Using Vanguard’s advisors

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easyodie
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Using Vanguard’s advisors

Post by easyodie » Fri Dec 29, 2017 1:15 pm

Any thoughts or recommendations. Thinking about moving funds to a trust account and also getting
advice about T-IRA conversions to Roth IRA’S. Have you had good experience with Vanguard’s advisors ?

boyntonstu
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Re: Using Vanguard’s adivisors

Post by boyntonstu » Fri Dec 29, 2017 3:17 pm

Just had a conversation with them today.

They seem very professional.

I would like to see their results.

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Re: Using Vanguard’s adivisors

Post by Jimceezu » Fri Dec 29, 2017 3:21 pm

I've had very good success with my advisor. I started with a 1/3rd of my portfolio at .25%. I now have half of my portfolio and will put another 25% with them in the next year.

They follow Bogles advice of keeping fees low. My other advisor I was paying 1% and doing have the directing. I' may make more on teh private side but I'm also at higher risk levels.

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Re: Using Vanguard’s advisors

Post by abuss368 » Fri Dec 29, 2017 3:30 pm

Do they essentially recommend the Vanguard Four Fund Portfolio that includes Total Stock and Total International Stock as well as Total Bond and Total International bond?
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CABob
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Re: Using Vanguard’s advisors

Post by CABob » Fri Dec 29, 2017 3:44 pm

easyodie wrote:
Fri Dec 29, 2017 1:15 pm
Any thoughts or recommendations. Thinking about moving funds to a trust account and also getting
advice about T-IRA conversions to Roth IRA’S. Have you had good experience with Vanguard’s advisors ?
If you are considering whether to set up a trust I don't think the VG would be the ones to advise. If the trust already exists and you want to open an account in the name of the trust VG advisers could help but that would be a simple process.
The traditional to Roth conversion is typically done for tax considerations either current or future. Again I'm not sure VG would be the best source of advice.
Perhaps if you could describe in more detail the advice you would like to receive some will be more helpful and you may get the advice you need right here.
Bob

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Re: Using Vanguard’s advisors

Post by BigPrince » Fri Dec 29, 2017 3:44 pm

abuss368 wrote:
Fri Dec 29, 2017 3:30 pm
Do they essentially recommend the Vanguard Four Fund Portfolio that includes Total Stock and Total International Stock as well as Total Bond and Total International bond?
I can't imagine paying .3% just for that.

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Re: Using Vanguard’s advisors

Post by livesoft » Fri Dec 29, 2017 3:56 pm

Now here's a specific question for folks who use Vanguard PAS (although I think they don't participate much in bogleheads.org):

If you have a taxable account using Vanguard PAS, do they use Specific Identification for the Cost Basis Method for the funds in the taxable account? Or what Cost Basis Method do they use? Also, do they do (have they done) any tax-loss harvesting for you?
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Re: Using Vanguard’s advisors

Post by abuss368 » Fri Dec 29, 2017 4:31 pm

BigPrince wrote:
Fri Dec 29, 2017 3:44 pm
abuss368 wrote:
Fri Dec 29, 2017 3:30 pm
Do they essentially recommend the Vanguard Four Fund Portfolio that includes Total Stock and Total International Stock as well as Total Bond and Total International bond?
I can't imagine paying .3% just for that.
For some who don't understanding investing, spouses who may be afraid and need support, and so forth, I could understanding the need and value.
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drzzzzz
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Re: Using Vanguard’s advisors

Post by drzzzzz » Fri Dec 29, 2017 5:12 pm

livesoft wrote:
Fri Dec 29, 2017 3:56 pm
Now here's a specific question for folks who use Vanguard PAS (although I think they don't participate much in bogleheads.org):

If you have a taxable account using Vanguard PAS, do they use Specific Identification for the Cost Basis Method for the funds in the taxable account? Or what Cost Basis Method do they use? Also, do they do (have they done) any tax-loss harvesting for you?
I can easily answer that question since we used to use Vanguard PAS - they will only use average cost basis but have been talking about other methods as well (no other options have been implemented over the past 1.5 years during which we had nearly monthly, detailed, frustrating, and unproductive conversations about this issue). I even suggested that they look at their Vanguard white paper on tax loss harvesting and the need for specific ID to be able to do this. I couldn't understand how they would suggest that they could tax loss harvest when they weren't using specific ID and the same is true for rebalancing of accounts when they are doing this without looking at the cost basis of which shares they were selling to rebalance and thereby causing either potential gains or losses that might not be the best approach for the particular client. I spoke to our flagship rep, the Vanguard PAS advisor, as well as a few supervisors above the level of our Vanguard PAS advisor on conference calls and they ultimately refused to budge and use specific ID. Of course the topper was their last detailed memo to us that the conversations that we were having were specious and theoretical since there were few tax losses this year (a point that I wholeheartedly agree with this year, but maybe not in the future). We left Vanguard PAS after that (continue at Vanguard), but I found this aspect of their presumed services to be less than adequate - my take is that Vanguard does not want to consider any tax consequences when using PAS and will only tax-loss harvest if the entire position is at a loss - I obviously thought it was an important issue.

