What's It Really Like to Work With Vanguard's Personal Advisory Service?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
User avatar
cowdogman
Posts: 2072
Joined: Sat Dec 16, 2017 6:44 pm
Location: Washington State

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

Tattarrattat wrote: Wed Mar 10, 2021 8:30 pm Not sure why so many people think their widows will need PAS. Put the entire pot of money in a target date or conservative life strategy fund, or the Fido or CS equivalent.
If you have large taxable and retirement accounts, and the taxable accounts have large capital gains, there is some skill involved in deciding how to draw down funds.

Here is what the PAS agreement says about draw downs:
When selling securities from the Portfolio during rebalancing or a Spending Fund replenishment, or when raising cash for a onetime withdrawal, securities will be sold according to the following drawdown hierarchy, as applicable: securities held in IRAs and Plan Accounts subject to required minimum
distributions (RMDs), securities held in taxable accounts, securities held in tax-deferred accounts, and then securities held in tax-free (Roth) accounts. You can work with an advisor to customize your drawdown hierarchy when you need to sell securities.
That's a pretty bare bones strategy and puts a lot of burden on the customer to "customize" to deal with issues like cap gains. I could see some PAS advisors being helpful and others taking a hands off approach on the customization.
GmanJeff
Posts: 945
Joined: Sun Jun 11, 2017 7:12 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by GmanJeff »

cowdogman wrote: Thu Mar 11, 2021 9:39 am
GmanJeff wrote: Thu Mar 11, 2021 7:35 am Most critics seem to assume that paying PAS fees will necessarily result in lower total returns compared to self-management. That is, there is an exclusive focus on the cost of the fees without reference to other factors which differentiate any self-managed portfolio from any PAS portfolio. Rarely stated explicitly, the implication is clear that a target date fund, or a self-devised and self-managed two, three or four-fund portfolio will achieve the same or better returns as a PAS portfolio with equivalent or less risk but without the PAS fee expense. That may or may not be a valid assumption but is usually presented here as self-evident.
I'm not sure it is still a Flagship benefit (I just looked and couldn't find it), but Vanguard does (or at least did) free portfolio reviews periodically for Flagship customers. I've done a few over the years.

Assuming that service is still available, a self-managed portfolio will very closely match a PAS portfolio because the advice will, I am certain, be the same.
If a portfolio review is available to non-PAS customers, that's not to say those customers will take action in the same way. Even assuming both PAS-managed and self-managed accounts start out with identical asset allocations, it would not surprise me if many self-managed accounts fail to rebalance or tax-loss harvest with the same frequency or in a disciplined and similar manner, resulting in total returns deviating from one another for better or for worse.
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by dbr »

cowdogman wrote: Thu Mar 11, 2021 10:02 am
When selling securities from the Portfolio during rebalancing or a Spending Fund replenishment, or when raising cash for a onetime withdrawal, securities will be sold according to the following drawdown hierarchy, as applicable: securities held in IRAs and Plan Accounts subject to required minimum
distributions (RMDs), securities held in taxable accounts, securities held in tax-deferred accounts, and then securities held in tax-free (Roth) accounts. You can work with an advisor to customize your drawdown hierarchy when you need to sell securities.
If the person faced with the problem can benefit from having someone there who will just tell them this is the way to do this, then there is value. Of course the person could know something like that without needing PAS, but the assumption is that this person does not know things like this. Of course, our hypothetical person could easily need help actually executing the withdrawal, and PAS would have value for that. I don't think enough emphasis is placed on the need of people needing help with mechanics even more than plans.

I am less clear on the idea of customized tax advice. I thought it was pretty clear that for policy and legal reasons Vanguard does not give actual personal tax advice or management. These statements like "You can work with an advisor . . . " is where we are all confused about what PAS does. It also should not depend on who your advisor is.
User avatar
cowdogman
Posts: 2072
Joined: Sat Dec 16, 2017 6:44 pm
Location: Washington State

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

GmanJeff wrote: Thu Mar 11, 2021 10:20 am
cowdogman wrote: Thu Mar 11, 2021 9:39 am
GmanJeff wrote: Thu Mar 11, 2021 7:35 am Most critics seem to assume that paying PAS fees will necessarily result in lower total returns compared to self-management. That is, there is an exclusive focus on the cost of the fees without reference to other factors which differentiate any self-managed portfolio from any PAS portfolio. Rarely stated explicitly, the implication is clear that a target date fund, or a self-devised and self-managed two, three or four-fund portfolio will achieve the same or better returns as a PAS portfolio with equivalent or less risk but without the PAS fee expense. That may or may not be a valid assumption but is usually presented here as self-evident.
I'm not sure it is still a Flagship benefit (I just looked and couldn't find it), but Vanguard does (or at least did) free portfolio reviews periodically for Flagship customers. I've done a few over the years.

Assuming that service is still available, a self-managed portfolio will very closely match a PAS portfolio because the advice will, I am certain, be the same.
If a portfolio review is available to non-PAS customers, that's not to say those customers will take action in the same way. Even assuming both PAS-managed and self-managed accounts start out with identical asset allocations, it would not surprise me if many self-managed accounts fail to rebalance or tax-loss harvest with the same frequency or in a disciplined and similar manner, resulting in total returns deviating from one another for better or for worse.
Totally agree on that. I was assuming customers would follow the portfolio review advice. My general point was that I doubt the advice given by PAS is any different than the advice given during portfolio reviews.
User avatar
cowdogman
Posts: 2072
Joined: Sat Dec 16, 2017 6:44 pm
Location: Washington State

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

dbr wrote: Thu Mar 11, 2021 10:28 am
cowdogman wrote: Thu Mar 11, 2021 10:02 am
When selling securities from the Portfolio during rebalancing or a Spending Fund replenishment, or when raising cash for a onetime withdrawal, securities will be sold according to the following drawdown hierarchy, as applicable: securities held in IRAs and Plan Accounts subject to required minimum
distributions (RMDs), securities held in taxable accounts, securities held in tax-deferred accounts, and then securities held in tax-free (Roth) accounts. You can work with an advisor to customize your drawdown hierarchy when you need to sell securities.
If the person faced with the problem can benefit from having someone there who will just tell them this is the way to do this, then there is value. Of course the person could know something like that without needing PAS, but the assumption is that this person does not know things like this. Of course, our hypothetical person could easily need help actually executing the withdrawal, and PAS would have value for that. I don't think enough emphasis is placed on the need of people needing help with mechanics even more than plans.

I am less clear on the idea of customized tax advice. I thought it was pretty clear that for policy and legal reasons Vanguard does not give actual personal tax advice or management. These statements like "You can work with an advisor . . . " is where we are all confused about what PAS does. It also should not depend on who your advisor is.
Agreed. I do not doubt the value of PAS for many people. I'm just trying to figure out what it covers and where the gaps are.
Clammypollack
Posts: 71
Joined: Tue Jul 28, 2020 4:47 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Clammypollack »

nisiprius wrote: Tue Mar 09, 2021 3:05 pm I once made a semi-serious effort to get an answer to seemingly simple question: if you sign up for this service, is the person you talk to acting in a fiduciary status? I failed to get any answer. I don't really think it's appropriate to push on this since I have no plans to use the service myself, but I'd be curious to know the answer if someone else is able to winkle it out.
I recently had a meeting with one of them and was told that they definitely act in a fiduciary status. They are salaried and receive no benefit from anything we do regarding investments.
Puppy Lip Soup
Posts: 24
Joined: Mon Sep 11, 2017 4:03 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Puppy Lip Soup »

We have all of our investments with Vanguard except approx. $67K in HSAs (Fidelity). It is easier to manage a portfolio if it's all with one company. However, your PAS will take into account outside investments for overall asset allocation, location, etc...

