Using Vanguard’s advisors

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
ny_knicks
Posts: 193
Joined: Wed Jan 04, 2017 11:20 pm

Re: Using Vanguard’s advisors

Post by ny_knicks » Mon Jan 08, 2018 10:57 am

Parents use Vanguard PAS. They switched from Edward Jones. They need significant hand holding and are uncomfortable with even the most simple tasks like setting up DD to bank let alone rebalancing. There is no interest on their part to learn. I cannot help them. While most on here would find little value for them it was that or a 1%+ fee advisor pushing high expense front loaded mutual funds. So far that have liked the service.

Philly_fan
Posts: 22
Joined: Sun Oct 01, 2017 2:39 pm

Re: Using Vanguard’s advisors

Post by Philly_fan » Mon Apr 23, 2018 6:45 pm

I know most people on this forum do not believe in tilting toward small and value, but does anyone know if Vanguard PAS would be willing to do it?

afan
Posts: 3883
Joined: Sun Jul 25, 2010 4:01 pm

Re: Using Vanguard’s advisors

Post by afan » Tue Apr 24, 2018 12:47 pm

Given the lack of non-investment financial planning advice and the standardized portfolio, one could save the 0.3% fee and simply buy a life strategy fund. You would get the same investments and the same non-customized management. Things could be a lot worse, but I don't see that PAS delivers anything worth paying for.
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

Philly_fan
Posts: 22
Joined: Sun Oct 01, 2017 2:39 pm

Re: Using Vanguard’s advisors

Post by Philly_fan » Tue Apr 24, 2018 12:53 pm

What if your heirs know nothing about investing? Isn't Vanguard Personal Advisory Service better than having them own a life strategy fund?

User avatar
Taylor Larimore
Advisory Board
Posts: 27516
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Using Vanguard’s advisors when transferring assets

Post by Taylor Larimore » Tue Apr 24, 2018 1:48 pm

Bogleheads:

We often received posts from investors with dozens of funds who want to simplify, reduce costs, and move to Vanguard. In these cases I often recommend Vanguard's low-cost PAS service which will manage the transfers in the most tax-efficient way and suggest a low-cost, tax-efficient portfolio. In my opinion, this is well-worth the small 0.3% fee.

Afterwards, if the investor feels they can manage their new professionally designed portfolio, they can discontinue the service.

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

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: Using Vanguard’s advisors

Post by livesoft » Tue Apr 24, 2018 1:49 pm

I have not seen how "most tax-efficient way" has ever been used by Vanguard when a transfer is done.
Wiki This signature message sponsored by sscritic: Learn to fish.

drzzzzz
Posts: 258
Joined: Sat Sep 22, 2012 9:56 pm

Re: Using Vanguard’s advisors

Post by drzzzzz » Tue Apr 24, 2018 2:14 pm

livesoft wrote:
Tue Apr 24, 2018 1:49 pm
I have not seen how "most tax-efficient way" has ever been used by Vanguard when a transfer is done.
+1

afan
Posts: 3883
Joined: Sun Jul 25, 2010 4:01 pm

Re: Using Vanguard’s advisors

Post by afan » Tue Apr 24, 2018 2:56 pm

Philly_fan wrote:
Tue Apr 24, 2018 12:53 pm
What if your heirs know nothing about investing? Isn't Vanguard Personal Advisory Service better than having them own a life strategy fund?
It is pretty much the same thing. You get the same portfolio. Except that with PAS they would be paying 0.3% of assets on top of the mutual fund expense ratios.
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

afan
Posts: 3883
Joined: Sun Jul 25, 2010 4:01 pm

Re: Using Vanguard’s advisors

Post by afan » Tue Apr 24, 2018 3:04 pm

livesoft wrote:
Tue Apr 24, 2018 1:49 pm
I have not seen how "most tax-efficient way" has ever been used by Vanguard when a transfer is done.
I have never used PAS, so I don't have direct experience. One friend who was using Vanguard years ago said that they not only kept some of the individual stocks they had transferred in (I assume to avoid capital gains recognition) but also bought some for them. The latter would open up tax loss harvesting opportunities.