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Re: Using Vanguard’s advisors

Post by livesoft » Fri Dec 29, 2017 6:12 pm

^Thanks very much for the comment and all the gory extra detail, too. I'm flabbergasted by what you wrote.
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Re: Using Vanguard’s advisors

Post by drzzzzz » Fri Dec 29, 2017 7:18 pm

livesoft wrote:
Fri Dec 29, 2017 6:12 pm
^Thanks very much for the comment and all the gory extra detail, too. I'm flabbergasted by what you wrote.
From our conversations, my take is they don't want to provide tax advice since they are not accountants so they rigoroursly avoid recommendations related to taxable issues and by using a standardized cookie cutter approach to this issue for all of their accounts, they can avoid the possible litigation and unhappiness of "why didn't you do it this way" since that would have been more beneficial for me, the client. We even separated out old positions into self-managed accounts to segregate positions with large imbedded gains from newer positions to limit the impact of averaging, but it wasn't worth continuing to argue for what they should do, when they weren't interested in helping me out in the process or changing their approach. So their loss, we are saving the management fee on the account - I decided that after the allocation and percentages were set up, the only thing they were really offerring was rebalancing, but without looking at the tax implications and it's impact on us - they also wouldn't allow us to decide which mutual fund shares in our portfolio to use to rebalance since of course that goes right back to specific identification.

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Re: Using Vanguard’s advisors

Post by livesoft » Fri Dec 29, 2017 7:21 pm

It makes one wonder what is the point then of using them. Clearly, you found there was no point.
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Re: Using Vanguard’s advisors

Post by tibbitts » Fri Dec 29, 2017 7:30 pm

I'm really shocked about them only using average cost... unless it's for VG funds that are so old that that is all they have available.

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Re: Using Vanguard’s advisors

Post by Nthomas » Fri Dec 29, 2017 7:33 pm

livesoft wrote:
Fri Dec 29, 2017 7:21 pm
It makes one wonder what is the point then of using them. Clearly, you found there was no point.
According to their marketing it seems the benefits are:
1. low cost funds (most of us already use low cost VG funds or equivalent)
2. tax efficient asset placement (not rocket science)
3. tax efficient withdrawal in retirement (perhaps a bit added value but shouldn't be too hard to figure out)
4. The biggest one they seem to tout is serving as your "investing coach" when turbulence hits.

How an advisor adds value:
https://investor.vanguard.com/financial ... l-planning

As far as I can see, unless you need someone to talk you off the ledge when the market drops, the other benefits may not be worth 0.3 AUM. Just come to bogleheads and read "the market is crashing" thread when the next drop comes. I trust you guys to talk me down as well as an advisor would.

The one argument I can understand is the "spouse not comfortable" managing investments when I'm gone and don't want him/her to get taken advantage of by a salesperson.

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Re: Using Vanguard’s advisors

Post by drzzzzz » Fri Dec 29, 2017 7:33 pm

livesoft wrote:
Fri Dec 29, 2017 7:21 pm
It makes one wonder what is the point then of using them. Clearly, you found there was no point.
We had that conversation with the Vanguard PAS supervisors since that was their question as well, why did we start using them. For us, it was initially related to making the process easier for spouse since Vanguard PAS was cheaper than the spouse's previous advisor and allowed us to have multiple accounts all based at Vanguard, but ultimately we agreed that Vanguard was not paying any attention to our tax issues and only placing hurdles on using specific ID which was not in our best interests - so we walked. Now I just check the portfolio watcher regarding our percentages and after reviewing their white paper on rebalancing subscribe to the concept that rebalancing actually might have less of an effect than people think and probably shouldn't be done as often as people say. The last advisor would rebalance for the account being out of whack by as little as one or two percent every quarter - maybe to show he was doing something, but again when doing it over taxable and non-taxable accounts, there was no way he could understand how that would impact on our tax situation.

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Re: Using Vanguard’s advisors

Post by afan » Fri Dec 29, 2017 7:41 pm

I have not been a PAS client. I have tried to ask the Vanguard CFP about Roth conversions, but they said that this would be tax advice, which they do not do.
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Re: Using Vanguard’s advisors

Post by drzzzzz » Fri Dec 29, 2017 8:02 pm

tibbitts wrote:
Fri Dec 29, 2017 7:30 pm
I'm really shocked about them only using average cost... unless it's for VG funds that are so old that that is all they have available.
They were both covered and non-covered shares. By using average cost they don't have to worry about the nitty gritty detail about which shares to sell in a taxable account, but unfortunately that decision may adversely impact on the clients taxes - again Vanguard is very upfront in saying they are not tax accountants and would not give us specific advice on tax issues when using them. It's a huge company with a large number of clients and having to individualize for each of those clients regarding taxes is something that would be fairly complicated for them. When I brought up Roth conversions, the comment was that could be a useful strategy, but we don't provide specific types of recommendations - you should speak to your accountant, financial advisor, estate planner, etc.

