Vanguard Personal Advisory Services Fees

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dave1054
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Vanguard Personal Advisory Services Fees

Post by dave1054 » Sat Jan 13, 2018 9:36 am

I am near retirement and have been fortunate to have a seven figure portfolio mostly of index funds and etf.
I want to pass these assets on to VPA Services but it seems their charges are outrageous at least in my situation.
There asset allocation is mostly computer driven so their costs are no different for a $50000 account or a $5,000,000
account. Yet they charge about 30 basis points for both. That's a lot of money for me per year.

I can continue to do on my own but my wife has zero interest in this and if I pass on, I wonder what she will do.

Is there any move afoot in Vanguard to reassess these fees? Any suggestions what I should do? Thank you.

livesoft
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Re: Vanguard Personal Advisory Services Fees

Post by livesoft » Sat Jan 13, 2018 9:42 am

dave1054 wrote:
Sat Jan 13, 2018 9:36 am
I can continue to do on my own but my wife has zero interest in this and if I pass on, I wonder what she will do.
I would ask her then what she will do.

I have seen where the surviving spouse didn't want to continue with the advisor that the deceased spouse had picked, so there's that, too. For instance, surviving spouse decides to use the Edward Jones advisor that her mother uses and shifts entire portfolio into variable annuities with huge surrender charges.
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dbr
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Re: Vanguard Personal Advisory Services Fees

Post by dbr » Sat Jan 13, 2018 10:01 am

You should consider that what your wife will do about financial management when you are not around involves far more than whatever VPAS does with those accounts. I would say it is time for a conversation with her about the whole thing.

I agree it is unlikely the services they do provide are worth it for a very large account. A possible alternative is that your wife will be robbed blind by someone else masquerading as an advisor. A possible fix for that is to find a son or daughter or other trusted individual to step in when you are gone. That route can also have its hazards. In the extreme setting up a trust could be indicated, but that is not less costly. Also, another means to manage assets is to get rid of the assets and replace them with an annuity so the survivor gets automatic income rather than investments to manage. None of this is a recommendation but rather food for thought.

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HueyLD
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Re: Vanguard Personal Advisory Services Fees

Post by HueyLD » Sat Jan 13, 2018 10:03 am

dave1054 wrote:
Sat Jan 13, 2018 9:36 am
I am near retirement and have been fortunate to have a seven figure portfolio mostly of index funds and etf.
I want to pass these assets on to VPA Services but it seems their charges are outrageous at least in my situation.
There asset allocation is mostly computer driven so their costs are no different for a $50000 account or a $5,000,000
account. Yet they charge about 30 basis points for both. That's a lot of money for me per year.

I can continue to do on my own but my wife has zero interest in this and if I pass on, I wonder what she will do.

Is there any move afoot in Vanguard to reassess these fees? Any suggestions what I should do? Thank you.
Do you have children?

Maybe you can recruit your adult children as your allies and train them to manage their parents' money.

Alternatively, you can set up various trusts to lock up the money for her benefit during her lifetime after you are gone. You will need to consult a qualified estate attorney for that.

Look, at your wealth level, you need to spend money for weath preservation given the fact that you may not be able to convince your wife to take a more active role in investment management.

A well thought out plan executed while you are alive and competent is much better than leaving her vulnerable to hungry salespeople who may become her favorite children nearby.

Don't be penny wise and pound foolish.

dbr
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Re: Vanguard Personal Advisory Services Fees

Post by dbr » Sat Jan 13, 2018 10:04 am

HueyLD wrote:
Sat Jan 13, 2018 10:03 am
dave1054 wrote:
Sat Jan 13, 2018 9:36 am
I am near retirement and have been fortunate to have a seven figure portfolio mostly of index funds and etf.
I want to pass these assets on to VPA Services but it seems their charges are outrageous at least in my situation.
There asset allocation is mostly computer driven so their costs are no different for a $50000 account or a $5,000,000
account. Yet they charge about 30 basis points for both. That's a lot of money for me per year.

I can continue to do on my own but my wife has zero interest in this and if I pass on, I wonder what she will do.

Is there any move afoot in Vanguard to reassess these fees? Any suggestions what I should do? Thank you.
Do you have children?

