Vanguard PAS vs. Schwab Intelligent Advisory service..

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Ykcor
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Joined: Mon Nov 26, 2018 7:42 am

Vanguard PAS vs. Schwab Intelligent Advisory service..

Post by Ykcor » Thu Jan 10, 2019 9:03 pm

Trying to decide. Both basically robo-advise with access to a personal financial advisor. Vanguard charges 0.3% with no cap whereas Schwab charges 0.28% with a $900 per quarter cap. To me it seems like a no-brainer.

afan
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Re: Vanguard PAS vs. Schwab Intelligent Advisory service..

Post by afan » Fri Jan 11, 2019 10:18 am

It would be a no brainer if the fees were the only difference.

Schwab manages the portfolios the same way as it's free Intelligent Portfolio. It uses a large number of funds, most of which you don't need.

The expense ratios of the funds are ok overall, but the extraneous funds have fees higher than VTI.

Schwab forces you to keep a large cash allocation on which it pays low interest rates. The difference between this and keeping no cash in the managed account is effectively another cost, not included in the capped fee.

Schwab is up front about the fact that they do this to make a profit on the cash allocation.

You would have to look at the size of your portfolio is worth the cash drag. Depending on how much Schwab forced into cash you could be better off at Vanguard.

You need to look more closely at the two services to see which is the better fit for you.
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nedsaid
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Re: Vanguard PAS vs. Schwab Intelligent Advisory service..

Post by nedsaid » Fri Jan 11, 2019 10:27 am

Vanguard will offer a relatively simpler portfolio, maybe 4-6 funds or so. Schwab will offer a relatively complex portfolio with maybe 15 funds and ETFs. Either would be a good option though most here would opt for simplicity.
A fool and his money are good for business.

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Ykcor
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Joined: Mon Nov 26, 2018 7:42 am

Re: Vanguard PAS vs. Schwab Intelligent Advisory service..

Post by Ykcor » Fri Jan 11, 2019 6:03 pm

Vanguard seems to use index funds and Schwab uses ETFs. Any advantage to either.

livesoft
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Re: Vanguard PAS vs. Schwab Intelligent Advisory service..

Post by livesoft » Fri Jan 11, 2019 6:23 pm

ETFs are index funds -- they are just exchange traded.

There have been quite a number of posts on the forum with "I have too many ETFs [or stocks] because I followed a roboadvisor, how do I get out?" To my knowledge there have been no posts on the forum with "I have too few index funds, so how do I make it more complicated."
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