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Re: Using Vanguard’s advisors

Post by Nthomas » Fri Dec 29, 2017 8:18 pm

drzzzzz wrote:
Fri Dec 29, 2017 8:02 pm
tibbitts wrote:
Fri Dec 29, 2017 7:30 pm
I'm really shocked about them only using average cost... unless it's for VG funds that are so old that that is all they have available.
They were both covered and non-covered shares. By using average cost they don't have to worry about the nitty gritty detail about which shares to sell in a taxable account, but unfortunately that decision may adversely impact on the clients taxes - again Vanguard is very upfront in saying they are not tax accountants and would not give us specific advice on tax issues when using them. It's a huge company with a large number of clients and having to individualize for each of those clients regarding taxes is something that would be fairly complicated for them. When I brought up Roth conversions, the comment was that could be a useful strategy, but we don't provide specific types of recommendations - you should speak to your accountant, financial advisor, estate planner, etc.
Wait...aren't they your "financial advisor"? Talk with your financial advisor?? I've never had a financial advisor but I figured that would be an integral part of their role, advising on things like Roth conversions. Sure, perhaps with the disclaimer "talk with your accountant" to confirm but to just side-step the conversation seems like not a lot of help. It's like Office Space..."so what is it exactly that you do here?".

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Re: Using Vanguard’s advisors

Post by Taylor Larimore » Fri Dec 29, 2017 8:32 pm

easyodie wrote:
Fri Dec 29, 2017 1:15 pm
Any thoughts or recommendations. Thinking about moving funds to a trust account and also getting
advice about T-IRA conversions to Roth IRA’S. Have you had good experience with Vanguard’s advisors ?
easyodie:

In my opinion, the biggest advantage of using PAS is for investors with a mish-mash of funds that need a simple professionally designed investment plan and want to transfer to Vanguard in a tax-efficient manner. This is easily worth 0.3% for a year.

After the transfer, if the investor thinks they can maintain the plan themselves, they can drop PAS. An important secondary advantage of PAS is for investors who are worried that caregivers and heirs will be unable to manage the portfolio.

Best wishes.
Taylor
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Re: Using Vanguard’s advisors

Post by lostdog » Fri Dec 29, 2017 10:04 pm

It's in our IPS that if I pass away or lose my mind, my wife is to contact Vanguard PAS and have them take over the portfolio.
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Re: Using Vanguard’s advisors

Post by jhfenton » Fri Dec 29, 2017 11:01 pm

livesoft wrote:
Fri Dec 29, 2017 6:12 pm
^Thanks very much for the comment and all the gory extra detail, too. I'm flabbergasted by what you wrote.
I am too. To my mind, you can't competently and ethically provide financial advisory services without explaining and managing basic tax issues like TLHing, the deductibility of $3,000 of capital losses against ordinary income, avoiding wash sales, explaining the basic concept of and executing of Roth IRA conversions (with the calculation of the exact amount to be converted deferred to an accountant), tax-sensitive rebalancing, etc.

The fact that not only does PAS not do any of that, they actively prevent you from using Spec ID, is indeed flabbergasting.

I will not be encouraging anyone to use PAS.

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fear/greed
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Re: Using Vanguard’s advisors

Post by fear/greed » Sat Dec 30, 2017 8:30 pm

I've been in Vanguard's PAS program for about two years. They got me invested (in a four-fund portfolio at an asset allocation that was determined after I completed a risk tolerance quiz) when I knew nothing other than that I needed to get a large sum invested asap and didn't want to wait till I understood all of the various aspects of investing (I truly knew nothing). I am very glad that I did it, but now that the things that bother me about the program (some of which were mentioned upthread) outweigh what I first needed from it, I'm going to leave it. They check the account four times a year and rebalance if the asset allocation is more than 5% off, and they lock in the asset allocation so that it's difficult to change (perhaps as a deterrent to selling in fear in a market collapse). I have gorged on bogleheads since I first found it a few years ago and now believe myself capable of rebalancing, and I also believe I've inoculated myself against fear-selling by reading so many posts that explain how awful the slide down really is. So those are things I think I can handle now, and with further reading at bogleheads perhaps I can do even more (like tax-loss harvesting, when the time comes). Livesoft's thread on how to use Portfolio Watch took rebalancing from theoretical to actually possible for me, and after reading it I was excited to add my info and see what my numbers looked like.

But if a friend were to ask me about using PAS, I would still recommend it as a starting place, or as good for someone who doesn't want to think about their investments - at least you know you're in low-cost funds at a reasonable price (compared to industry rates) with fiduciaries. Were I to stay in the program, I would consider their bare-bones approach to be good enough.

As far as getting advice from them about conversions from traditional IRAs to Roths, there's information available for free on their website about it.

And as to the advisors themselves, they're as varied as humans are, in personality and ability to communicate their knowledge.