Maybe you can recruit your adult children as your allies and train them to manage their parents' money.

Alternatively, you can set up various trusts to lock up the money for her benefit during her lifetime after you are gone. You will need to consult a qualified estate attorney for that.

Look, at your wealth level, you need to spend money for weath preservation given the fact that you may not be able to convince your wife to take a more active role in investment management.

A well thought out plan executed while you are alive and competent is much better than leaving her vulnerable to hungry salespeople who may become her favorite children nearby.

Don't be penny wise and pound foolish.
Interesting our two replies are along the same lines.

jadedfalcons
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Re: Vanguard Personal Advisory Services Fees

Post by jadedfalcons » Sat Jan 13, 2018 10:04 am

I understand your issue, but I guess another way of thinking about it is whether that's a fair price for your peace of mind. I don't think you're going to find much out there in the way of cheaper options. As livesoft said, this is also a question for her. If she doesn't want to think about it, then one way of looking at it is if you're getting a 5.5% return on your money, they'd be taking $3k/yr per million that would be producing $55k, leaving her with $52k. That's a lot better than a 1% charge that would skim $10k off the top and leave her with $45k, per million.

In fact, in that hypothetical situation, we've just raised your after fees return by 15.5%! (does that make you feel better?)

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Toons
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Re: Vanguard Personal Advisory Services Fees

Post by Toons » Sat Jan 13, 2018 10:07 am

You say you are "near" retirement.
Give it some more thought.
No need for kneed jerk movements right now.
I agree ,a lot of money for a seven figure portfolio Of Index Funds.
Whats to manage.Take the dividends in cash.
:happy
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Nthomas
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Re: Vanguard Personal Advisory Services Fees

Post by Nthomas » Sat Jan 13, 2018 10:28 am

Agree with the idea of taking dividends as cash. Also, doesn't VG provide trust service that doesn't require VPAS? Perhaps that's an option ("trust for surviving spouse")

dbr
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Re: Vanguard Personal Advisory Services Fees

Post by dbr » Sat Jan 13, 2018 10:31 am

Nthomas wrote:
Sat Jan 13, 2018 10:28 am
Agree with the idea of taking dividends as cash. Also, doesn't VG provide trust service that doesn't require VPAS? Perhaps that's an option ("trust for surviving spouse")
Trust service would cost more than VPAS.

Nthomas
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Re: Vanguard Personal Advisory Services Fees

Post by Nthomas » Sat Jan 13, 2018 10:39 am

dbr wrote:
Sat Jan 13, 2018 10:31 am
Nthomas wrote:
Sat Jan 13, 2018 10:28 am
Agree with the idea of taking dividends as cash. Also, doesn't VG provide trust service that doesn't require VPAS? Perhaps that's an option ("trust for surviving spouse")
Trust service would cost more than VPAS.
Good to know, thanks.

Nthomas
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Re: Vanguard Personal Advisory Services Fees

Post by Nthomas » Sat Jan 13, 2018 11:03 am

dbr wrote:
Sat Jan 13, 2018 10:31 am
Nthomas wrote:
Sat Jan 13, 2018 10:28 am
Agree with the idea of taking dividends as cash. Also, doesn't VG provide trust service that doesn't require VPAS? Perhaps that's an option ("trust for surviving spouse")
Trust service would cost more than VPAS.
I didn't realize the trust required advisor services as well.

https://personal.vanguard.com/pdf/s341.pdf?2210071322

John Laurens
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Re: Vanguard Personal Advisory Services Fees

Post by John Laurens » Sat Jan 13, 2018 11:10 am

I believe VPAS overcharges for what they offer. Basically a LS Fund broken into smaller parts for 30 basis points.

That being said, My wife knows to call VPAS immediately upon my death and sign up. The alternatives to VPAS are much worse.