Someone had earlier posted an extensive list of services V. PAS offers. One of these is analysis of when to claim Social Security for each spouse. We're going to take advantage of that service since there's a 9 year age difference between us. Good luck.

P.S. when I mentioned we don't need a lot of hand-holding with the exception of last March-April 2020 market swoon, I meant it was a good time to tax-loss harvest with the help of a V. PAS.
User avatar
slowandsteadywins
Posts: 301
Joined: Tue Dec 20, 2016 2:13 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by slowandsteadywins »

Puppy Lip Soup wrote: Thu Mar 11, 2021 3:20 pm We have all of our investments with Vanguard except approx. $67K in HSAs (Fidelity). It is easier to manage a portfolio if it's all with one company. However, your PAS will take into account outside investments for overall asset allocation, location, etc...
Do you know if they get access to real-time data from other accounts or if it needs to be provided manually to them regarding allocation percentages, etc?
"Nothing in this world can take the place of persistence; Persistence and determination alone are omnipotent." | -Calvin Coolidge
Puppy Lip Soup
Posts: 24
Joined: Mon Sep 11, 2017 4:03 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Puppy Lip Soup »

"Do you know if they get access to real-time data from other accounts or if it needs to be provided manually to them regarding allocation percentages, etc?"

V. has several fields for "Outside Investments." Just add the ticker symbol, amount of shares, and cost of shares when purchased. With that information, your outside investments will show real-time data.
friar1610
Posts: 2331
Joined: Sat Nov 29, 2008 8:52 pm
Location: MA South Shore

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by friar1610 »

cowdogman wrote: Tue Mar 09, 2021 8:23 pm
afan wrote: Tue Mar 09, 2021 8:16 pm A better solution, and far cheaper than even 0.3%, is to use an hourly fee planner for financial advice and a simple 3 fund portfolio for investment. There is no point in paying anyone anything to run a 3 fund portfolio but if occasional rebalancing is too intimidating then a balanced fund is the solution. The increased cost over an index fund is much less than 0.3%.
Yep, that's where I'm coming out after this discussion. The trick of course if finding the right per hour planner.
I went through the PAS drill a couple of times in the past and each time couldn’t convince myself it met my needs. Like many here, I was looking for a service that would hold my wife’s hand, financially speaking, when I’m 6’ under.

My main issue is that PAS deals only with Vanguard assets. I have a big chunk of I-Bonds, a direct CD ladder and an unannuitized deferred annuity in addition to several VG accounts. (VG assets are the majority of my holdings.) I don’t necessarily want to liquidate those holdings and turn them over to VG to place in their funds. But I do want my assets to be viewed comprehensively with recommendations covering all my assets as a cohesive whole. VG told me they couldn’t manage those non-VG assets (which I totally understand) but they would consider those assets when making recommendations for the VG assets. But when they produced the plan/recommendations, I never saw any indication that they had done so. (We had discussed the fact that I would like to shoot for a 50/50 overall allocation. They gave me that in VG funds. But the I-Bonds and CDs (which they’d said they would consider) brought the overall allocation to more like 35/65. And they didn’t have a good answer how they’d “considered” the non-VG stuff.

I finally went to fee-only investment advisor Rick Ferri who reviewed my port (as a whole - VG and non-VG - ) and made a few recommendations for tweaking it. He doesn’t do ongoing portfolio management although he can apparently recommend people he has vetted and who charge PAS-like fees. I plan to continue managing the port myself for the present. If I get to the point that I lose interest in doing so, I’ll call Rick for an updated portfolio review and a recommendation on someone to manage it for me and/or my wife. (I’m 75 and finding my interest in personal finance is waning ever so slightly.)

So, based on prior experience, I will not be leaving my wife instructions to seek out PAS when I’m no longer in the picture. I understand PAS may work better for those with different needs than mine.
Friar1610 | 50-ish/50-ish - a satisficer, not a maximizer
FoolStreet
Posts: 1554
Joined: Fri Sep 07, 2012 12:18 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FoolStreet »

friar1610 wrote: Thu Mar 11, 2021 8:57 pm
cowdogman wrote: Tue Mar 09, 2021 8:23 pm
afan wrote: Tue Mar 09, 2021 8:16 pm A better solution, and far cheaper than even 0.3%, is to use an hourly fee planner for financial advice and a simple 3 fund portfolio for investment. There is no point in paying anyone anything to run a 3 fund portfolio but if occasional rebalancing is too intimidating then a balanced fund is the solution. The increased cost over an index fund is much less than 0.3%.
Yep, that's where I'm coming out after this discussion. The trick of course if finding the right per hour planner.
I went through the PAS drill a couple of times in the past and each time couldn’t convince myself it met my needs. Like many here, I was looking for a service that would hold my wife’s hand, financially speaking, when I’m 6’ under.

My main issue is that PAS deals only with Vanguard assets. I have a big chunk of I-Bonds, a direct CD ladder and an unannuitized deferred annuity in addition to several VG accounts. (VG assets are the majority of my holdings.) I don’t necessarily want to liquidate those holdings and turn them over to VG to place in their funds. But I do want my assets to be viewed comprehensively with recommendations covering all my assets as a cohesive whole. VG told me they couldn’t manage those non-VG assets (which I totally understand) but they would consider those assets when making recommendations for the VG assets. But when they produced the plan/recommendations, I never saw any indication that they had done so. (We had discussed the fact that I would like to shoot for a 50/50 overall allocation. They gave me that in VG funds. But the I-Bonds and CDs (which they’d said they would consider) brought the overall allocation to more like 35/65. And they didn’t have a good answer how they’d “considered” the non-VG stuff.

I finally went to fee-only investment advisor Rick Ferri who reviewed my port (as a whole - VG and non-VG - ) and made a few recommendations for tweaking it. He doesn’t do ongoing portfolio management although he can apparently recommend people he has vetted and who charge PAS-like fees. I plan to continue managing the port myself for the present. If I get to the point that I lose interest in doing so, I’ll call Rick for an updated portfolio review and a recommendation on someone to manage it for me and/or my wife. (I’m 75 and finding my interest in personal finance is waning ever so slightly.)