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Re: Using Vanguard’s advisors

Post by CABob » Sat Dec 30, 2017 11:08 pm

fear/greed wrote:
Sat Dec 30, 2017 8:30 pm
They check the account four times a year and rebalance if the asset allocation is more than 5% off, and they lock in the asset allocation so that it's difficult to change (perhaps as a deterrent to selling in fear in a market collapse).
How do they do that?
Bob

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Re: Using Vanguard’s advisors

Post by drzzzzz » Sun Dec 31, 2017 8:20 am

CABob wrote:
Sat Dec 30, 2017 11:08 pm
fear/greed wrote:
Sat Dec 30, 2017 8:30 pm
They check the account four times a year and rebalance if the asset allocation is more than 5% off, and they lock in the asset allocation so that it's difficult to change (perhaps as a deterrent to selling in fear in a market collapse).
How do they do that?
I think that is an incorrect characterization - what their brochure says is that they rebalance quarterly as needed using a 5% threshold - the asset allocation is decided by you and your advisor and can be changed at anytime with discussion with them based upon your situtation and your objectives. What they don't allow you to do, however, is to go into your account and buy or sell mutual funds based upon your "feelings" that day which should avoid panicked sell or buying shares that change your asset allocation (the goal is to maintain the asset allocation that you have agreed to within a small percentage to lessen your risk). If you need to sell shares on a monthly basis they set up a money market account for you to sell from, similarly if new money is being added to the account, it goes to investments that maintain the agreed upon asset allocation.

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Re: Using Vanguard’s advisors

Post by fourwheelcycle » Sun Dec 31, 2017 10:45 am

livesoft wrote:
Fri Dec 29, 2017 7:21 pm
It makes one wonder what is the point then of using them.
I agree that Vanguard's PAS is probably not the right match for anyone who is very knowledgable and concerned about personal investment management. I think Vangaurd's PAS is a better match for someone who recognizes they are not experienced in personal investment management, or who prefers not to spend time managing their investments, and chooses Vanguard's PAS to at least earn the .70% or more cost difference between PAS vs. a 1% fee advisor who will probably not use a low ER index fund portfolio.

In my case, there is a chance I will no longer be competent to manage our money when I get to my eighties. We have always had our taxable savings at Vanguard. As we have retired I have moved our employer-based savings to Vanguard as well so that it will all be in one place, mostly in a simple two-fund portfolio, if my wife ever has to manage our finances on her own. If that time comes I think Vanguard's PAS might be a good choice for us (her choice by that time, of course). I realize Vanguard's PAS would move our savings to at least a three or four fund portfolio.

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Re: Using Vanguard’s advisors

Post by smectym » Sun Dec 31, 2017 11:16 am

We use PAS for a portion of assets at Vanguard, for the reason others cite above: I am interested in investing and by now somewhat knowledgeable, while my spouse has no interest and would want a reliable advisor to take over should I fall by the wayside.

Having said that, talking with the advisor at Vanguard has provided the impetus to reorganize our entire portfolio (which includes non-managed assets at Vanguard as well as assets elsewhere) according to basic principles I “knew all about” but had nevertheless been somewhat sloppy about implementing—such as emphasizing bonds in tax-advantaged accounts and stocks in taxable.

It’s been worth it for us. We also use other robo advisors such as Schwab IP. Generally, moving in that direction. My “self managed” results are competitive, but how I manage is increasingly informed by what I’m learning from the robos and the hybrid services such as PAS.

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Re: Using Vanguard’s advisors

Post by GmanJeff » Sun Dec 31, 2017 11:34 am

I recently posted the following in a different thread; it seems pertinent here, too:

"With regard to PAS, here are a few reasons to consider it:

1) It can provide you with an asset allocation model which conforms to Vanguard's principles and your specific risk tolerance, rather than you devising such a portfolio on your own. If the PAS model is even only slightly superior to one you create, the difference in returns may pay for the service.
2) The portfolio will be managed with tax efficiency in mind, potentially increasing your returns.
3) The portfolio will be evaluated for potential rebalancing quarterly, which is something you may or may not be sufficiently disciplined to do yourself.
4) You have access to a dedicated CFP to address any questions you may have and who will provide you with a financial plan, one which is typically updated annually.
5) If you are the portfolio manager and something happens to you, your spouse need not be concerned with taking over responsibility for managing the portfolio or for placing it under management somewhere - you'll have seamless continuity of management during any period of incapacity.
6) Probably not a concern at present, but as you age and your cognitive abilities decline, your interest in and ability to actively manage your portfolio may also decline, at first perhaps without you even realizing it. Inattentiveness or imprudent decisions associated with cognitive decline may undermine all your prior good work managing on your own, before you or anyone else realizes what is occurring and can take remedial action by having someone else take over. Since we can't know in advance when we'll become unable to manage things optimally, and because we may not even recognize when that is happening, placing your portfolio under management now sidesteps the potential for a future where your portfolio may be less well independently monitored and managed by you.

You may be able to prudently save the PAS fee by going it alone, but if any of the foregoing resonate, you may find the relatively modest cost of PAS to be worthwhile."