Regards,
John

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CABob
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Re: Vanguard Personal Advisory Services Fees

Post by CABob » Sat Jan 13, 2018 11:18 am

dave1054 wrote:
Sat Jan 13, 2018 9:36 am
Is there any move afoot in Vanguard to reassess these fees? Any suggestions what I should do? Thank you.
I doubt that than Vanguard will make a major change to fees in the near future. As time passes they will probably reevaluate and there may be some minor changes (but what do I know?)
I am retired and have the same concerns. What I have done to date is to change the majority of investments (an IRA) to a target date fund and set up automatic RMD. Hopefully this will tide DW over until she gets on board.
Bob

schachtw
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Re: Vanguard Personal Advisory Services Fees

Post by schachtw » Sat Jan 13, 2018 12:55 pm

John Laurens wrote:
Sat Jan 13, 2018 11:10 am
I believe VPAS overcharges for what they offer. Basically a LS Fund broken into smaller parts for 30 basis points.

That being said, My wife knows to call VPAS immediately upon my death and sign up. The alternatives to VPAS are much worse.

Regards,
John
+1 My wife has been instructed to do likewise.

BTW: if you use VG’s Trust Services, they will employ VPAS and the trust fee is an additional 0.20%. Making it a 0.50% proposition.

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Re: Vanguard Personal Advisory Services Fees

Post by 123 » Sat Jan 13, 2018 1:19 pm

An alternative to Vanguard PAS if you're not longer in the picture is to pick a set of Vanguard fund-of-funds (LifeStrategy, Balanced, etc) that automatically re-balance. If a single fund doesn't match your asset allocation you can pick a couple that achieve your desired result proportionately. While I don't see a need for international bonds they are in a LifeStrategy fund I've chosen because it's an otherwise desirable choice for me. As Taylor has told us don't let the search for a perfect plan prevent you from adopting a good plan. Life has compromises.
The closest helping hand is at the end of your own arm.

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Re: Vanguard Personal Advisory Services Fees

Post by drk » Sat Jan 13, 2018 1:52 pm

dave1054 wrote:
Sat Jan 13, 2018 9:36 am
I can continue to do on my own but my wife has zero interest in this and if I pass on, I wonder what she will do.
You should have this conversation with your wife.

sport
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Re: Vanguard Personal Advisory Services Fees

Post by sport » Sat Jan 13, 2018 3:29 pm

Does the percentage used for Vanguard fees decrease for larger portfolios? Is it 0.30% regardless of the portfolio size?

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1210sda
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Re: Vanguard Personal Advisory Services Fees

Post by 1210sda » Sat Jan 13, 2018 3:52 pm

Two points.

1. Schwab Intelligent Advisory has a 28bps fee per annum. The best part is that they "cap" the fees at $900 per quarter. If someone has a very large portfolio, they could benefit quit a bit from this. ($900 x 4 = $3,600 per year). If you have a portfolio of $3,600,000, the $3,600 would only be 10bps. (I'm hoping that Vanguard will follow Schwab's example) :D

2. A financially involved spouse may be concerned about the non-involved spouse's handling of the portfolio at his/her death. But, you also have to consider your own incapacity while you are still living. (as a surviving spouse or otherwise)

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dave1054
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Re: Vanguard Personal Advisory Services Fees

Post by dave1054 » Sat Jan 13, 2018 3:56 pm

My understanding that it is 0.3% regardless of portfolio size.

sport
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Re: Vanguard Personal Advisory Services Fees

Post by sport » Sat Jan 13, 2018 5:59 pm

dave1054 wrote:
Sat Jan 13, 2018 3:56 pm
My understanding that it is 0.3% regardless of portfolio size.
It would be interesting to know if anyone with a large portfolio tried to negotiate that fee and If they were successful.

schachtw
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Re: Vanguard Personal Advisory Services Fees

Post by schachtw » Sat Jan 13, 2018 6:03 pm

sport wrote:
Sat Jan 13, 2018 3:29 pm
Does the percentage used for Vanguard fees decrease for larger portfolios? Is it 0.30% regardless of the portfolio size?
The fees are stepped:

< 5 million is 0.30% per quarter.
>= 5 & < 10 million is 0.20% per quarter
Not sure of the rates beyond 10M

Bmac
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Re: Vanguard Personal Advisory Services Fees

Post by Bmac » Sat Jan 13, 2018 6:11 pm

To be fair, compared to many 401k fees, actively managed mutual fund ERs and the typical boutique financial management firm fees, 30 basis points is quite low. Likely worth the cost if it provides ease and peace of mind to your wife.