So, based on prior experience, I will not be leaving my wife instructions to seek out PAS when I’m no longer in the picture. I understand PAS may work better for those with different needs than mine.
I don’t mean to be morbid, but I would like to find a PAS-like advisor who is 20 years younger than I. I’m still “young” but the more I think about estate planning, the more I want to get and identify someone who can manage this in my absence. Namely,


- make a back door Roth contribution on the 1st of the year, as appropriate
- turn-key coordinate an accountant to calculate the Roth conversion for the year
- keep track of inherited IRAs, Roth and 401k
- tax loss harvest and rebalance through the year
- plan for upcoming expense items
- purchase I-bonds in treasury direct as needed
- calculate 4% withdrawal rate budget for the year
- keep track of HSA balance and receipts held in reserve
- coordinate with admin co-trustee on trust held for heir, if appropriate
- quarterly read-outs, maybe semi annual to beneficiaries or spouse

For a sense of scale, if I left $5M, then is that worth $15k per year for 0.3%? I think so... Does that sound right?
tibbitts
Posts: 23728
Joined: Tue Feb 27, 2007 5:50 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by tibbitts »

FoolStreet wrote: Thu Mar 11, 2021 9:46 pm I don’t mean to be morbid, but I would like to find a PAS-like advisor who is 20 years younger than I. I’m still “young” but the more I think about estate planning, the more I want to get and identify someone who can manage this in my absence.
The problem is that advisers do move on, especially earlier in their career. And businesses they work for change. Self-employed advisers may be just a one-person shop and close. So there are pros and cons to larger and smaller firms and to keeping (or thinking you can) just one adviser for decades.

However you have a point that Bogleheads tend to want an adviser to be so old that they're already on the verge of retirement by the time they're sufficiently qualified.
jimkinny
Posts: 1856
Joined: Sun Mar 14, 2010 1:51 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by jimkinny »

Small Law Survivor wrote: Tue Mar 09, 2021 11:52 am I've told my wife and daughter that if I kick the bucket they should sign up for Vanguard's personal advisory service (PAS). However, I can't get rid of a nagging doubt about this. I'm wondering what it's really like to work with these people? There are a lot of them, around 500 (https://vanguard.com/pdf/r130.pdf). With that many advisors Vanguard can't let them have much discretion, can it? It must be cookie cutter -the four "Totals" - for everyone, is that right? What if you don't like your advisor can you switch? How skilled are these people?

If you have $5MM invested with Vanguard, you're paying close to $15,000 a year for this service. At $500/hour (I know that's high), that's 30 hours of attention a year. Does Vanguard spend anything close to that with a client (or on a client's affairs) with that much money invested?

Personal experiences appreciated. Thanks in advance.
I am guessing but those who use a PAS likely do not read this forum. I have a brother in law who inherited a bunch of money, no knowldge of investing. He is satisfied now but who knows how he will feel when we have a bear market. He inherited the money several years ago.
Mtnman16
Posts: 2
Joined: Sun May 02, 2021 10:23 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Mtnman16 »

cowdogman wrote: Thu Mar 11, 2021 9:39 am
GmanJeff wrote: Thu Mar 11, 2021 7:35 am Most critics seem to assume that paying PAS fees will necessarily result in lower total returns compared to self-management. That is, there is an exclusive focus on the cost of the fees without reference to other factors which differentiate any self-managed portfolio from any PAS portfolio. Rarely stated explicitly, the implication is clear that a target date fund, or a self-devised and self-managed two, three or four-fund portfolio will achieve the same or better returns as a PAS portfolio with equivalent or less risk but without the PAS fee expense. That may or may not be a valid assumption but is usually presented here as self-evident.
I'm not sure it is still a Flagship benefit (I just looked and couldn't find it), but Vanguard does (or at least did) free portfolio reviews periodically for Flagship customers. I've done a few over the years.

Assuming that service is still available, a self-managed portfolio will very closely match a PAS portfolio because the advice will, I am certain, be the same.

If Flagship has removed that benefit in a move to push customers to PAS that would not be a very customer-friendly move for those many of us who want to self-manage but like a reality check portfolio review every few years.
Yes, Vanguard has removed that benefit for Flagship customers apparently since 2019. Worse yet, they didn't bother to inform you, so you'll find out when you request one. A stinky move on their part.

In the past, reviews, projections of retirement 'savings', and rebalancing were most useful and the financial advisors I had were very good. While their 0.3% rate may be better than many, on for example a $3M investment with them that's 9 grand a year. If they are to charge, they need an alternative way for charging for occasional consultations.

They also stopped assigning you to a personal Flagship rep even before that. I had some good ones in the past. Very recently based on a telephone call to request a PAS consult, the Flagship rep who took my call was assigned to me as seen on my account.
hvaclorax
Posts: 598
Joined: Mon Nov 21, 2016 5:01 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by hvaclorax »

These replies would be more informative if divided into those in accumulation phase vs. decumulation phase. I’ve always thought decumulation is more difficult and I see that reflected in the questions on this forum. DIY is not that hard when all you do is put specified amounts into 401k accounts using 3fund portfolio. Drawdown requires sell discipline that is very different set of skills and not really well developed in accumulating assets. Properly choosing what to sell can make quite a bit of difference in portfolio value and annual return. 3funds are lower cost but don’t give you very much choice when you need to sell.
HVAC
Mtnman16
Posts: 2
Joined: Sun May 02, 2021 10:23 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Mtnman16 »

I am new to this board. Are the three funds some of you reference Vanguard's Total Stock Market, Total International Stock Market and Total Bond Market?
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by dbr »

Mtnman16 wrote: Sat May 08, 2021 7:38 am I am new to this board. Are the three funds some of you reference Vanguard's Total Stock Market, Total International Stock Market and Total Bond Market?
Yes, but see many discussions such as the 65 pages of posts here:

viewtopic.php?t=88005

and the Wiki page here:

https://www.bogleheads.org/wiki/Three-fund_portfolio
User avatar
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

FoolStreet wrote: Thu Mar 11, 2021 9:46 pm
friar1610 wrote: Thu Mar 11, 2021 8:57 pm
cowdogman wrote: Tue Mar 09, 2021 8:23 pm
afan wrote: Tue Mar 09, 2021 8:16 pm A better solution, and far cheaper than even 0.3%, is to use an hourly fee planner for financial advice and a simple 3 fund portfolio for investment. There is no point in paying anyone anything to run a 3 fund portfolio but if occasional rebalancing is too intimidating then a balanced fund is the solution. The increased cost over an index fund is much less than 0.3%.
Yep, that's where I'm coming out after this discussion. The trick of course if finding the right per hour planner.
I went through the PAS drill a couple of times in the past and each time couldn’t convince myself it met my needs. Like many here, I was looking for a service that would hold my wife’s hand, financially speaking, when I’m 6’ under.

My main issue is that PAS deals only with Vanguard assets. I have a big chunk of I-Bonds, a direct CD ladder and an unannuitized deferred annuity in addition to several VG accounts. (VG assets are the majority of my holdings.) I don’t necessarily want to liquidate those holdings and turn them over to VG to place in their funds. But I do want my assets to be viewed comprehensively with recommendations covering all my assets as a cohesive whole. VG told me they couldn’t manage those non-VG assets (which I totally understand) but they would consider those assets when making recommendations for the VG assets. But when they produced the plan/recommendations, I never saw any indication that they had done so. (We had discussed the fact that I would like to shoot for a 50/50 overall allocation. They gave me that in VG funds. But the I-Bonds and CDs (which they’d said they would consider) brought the overall allocation to more like 35/65. And they didn’t have a good answer how they’d “considered” the non-VG stuff.

I finally went to fee-only investment advisor Rick Ferri who reviewed my port (as a whole - VG and non-VG - ) and made a few recommendations for tweaking it. He doesn’t do ongoing portfolio management although he can apparently recommend people he has vetted and who charge PAS-like fees. I plan to continue managing the port myself for the present. If I get to the point that I lose interest in doing so, I’ll call Rick for an updated portfolio review and a recommendation on someone to manage it for me and/or my wife. (I’m 75 and finding my interest in personal finance is waning ever so slightly.)