I'm not sure how typical my PAS portfolio is, but it consists of 6 funds selected by PAS to meet my risk/reward objectives, and two additional Vanguard funds which have not yet been converted to funds PAS would ordinarily recommend, because their sale would generate material capital gains. So in my case, the PAS portfolio is somewhat more involved that the 2, 3 or 4-fund structure some adopt.

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Re: Using Vanguard’s advisors

Post by Ginger » Sun Dec 31, 2017 1:04 pm

Are the Vanguard Financial Advisors outsourced? Are these people based in the U.S. or some place else? Are they U.S. citizens or are they on work visas if in this country? I have issues with allowing my investments to be managed by foreign personnel.

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Re: Using Vanguard’s advisors

Post by LadyGeek » Sun Dec 31, 2017 1:49 pm

This thread is now in the Personal Finance (Not Investing) forum (advisor).

Be sure you understand the difference between an Investment adviser and Financial planner

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Re: Using Vanguard’s advisors

Post by fear/greed » Sun Dec 31, 2017 1:52 pm

drzzzzz wrote:
Sun Dec 31, 2017 8:20 am
CABob wrote:
Sat Dec 30, 2017 11:08 pm
fear/greed wrote:
Sat Dec 30, 2017 8:30 pm
They check the account four times a year and rebalance if the asset allocation is more than 5% off, and they lock in the asset allocation so that it's difficult to change (perhaps as a deterrent to selling in fear in a market collapse).
How do they do that?
I think that is an incorrect characterization - what their brochure says is that they rebalance quarterly as needed using a 5% threshold - the asset allocation is decided by you and your advisor and can be changed at anytime with discussion with them based upon your situtation and your objectives. What they don't allow you to do, however, is to go into your account and buy or sell mutual funds based upon your "feelings" that day which should avoid panicked sell or buying shares that change your asset allocation (the goal is to maintain the asset allocation that you have agreed to within a small percentage to lessen your risk). If you need to sell shares on a monthly basis they set up a money market account for you to sell from, similarly if new money is being added to the account, it goes to investments that maintain the agreed upon asset allocation.
Apologies for not explaining myself well. Two of my experiences regarding PAS and asset allocation:

1. At some point, I decided I wanted to change my asset allocation. After a conversation with an advisor, they did change it - so yes, what you said about that is what my experience was.

2. When I wanted to move other assets to Vanguard, the order in which I was moving the money meant that, for a month or so, my asset allocation in my Vanguard account would be off from what I'd chosen, but would then be "corrected" by the other account I was moving over. I guess I expected an "OK, that's fine," but instead I got a lecture on "how PAS works." I asked the advisor why he couldn't temporarily override my AA while these transfers took place (no panic-selling or wild deviations here). He said he could do a one-time override of my AA, but that when the next quarter-end was reached, if the other accounts hadn't migrated over yet, they'd rebalance with what was already in my account at that moment. But he shied away from doing the override and ultimately didn't do it. This is where I felt that The Machine was in charge and I was locked in, and it was maddening. (I've found PAS to be a curious mix of human and automation - some things I thought would be automatic are handled by humans, and vice versa.)

Still, for someone who can't or doesn't want to think about investing but who wants to be invested, PAS seems like one of the few sane choices, currently - with a fee of only .3% of assets under management and the lowest expense ratios in the industry, the advisors are CFPs and fiduciaries, and it's backed by, well, a machine that is a safeguard against rogue advisors and human frailties.

Just my thoughts so far on my experiences.

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Re: Using Vanguard’s advisors

Post by BigPrince » Sun Dec 31, 2017 2:04 pm

Ginger wrote:
Sun Dec 31, 2017 1:04 pm
Are the Vanguard Financial Advisors outsourced? Are these people based in the U.S. or some place else? Are they U.S. citizens or are they on work visas if in this country? I have issues with allowing my investments to be managed by foreign personnel.
Anyone who works a front facing job at Vanguard as a permanent employee (as with any Broker/Deal) in the USA under goes a criminal background and credit check in compliance with FINRA requirements and Vanguard also conducts a pre-employment drug test.

I don't think Citizenship is a FINRA requirement but Vanguard typically lists their job descriptions as "Visa Sponsorship is not available for this position."

Vanguard has offices in a few major cities around the world, but if you call their US number then you will be getting a US based crew member from either PA, NC, or AZ.

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Re: Using Vanguard’s advisors

Post by pyld76 » Sun Dec 31, 2017 11:45 pm

So, the “we don’t do tax advice” stuff is a problem. I intended to have DW go to PAS if I’m hit by a bus. I suppose now I’ll have to seek a local RIA of decent repute as the fallback plan, assuming such a person exists.

I think the AA and “not letting you harm yourself in a downtown”stuff might be worth 30bps, but for anyone with any sizeabke taxable assets “tax advice” matters. A lot. Perhaps even the 70bps which separate them from a more typical RIA fee.

For folks who can parse BH and the wiki this is moot. But I really wanted to use PAS as the fallback so DW isn’t taken advantage of after my demise. I’ll either have to find a full service advisor or an accountant to match with PAS...

