Is Vanguard's Personal Advisor Service Worth It???

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Xav2020
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Is Vanguard's Personal Advisor Service Worth It???

Post by Xav2020 » Thu May 21, 2020 10:47 pm

Hello,

I have 150k and 80k in a rollover IRA and brokerage account respectively. The money is managed by a financial advisor affiliated with LPL financial. The advisory fee is 1.25 % and the yearly account maintenance fee is $40.0. Since inception in 2017, I have paid over 7k in fees. However, I have nothing to show for as I'm barely breaking even... I'm considering transferring my portfolio to Vanguard "as-is" (in kind transfer) and leverage their financial advisor service at 0.3%.

I'd appreciate to get any inputs on this.

Thanks in advance for your trouble!

nanameg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by nanameg » Fri May 22, 2020 6:24 am

If you need handholding and someone to talk to yes. However, they only give you a sort of boiler plate plan...4 index funds which you can really do yourself. It may be worthwhile for you to have someone help you transition and then after you feel comfortable you can discontinue the advisory service.

Be aware that they will most likely not allow you to use mutual funds and will put your money in ETF’s. I was told I will be transitioned to ETF’s by September and it’s one of the reason I’m discontinuing the PAS.

afan
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by afan » Fri May 22, 2020 6:28 am

I can think of no reason to care whether you are in mutual funds or etfs. At Vanguard, these are different classes of the same funds.

There is no reason to pay anyone to manage your portfolio. Post your information here and people will give you a portfolio for free.

If you want to pay for something you don't need, better to pay 0.3% than 1.5% but the right figure is zero.
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

rkhusky
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by rkhusky » Fri May 22, 2020 6:45 am

Just realize that Vanguard PAS doesn't have any secret sauce that will give you high returns when the market crashes, as you have now realized with your current advisor. Your returns will be what the market gives and will be based on your stock/bond ratio (and to a lesser extent your US/Int'l ratio). But at least you will make about 1% more with Vanguard, given the decrease in fees.

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bhwabeck3533
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by bhwabeck3533 » Fri May 22, 2020 6:53 am

Xav2020, to underscore the replies to your post, please read "The Little Book of Common Sense Investing" by John C Bogle. The basis for DIY investing will become quite clear to you.

retiredjg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by retiredjg » Fri May 22, 2020 6:54 am

If you actually need an advisor, Vanguard's PAS is definitely worth it and the only place I suggest. Or if you need an advisor until you get investing figure out, they are worth it.

Have you considered doing it yourself? It is not terribly difficult. You do have to learn some things. Start here.

https://www.bogleheads.org/wiki/Getting_started

Jack FFR1846
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Jack FFR1846 » Fri May 22, 2020 6:56 am

Absolutely move it. If you add the ER cost to that 1.25%, you're paying over 6 times the annual cost that I pay in total. And my portfolio is over $2.5MM. PAS is a good first step. Your second baby step (not Dave Ramsey) would be to dump PAS and go to a target date fund. Finally, when you're ready, go to the individual funds or ETFs and take the whopping 15 minutes a year to manage the portfolio by doing a rebalance back to target.
Bogle: Smart Beta is stupid

maggsmaggs
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by maggsmaggs » Fri May 22, 2020 7:02 am

I have my parents using PAS and I have been impressed with it every time. My parents ask me to participate in the calls they have with their advisor because they know I can wade through any BS, but there has been nothing with Vanguard that I haven't agreed with.

GmanJeff
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by GmanJeff » Fri May 22, 2020 7:41 am

Search the site for prior threads on this topic, which are plentiful.

Portfolios suggested by PAS vary with client objectives and risk tolerance, and are not all identical despite statements you'll read to the contrary, often from the same misinformed people who offer to anonymously advise you for free here.

PAS' rationale for recommending ETFs is that they have very slightly lower expense ratios than their corresponding mutual funds.

lakpr
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by lakpr » Fri May 22, 2020 7:54 am

GmanJeff wrote:
Fri May 22, 2020 7:41 am
Search the site for prior threads on this topic, which are plentiful.