So, based on prior experience, I will not be leaving my wife instructions to seek out PAS when I’m no longer in the picture. I understand PAS may work better for those with different needs than mine.
I don’t mean to be morbid, but I would like to find a PAS-like advisor who is 20 years younger than I. I’m still “young” but the more I think about estate planning, the more I want to get and identify someone who can manage this in my absence. Namely,


- make a back door Roth contribution on the 1st of the year, as appropriate
- turn-key coordinate an accountant to calculate the Roth conversion for the year
- keep track of inherited IRAs, Roth and 401k
- tax loss harvest and rebalance through the year
- plan for upcoming expense items
- purchase I-bonds in treasury direct as needed
- calculate 4% withdrawal rate budget for the year
- keep track of HSA balance and receipts held in reserve
- coordinate with admin co-trustee on trust held for heir, if appropriate
- quarterly read-outs, maybe semi annual to beneficiaries or spouse

For a sense of scale, if I left $5M, then is that worth $15k per year for 0.3%? I think so... Does that sound right?
I think at $5 million the fee decreases.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
RickBoglehead
Posts: 7877
Joined: Wed Feb 14, 2018 8:10 am
Location: In a house

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by RickBoglehead »

Puppy Lip Soup wrote: Thu Mar 11, 2021 8:36 am Finally, a PAS is going to access your portfolio and make changes, such as targeting (selling) specific shares on a cost-basis that will affect taxes. An outside financial advisor cannot do that for you.
This isn't a correct statement. You can provide agent access to an outside financial advisor to trade on your behalf with any brokerage firm.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
User avatar
Taylor Larimore
Posts: 32842
Joined: Tue Feb 27, 2007 7:09 pm
Location: Miami FL

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Taylor Larimore »

Bogleheads:

I have a very good friend with several trusts (each invested in The Three-Fund Portfolio.

On one occasion her Vanguard PAS advisor flew to Miami to help my friend with her problem.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Tens of millions of investors need personal guidance in allocating their assets and selecting funds. Other tens of millions do not."
"Simplicity is the master key to financial success." -- Jack Bogle
Ranunculus
Posts: 230
Joined: Wed Aug 28, 2019 1:32 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Ranunculus »

formerlybroke wrote: Tue Mar 09, 2021 6:49 pm Having come from the investment management business and recognizing that, at my age, I needed to find highly competent advisor assistance for the next/final 3 innings (for the benefit of both myself and my heirs), I began a multi year search for an advisor (note: protracted process while I reconciled forgoing my do-it-yourself history).

One stop in my search was PAS. We were discussing a +$10 million portfolio. The Vanguard advisors’ solution was a three fund portfolio.

That may be just fine for many. It’s was well, well below my expectations.
I would be interested to know who you chose after your extensive research. I also ruled out the major brokerages because they will not manage real estate, an important component of a diversified estate IMO. I had several discussions with wealth management firms but found them very opaque with regard to investment strategies and I wasn’t impressed with the depth of knowledge of the advisors. Some of the advisors at wealth management firms seemed to be chosen more for their charisma than financial acumen- former athletes etc.

I’m starting to think it will be better to form my own financial team comprised of a competent fee-only planner, competent estate attorney and an excellent enrolled agent tax preparer. I’d also like to find a professional fiduciary to coordinate the team and provide as much hand holding as necessary to my survivor(s).
afan
Posts: 8195
Joined: Sun Jul 25, 2010 4:01 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by afan »

Vanguard will not manage real estate.

If you have complex series of investments including real estate, perhaps consider simplifying it when you need to turn it over to someone else.

Market efficiency means that a handful of index funds is great for stocks and bonds. There is no equivalent for closely held businesses, investment properties, PE and VC... If you are comfortable and successful managing something like this, keep it up. But recognize that it may be impossible to find someone who can reliably do it for you.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
FoolStreet
Posts: 1554
Joined: Fri Sep 07, 2012 12:18 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FoolStreet »

afan wrote: Sat May 08, 2021 8:26 pm Vanguard will not manage real estate.

If you have complex series of investments including real estate, perhaps consider simplifying it when you need to turn it over to someone else.

Market efficiency means that a handful of index funds is great for stocks and bonds. There is no equivalent for closely held businesses, investment properties, PE and VC... If you are comfortable and successful managing something like this, keep it up. But recognize that it may be impossible to find someone who can reliably do it for you.
In doing research here, seems like real estate could be managed outside of the vanguard managed assets, so could give ability to sell or keep real estate to personal/family/guardian co- trustee. At this point, I’m leaning that direction and owe a call to vanguard to get more details.

Edit: I realize I responded out of context, thinking this was Vanguard Trust, not Vanguard PAS.
Last edited by FoolStreet on Sun May 09, 2021 4:30 pm, edited 1 time in total.
User avatar
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

Puppy Lip Soup wrote: Thu Mar 11, 2021 3:20 pm We have all of our investments with Vanguard except approx. $67K in HSAs (Fidelity). It is easier to manage a portfolio if it's all with one company. However, your PAS will take into account outside investments for overall asset allocation, location, etc...

Someone had earlier posted an extensive list of services V. PAS offers. One of these is analysis of when to claim Social Security for each spouse. We're going to take advantage of that service since there's a 9 year age difference between us. Good luck.

P.S. when I mentioned we don't need a lot of hand-holding with the exception of last March-April 2020 market swoon, I meant it was a good time to tax-loss harvest with the help of a V. PAS.
I have family who engaged Vanguard PAS clients and could not be happier. Essentially Total Stock, Total International, Total Bond, and Total International Bond.

I did not realize they will review and provide Social Security options to consider.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

afan wrote: Sat May 08, 2021 8:26 pm Vanguard will not manage real estate.
I would expect that is beyond the scope of their offered services.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
rrt
Posts: 49
Joined: Sun Feb 26, 2012 11:01 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by rrt »

Used VG PAS for a 15 month period back in 2016/2017 when wife and I both had health scares about the same time. Wanted time to focus on us and our health for as long as needed. Everything happened very quickly so wasn't really time to get recommendations and interview for any other options.

Liked Ryan who was assigned to us. Felt like he was knowledgeable and listened. More than anything it gave me the comfort that if my situation was long term my spouse had someone to ask questions of and guide her on the financial side of things.

IIRC he did ask me specifically about having wills and power of attorney and making certain our beneficiaries were up to date on all our legal docs. Just as a suggestion in one of our conversations.

Let them re-balance to appx 55/45 in our IRA and Roths. Didn't touch our taxable accounts but had told them not to and I put it in an email to give me some back-up.

Once we both came through everything I told him I was going back to self-management of all our accounts and would be dropping PAS he was professional and said that if we needed him in the future he was glad to step back in and help.

In my "If I Die" folder for the wife PAS or a second firm we later found are recommended for her to engage should I die first or we get to the point where someone needs to step in. We have the legal in place but my accountant is older than I am so doubt he will still be practicing.

Are they the perfect answer, probably not. But I did like being able to engage them quickly and my wife especially relieved to have someone watching over things for that time.
tj
Posts: 9368
Joined: Wed Dec 23, 2009 11:10 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by tj »

rrt wrote: Sun May 09, 2021 4:06 pm Used VG PAS for a 15 month period back in 2016/2017 when wife and I both had health scares about the same time. Wanted time to focus on us and our health for as long as needed. Everything happened very quickly so wasn't really time to get recommendations and interview for any other options.