I realize that the comments here have suggested they completely ignore tax considerations, which seems almost unbelievable. I would just note that we have a few anecdotal reports. We don't know what Vanguard will actually do in every case. The reports in this thread are discouraging. But since all they offer is a balanced portfolio of a few index funds, one can get that without the cost of PAS.
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

User avatar
gasdoc
Posts: 1549
Joined: Mon Nov 03, 2014 8:26 am

Re: Using Vanguard’s advisors

Post by gasdoc » Wed Apr 25, 2018 9:31 am

afan wrote:
Tue Apr 24, 2018 3:04 pm
livesoft wrote:
Tue Apr 24, 2018 1:49 pm
I have not seen how "most tax-efficient way" has ever been used by Vanguard when a transfer is done.
I have never used PAS, so I don't have direct experience. One friend who was using Vanguard years ago said that they not only kept some of the individual stocks they had transferred in (I assume to avoid capital gains recognition) but also bought some for them. The latter would open up tax loss harvesting opportunities.

I realize that the comments here have suggested they completely ignore tax considerations, which seems almost unbelievable. I would just note that we have a few anecdotal reports. We don't know what Vanguard will actually do in every case. The reports in this thread are discouraging. But since all they offer is a balanced portfolio of a few index funds, one can get that without the cost of PAS.
I am only adding that when I have used Vanguard's financial planning services in the past, they have absolutely taken tax considerations into account when making recommendations for changes, and I would be very surprised if that were not the case with their personal advisor services. For those that need a little "hand holding," I would not shy away from recommending their PAS, if for no reason other than providing a calm voice in a storm (volatile market). Many older individuals, especially those that have little financial "education," are terrified of what can happen to their life savings and investments in the stock market. Let's not summarily trash Vanguard's advisor services without knowing the individual's personal situation- it may be the most prudent and economical way for them to stay in the market.

gasdoc

daheld
Posts: 322
Joined: Wed Sep 13, 2017 8:14 am

Re: Using Vanguard’s advisors

Post by daheld » Wed Apr 25, 2018 11:01 am

DW and I (33 and 32 respectively) use PAS for our Roth's and a taxable account that will eventually mostly become a 529. All told, we have about $200k under management in PAS guided accounts. For me, it's worth it to pay the extra 0.3%. When my wife and I married, I made a strong push to get her to dump her FA. The solution for us was to go with PAS.

We are frugal, save as much as we can and understand basics of retirement savings. But when we get to a point of needing to make a transaction or access money in the taxable account, we like the idea of having someone to lean on to explain different methods, tax implications, and the like. This is not to challenge anyone who thinks it's silly to pay someone 0.3% for a yearly conversation and a quarterly look at your accounts to see if it needs re-balancing. But for us, it makes sense. I feel like it's a healthy compromise between paying a FA some insane, stupid amount in commissions, and trying to self manage but potentially make an expensive mistake, or be paralyzed by not being able to make decisions. Having someone you know you can trust is reassuring to those of us who aren't self-proclaimed experts.

LoganLot
Posts: 9
Joined: Fri Oct 13, 2017 1:36 pm

Re: Using Vanguard’s advisors

Post by LoganLot » Wed Apr 25, 2018 11:19 am

livesoft wrote:
Tue Apr 24, 2018 1:49 pm
I have not seen how "most tax-efficient way" has ever been used by Vanguard when a transfer is done.
On this topic I can tell you first hand that they absolutely consider tax consequences when a transfer is done.

I completed a large transfer a couple weeks ago that included many non vanguard funds and some individual stocks. The PAS adviser put together a plan that sold some, but kept others based on tax consequences, expense ratios and overlap. Some of the funds that were kept tilted my portfolio a bit too far towards growth, so we discussed adding a value index fund to tip it back.

Once he came up with an initial plan, we had a good conversation about some of my specific situation, for example, my expected tax bracket for this year. This discussion resulted in some tweaks and a plan on when to revisit the portfolio. There is an ultimate goal to simplify, but not at the expense of large and unnecessary capital gains taxes.

User avatar
SeeMoe
Posts: 1002
Joined: Sat Jul 18, 2015 11:30 am
Location: Near Philly..

Re: Using Vanguard’s advisors

Post by SeeMoe » Thu Apr 26, 2018 1:57 pm

Time was Vanguard Group offered a one time for a fee portfolio analysis that was prepared by a team of their professionals. It was thoughtfully bound in an attractive binder and had lots and lots of information as to what I was doing(wrong) and their reasoning for the folios they had chosen. It up was to the customers to decide what to do after that. Most customers did some, or nothing out of fear and bias I’m told. We got our report before “911” and followed most of the recommendations through. Especially during those dark days when the markets reopened and plummeted like a lead weight down and down...Wish Vanguard still offered that wonderful service today...sigh.