Portfolios suggested by PAS vary with client objectives and risk tolerance, and are not all identical despite statements you'll read to the contrary, often from the same misinformed people who offer to anonymously advise you for free here.

PAS' rationale for recommending ETFs is that they have very slightly lower expense ratios than their corresponding mutual funds.
While I don't doubt that the PAS would suggest portfolio that vary with the client objectives and risk tolerance, I strongly object to the characterization that the board members offering advice for free are misinformed. Proposed Vanguard PAS portfolios were posted here and picked apart, certain allocations do not / did not make sense at all.

One example I remember was that PAS advised a client to put the proposed bond allocation in a 3:4:3 ratio in a short term bond fund, intermediate term bond fund and long term bond fund (all of them ETFs by the way) respectively. Other than added complexity that seemed to make no sense at all.

Vanguard PAS are not some Gods whose advice is infallible.

rockAction
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by rockAction » Fri May 22, 2020 8:05 am

I use Vanguard's PAS, and only put the minimum ($50K) under their management. I self-manage the remainder of my portfolio, which closely resembles the plan that PAS puts together for me. At .3%, my costs are only about $150 a year.

I actually call them quite a bit, and they have been extremely helpful. Plus, you get some nice tools that give you access to the Monte Carlo simulations, what-if scenarios, and quarterly updated plans and reports to let you know where you stand in terms of your financial goals.

For $150 a year, it's a no-brainer imo, at least until you are completely comfortable doing it all on your own.

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Toons
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Toons » Fri May 22, 2020 9:36 am

I have 150k and 80k in a rollover IRA and brokerage account respectively.


A couple of index funds.
Maybe 1
Low management fees,
What is left to manage
by an outside advisor?

:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

soundwave
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by soundwave » Fri May 22, 2020 10:21 am

afan wrote:
Fri May 22, 2020 6:28 am
I can think of no reason to care whether you are in mutual funds or etfs. At Vanguard, these are different classes of the same funds.

There is no reason to pay anyone to manage your portfolio. Post your information here and people will give you a portfolio for free.

If you want to pay for something you don't need, better to pay 0.3% than 1.5% but the right figure is zero.
+1

It's also possible that your 1.25% advisor has you in higher cost funds so your costs might be even higher than you know, since those costs are "hidden". Mine were before I transferred my retirement to Vanguard. There's so many intelligent & experienced people on this board that will assist you. They continue to educate me from the comfort of my home :D
"Go placidly amid the noise and the haste..." Max Ehrmann

standard7
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by standard7 » Fri May 22, 2020 12:38 pm

Similar to rockAction we have put a small portion of our portfolio into PAS. As rockAction has found, PAS includes our entire portfolio into the retirement calculations so the benefits extend beyond the limited funds that it currently manages.

But here's our main rationale - the last thing that I want when I'm no longer around (no worries I'm fine now) is for my spouse to have to fend off calls from brokers and their "hot" investment ideas. Like many people, managing investments is not something that she would enjoy. We have already established an AA and risk tolerance that would be applicable for the entire portfolio and the future. So at the right time, it's a simple task to slide the entire portfolio into the PAS account and it will be managed in the manner that we are comfortable with, create spending accounts, RMDs etc.

My opinion is that given the right situation PAS can be a very good solution.

rockAction
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by rockAction » Fri May 22, 2020 2:00 pm

standard7 wrote:
Fri May 22, 2020 12:38 pm
Similar to rockAction we have put a small portion of our portfolio into PAS. As rockAction has found, PAS includes our entire portfolio into the retirement calculations so the benefits extend beyond the limited funds that it currently manages.

But here's our main rationale - the last thing that I want when I'm no longer around (no worries I'm fine now) is for my spouse to have to fend off calls from brokers and their "hot" investment ideas. Like many people, managing investments is not something that she would enjoy. We have already established an AA and risk tolerance that would be applicable for the entire portfolio and the future. So at the right time, it's a simple task to slide the entire portfolio into the PAS account and it will be managed in the manner that we are comfortable with, create spending accounts, RMDs etc.