Liked Ryan who was assigned to us. Felt like he was knowledgeable and listened. More than anything it gave me the comfort that if my situation was long term my spouse had someone to ask questions of and guide her on the financial side of things.

IIRC he did ask me specifically about having wills and power of attorney and making certain our beneficiaries were up to date on all our legal docs. Just as a suggestion in one of our conversations.

Let them re-balance to appx 55/45 in our IRA and Roths. Didn't touch our taxable accounts but had told them not to and I put it in an email to give me some back-up.

Once we both came through everything I told him I was going back to self-management of all our accounts and would be dropping PAS he was professional and said that if we needed him in the future he was glad to step back in and help.

In my "If I Die" folder for the wife PAS or a second firm we later found are recommended for her to engage should I die first or we get to the point where someone needs to step in. We have the legal in place but my accountant is older than I am so doubt he will still be practicing.

Are they the perfect answer, probably not. But I did like being able to engage them quickly and my wife especially relieved to have someone watching over things for that time.
Who is the second firm?
User avatar
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

Mtnman16 wrote: Sat May 08, 2021 7:38 am I am new to this board. Are the three funds some of you reference Vanguard's Total Stock Market, Total International Stock Market and Total Bond Market?
Plus Total International Bond.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
afan
Posts: 8195
Joined: Sun Jul 25, 2010 4:01 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by afan »

FoolStreet wrote: Sun May 09, 2021 2:14 pm
afan wrote: Sat May 08, 2021 8:26 pm Vanguard will not manage real estate.

If you have complex series of investments including real estate, perhaps consider simplifying it when you need to turn it over to someone else.

Market efficiency means that a handful of index funds is great for stocks and bonds. There is no equivalent for closely held businesses, investment properties, PE and VC... If you are comfortable and successful managing something like this, keep it up. But recognize that it may be impossible to find someone who can reliably do it for you.
In doing research here, seems like real estate could be managed outside of the vanguard managed assets, so could give ability to sell or keep real estate to personal/family/guardian co- trustee. At this point, I’m leaning that direction and owe a call to vanguard to get more details.

Edit: I realize I responded out of context, thinking this was Vanguard Trust, not Vanguard PAS.
Neither Vanguard National Trust Company nor PAS will manage your real estate. You would have to find someone else. The challenge may not be in finding someone who would agree to do it. The hard part may be finding someone who would do it to your liking. Unlike stocks and bonds, there are no index funds.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
Imadeit
Posts: 24
Joined: Fri Apr 30, 2021 6:13 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Imadeit »

I retired 3 years ago. I used them for approximately 4 years and recently changed to self direct. They started by helping me determine an asset allocation that I was comfortable with based on Vanguard questionnaire. They set up an investment and retirement plan. They purchased the funds for my taxable, Roth, and rollover IRA accounts. They setup a monthly withdrawal. They sold investments for needed withdrawals and determined which accounts to sell from to minimize taxes. They determined how much I could withdraw from my accounts that would ensure my money lasted until the age of 100. They encouraged quarterly phone conference calls that were scheduled. They quickly helped when I had questions or requested withdrawals beyond my normal monthly withdrawals. I had One advisor for the first three years and then a second advisor in the fourth year. I liked them both. I finally decided to go self direct when I felt comfortable that I could do what they do. Also I realized that even though the advisor fee is 0.3% of managed funds, it actually was 10% of my yearly withdrawal income. In addition was paying taxes on the advisor fees. I’m now happily managing my own retirement portfolio using the information I have learned from Jack Bogle books and this Bogleheads website.
DesertGator
Posts: 273
Joined: Thu Jun 21, 2018 11:12 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by DesertGator »

daleddm wrote: Tue Mar 09, 2021 12:57 pm On a sorta related note, my admittedly odd measure in considering even occasional fee for service advising has been whether or not the person is maintaining a facebook page, as my analog upbringing suggests to me that anybody that takes time to do that isn't someone I'd consider mature enough to do the job (for me ... YMMV). So far, they all do.
I am extremely technically savvy and advanced...like decoding ethernet packets advanced. I have permanently left Facebook and believe and hope EVERYONE will. I consider a financial advisor who is on Facebook to be a relatively better target for hackers, and relatively more likely to be compromised than someone with the smarts to eliminate any contact with this service/company.

So, I think having a Facebook presence may indicate some technical/modern savvy, but bad judgement regarding the risks of this platform.
rrt
Posts: 49
Joined: Sun Feb 26, 2012 11:01 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by rrt »

Who is the second firm?
Asset Builder in Plano Texas
Jason-Paul
Posts: 43
Joined: Wed Mar 07, 2018 10:48 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Jason-Paul »

I keep getting PAS invitations, and so here I am trying to see if there is any value in it. I recently moved my old employer's 401K to Vanguard, and constructing a portfolio has been a laborious, but enlightening process for me. Recently, the financial media has been promoting active management over passive, which of course runs counter to Jack Bogle's vision. My old 401K contained only a handfull of passively-managed index funds, and so after my rollover, I believed that the increased variety of funds that I could now access, including both passive and active, would ultimately lead me to better performance than what I had before. That couldn't be further from the case. Even though I have performed nicely this year with a mix of both, I am still lagging what I would have gained by just leaving my old 401K stay put, and...I'm assuming more risk now. One nice option available to 401K's that Vanguard, Fidelity, and others lack is a Stable Value Fund. That is critical in a year like 2021 where bonds have been underperforming. So, my advice is: save your money on "investing advice," and spend that money instead on a tax accountant, or legal counsel on your money manuevers. Remember: higher fees erode your returns, and active only beats passive 33% of the time. So, from my personal experience, I now have more conviction that the best way to invest for your future is to put the bulk of your savings into a low-cost, passively-managed S&P 500 index fund, and just forget about it. You'll win everytime, and with just one decision.
afan
Posts: 8195
Joined: Sun Jul 25, 2010 4:01 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by afan »

DesertGator wrote: Sun May 09, 2021 9:52 pm
So, I think having a Facebook presence may indicate some technical/modern savvy, but bad judgement regarding the risks of this platform.
Interesting. I know quite a few software engineers. Some work in security for the biggest tech companies. Every one of them has a Facebook page
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
miket29
Posts: 1067
Joined: Tue Jun 20, 2017 9:07 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by miket29 »

I now have more conviction that the best way to invest for your future is to put the bulk of your savings into a low-cost, passively-managed S&P 500 index fund, and just forget about it.
Vanguard currently recommends 40% of ones holdings should be international. While Bogle thought you get enough international exposure thru US funds, many disagree. I don't know what the future holds. For many years the S&P has significantly outperformed the international index, but this hasn't always been true.
coffeeblack
Posts: 770
Joined: Wed Jun 19, 2019 10:20 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by coffeeblack »

I was thinking of a similar thing.

One thought that comes to mind is have my wife move the funds into one fund. Such as a balanced fund from vanguard. It would then be rebalanced automatically and there would be no need for their advisor service. She would be able to go in and sell what she needed once or twice per year and be done with it.

There would have to be some advanced planning to pick the right funds. That way when the funds are transferred into one fund there wouldn't be much capital gains. The more that can be transferred in kind the better.