SeeMoe.. :greedy
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}

Miriam2
Posts: 2329
Joined: Fri Nov 14, 2014 11:51 am

Re: Using Vanguard’s advisors

Post by Miriam2 » Thu Apr 26, 2018 6:50 pm

SeeMoe wrote: Time was Vanguard Group offered a one time for a fee portfolio analysis that was prepared by a team of their professionals. It was thoughtfully bound in an attractive binder and had lots and lots of information as to what I was doing(wrong) and their reasoning for the folios they had chosen. It up was to the customers to decide what to do after that. Most customers did some, or nothing out of fear and bias I’m told. We got our report before “911” and followed most of the recommendations through. Especially during those dark days when the markets reopened and plummeted like a lead weight down and down...Wish Vanguard still offered that wonderful service today...sigh.
SeeMoe.. :greedy
SeeMoe - I thought you were still using the Vanguard Personal Advisors. Don't they provide the same service? (perhaps without the attractive binder - although I do like attractive binders and it's nice to open and see my accounts :wink:

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: Using Vanguard’s advisors

Post by livesoft » Thu Apr 26, 2018 7:19 pm

LoganLot wrote:
Wed Apr 25, 2018 11:19 am
livesoft wrote:
Tue Apr 24, 2018 1:49 pm
I have not seen how "most tax-efficient way" has ever been used by Vanguard when a transfer is done.
On this topic I can tell you first hand that they absolutely consider tax consequences when a transfer is done.
Thanks for the testimonial.
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
SeeMoe
Posts: 1002
Joined: Sat Jul 18, 2015 11:30 am
Location: Near Philly..

Re: Using Vanguard’s advisors

Post by SeeMoe » Thu Apr 26, 2018 8:24 pm

Miriam2 wrote:
Thu Apr 26, 2018 6:50 pm
SeeMoe wrote: Time was Vanguard Group offered a one time for a fee portfolio analysis that was prepared by a team of their professionals. It was thoughtfully bound in an attractive binder and had lots and lots of information as to what I was doing(wrong) and their reasoning for the folios they had chosen. It up was to the customers to decide what to do after that. Most customers did some, or nothing out of fear and bias I’m told. We got our report before “911” and followed most of the recommendations through. Especially during those dark days when the markets reopened and plummeted like a lead weight down and down...Wish Vanguard still offered that wonderful service today...sigh.
SeeMoe.. :greedy
SeeMoe - I thought you were still using the Vanguard Personal Advisors. Don't they provide the same service? (perhaps without the attractive binder - although I do like attractive binders and it's nice to open and see my accounts :wink:
No, after one year my advisor left for a private concern. Tried to take our account with him but I simply stopped all services. Still have that wonderful Vanguard analysis in its binder from August 2001, and occasionally look it over. I did not care for the total international bond index fund that the advisor put in our folio, nor spending over $4 k in fees for just making minor adjustments to our folios either. But I would like to find a decent analyst who will provide us with another gorgeously bound one time folio analysis every so often, for a reasonable fee naturally,...Know of Any Mariam?

SeeMoe.. :shock:
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}

Miriam2
Posts: 2329
Joined: Fri Nov 14, 2014 11:51 am

Re: Using Vanguard’s advisors

Post by Miriam2 » Fri Apr 27, 2018 9:46 pm

SeeMoe wrote: . . . after one year my advisor left for a private concern. Tried to take our account with him but I simply stopped all services. Still have that wonderful Vanguard analysis in its binder from August 2001, and occasionally look it over. I did not care for the total international bond index fund that the advisor put in our folio, nor spending over $4 k in fees for just making minor adjustments to our folios either. But I would like to find a decent analyst who will provide us with another gorgeously bound one time folio analysis every so often, for a reasonable fee naturally,...Know of Any Mariam?
I don't know of any, but perhaps try the Vanguard Personal Advisor service again, this time speaking with a supervisor who can connect you to a more suitable person. Have them do a new portfolio analysis covering everything you want.

Then carefully take that old 2001 analysis out of that Gorgeously Bound Folio the first guy gave you, put that old 2001 analysis in a manila folder and file it in that cabinet you have not yet decluttered :wink: then put your new portfolio in the Gorgeously Bound Folio - it could become The Permanent Portfolio Folio. If the Gorgeously Bound Folio is hard to separate, raid your wife's sewing kit for a hem-taker-outer, looks like a little jabber or crook, and spend several hours like an Old World Craftsman carefully undoing the Gorgeously Bound Folio without harming it. What a nice project :D

User avatar
Misenplace
Posts: 232
Joined: Mon Feb 01, 2016 9:46 pm

Re: Using Vanguard’s advisors

Post by Misenplace » Fri Apr 27, 2018 10:10 pm

Vanguard PAS definitely takes into account tax considerations.