My opinion is that given the right situation PAS can be a very good solution.
Exactly! I told my wife that if anything ever happens to me, she should do exactly that. I have consolidated all of my accounts into Vanguard already, so it's simply a matter of turning the self-managed accounts into managed accounts. One phone call - done.

JLJL
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by JLJL » Fri May 22, 2020 2:15 pm

rockAction wrote:
Fri May 22, 2020 2:00 pm
standard7 wrote:
Fri May 22, 2020 12:38 pm
Similar to rockAction we have put a small portion of our portfolio into PAS. As rockAction has found, PAS includes our entire portfolio into the retirement calculations so the benefits extend beyond the limited funds that it currently manages.

But here's our main rationale - the last thing that I want when I'm no longer around (no worries I'm fine now) is for my spouse to have to fend off calls from brokers and their "hot" investment ideas. Like many people, managing investments is not something that she would enjoy. We have already established an AA and risk tolerance that would be applicable for the entire portfolio and the future. So at the right time, it's a simple task to slide the entire portfolio into the PAS account and it will be managed in the manner that we are comfortable with, create spending accounts, RMDs etc.

My opinion is that given the right situation PAS can be a very good solution.
Exactly! I told my wife that if anything ever happens to me, she should do exactly that. I have consolidated all of my accounts into Vanguard already, so it's simply a matter of turning the self-managed accounts into managed accounts. One phone call - done.
These are great points and a nice idea. PAS also has this statement on their website, which makes this idea more appealing:
TAXES, ESTATE PLANNING, AND CHARITABLE GIVING

Our advisors can help educate the whole family. They can advise on estate planning, creating a succession plan, and provide guidance on charitable giving to causes you care about, at no extra cost. We combine low-cost funds and tax-smart strategies to maximize your tax savings, so you can keep more of your money.

annu
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by annu » Fri May 22, 2020 2:27 pm

Is a personal trainer worth the extra money? :D I
Yes, if you will not followup and do what is needed on your own, a trainer will definitely help.
No, if you will just question what they suggest, as you read on a blog how a new excercise is all the rage

lakpr
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by lakpr » Fri May 22, 2020 2:41 pm

annu wrote:
Fri May 22, 2020 2:27 pm
Is a personal trainer worth the extra money? :D I
Yes, if you will not followup and do what is needed on your own, a trainer will definitely help.
No, if you will just question what they suggest, as you read on a blog how a new excercise is all the rage
LOL, but sir, you hit the nail on the head pretty forcefully!

annu
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by annu » Fri May 22, 2020 2:47 pm

lakpr wrote:
Fri May 22, 2020 2:41 pm
annu wrote:
Fri May 22, 2020 2:27 pm
Is a personal trainer worth the extra money? :D I
Yes, if you will not followup and do what is needed on your own, a trainer will definitely help.
No, if you will just question what they suggest, as you read on a blog how a new excercise is all the rage
LOL, but sir, you hit the nail on the head pretty forcefully!
I am glad you had a laugh, me and wife work in fields, where we get asked about blogs all the time, at this point our eyes role so fast, they seem to be not rolling at all.

nanameg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by nanameg » Fri May 22, 2020 3:27 pm

afan wrote:
Fri May 22, 2020 6:28 am
I can think of no reason to care whether you are in mutual funds or etfs. At Vanguard, these are different classes of the same funds.

There is no reason to pay anyone to manage your portfolio. Post your information here and people will give you a portfolio for free.

If you want to pay for something you don't need, better to pay 0.3% than 1.5% but the right figure is zero.
I need a YTD balance for the third party administrator for my husbands employer 401k. Form what I’ve read on this forum, that YTD balance is not available for ETF’s on the brokerage platform. I have not confirmed that with Vanguard yet myself.