For example: VTSAX and VBTLX and VTIAX can be transferred into a balanced Vanguard fund. There shouldn't be much capital gains tax because the funds are very similar. The only difference would be the foreign bond percentage.
tibbitts
Posts: 23728
Joined: Tue Feb 27, 2007 5:50 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by tibbitts »

coffeeblack wrote: Sun Aug 29, 2021 9:44 pm There would have to be some advanced planning to pick the right funds. That way when the funds are transferred into one fund there wouldn't be much capital gains. The more that can be transferred in kind the better.

For example: VTSAX and VBTLX and VTIAX can be transferred into a balanced Vanguard fund. There shouldn't be much capital gains tax because the funds are very similar. The only difference would be the foreign bond percentage.
I don't understand your point about capital gains; they're determined by appreciation since each share was purchased. That doesn't have anything to do with transferring to a fund with similar holdings. So if someone had held funds for a while, there are likely to be large capital gains. You can't transfer three funds into one "in kind."

Also realistically any Vanguard fund (or any other fund) can be (and have sometimes in the past been) a moving target, so just because it's a fund you'd pick today, doesn't mean it will be the same fund tomorrow.
afan
Posts: 8195
Joined: Sun Jul 25, 2010 4:01 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by afan »

Most returns to bond funds are distributed and taxed as time goes by. They usually do not have a lot of unrealized capital gains. So one could sell the bond fund and buy a balanced fund with little tax penalty. Not true for stock index funds.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
coffeeblack
Posts: 770
Joined: Wed Jun 19, 2019 10:20 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by coffeeblack »

tibbitts wrote: Sun Aug 29, 2021 10:03 pm
coffeeblack wrote: Sun Aug 29, 2021 9:44 pm There would have to be some advanced planning to pick the right funds. That way when the funds are transferred into one fund there wouldn't be much capital gains. The more that can be transferred in kind the better.

For example: VTSAX and VBTLX and VTIAX can be transferred into a balanced Vanguard fund. There shouldn't be much capital gains tax because the funds are very similar. The only difference would be the foreign bond percentage.
I don't understand your point about capital gains; they're determined by appreciation since each share was purchased. That doesn't have anything to do with transferring to a fund with similar holdings. So if someone had held funds for a while, there are likely to be large capital gains. You can't transfer three funds into one "in kind."

Also realistically any Vanguard fund (or any other fund) can be (and have sometimes in the past been) a moving target, so just because it's a fund you'd pick today, doesn't mean it will be the same fund tomorrow.
My understanding is when you transfer a fund to a similar fund the holding that are identical will be transferred in kind.

So if you transfer VTSAX to a balanced fund a percentage of it will not see capital gains tax because it can be transferred in kind. If I'm not understanding this correctly then my mistake.

The OP wanted his wife to pay Vanguard to manage his funds if he passed. So transferring could solve this issue.
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by dbr »

coffeeblack wrote: Mon Aug 30, 2021 8:22 am
tibbitts wrote: Sun Aug 29, 2021 10:03 pm
coffeeblack wrote: Sun Aug 29, 2021 9:44 pm There would have to be some advanced planning to pick the right funds. That way when the funds are transferred into one fund there wouldn't be much capital gains. The more that can be transferred in kind the better.

For example: VTSAX and VBTLX and VTIAX can be transferred into a balanced Vanguard fund. There shouldn't be much capital gains tax because the funds are very similar. The only difference would be the foreign bond percentage.
I don't understand your point about capital gains; they're determined by appreciation since each share was purchased. That doesn't have anything to do with transferring to a fund with similar holdings. So if someone had held funds for a while, there are likely to be large capital gains. You can't transfer three funds into one "in kind."

Also realistically any Vanguard fund (or any other fund) can be (and have sometimes in the past been) a moving target, so just because it's a fund you'd pick today, doesn't mean it will be the same fund tomorrow.
My understanding is when you transfer a fund to a similar fund the holding that are identical will be transferred in kind.

So if you transfer VTSAX to a balanced fund a percentage of it will not see capital gains tax because it can be transferred in kind. If I'm not understanding this correctly then my mistake.

The OP wanted his wife to pay Vanguard to manage his funds if he passed. So transferring could solve this issue.
You are certainly confused. There is no such thing as transferring a fund into a different fund. You transfer funds or a fund in an account to another account in kind and in that case funds in the original account are simply moved to the new account. There is such a thing as exchanging a fund for a different fund but that acts as a sell and a buy. It is also possible to exchange a Vanguard mutual fund for its ETF share class and that has no tax consequences. They do not exchange ETFs back to the fund.
coffeeblack
Posts: 770
Joined: Wed Jun 19, 2019 10:20 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by coffeeblack »

dbr wrote: Mon Aug 30, 2021 8:36 am
coffeeblack wrote: Mon Aug 30, 2021 8:22 am
tibbitts wrote: Sun Aug 29, 2021 10:03 pm
coffeeblack wrote: Sun Aug 29, 2021 9:44 pm There would have to be some advanced planning to pick the right funds. That way when the funds are transferred into one fund there wouldn't be much capital gains. The more that can be transferred in kind the better.

For example: VTSAX and VBTLX and VTIAX can be transferred into a balanced Vanguard fund. There shouldn't be much capital gains tax because the funds are very similar. The only difference would be the foreign bond percentage.
I don't understand your point about capital gains; they're determined by appreciation since each share was purchased. That doesn't have anything to do with transferring to a fund with similar holdings. So if someone had held funds for a while, there are likely to be large capital gains. You can't transfer three funds into one "in kind."

Also realistically any Vanguard fund (or any other fund) can be (and have sometimes in the past been) a moving target, so just because it's a fund you'd pick today, doesn't mean it will be the same fund tomorrow.
My understanding is when you transfer a fund to a similar fund the holding that are identical will be transferred in kind.

So if you transfer VTSAX to a balanced fund a percentage of it will not see capital gains tax because it can be transferred in kind. If I'm not understanding this correctly then my mistake.

The OP wanted his wife to pay Vanguard to manage his funds if he passed. So transferring could solve this issue.
You are certainly confused. There is no such thing as transferring a fund into a different fund. You transfer funds or a fund in an account to another account in kind and in that case funds in the original account are simply moved to the new account. There is such a thing as exchanging a fund for a different fund but that acts as a sell and a buy. It is also possible to exchange a Vanguard mutual fund for its ETF share class and that has no tax consequences. They do not exchange ETFs back to the fund.
I see. Ty.
coffeeblack
Posts: 770
Joined: Wed Jun 19, 2019 10:20 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by coffeeblack »

dbr wrote: Mon Aug 30, 2021 8:36 am
coffeeblack wrote: Mon Aug 30, 2021 8:22 am
tibbitts wrote: Sun Aug 29, 2021 10:03 pm
coffeeblack wrote: Sun Aug 29, 2021 9:44 pm There would have to be some advanced planning to pick the right funds. That way when the funds are transferred into one fund there wouldn't be much capital gains. The more that can be transferred in kind the better.

For example: VTSAX and VBTLX and VTIAX can be transferred into a balanced Vanguard fund. There shouldn't be much capital gains tax because the funds are very similar. The only difference would be the foreign bond percentage.
I don't understand your point about capital gains; they're determined by appreciation since each share was purchased. That doesn't have anything to do with transferring to a fund with similar holdings. So if someone had held funds for a while, there are likely to be large capital gains. You can't transfer three funds into one "in kind."