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Re: Vanguard Personal Advisory Services Fees

Post by dbr » Sat Jan 13, 2018 6:16 pm

Bmac wrote:
Sat Jan 13, 2018 6:11 pm
To be fair, compared to many 401k fees, actively managed mutual fund ERs and the typical boutique financial management firm fees, 30 basis points is quite low. Likely worth the cost if it provides ease and peace of mind to your wife.
I agree. The problem has the property of diminishing disadvantage and 0.3% is fairly well diminished. A purist would probably want to hack that cost away, but in the larger scheme it is not terrible.

alwayshedge
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Re: Vanguard Personal Advisory Services Fees

Post by alwayshedge » Sat Jan 13, 2018 6:28 pm

I pay for PAS not really for there service but more so because I am a tinkerer and PAS has prevented me from hurting my own self.

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Re: Vanguard Personal Advisory Services Fees

Post by Mel Lindauer » Sat Jan 13, 2018 8:00 pm

I'd recommend a single-fund portfolio of one of the Life Strategy funds or one of the Target Retirement funds with instructions to not change or do anything on your demise.

Vanguard will figure out any required minimum distributions at no cost and with only one fund, there's only one fund to take it from.

Doesn't get any simpler than that.
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Re: Vanguard Personal Advisory Services Fees

Post by Outafter20 » Sat Jan 13, 2018 9:04 pm

Mel Lindauer wrote:
Sat Jan 13, 2018 8:00 pm
I'd recommend a single-fund portfolio of one of the Life Strategy funds or one of the Target Retirement funds with instructions to not change or do anything on your demise.

Vanguard will figure out any required minimum distributions at no cost and with only one fund, there's only one fund to take it from.

Doesn't get any simpler than that.
+1

I plan on doing the same thing with my two tIRAs. One will have a Target Retirement Fund and the other most likely a LifeStrategy Fund (or the Vanguard Balanced Fund). Both IRAs are in the high six figures each and I know I will be paying 3bp more for the balanced fund and 7 bp more for one of the LifeStrategy and Target Retirement Funds, as opposed to using individual Admiral shares. If I should meet my maker before her, and I am comfortable with the asset allocation I set up, the couple of extra bp are worth it to me.

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Re: Vanguard Personal Advisory Services Fees

Post by Bmac » Sat Jan 13, 2018 10:05 pm

No question if everything is in tax-deferred (IRA) or tax-free (Roth) space a single Life-Strategy or similar fund would be the easiest/smartest/cheapest thing to do. If there is a significant taxable portion to the investments with large unrealized capital gains, then the management would be more onerous and perhaps better to use the Vanguard services.

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Re: Vanguard Personal Advisory Services Fees

Post by arcticpineapplecorp. » Sat Jan 13, 2018 10:16 pm

schachtw wrote:
Sat Jan 13, 2018 6:03 pm
sport wrote:
Sat Jan 13, 2018 3:29 pm
Does the percentage used for Vanguard fees decrease for larger portfolios? Is it 0.30% regardless of the portfolio size?
The fees are stepped:

< 5 million is 0.30% per quarter.
>= 5 & < 10 million is 0.20% per quarter
Not sure of the rates beyond 10M
.10% for 10Mil-25MIl
.05% for 25Mil+

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source: https://personal.vanguard.com/pdf/vpabroc.pdf
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Mel Lindauer
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Re: Vanguard Personal Advisory Services Fees

Post by Mel Lindauer » Sat Jan 13, 2018 10:31 pm

Bmac wrote:
Sat Jan 13, 2018 10:05 pm
No question if everything is in tax-deferred (IRA) or tax-free (Roth) space a single Life-Strategy or similar fund would be the easiest/smartest/cheapest thing to do. If there is a significant taxable portion to the investments with large unrealized capital gains, then the management would be more onerous and perhaps better to use the Vanguard services.
Not necessarily true. If one is using the income produced by the funds for current living expenses, then tax-efficiency isn't necessarily the primary concern (simplicity is). In that case, there's no reason why a LS or TR fund wouldn't suffice in one's taxable account as well.
Best Regards - Mel | | Semper Fi

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Re: Vanguard Personal Advisory Services Fees

Post by Bmac » Sat Jan 13, 2018 11:18 pm

I’m referring more to the issue of selling multiple funds with large unrealized gains in order to simplify to one Life-Strategy Fund.