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Re: Using Vanguard’s advisors

Post by hale2 » Mon Jan 01, 2018 12:05 pm

Probably cheaper and better individual advice to go with a fee only planner that charges by the hour or project. You'll end up getting more than just a boilerplate asset allocation. If you feel you need additional help just pay the person for an annual review. I'm sure they'll be willing to help you TLH and other things that Vanguard considers "tax advice".

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PAS Tax advice?

Post by Taylor Larimore » Mon Jan 01, 2018 2:10 pm

Bogleheads:

Vanguard advisors DO give tax-advice as stated on their website:

https://investor.vanguard.com/financial ... l-planning

Of course, they don't attempt to give tax-advice with complicated portfolios. No responsible advisor does. That is the job of a qualified tax-accountant.

Happy New Year!
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: PAS Tax advice?

Post by drzzzzz » Mon Jan 01, 2018 2:22 pm

Taylor Larimore wrote:
Mon Jan 01, 2018 2:10 pm
Bogleheads:

Vanguard advisors DO give tax-advice as stated on their website:

https://investor.vanguard.com/financial ... l-planning

Of course, they don't attempt to give tax-advice with complicated portfolios. No responsible advisor does. That is the job of a qualified tax-accountant.

Happy New Year!
Taylor
If you read closely what is written on their web-site it is carefully worded to say the following - Minimizing your taxes
The less you pay in taxes, the more money you keep. According to our research, an advisor can help minimize an investor's tax burden in two ways: first, by efficiently allocating assets between taxable and tax-advantaged accounts; and second, when the time comes to withdraw money, such as for retirement, by developing a tax-smart distribution plan.

The type of tax advice that was asked about initially was average cost or specific ID and tax loss harvesting. It was our experience that as of a few months back, they were not responsive on those issues. Also if you look at their newest PDF from Vanguard advisory services it mentions either nothing or minimal regarding tax loss harvesting. I do think they are very efficient in allocating assest between taxable and tax-advantage accounts, but I don't understand how, if they are going to rebalance, you can do that without specific identification and knowing cost basis in taxable accounts since you need to sell shares to rebalance - there are tax efficient ways to do that, but unless I am missing something just using average cost doesn't get you to that point.

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Re: Using Vanguard’s advisors

Post by tfb » Mon Jan 01, 2018 3:41 pm

pyld76 wrote:
Sun Dec 31, 2017 11:45 pm
I think the AA and “not letting you harm yourself in a downtown”stuff might be worth 30bps, but for anyone with any sizeabke taxable assets “tax advice” matters. A lot. Perhaps even the 70bps which separate them from a more typical RIA fee.
Worth and how much you should pay are not the same. Eating is worth a lot (otherwise you starve) but you don't have to pay nearly as much for your meals. See below.
hale2 wrote:
Mon Jan 01, 2018 12:05 pm
Probably cheaper and better individual advice to go with a fee only planner that charges by the hour or project. You'll end up getting more than just a boilerplate asset allocation. If you feel you need additional help just pay the person for an annual review. I'm sure they'll be willing to help you TLH and other things that Vanguard considers "tax advice".
Harry Sit, taking a break from the forums.

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Re: Using Vanguard’s advisors

Post by livesoft » Mon Jan 01, 2018 3:47 pm

I only looked casually today, but the bogleheads' wiki does not seem to have a good page on "How to Select the Right Financial Advisor (or Not)" that would be quite helpful.

Now I know that tfb does have a service to help folks with this, so may I ask tfb if that is actually working out from client testimonials? Have you written up your experiences making recommendations for clients that want that? Can you link an article of yours on that? Thanks! (If you feel it inappropriate to respond in the thread, I would still enjoy a pm then.)
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Re: Using Vanguard’s advisors

Post by virginiabirdie » Mon Jan 01, 2018 5:07 pm

We've cycled through three advisers. The first one seemed very distracted, or possibly just not great with on-the-fly math. Regardless, it wasn't confidence inspiring. Our second adviser was more numbers oriented. However, he got promoted, so we got a new adviser.

The last two advisers were perfectly serviceable. Their main job is to evaluate you on risk, then do your asset allocation. At their level, it's plug and play, not art. They clearly have some sort of model that they want you to stick with. Tweaking is discouraged. That's fine with me, as life is complicated enough, and I'm just not that big of a fish.

However, having come from a 1% full-service background, I also look at my CFA to help me talk through other life decision: estate planning, taxes, how much house I can afford, etc. The Vanguard professionals were not helpful here. Even when I came up with the numbers myself and walked them through it, they didn't seem at all interested in offering any opinions. I found that frustrating.

I cancelled my service, as I think I can do the asset allocation myself.

That said, if you have a complicated legacy portfolio -- I had 60 funds -- and need someone to get you streamlined, then consider signing up with them, getting things cleaned up, then cancelling if you don't have a need for them. It's a very affordable service that you can cancel any time.