Also realistically any Vanguard fund (or any other fund) can be (and have sometimes in the past been) a moving target, so just because it's a fund you'd pick today, doesn't mean it will be the same fund tomorrow.
My understanding is when you transfer a fund to a similar fund the holding that are identical will be transferred in kind.

So if you transfer VTSAX to a balanced fund a percentage of it will not see capital gains tax because it can be transferred in kind. If I'm not understanding this correctly then my mistake.

The OP wanted his wife to pay Vanguard to manage his funds if he passed. So transferring could solve this issue.
You are certainly confused. There is no such thing as transferring a fund into a different fund. You transfer funds or a fund in an account to another account in kind and in that case funds in the original account are simply moved to the new account. There is such a thing as exchanging a fund for a different fund but that acts as a sell and a buy. It is also possible to exchange a Vanguard mutual fund for its ETF share class and that has no tax consequences. They do not exchange ETFs back to the fund.
One thing. The OP's question and one that I have had is what happens if one or both people are unable to manage their investments? In this case he was asking about turning over his accounts to a PAS at Vanguard. Could it be that simple? What if someone has accounts outside of vanguard? What if vanguard suggest consolidating several accounts? That would potentially have costs associated with it.
For someone without children, this is a very important question.
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by dbr »

coffeeblack wrote: Mon Aug 30, 2021 3:52 pm
dbr wrote: Mon Aug 30, 2021 8:36 am
coffeeblack wrote: Mon Aug 30, 2021 8:22 am
tibbitts wrote: Sun Aug 29, 2021 10:03 pm
coffeeblack wrote: Sun Aug 29, 2021 9:44 pm There would have to be some advanced planning to pick the right funds. That way when the funds are transferred into one fund there wouldn't be much capital gains. The more that can be transferred in kind the better.

For example: VTSAX and VBTLX and VTIAX can be transferred into a balanced Vanguard fund. There shouldn't be much capital gains tax because the funds are very similar. The only difference would be the foreign bond percentage.
I don't understand your point about capital gains; they're determined by appreciation since each share was purchased. That doesn't have anything to do with transferring to a fund with similar holdings. So if someone had held funds for a while, there are likely to be large capital gains. You can't transfer three funds into one "in kind."

Also realistically any Vanguard fund (or any other fund) can be (and have sometimes in the past been) a moving target, so just because it's a fund you'd pick today, doesn't mean it will be the same fund tomorrow.
My understanding is when you transfer a fund to a similar fund the holding that are identical will be transferred in kind.

So if you transfer VTSAX to a balanced fund a percentage of it will not see capital gains tax because it can be transferred in kind. If I'm not understanding this correctly then my mistake.

The OP wanted his wife to pay Vanguard to manage his funds if he passed. So transferring could solve this issue.
You are certainly confused. There is no such thing as transferring a fund into a different fund. You transfer funds or a fund in an account to another account in kind and in that case funds in the original account are simply moved to the new account. There is such a thing as exchanging a fund for a different fund but that acts as a sell and a buy. It is also possible to exchange a Vanguard mutual fund for its ETF share class and that has no tax consequences. They do not exchange ETFs back to the fund.
One thing. The OP's question and one that I have had is what happens if one or both people are unable to manage their investments? In this case he was asking about turning over his accounts to a PAS at Vanguard. Could it be that simple? What if someone has accounts outside of vanguard? What if vanguard suggest consolidating several accounts? That would potentially have costs associated with it.
For someone without children, this is a very important question.
This is a whole different realm of questions. When people become unable to manage their affairs there needs to be a person with power of attorney or even a person who is a custodian. Vanguard does not do those things. It could be specific assets, investments, would be placed in a trust and Vanguard could be appointed as a trustee. But even that has nothing to do with VPAS.

A person concerned with these things needs to consult at attorney, particularly one working in wills and estates and/or possibly specializing in elder law issues. An investment company is not the place to go to manage those things.

I am not sure exactly what goes on at VPAS for assets that are not at Vanguard. I am sure they do not actually manage those assets, but I have never been able to figure out to what degree they advise how the investor should manage those assets. Of course I do not have accounts at Vanguard or use VPAS.
coffeeblack
Posts: 770
Joined: Wed Jun 19, 2019 10:20 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by coffeeblack »

dbr wrote: Mon Aug 30, 2021 5:20 pm
coffeeblack wrote: Mon Aug 30, 2021 3:52 pm
dbr wrote: Mon Aug 30, 2021 8:36 am
coffeeblack wrote: Mon Aug 30, 2021 8:22 am
tibbitts wrote: Sun Aug 29, 2021 10:03 pm
I don't understand your point about capital gains; they're determined by appreciation since each share was purchased. That doesn't have anything to do with transferring to a fund with similar holdings. So if someone had held funds for a while, there are likely to be large capital gains. You can't transfer three funds into one "in kind."

Also realistically any Vanguard fund (or any other fund) can be (and have sometimes in the past been) a moving target, so just because it's a fund you'd pick today, doesn't mean it will be the same fund tomorrow.
My understanding is when you transfer a fund to a similar fund the holding that are identical will be transferred in kind.

So if you transfer VTSAX to a balanced fund a percentage of it will not see capital gains tax because it can be transferred in kind. If I'm not understanding this correctly then my mistake.

The OP wanted his wife to pay Vanguard to manage his funds if he passed. So transferring could solve this issue.
You are certainly confused. There is no such thing as transferring a fund into a different fund. You transfer funds or a fund in an account to another account in kind and in that case funds in the original account are simply moved to the new account. There is such a thing as exchanging a fund for a different fund but that acts as a sell and a buy. It is also possible to exchange a Vanguard mutual fund for its ETF share class and that has no tax consequences. They do not exchange ETFs back to the fund.
One thing. The OP's question and one that I have had is what happens if one or both people are unable to manage their investments? In this case he was asking about turning over his accounts to a PAS at Vanguard. Could it be that simple? What if someone has accounts outside of vanguard? What if vanguard suggest consolidating several accounts? That would potentially have costs associated with it.
For someone without children, this is a very important question.
This is a whole different realm of questions. When people become unable to manage their affairs there needs to be a person with power of attorney or even a person who is a custodian. Vanguard does not do those things. It could be specific assets, investments, would be placed in a trust and Vanguard could be appointed as a trustee. But even that has nothing to do with VPAS.

A person concerned with these things needs to consult at attorney, particularly one working in wills and estates and/or possibly specializing in elder law issues. An investment company is not the place to go to manage those things.

I am not sure exactly what goes on at VPAS for assets that are not at Vanguard. I am sure they do not actually manage those assets, but I have never been able to figure out to what degree they advise how the investor should manage those assets. Of course I do not have accounts at Vanguard or use VPAS.
I agree but if one person passes and the other does not know how or is not and has never been interested in managing investments, then someone capable has to do it. Vanguard would be one such service. The trust will not address this situation. I suppose an attorney can help write something in the trust that states vanguard should take over. However, if the living spouse is unable due to lack of knowledge or unwilling, then a will and trust can't really address this issue. Once the living spouse unable due to health issues then the will and trust can address that issue. So you will need to address both situations. The trust and will is relatively easy. The other can get complicated.
afan
Posts: 8195
Joined: Sun Jul 25, 2010 4:01 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by afan »

If the assets were already in trust with Vanguard as trustee when the person who was managing them becomes incapable of continuing, Vanguard would remain the trustee. That would not be a problem.