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Re: Vanguard Personal Advisory Services Fees

Post by 1210sda » Sun Jan 14, 2018 8:21 am

Mel Lindauer wrote:
Sat Jan 13, 2018 10:31 pm
Bmac wrote:
Sat Jan 13, 2018 10:05 pm
No question if everything is in tax-deferred (IRA) or tax-free (Roth) space a single Life-Strategy or similar fund would be the easiest/smartest/cheapest thing to do. If there is a significant taxable portion to the investments with large unrealized capital gains, then the management would be more onerous and perhaps better to use the Vanguard services.
Not necessarily true. If one is using the income produced by the funds for current living expenses, then tax-efficiency isn't necessarily the primary concern (simplicity is). In that case, there's no reason why a LS or TR fund wouldn't suffice in one's taxable account as well.
Fully agree!

As to the issue of large unrealized capital gains, one consideration is to wait until the first death and take advantage of the stepped up basis.

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student
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Re: Vanguard Personal Advisory Services Fees

Post by student » Sun Jan 14, 2018 8:38 am

I agree with others who said to use a singe life strategy fund.

Dandy
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Re: Vanguard Personal Advisory Services Fees

Post by Dandy » Sun Jan 14, 2018 9:34 am

I believe some previous posts suggested that the recommended portfolios were somewhat or very close to some TD or LIfe Strategy Funds. That would make some sense since those funds are designed with Vanguard's approach to how people should invest for and in retirement.

You are unlikely to find them making a radically different, custom tailored investments using funds out of their mainstream.
So, you might want to look at their various balanced, Life Strategy and TD funds and go with one of them. Automatic re balancing, automatic distribution reinvestment, probably the ability to send monthly amounts to your checking account? Spouse/heirs may not have to pay much attention to this aspect of money management.

Vanguard also offers an Advantage Account (not promoted I have one and have to use their search box to find info on it.) a brokerage account that offers the ability to write drafts with no minimum, use an ATM/debit? card, bill payment (never used either), etc. There may not be a charge depending on your asset level with Vanguard. Money e.g. Divdends, Cap gains, RMDs etc can be sent to the clearing account automatically and your spouse can use it as a checking account. I believe Fidelity and Schwab offer these type of accounts but probably much better.

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Re: Vanguard Personal Advisory Services Fees

Post by lostdog » Sun Jan 14, 2018 9:44 am

John Laurens wrote:
Sat Jan 13, 2018 11:10 am
I believe VPAS overcharges for what they offer. Basically a LS Fund broken into smaller parts for 30 basis points.

That being said, My wife knows to call VPAS immediately upon my death and sign up. The alternatives to VPAS are much worse.

Regards,
John
+1

I instructed my wife to do the same. I also instructed her to stay away from annuity salesman, whole life policies, high cost brokers etc...

This is all listed on our IPS.
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fundseeker
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Re: Vanguard Personal Advisory Services Fees

Post by fundseeker » Sun Mar 18, 2018 7:43 am

I hope people who use the VG PAS realize how much it is costing them each month, AFTER the advisor has set them up in index funds and put their portfolio on auto pilot. After all, you are supposed to set it up and leave it alone for years! For example, with the following assets under management (AUM) at .3%:

$400,000 x .003 + $1,200. That's $100/month, and if you had to write someone a check each month for that, you'd probably cancel the service. But, each quarter they are taking $300 out of your account.

$500,000 x .003 = $1,500, or $125/month!

$1,000,000 x .003 = $3,000, or $250/month! Wow, do you really need to pay someone to be able to call them rarely?

$1,500,000 x .003 = $4,500 = $375/month! Think about that! How many other things could you do or buy with $375/month!

If you will pay me that money, I will take your calls and I will post your question on this site and then call you back with the answer. :)

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Re: Vanguard Personal Advisory Services Fees

Post by alrick » Sun Mar 18, 2018 7:56 am

I have talked with Vanguard advisors for years about going to a flat fee for service....and perhaps provide different bundles of services to meet the needs/desires of different investors........not unlike a fee only financial advisor. The advise sought or given is usually not a function of assets under management.

