety of similar but not identical low cost funds to do it. When limited to a smaller set of funds, it seems like Vanguard's tax loss harvesting will be at a disadvantage. I love to be proven wrong on this though.
Vanguard has never done automated TLH.
Maybe not yet, but it appears its coming

The SEC filing says
...as well as their ability to help facilitate future investment strategies, such as tax loss harvesting...
I've been surprised how much short term losses Wealthfront has harvested. If Vanguard could match Wealthfront on TLH, they'd be very appealing to me. But as it is (or as I expect it to be), I think I'm better off paying the extra 0.1%.

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Re: Vanguard said to offer Digital Advisory Service

Post by Silence Dogood » Fri Sep 20, 2019 11:01 pm

leeks wrote:
Fri Sep 20, 2019 10:44 pm
smectym wrote:
Fri Sep 20, 2019 10:33 pm
Silence Dogood wrote:
Fri Sep 20, 2019 10:10 pm
rolandtorres wrote:
Thu Sep 19, 2019 3:10 pm
Reading this thread, one thing Vanguard could do would be to hire a social community manager to come on this forum or other places and explain to Bogleheads who these future offerings are for and implicitly not for. Here's a hint- based on what's been published so far about this, it's probably not for DIY, well-read folks with more than a passing interest in personal finance in their decumulation phase who are in the +90th percentile for those that have the time/interest in optimizing and customizing their finances. Keep doing what you're doing and respect that Vanguard is trying to serve a different retail customer than you and that this offering may be a godsend for others compared to what else is out there.
If it's not for me then why send me postcards in the mail?

Why the weekly email? Or the pop-up when signing in? Or the prominent banner ad?

I don't mind that they offer the service, I just wish they'd leave me alone about it.

I'm 100% invested in one of their own Target Retirement funds, by the way.
Wait a sec, I never get postcards from Vanguard, and I’ve been invested with them for a period which spans two millenia
I also get no postcards and no weekly email. Thankfully.
To be fair to Vanguard, the emails and postcards stopped once I called them and asked them to stop sending them.

I wanted to only opt-out of marketing regarding VPAS, but I was told that the only option was to opt-out of all Vanguard marketing, so I did just that.

I would get an email every Tuesday (which wasn't a big deal), but the postcards irked me.

I still get a pop-up when I log on and a large banner ad. Do you not get that?
Last edited by Silence Dogood on Fri Sep 20, 2019 11:03 pm, edited 1 time in total.

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Re: Vanguard said to offer Digital Advisory Service

Post by tj » Fri Sep 20, 2019 11:03 pm

ksJoe wrote:
Fri Sep 20, 2019 10:50 pm
tj wrote:
Fri Sep 20, 2019 10:46 pm
ksJoe wrote:
Fri Sep 20, 2019 10:43 pm
I read that they'll be sticking to Vanguard funds. That's understandable, but it makes me skeptical of their tax loss harvesting.

I have some taxable funds at Wealthfront and they are aggressive on tax loss harvesting. Wealthfront rotates between a variety of similar but not identical low cost funds to do it. When limited to a smaller set of funds, it seems like Vanguard's tax loss harvesting will be at a disadvantage. I love to be proven wrong on this though.
Vanguard has never done automated TLH.
Maybe not yet, but it appears its coming

The SEC filing says
...as well as their ability to help facilitate future investment strategies, such as tax loss harvesting...
I've been surprised how much short term losses Wealthfront has harvested. If Vanguard could match Wealthfront on TLH, they'd be very appealing to me. But as it is (or as I expect it to be), I think I'm better off paying the extra 0.1%.
I will be very interested to see what types of funs they they use for TLH. I mean if theyp ut everyone in four fund portfolios, I guess you could sub VOO for VTI and VEU for VXUS, not sure what they would do for bonds, but BND and BNDX are probably less likely to trigger a TLH.