Doctor Rhythm
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Doctor Rhythm » Fri May 22, 2020 3:36 pm

Xav2020 wrote:
Thu May 21, 2020 10:47 pm
Hello,

I have 150k and 80k in a rollover IRA and brokerage account respectively. The money is managed by a financial advisor affiliated with LPL financial. The advisory fee is 1.25 % and the yearly account maintenance fee is $40.0. Since inception in 2017, I have paid over 7k in fees.
Yes, you should definitely leave that advisor as soon as possible. Unless your financial situation is very unusual, Vanguard's advice to you will be very simple: invest in stock and bond index funds at a ratio appropriate for your risk tolerance I think many people could just invest in a target date funds to get a very similar portfolio without paying the advisory fee. However, if you're used to having someone else manage your investments, this is a pretty low cost option.

ronin
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by ronin » Fri May 22, 2020 7:32 pm

standard7 wrote:
Fri May 22, 2020 12:38 pm
Similar to rockAction we have put a small portion of our portfolio into PAS. As rockAction has found, PAS includes our entire portfolio into the retirement calculations so the benefits extend beyond the limited funds that it currently manages.

But here's our main rationale - the last thing that I want when I'm no longer around (no worries I'm fine now) is for my spouse to have to fend off calls from brokers and their "hot" investment ideas. Like many people, managing investments is not something that she would enjoy. We have already established an AA and risk tolerance that would be applicable for the entire portfolio and the future. So at the right time, it's a simple task to slide the entire portfolio into the PAS account and it will be managed in the manner that we are comfortable with, create spending accounts, RMDs etc.

My opinion is that given the right situation PAS can be a very good solution.
This is spot on and to why I too would consider PAS including building out my relationship further with Vanguard versus moving elsewhere such ad Fidelity. While I’m quite comfortable managing 3 fund portfolio, my DW would not, and could succumb to sales pressure to wander off into high fees land.

nanameg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by nanameg » Fri May 22, 2020 7:57 pm

rkhusky wrote:
Fri May 22, 2020 6:45 am
Just realize that Vanguard PAS doesn't have any secret sauce that will give you high returns when the market crashes, as you have now realized with your current advisor. Your returns will be what the market gives and will be based on your stock/bond ratio (and to a lesser extent your US/Int'l ratio). But at least you will make about 1% more with Vanguard, given the decrease in fees.
Rkhusky,
How do u think the US/ Int’l ratio affects returns?

nanameg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by nanameg » Fri May 22, 2020 8:01 pm

ronin wrote:
Fri May 22, 2020 7:32 pm
standard7 wrote:
Fri May 22, 2020 12:38 pm
Similar to rockAction we have put a small portion of our portfolio into PAS. As rockAction has found, PAS includes our entire portfolio into the retirement calculations so the benefits extend beyond the limited funds that it currently manages.

But here's our main rationale - the last thing that I want when I'm no longer around (no worries I'm fine now) is for my spouse to have to fend off calls from brokers and their "hot" investment ideas. Like many people, managing investments is not something that she would enjoy. We have already established an AA and risk tolerance that would be applicable for the entire portfolio and the future. So at the right time, it's a simple task to slide the entire portfolio into the PAS account and it will be managed in the manner that we are comfortable with, create spending accounts, RMDs etc.

My opinion is that given the right situation PAS can be a very good solution.
This is spot on and to why I too would consider PAS including building out my relationship further with Vanguard versus moving elsewhere such ad Fidelity. While I’m quite comfortable managing 3 fund portfolio, my DW would not, and could succumb to sales pressure to wander off into high fees land.
Why would you need an advisor to create spending accounts and deal with RMDs? Is that complicated? We are a few years from withdrawing from our accounts and I didn’t think it would be something you needed an advisor to do.

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Horton
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Horton » Fri May 22, 2020 9:15 pm

nanameg wrote:
Fri May 22, 2020 3:27 pm
afan wrote:
Fri May 22, 2020 6:28 am
I can think of no reason to care whether you are in mutual funds or etfs. At Vanguard, these are different classes of the same funds.

There is no reason to pay anyone to manage your portfolio. Post your information here and people will give you a portfolio for free.