Response has to this suggestion/proposal has never been answered.

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Re: Vanguard Personal Advisory Services Fees

Post by Glamdring56 » Sun Mar 18, 2018 9:20 am

I keep my wife's $3 million with PAS. Our advisor, whom we only talk to annually by our choice, recently told us that "We are his least demanding clients". Since I have no need for this money for a decade or so, I just don't care to spend time talking about it.

I have another $4 million I could put in the PAS program but given how little we use/need the service we are already paying for, I find it much more cost effective to just "mimic" their allocations based on our PAS monies. I use Lifestyle funds in my iRA's.

I recently move $500k to Schwab and I find a lot of merit with the Intelligent advisor platforms. Each additional million I invest with Vanguard costs .2% and the additional effort and service incurred/offered by Vanguard is nearly 0%. Given Vanguards "high" incremental cost for each million I might add to PAS, I feel my assests are likely to begin a slow drift from Vanguard to Schwab

Get your act together Vanguard!

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Re: Vanguard Personal Advisory Services Fees

Post by fundseeker » Sun Mar 18, 2018 9:31 am

Glamdring56 wrote:
Sun Mar 18, 2018 9:20 am
I keep my wife's $3 million with PAS. Our advisor, whom we only talk to annually by our choice, recently told us that "We are his least demanding clients".
$3,000,000 x .003 = $90,000/year or $7,500/month.

So, is that a $90,000 conversation once each year?

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Re: Vanguard Personal Advisory Services Fees

Post by schachtw » Sun Mar 18, 2018 9:36 am

fundseeker wrote:
Sun Mar 18, 2018 9:31 am
Glamdring56 wrote:
Sun Mar 18, 2018 9:20 am
I keep my wife's $3 million with PAS. Our advisor, whom we only talk to annually by our choice, recently told us that "We are his least demanding clients".
$3,000,000 x .003 = $90,000/year or $7,500/month.

So, is that a $90,000 conversation once each year?

I believe you’re off by a factor of 10.
.30% of 3 million is 9K per year, not 90K

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Re: Vanguard Personal Advisory Services Fees

Post by ruralavalon » Sun Mar 18, 2018 11:15 am

dave1054 wrote:
Sat Jan 13, 2018 9:36 am
I am near retirement and have been fortunate to have a seven figure portfolio mostly of index funds and etf.
I want to pass these assets on to VPA Services but it seems their charges are outrageous at least in my situation.
There asset allocation is mostly computer driven so their costs are no different for a $50000 account or a $5,000,000
account. Yet they charge about 30 basis points for both. That's a lot of money for me per year.

I can continue to do on my own but my wife has zero interest in this and if I pass on, I wonder what she will do.

Is there any move afoot in Vanguard to reassess these fees? Any suggestions what I should do? Thank you.
My wife has no interest in investing, so I want to have the portfolio set up so that she needs no help.

My wife has my durable power of attorney, and full agent authorization on Vanguard's preferred form. I have a very simple one page Investment Policy Statement, and currently use just 4 funds.

81% of portfolio is in my rollover IRA, with Required Minimum Distributions set up for monthly payments (so there is regular monthly income in addition to Social Security), proportionally from each fund in the rollover IRA (so that the portfolio tends to keep itself on the desired asset allocation).

I plan to transition to a simpler portfolio, perhaps just one fund, either Vanguard LifeStrategy Moderate Growth or Vanguard Balanced Index Fund.

The idea is to eliminate the need for portfolio management and put withdrawals on autopilot, so that there is no need for her to have help.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: Vanguard Personal Advisory Services Fees

Post by StevieG72 » Sun Mar 18, 2018 1:43 pm

John Laurens wrote:
Sat Jan 13, 2018 11:10 am
I believe VPAS overcharges for what they offer. Basically a LS Fund broken into smaller parts for 30 basis points.

That being said, My wife knows to call VPAS immediately upon my death and sign up. The alternatives to VPAS are much worse.