If the assets were in a revocable living trust but an individual had been managing the investments themselves, then someone would need to take over as trustee. If one had already arranged for Vanguard to be the successor trustee, then they could step in. If assets were held outside of Vanguard, I don't know whether Vanguard would have responsibility for collecting them, even if they were in a revocable trust. I doubt it.

If the person who was managing the assets died and a trust was established in the will, then the executor would have to transfer assets into Vanguard. If the beneficiary, say the surviving spouse, also was not competent to manage their affairs, then there would need to be a trustee. Again, it could be Vanguard, but the executor would have to deliver the assets to Vanguard.

If the surviving beneficiary is competent to manage their affairs, but does not have the knowledge or inclination to manage the investments, then VPAS could be a solution.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
Paddygirl
Posts: 95
Joined: Fri Mar 09, 2018 6:09 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Paddygirl »

I have been with PAS for about 5+ years. Our situation is that we both retired and then my spouse started to do some consulting work. We are not drawing down on our IRA yet. Our PAS has made some suggestions that confirmed our beliefs on how to hold our funds, helped us to convert to ETFs, set up a 60/40 investment plan, and is there to consult with if we require help. We meet quarterly by telephone. We have had 4 different advisors over the past 5 years which was a little unsettling, yet each one of them was extremely knowledgeable, pleasant, and efficient. They rebalanced our portfolio and let us know about it. I don't know if there is anything better for us than knowing someone has our backs for 0.3% and the comfort of knowing we can get answers to questions if need be. It works for us.
coffeeblack
Posts: 770
Joined: Wed Jun 19, 2019 10:20 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by coffeeblack »

afan wrote: Tue Aug 31, 2021 9:53 am If the assets were already in trust with Vanguard as trustee when the person who was managing them becomes incapable of continuing, Vanguard would remain the trustee. That would not be a problem.

If the assets were in a revocable living trust but an individual had been managing the investments themselves, then someone would need to take over as trustee. If one had already arranged for Vanguard to be the successor trustee, then they could step in. If assets were held outside of Vanguard, I don't know whether Vanguard would have responsibility for collecting them, even if they were in a revocable trust. I doubt it.

If the person who was managing the assets died and a trust was established in the will, then the executor would have to transfer assets into Vanguard. If the beneficiary, say the surviving spouse, also was not competent to manage their affairs, then there would need to be a trustee. Again, it could be Vanguard, but the executor would have to deliver the assets to Vanguard.

If the surviving beneficiary is competent to manage their affairs, but does not have the knowledge or inclination to manage the investments, then VPAS could be a solution.
So a person could do both. They could put vanguard as the trustee in the revocable trust in the event both or one of the beneficiaries were unable (due to health reasons) to manage the funds and they could say if one spouse passes and the other can't mange or is unable to manage then vanguard can be the trustee.
friar1610
Posts: 2331
Joined: Sat Nov 29, 2008 8:52 pm
Location: MA South Shore

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by friar1610 »

dbr wrote: Mon Aug 30, 2021 5:20 pm
I am not sure exactly what goes on at VPAS for assets that are not at Vanguard. I am sure they do not actually manage those assets, but I have never been able to figure out to what degree they advise how the investor should manage those assets. Of course I do not have accounts at Vanguard or use VPAS.
As I mentioned upthread (back when this thread was started) my impression is they don’t do much or anything at all. From my earlier post:
My main issue is that PAS deals only with Vanguard assets. I have a big chunk of I-Bonds, a direct CD ladder and an unannuitized deferred annuity in addition to several VG accounts. (VG assets are the majority of my holdings.) I don’t necessarily want to liquidate those holdings and turn them over to VG to place in their funds. But I do want my assets to be viewed comprehensively with recommendations covering all my assets as a cohesive whole. VG told me they couldn’t manage those non-VG assets (which I totally understand) but they would consider those assets when making recommendations for the VG assets. But when they produced the plan/recommendations, I never saw any indication that they had done so. (We had discussed the fact that I would like to shoot for a 50/50 overall allocation. They gave me that in VG funds. But the I-Bonds and CDs (which they’d said they would consider) brought the overall allocation to more like 35/65. And they didn’t have a good answer how they’d “considered” the non-VG stuff.
I would love to hear from any BHs who use PAS and who have been satisfied that VG does in fact look at their whole financial picture while doing hands-on management only for the VG part. Any specific examples would be great.
Friar1610 | 50-ish/50-ish - a satisficer, not a maximizer
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by dbr »

friar1610 wrote: Tue Aug 31, 2021 12:28 pm
dbr wrote: Mon Aug 30, 2021 5:20 pm
I am not sure exactly what goes on at VPAS for assets that are not at Vanguard. I am sure they do not actually manage those assets, but I have never been able to figure out to what degree they advise how the investor should manage those assets. Of course I do not have accounts at Vanguard or use VPAS.
As I mentioned upthread (back when this thread was started) my impression is they don’t do much or anything at all. From my earlier post:
My main issue is that PAS deals only with Vanguard assets. I have a big chunk of I-Bonds, a direct CD ladder and an unannuitized deferred annuity in addition to several VG accounts. (VG assets are the majority of my holdings.) I don’t necessarily want to liquidate those holdings and turn them over to VG to place in their funds. But I do want my assets to be viewed comprehensively with recommendations covering all my assets as a cohesive whole. VG told me they couldn’t manage those non-VG assets (which I totally understand) but they would consider those assets when making recommendations for the VG assets. But when they produced the plan/recommendations, I never saw any indication that they had done so. (We had discussed the fact that I would like to shoot for a 50/50 overall allocation. They gave me that in VG funds. But the I-Bonds and CDs (which they’d said they would consider) brought the overall allocation to more like 35/65. And they didn’t have a good answer how they’d “considered” the non-VG stuff.
I would love to hear from any BHs who use PAS and who have been satisfied that VG does in fact look at their whole financial picture while doing hands-on management only for the VG part. Any specific examples would be great.
For the benefit of others this is helpful. I guess the contradiction between what they said and what they did is the essence of the problem.
stan1
Posts: 14246
Joined: Mon Oct 08, 2007 4:35 pm

Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by stan1 »

Paddygirl wrote: Tue Aug 31, 2021 10:36 am I have been with PAS for about 5+ years. Our situation is that we both retired and then my spouse started to do some consulting work. We are not drawing down on our IRA yet. Our PAS has made some suggestions that confirmed our beliefs on how to hold our funds, helped us to convert to ETFs, set up a 60/40 investment plan, and is there to consult with if we require help. We meet quarterly by telephone. We have had 4 different advisors over the past 5 years which was a little unsettling, yet each one of them was extremely knowledgeable, pleasant, and efficient. They rebalanced our portfolio and let us know about it. I don't know if there is anything better for us than knowing someone has our backs for 0.3% and the comfort of knowing we can get answers to questions if need be. It works for us.
You sound like the perfect client for PAS, and I suspect there are millions of retirees in the US just like you who would benefit from a similar relationship at a 0.3% fee.
Post Reply