If you want to pay for something you don't need, better to pay 0.3% than 1.5% but the right figure is zero.
I need a YTD balance for the third party administrator for my husbands employer 401k. Form what I’ve read on this forum, that YTD balance is not available for ETF’s on the brokerage platform. I have not confirmed that with Vanguard yet myself.
You need to be aware that the mutual fund platform is going away whether you stay with PAS or not:

viewtopic.php?f=10&t=314816&p=5250988

rkhusky
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by rkhusky » Fri May 22, 2020 9:52 pm

nanameg wrote:
Fri May 22, 2020 7:57 pm
rkhusky wrote:
Fri May 22, 2020 6:45 am
Just realize that Vanguard PAS doesn't have any secret sauce that will give you high returns when the market crashes, as you have now realized with your current advisor. Your returns will be what the market gives and will be based on your stock/bond ratio (and to a lesser extent your US/Int'l ratio). But at least you will make about 1% more with Vanguard, given the decrease in fees.
Rkhusky,
How do u think the US/ Int’l ratio affects returns?
It depends on which does better. Having some of both seems prudent.

standard7
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by standard7 » Fri May 22, 2020 10:18 pm

Why would you need an advisor to create spending accounts and deal with RMDs? Is that complicated? We are a few years from withdrawing from our accounts and I didn’t think it would be something you needed an advisor to do.
It isn’t difficult, it’s just a convenience for someone that enjoys other things than messing around with investments. The PAS representative can help set up a spending account with min/max thresholds so that it remains adequately funded to take care of expenses and then the PAS platform would automatically readjust the AA as the balance grows or declines. We currently do not have a spending account linked to our PAS.

We use PAS to manage a small portion of our account and in doing so it is “pre” setup for the future if needed. And at that point we would trust PAS to manage the investments.

nanameg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by nanameg » Sat May 23, 2020 6:04 am

Horton wrote:
Fri May 22, 2020 9:15 pm
nanameg wrote:
Fri May 22, 2020 3:27 pm
afan wrote:
Fri May 22, 2020 6:28 am
I can think of no reason to care whether you are in mutual funds or etfs. At Vanguard, these are different classes of the same funds.

There is no reason to pay anyone to manage your portfolio. Post your information here and people will give you a portfolio for free.

If you want to pay for something you don't need, better to pay 0.3% than 1.5% but the right figure is zero.
I need a YTD balance for the third party administrator for my husbands employer 401k. Form what I’ve read on this forum, that YTD balance is not available for ETF’s on the brokerage platform. I have not confirmed that with Vanguard yet myself.
You need to be aware that the mutual fund platform is going away whether you stay with PAS or not:

viewtopic.php?f=10&t=314816&p=5250988
I understand that the older platform is going away and I accept that ...but are MUTUAL FUNDS going away?? That’s what is happening if you use the PAS. No more mutual funds for you!

nanameg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by nanameg » Sat May 23, 2020 6:17 am

standard7 wrote:
Fri May 22, 2020 10:18 pm
Why would you need an advisor to create spending accounts and deal with RMDs? Is that complicated? We are a few years from withdrawing from our accounts and I didn’t think it would be something you needed an advisor to do.
It isn’t difficult, it’s just a convenience for someone that enjoys other things than messing around with investments. The PAS representative can help set up a spending account with min/max thresholds so that it remains adequately funded to take care of expenses and then the PAS platform would automatically readjust the AA as the balance grows or declines. We currently do not have a spending account linked to our PAS.

We use PAS to manage a small portion of our account and in doing so it is “pre” setup for the future if needed. And at that point we would trust PAS to manage the investments.
I don’t want to oversimplify things and make mistakes that way. But it seems to me that saying someone enjoys other things other than messing around with investments COULD be like saying someone enjoys other things other than paying bills. I mean people who are wealthy enough hire people to do that too. I don’t want to hire someone to do something I could easily do myself.

Same with a PAS advisor...why hire someone to do basically nothing? Once you have set your AA and buy appropriate index funds , you rebalance once a year . I used to look once a quarter and never really went over the 5 band much at all. I just added new cash to the funds that needed some propping up.

I have a PAS advisor now but I don’t see the value and have a phone call scheduled this week with him this week to decide.

Nastywarnob
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Nastywarnob » Sat May 23, 2020 6:23 am

We reviewed the PAS offering when first bringing funds to Vanguard. I did not consider it as a necessary option for me only because I had already felt battle tested from the last 2 recessions and felt comfortable managing my own portfolio. This time was no different although I did feel the stomach churn I feel at the top of particularly scary rollercoasters prior to that first big drop.