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Re: Using Vanguard’s advisors

Post by afan » Mon Jan 01, 2018 8:21 pm

Deleted
Last edited by afan on Mon Jan 01, 2018 8:24 pm, edited 1 time in total.
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Re: Using Vanguard’s advisors

Post by afan » Mon Jan 01, 2018 8:21 pm

virginiabirdie wrote:
Mon Jan 01, 2018 5:07 pm


However, having come from a 1% full-service background, I also look at my CFA to help me talk through other life decision: estate planning, taxes, how much house I can afford, etc. The Vanguard professionals were not helpful here. Even when I came up with the numbers myself and walked them through it, they didn't seem at all interested in offering any opinions. I found that frustrating.

I never signed up with PAS but I have tried to use the "ask a CFP" service. As best I can tell, it is the same CFPs who work with PAS clients.

I have tried them several times and always had the same experience: they had nothing useful to say. I did not get so much an impression that they were not interested as that they were not knowledgeable. A question about disability insurance got the telephone equivalent of a blank look. I thought they might know the age -specifuc risks of going on long term disability, which would have been relevant. They did not know, agreed it would be critical to making an informed decision "Anything else I can help you with?"

Useless for life insurance planning or shopping. Would not engage in a discussion of estate planning, again that was labeled as "tax advice". Same for Roth conversions.

They are not financial advisors, CFP designation notwithstanding. They provide investment advice only. It is good, standard 4 fund portfolio advice, but there is nothing else. Once you believe you are not going to beat the market and accept the returns of cap weighted index funds they have nothing more to offer.

Those who need financial advice are better off hiring an "advice only" planner who charges by the hour or by the project. Someone who does not offer investment management as a service and does not sell products, insurance, mutual funds or anything other than advice.
Last edited by afan on Mon Jan 01, 2018 8:23 pm, edited 1 time in total.
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

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Re: Using Vanguard’s advisors

Post by tfb » Tue Jan 02, 2018 2:23 pm

livesoft wrote:
Mon Jan 01, 2018 3:47 pm
I only looked casually today, but the bogleheads' wiki does not seem to have a good page on "How to Select the Right Financial Advisor (or Not)" that would be quite helpful.

Now I know that tfb does have a service to help folks with this, so may I ask tfb if that is actually working out from client testimonials? Have you written up your experiences making recommendations for clients that want that? Can you link an article of yours on that? Thanks! (If you feel it inappropriate to respond in the thread, I would still enjoy a pm then.)
From what I can tell it's working. I give everyone three candidates. So far no one came back and said they didn't like all three. If that happens I'm ready to find replacement candidates for free or just give a full refund of my service fee. Just yesterday a client said he interviewed three candidates, liked two of them, and picked one. Last week another client said he went with one of the three candidates and he was satisfied.

The challenge is still with availability. Fewer advisors operate in this model. The candidates may be far away (Vanguard PAS is all by phone and Internet video anyway). These advisors are solo practitioners for the most part. Their capacity is limited. There can be a wait before the advisor can see a new client or start a new project. But I think if someone is a little flexible, working with an independent advisor is both less expensive and more comprehensive. I wrote a number of FAQs on how this works, including the latest on how it compares with Vanguard PAS. I will PM you the link.
Harry Sit, taking a break from the forums.

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Re: Using Vanguard’s advisors

Post by livesoft » Tue Jan 02, 2018 2:34 pm

@tfb, Thank you very much!
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Re: Using Vanguard’s advisors

Post by Taylor Larimore » Tue Jan 02, 2018 3:03 pm

I wrote a number of FAQs on how this works, including the latest on how it compares with Vanguard PAS. I will PM you the link.
tfb:

I hope you will post the link here.

Happy New Year!

Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Using Vanguard’s advisors

Post by Alexa9 » Tue Jan 02, 2018 3:05 pm

I find the main benefit of using Vanguard/Boglehead type strategy is that you don't need an advisor. Keep it simple. I suppose if you're running a small business you might use a fee only CFP and CPA, but the average investor has a fairly simple situation. I wouldn't feel comfortable with AUM fee advisors at Vanguard not that I doubt their qualifications. I prefer meeting someone in person for an hourly fee that is well reviewed in my city or perhaps over Skype/email if I lived in a small town. If someone like Larry Swedroe or Rick Ferri offered this, I'm sure people would be all over it.

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Re: Using Vanguard’s advisors

Post by tfb » Tue Jan 02, 2018 3:17 pm

Taylor Larimore wrote:
Tue Jan 02, 2018 3:03 pm
I wrote a number of FAQs on how this works, including the latest on how it compares with Vanguard PAS. I will PM you the link.
tfb:

I hope you will post the link here.

Happy New Year!

Taylor
Happy New Year to you too, Taylor! The FAQs: https://adviceonlyfinancial.com/sections/faqs
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Re: Using Vanguard’s advisors

Post by Taylor Larimore » Tue Jan 02, 2018 3:33 pm

Harry Sit:

Thank you for your quick link.