Regards,
John
This is the simplest solution. Have a brief conversation as to why it is the best option. Leave reminder / followup instructions within your will.
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Re: Vanguard Personal Advisory Services Fees

Post by ragabnh » Sun Mar 18, 2018 1:53 pm

schachtw wrote:
Sat Jan 13, 2018 6:03 pm
sport wrote:
Sat Jan 13, 2018 3:29 pm
Does the percentage used for Vanguard fees decrease for larger portfolios? Is it 0.30% regardless of the portfolio size?
The fees are stepped:

< 5 million is 0.30% per quarter.
>= 5 & < 10 million is 0.20% per quarter
Not sure of the rates beyond 10M
Fees are not per quarter but are annual.

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burt
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Re: Vanguard Personal Advisory Services Fees

Post by burt » Sun Mar 18, 2018 5:42 pm

Mel Lindauer wrote:
Sat Jan 13, 2018 8:00 pm
I'd recommend a single-fund portfolio of one of the Life Strategy funds or one of the Target Retirement funds with instructions to not change or do anything on your demise.

Vanguard will figure out any required minimum distributions at no cost and with only one fund, there's only one fund to take it from.

Doesn't get any simpler than that.
+1
Age in bonds (+/-10%)
Vanguard Target Retirement Fund or Life Strategy Fund.
Done.

burt

dave1054
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Re: Vanguard Personal Advisory Services Fees

Post by dave1054 » Sun Mar 18, 2018 5:50 pm

Glamdring56 wrote:
Sun Mar 18, 2018 9:20 am
I keep my wife's $3 million with PAS. Our advisor, whom we only talk to annually by our choice, recently told us that "We are his least demanding clients". Since I have no need for this money for a decade or so, I just don't care to spend time talking about it.

I have another $4 million I could put in the PAS program but given how little we use/need the service we are already paying for, I find it much more cost effective to just "mimic" their allocations based on our PAS monies. I use Lifestyle funds in my iRA's.

I recently move $500k to Schwab and I find a lot of merit with the Intelligent advisor platforms. Each additional million I invest with Vanguard costs .2% and the additional effort and service incurred/offered by Vanguard is nearly 0%. Given Vanguards "high" incremental cost for each million I might add to PAS, I feel my assests are likely to begin a slow drift from Vanguard to Schwab

Get your act together Vanguard!
Schwab intelligent advisor is not a personal advisor but mostly robo investing with occasional discussion with financial planner. Its service that is similar to Vanguard PAS appears to be more expensive. Am I missing something?

dave1054
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Re: Vanguard Personal Advisory Services Fees

Post by dave1054 » Sun Mar 18, 2018 5:54 pm

ruralavalon wrote:
Sun Mar 18, 2018 11:15 am
dave1054 wrote:
Sat Jan 13, 2018 9:36 am
I am near retirement and have been fortunate to have a seven figure portfolio mostly of index funds and etf.
I want to pass these assets on to VPA Services but it seems their charges are outrageous at least in my situation.
There asset allocation is mostly computer driven so their costs are no different for a $50000 account or a $5,000,000
account. Yet they charge about 30 basis points for both. That's a lot of money for me per year.

I can continue to do on my own but my wife has zero interest in this and if I pass on, I wonder what she will do.

Is there any move afoot in Vanguard to reassess these fees? Any suggestions what I should do? Thank you.
My wife has no interest in investing, so I want to have the portfolio set up so that she needs no help.

My wife has my durable power of attorney, and full agent authorization on Vanguard's preferred form. I have a very simple one page Investment Policy Statement, and currently use just 4 funds.

81% of portfolio is in my rollover IRA, with Required Minimum Distributions set up for monthly payments (so there is regular monthly income in addition to Social Security), proportionally from each fund in the rollover IRA (so that the portfolio tends to keep itself on the desired asset allocation).

I plan to transition to a simpler portfolio, perhaps just one fund, either Vanguard LifeStrategy Moderate Growth or Vanguard Balanced Index Fund.

The idea is to eliminate the need for portfolio management and put withdrawals on autopilot, so that there is no need for her to have help.
Can I set up single target date or life strategy fund and have Vanguard send my wife a monthly check for the dividends in taxable account and monthly payments on retirement accou t?