However, my wife would have zero interest (and has no experience) in running the investments should something happen to me....and I am quite happy to have that fallback plan in place to insure she’d be supported from a portfolio management perspective. Also, who knows about cognitive ability with aging in the future? For now, I’ll keep the .3 percent charges and put them to work to fund any future needs in that area should they arise!

YMMV, and you may not trust yourself for now regarding making a bad decision due to market volatility...and compared to elsewhere, it’s reasonably priced. I myself do not fret over the ETF-to-mutual fund debate. We have 2 Roth IRAs..mine has MFs and the wife’s has ETFs....same allocations, but wanted to see if anything appreciable was different...sine I’m not day trading, there is little difference. When they offer fractional share purchases of ETFs, I’ll likely convert mine to save on the tiny improvement on expenses.

standard7
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by standard7 » Sat May 23, 2020 10:53 am

Nastywarnob -
However, my wife would have zero interest (and has no experience) in running the investments should something happen to me....and I am quite happy to have that fallback plan in place to insure she’d be supported from a portfolio management perspective. Also, who knows about cognitive ability with aging in the future? For now, I’ll keep the .3 percent charges and put them to work to fund any future needs in that area should they arise!
Exactly and good point about the unsure future of anyone's cognitive ability.

Namameg -
I have a PAS advisor now but I don’t see the value and have a phone call scheduled this week with him this week to decide.
If you have a small Roth or Traditional IRA, why not assign this to the PAS account and reduce the cost. Manage the rest of the account by yourself and have the best of both worlds. You can watch how they manage the PAS and compare that with your own management style.
But it seems to me that saying someone enjoys other things other than messing around with investments COULD be like saying someone enjoys other things other than paying bills. I mean people who are wealthy enough hire people to do that too. I don’t want to hire someone to do something I could easily do myself.
It's great if you want to handle it at this point, I enjoy it as well and I agree that it's not a difficult task for most. But paying bills is not the same as managing a portfolio. And at .3% I wouldn't classify it as something for "wealthy people" especially when you can allocate a small portion of your portfolio to the PAS account and reduce this cost even further. We all spend a bit of time around here thinking about retirement savings, LTC insurance, health insurance etc. This is an inexpensive way to gain a little security knowing that there's an option of putting your portfolio on auto-pilot in case there comes a time that you or a partner can't or don't want to manage the task.

I found the value of adding PAS to our account as a part of future planning for myself and wife while visiting an in-law who's husband had recently passed. While there she received a call from a broker to discuss buying or selling something. She clearly wasn't prepared for, or cared to deal with that call and honestly it may not be a safe scenario depending upon who that broker is. That is not the situation that I want to leave.

I don't expect this to be the right thing for everyone to do, as I mentioned earlier - for some a PAS account can be a very good solution.

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CABob
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by CABob » Sat May 23, 2020 11:35 am

If you are willing and able to do a little bit of setup and maintenance I suggest you put all of it into a 3-fund portfolio with all of the bond funds in the tax advantaged account. If even that is more effort than you are willing and able to expend I suggest a target date fund or life strategy fund for it all. Zero cost and I suggest that its performance might be better that the portfolios you currently have.
Bob

j0nnyg1984
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by j0nnyg1984 » Sat May 23, 2020 4:14 pm

maggsmaggs wrote:
Fri May 22, 2020 7:02 am
I have my parents using PAS and I have been impressed with it every time. My parents ask me to participate in the calls they have with their advisor because they know I can wade through any BS, but there has been nothing with Vanguard that I haven't agreed with.
I have my parents ~1mm IRAs in TR2015, I think. My mom would be lost trying to rebalance and I just don’t care to do it. The .15% or whatever ER is well worth the simplicity.

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Xav2020
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Xav2020 » Sun May 24, 2020 5:51 pm

All,

I do appreciate your valuable inputs.