Please accept my personal wish for you and your family to enjoy a Happy New Year for all 12 months of 2018.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Using Vanguard’s advisors

Post by afan » Tue Jan 02, 2018 8:05 pm

Alexa9 wrote:
Tue Jan 02, 2018 3:05 pm
...I wouldn't feel comfortable with AUM fee advisors at Vanguard not that I doubt their qualifications. I prefer meeting someone in person for an hourly fee that is well reviewed in my city or perhaps over Skype/email if I lived in a small town. If someone like Larry Swedroe or Rick Ferri offered this, I'm sure people would be all over it.


Each to their own, but I don't get this. I have never met the people who run TSM but I have a large share of my money in there. Same for Muni bond funds and international
I have a bricks and mortar bank so I see the tellers a few times a year, but I have no idea who runs the bank. I buy my insurance online, never met anyone involved with running any of the companies. Why would I care whether I meet the person giving financial advice? I would be interested in the advice, not the advisor's haircut or earnest expression .

If I needed a financial planner I would expect not to meet them in person, even if they lived in my town. Online or telephone would be far more time efficient than an in person meeting.
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

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Re: Using Vanguard’s advisors

Post by Alexa9 » Tue Jan 02, 2018 8:31 pm

afan wrote:
Tue Jan 02, 2018 8:05 pm
Alexa9 wrote:
Tue Jan 02, 2018 3:05 pm
...I wouldn't feel comfortable with AUM fee advisors at Vanguard not that I doubt their qualifications. I prefer meeting someone in person for an hourly fee that is well reviewed in my city or perhaps over Skype/email if I lived in a small town. If someone like Larry Swedroe or Rick Ferri offered this, I'm sure people would be all over it.


Each to their own, but I don't get this. I have never met the people who run TSM but I have a large share of my money in there. Same for Muni bond funds and international
I have a bricks and mortar bank so I see the tellers a few times a year, but I have no idea who runs the bank. I buy my insurance online, never met anyone involved with running any of the companies. Why would I care whether I meet the person giving financial advice? I would be interested in the advice, not the advisor's haircut or earnest expression .

If I needed a financial planner I would expect not to meet them in person, even if they lived in my town. Online or telephone would be far more time efficient than an in person meeting.
I agree with you, but I just want someone that is an expert. Not an intern. I want the best person to give me advice that knows their stuff. I'm not sure that Vanguard's Ask A CFP is going to give you the best advice if you have a complicated question. I know several highly qualified and respected people in my city that I could ask that I would feel comfortable with giving them detailed information. I think On Demand financial planning will become more popular especially from big name advisors just like big name lawyers/doctors etc. Maybe Vanguard's advisors are great, I don't really know who they are though is my point.

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Re: Using Vanguard’s advisors

Post by WhyAmeriprise » Mon Jan 08, 2018 5:31 am

afan wrote:
Tue Jan 02, 2018 8:05 pm
I have a bricks and mortar bank so I see the tellers a few times a year, but I have no idea who runs the bank. I buy my insurance online, never met anyone involved with running any of the companies. Why would I care whether I meet the person giving financial advice? I would be interested in the advice, not the advisor's haircut or earnest expression .

If I needed a financial planner I would expect not to meet them in person, even if they lived in my town. Online or telephone would be far more time efficient than an in person meeting.
I always find it funny, a little odd, that the financial advisor that I was assigned wants to meet in person, suggesting that I should see their new office. I usually don't have time, but honestly don't care about the office, if visiting his office means paying his annual fee. I'd rather he focus his time on useful advice if I'm going to pay $750/year plus all of the other commissions and fees.

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Re: Using Vanguard’s advisors

Post by Klaxton » Mon Jan 08, 2018 9:45 am

Nthomas wrote:
Fri Dec 29, 2017 8:18 pm
drzzzzz wrote:
Fri Dec 29, 2017 8:02 pm
tibbitts wrote:
Fri Dec 29, 2017 7:30 pm
I'm really shocked about them only using average cost... unless it's for VG funds that are so old that that is all they have available.
They were both covered and non-covered shares. By using average cost they don't have to worry about the nitty gritty detail about which shares to sell in a taxable account, but unfortunately that decision may adversely impact on the clients taxes - again Vanguard is very upfront in saying they are not tax accountants and would not give us specific advice on tax issues when using them. It's a huge company with a large number of clients and having to individualize for each of those clients regarding taxes is something that would be fairly complicated for them. When I brought up Roth conversions, the comment was that could be a useful strategy, but we don't provide specific types of recommendations - you should speak to your accountant, financial advisor, estate planner, etc.
Wait...aren't they your "financial advisor"? Talk with your financial advisor?? I've never had a financial advisor but I figured that would be an integral part of their role, advising on things like Roth conversions. Sure, perhaps with the disclaimer "talk with your accountant" to confirm but to just side-step the conversation seems like not a lot of help. It's like Office Space..."so what is it exactly that you do here?".

https://www.youtube.com/watch?v=n3Sle_o1bcs
This is Exactly what I was thinking when I asked 'Which Advisor/" yesterday

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