I participated in a free portfolio review earlier this year. When first I spoke to the assigned advisor, I got the impression that he had not looked closely at our portfolio and was winging it. That was fine with me, I was just going through the process and didn’t expect much. However, when I got their recommended plan, it was much more thoughtful than his initial response, and differed in that it took into account tax issues for funds I already held at Vanguard. It was a good plan.

Just not my plan since (1) I want to tilt slightly to SC and Value, and (2) I’m a control freak. But I would heartily recommend them to those who don’t want to manage themselves. Or to my spouse should something happen to me. Or to me if I ever lose capacity.

Edited to add: this was a free portfolio review to see if they could get me to go the PAS route.

standard7
Posts: 75
Joined: Thu Jul 30, 2015 9:39 am

Re: Using Vanguard’s advisors

Post by standard7 » Wed Jul 11, 2018 7:21 am

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
This sounds like a good plan and something that I would like to setup. I realize that PAS or any advisory group would have some issues, but from a trust and performance scenario this seems to be perfect fit for when I... "I pass away or lose my mind". No I'm not ready yet, but I do like to plan.

As per the original quoted comment I would not use PAS at this point just when I'm not here. A couple questions:

Is an IPS an informal document of my construct, or are there forms and in particular forms from VG available? I assume it would be something good to keep in a safe place and possibly with a will? Or, could this be kept with my VG account?

Does PAS use a prescribed formula for allocation and strategy based upon initial feedback from the client... for example do they plug in a bunch of answers from a customer questionnaire and out plops an investment strategy?

And... if there is a welcome packet with a questionnaire are these documents available to me at this point to help go over the questions in advance?

many thanks in advance!

standard7
Posts: 75
Joined: Thu Jul 30, 2015 9:39 am

Re: Using Vanguard’s advisors

Post by standard7 » Wed Jul 11, 2018 7:40 am

OK... so I called VG ( I was just being lazy) and got most of the answers. Instead of deleting my post I thought I'd just keep it incase anyone else has a similar thought.

As per the original quoted comment I would not use PAS at this point just when I'm not here. A couple questions:

Is an IPS an informal document of my construct, or are there forms and in particular forms from VG available? I assume it would be something good to keep in a safe place and possibly with a will? Or, could this be kept with my VG account?
IPS - informal document, it would still require my wife to actively initiate the PAS process
Does PAS use a prescribed formula for allocation and strategy based upon initial feedback from the client... for example do they plug in a bunch of answers from a customer questionnaire and out plops an investment strategy?
The answer to this was a little grey... so I wouldn't mind some followup answers about whether VG PAS strategies do follow standard VG theory, or has anyone experience account managers going rogue and not following VG theory?
And... if there is a welcome packet with a questionnaire are these documents available to me at this point to help go over the questions in advance?
Seems that most of the process is via phone questions and consultation. No paperwork or formal forms that can be sent out at this time. I would consider this a downside. It would be good to be able to read through the questions at this point and may help smooth the transition any possible miscommunication in the future. Although this goes to my first question about the IPS. Establishing this first may be the answer. Quite possibly the VG asset allocation tool may be similar to the initial questions that would be asked by the PAS advisors - https://personal.vanguard.com/us/FundsInvQuestionnaire

FBN2014
Posts: 465
Joined: Sat Mar 08, 2014 3:07 pm

Re: Using Vanguard’s advisors

Post by FBN2014 » Sat Jul 14, 2018 11:21 am

fear/greed wrote:
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.
Anyone have the link to Livesoft's thread on how to use Portfolio Watch? Thanks
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

User avatar
LadyGeek
Site Admin
Posts: 48632
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Using Vanguard’s advisors

Post by LadyGeek » Sat Jul 14, 2018 11:37 am

^^^ It's in the wiki: Vanguard Portfolio Watch, the last thread under "External links".
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
SeeMoe
Posts: 1002
Joined: Sat Jul 18, 2015 11:30 am
Location: Near Philly..

Re: Using Vanguard’s advisors

Post by SeeMoe » Sat Jul 14, 2018 12:38 pm

A good service for the price, but I like a one time fee only analyst to look my folios over then submit a written “ how to” paper for my perusal . Then I can decide what needs changing and try to see how my personal biases interplay with the suggestions. Execution is the hard part, and an advisor will do that for you without biase interfering in their decisions.

SeeMoe.. :annoyed
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}

Post Reply