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1210sda
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Re: Vanguard Personal Advisory Services Fees

Post by 1210sda » Sun Mar 18, 2018 6:43 pm

Yes!
1210

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tfb
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Re: Vanguard Personal Advisory Services Fees

Post by tfb » Sun Mar 18, 2018 9:47 pm

dave1054 wrote:
Sun Mar 18, 2018 5:50 pm
Schwab intelligent advisor is not a personal advisor but mostly robo investing with occasional discussion with financial planner. Its service that is similar to Vanguard PAS appears to be more expensive. Am I missing something?
Schwab caps the fees at $3,600/year. For a $3 million account, Vanguard charges $9,000, which is 2.5x of Schwab's $3,600 fee. $9,000 for one conversation a year is quite expensive.
Harry Sit, taking a break from the forums.

heyyou
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Re: Vanguard Personal Advisory Services Fees

Post by heyyou » Sun Mar 18, 2018 10:11 pm

Our assets are with a lower cost, flat fee advisor that charges less than VG PAS would for our portfolio size.

We have dealt with the same staff person (with an MBA degree) there since 2005. TD Ameritrade is the brokerage that holds the mutual funds and issues a monthly report for each account type (taxable, tIRA, RIRA), listing specific funds, and the amounts, while the advisor sends us a quarterly portfolio report. DFA, VG, and Schwab funds are available from our advisor through the institutional side of Ameritrade.

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Re: Vanguard Personal Advisory Services Fees

Post by ruralavalon » Mon Mar 19, 2018 8:48 am

dave1054 wrote:
Sun Mar 18, 2018 5:54 pm
ruralavalon wrote:
Sun Mar 18, 2018 11:15 am
dave1054 wrote:
Sat Jan 13, 2018 9:36 am
I am near retirement and have been fortunate to have a seven figure portfolio mostly of index funds and etf.
I want to pass these assets on to VPA Services but it seems their charges are outrageous at least in my situation.
There asset allocation is mostly computer driven so their costs are no different for a $50000 account or a $5,000,000
account. Yet they charge about 30 basis points for both. That's a lot of money for me per year.

I can continue to do on my own but my wife has zero interest in this and if I pass on, I wonder what she will do.

Is there any move afoot in Vanguard to reassess these fees? Any suggestions what I should do? Thank you.
My wife has no interest in investing, so I want to have the portfolio set up so that she needs no help.

My wife has my durable power of attorney, and full agent authorization on Vanguard's preferred form. I have a very simple one page Investment Policy Statement, and currently use just 4 funds.

81% of portfolio is in my rollover IRA, with Required Minimum Distributions set up for monthly payments (so there is regular monthly income in addition to Social Security), proportionally from each fund in the rollover IRA (so that the portfolio tends to keep itself on the desired asset allocation).

I plan to transition to a simpler portfolio, perhaps just one fund, either Vanguard LifeStrategy Moderate Growth or Vanguard Balanced Index Fund.

The idea is to eliminate the need for portfolio management and put withdrawals on autopilot, so that there is no need for her to have help.
Can I set up single target date or life strategy fund and have Vanguard send my wife a monthly check for the dividends in taxable account and monthly payments on retirement accou t?
Yes, and you can have the dividends sent to your checking account. This will be quarterly when dividends are paid.

Be sure to give her a full agent authorization on Vanguard's preferred form.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

SGM
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Re: Vanguard Personal Advisory Services Fees

Post by SGM » Mon Mar 19, 2018 3:52 pm

I have discussed the possibility of my children using Vanguard PAS for a short period of time until they are more comfortable handling their finances with a senior financial advisor at Vanguard. I have signed myself and one child for the national BH conference in Phillie this year. The children are buying their own tax software next year and doing their own taxes for the first time. I have been showing them how to do their own taxes for several years.

My spouse who has little interest in finances is aware of Vanguard PAS. One reason we converted all tax deferred accounts to Roth accounts is to avoid the complication of RMDs. It is the lamest reason as other factors made the conversions better for our situation, but my spouse appreciates not having to depend on anyone to calculate RMDs.

We are actively simplifying our financial life on all fronts. This is a process that has been going on for 10 years delayed in part by capital gains taxes.

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