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Re: Vanguard said to offer Digital Advisory Service

Post by Silence Dogood » Fri Sep 20, 2019 11:25 pm

smectym wrote:
Fri Sep 20, 2019 10:33 pm
Silence Dogood wrote:
Fri Sep 20, 2019 10:10 pm
rolandtorres wrote:
Thu Sep 19, 2019 3:10 pm
Reading this thread, one thing Vanguard could do would be to hire a social community manager to come on this forum or other places and explain to Bogleheads who these future offerings are for and implicitly not for. Here's a hint- based on what's been published so far about this, it's probably not for DIY, well-read folks with more than a passing interest in personal finance in their decumulation phase who are in the +90th percentile for those that have the time/interest in optimizing and customizing their finances. Keep doing what you're doing and respect that Vanguard is trying to serve a different retail customer than you and that this offering may be a godsend for others compared to what else is out there.
If it's not for me then why send me postcards in the mail?

Why the weekly email? Or the pop-up when signing in? Or the prominent banner ad?

I don't mind that they offer the service, I just wish they'd leave me alone about it.

I'm 100% invested in one of their own Target Retirement funds, by the way.
Wait a sec, I never get postcards from Vanguard, and I’ve been invested with them for a period which spans two millenia
I have no idea how Vanguard determines their target market. I know there is at least one other person who got postcards.

You'd think a person in their 20s (no immediate concerns regarding cognitive decline), invested in one of their own target retirement funds, in a tax advantaged account, wouldn't necessarily be the best candidate for VPAS.

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Vanguard offering a new robo advisor

Post by BeachPerson » Sat Sep 21, 2019 6:04 am

[Thread merged into here, see below (Page 2). --admin LadyGeek]
Vanguard is testing a pure robo adviser that is pushing costs down even further for that automated investing service.
Initially, the trial robo adviser is available only to those with Vanguard brokerage accounts, who would hand over control of their money for a 0.15% fee.
Good move since Schwab has a version with an adviser and without and adviser

Cheaper Robo Advisor
From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"

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Re: Vanguard offering a new robo advisor

Post by RickBoglehead » Sat Sep 21, 2019 6:08 am

Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

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Re: Vanguard said to offer Digital Advisory Service

Post by columbia » Sat Sep 21, 2019 7:33 am

Silence Dogood wrote:
Fri Sep 20, 2019 10:10 pm
rolandtorres wrote:
Thu Sep 19, 2019 3:10 pm
Reading this thread, one thing Vanguard could do would be to hire a social community manager to come on this forum or other places and explain to Bogleheads who these future offerings are for and implicitly not for. Here's a hint- based on what's been published so far about this, it's probably not for DIY, well-read folks with more than a passing interest in personal finance in their decumulation phase who are in the +90th percentile for those that have the time/interest in optimizing and customizing their finances. Keep doing what you're doing and respect that Vanguard is trying to serve a different retail customer than you and that this offering may be a godsend for others compared to what else is out there.
If it's not for me then why send me postcards in the mail?

Why the weekly email? Or the pop-up when signing in? Or the prominent banner ad?

I don't mind that they offer the service, I just wish they'd leave me alone about it.

I'm 100% invested in one of their own Target Retirement funds, by the way.

I’ve never actually called Vanguard, because I’ve never needed to. I’ve set my preferences to not receive any physical mail and I can’t recall ever getting a sales email from them.

In comparison, USAA was pretty aggressive about trying to sell me their financial services when I’ve had to call them about an auto insurance claim or issue with a credit card. Now that’s obnoxious.
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: Vanguard said to offer Digital Advisory Service

Post by stan1 » Sat Sep 21, 2019 7:44 am

ksJoe wrote:
Fri Sep 20, 2019 10:50 pm
tj wrote:
Fri Sep 20, 2019 10:46 pm

Vanguard has never done automated TLH.
Maybe not yet, but it appears its coming

The SEC filing says
...as well as their ability to help facilitate future investment strategies, such as tax loss harvesting...
I've been surprised how much short term losses Wealthfront has harvested. If Vanguard could match Wealthfront on TLH, they'd be very appealing to me. But as it is (or as I expect it to be), I think I'm better off paying the extra 0.1%.
That's a big change from Vanguard. They have gone out of their way for decades to discourage tax loss harvesting by clinging to average cost basis until the last hour they could (prior to 2011) and short term trading restrictions on mutual funds.

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