Per my current advisor, his 1.25% fee is primarily for financial advice as opposed to portfolio management... At 45, I’m considering the following options If I decide to do it myself:
VTWAX (100%, E/R: 0.1%)
VTSAX (80%, E/R: 0.04%), VTIAX (20%, E/R: 0.11%)

I’m not sure how to effectively manage the transition though… (e.g. when to sell the current assets and buy the new ones... After selling the current assets, should I immediately put the money in the new funds?).

I read https://jlcollinsnh.com/stock-series/

retiredjg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by retiredjg » Sun May 24, 2020 6:08 pm

If you want help managing the transition, you need to show us exactly what you have and tell us more about your financial picture. SEe the link at the bottom of this message for how to do that.

The rollover IRA can be cleaned up immediately. The taxable account might require some planning.

You don't mention a plan at work or any spouse's accounts. Those are important in your planning process too.

Yes, if you sell something you should purchase what you want immediately.

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nedsaid
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by nedsaid » Sun May 24, 2020 10:35 pm

retiredjg is on the case and the Original Poster should be greatly relieved. She has helped many investors on this site. When she takes interest in a thread, her advice is pretty thorough and of course there is no charge. The OP might still decide to hire Vanguard Personal Advisor service but will come out of this much better informed and better able to ask good questions of the Vanguard advisor. So listen up.
A fool and his money are good for business.

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imbogled
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by imbogled » Mon May 25, 2020 6:01 am

nedsaid wrote:
Sun May 24, 2020 10:35 pm
retiredjg is on the case and the Original Poster should be greatly relieved. She has helped many investors on this site. When she takes interest in a thread, her advice is pretty thorough and of course there is no charge. The OP might still decide to hire Vanguard Personal Advisor service but will come out of this much better informed and better able to ask good questions of the Vanguard advisor. So listen up.
+1 retiredjg is a Boglehead luminary!
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MikeG62
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by MikeG62 » Mon May 25, 2020 7:32 am

retiredjg wrote:
Fri May 22, 2020 6:54 am
If you actually need an advisor, Vanguard's PAS is definitely worth it and the only place I suggest. Or if you need an advisor until you get investing figure out, they are worth it.
Good Advice.

Personal story.

A few months ago, I helped my recently divorced SIL put her share of the proceeds from the sale of their former home in a safe place for now. Funds initially deposited in her Chase savings account with a yield close to 0.01%. :oops:

She is finally about to get her share of her former husband’s retirement accounts (which is where pretty much where all their financial assets are/were). IRA was at Chase. She was 30 minutes away from being sweet-talked by a Chase personal advisor into opening an IRA at Chase and having the Chase advisor manage the investments for her - for the low annual fee of 1.45%. This is on top of the weighted average expense ratio of the mostly active funds the advisor was recommending of 64bps. Total expense drag of 2.09%!

Thankfully, she does ask for my financial advice (her knowledge and comfort level with managing her finances is close to zero). I stopped that Chase advisor-managed IRA in its tracks. She is now opening a non-advisor managed IRA at Chase simply to facilitate the split of her former husband's Chase IRA. Once set up and the assets transferred in, I've suggested she open an IRA at Vanguard and transfer over all assets in the Chase IRA and hire Vanguard to manage that IRA for the annual advisory fee of 30pbs (plus about 10bps for the underlying funds/ETFs). Same kind of professional management at 1/5th the cost. While I could provide the guidance she needs to get the funds invested, I'd rather not become her personal advisor and change the nature of our 30+ year relationship. She agrees. Plus, she may need other/additional financial advice as she moves along and I like the idea of her feeling like she has access to an advisor at Vanguard she can talk to when and if she has questions.

She will be getting her share of his 401k in the comings months as well. She can then open a rollover IRA at Vanguard and either have Vanguard manage that IRA as well or invest it on her own in the same funds as her other IRA (the latter option would allow her to save the 30bp advisory fee on the rollover IRA as she would at that point know how Vanguard would manage the funds if she engaged them to do it in the first place).

A long way of saying, Vanguard PAS does make sense for some people (those who have no idea how to invest and sadly no interest in learning how either).
Real Knowledge Comes Only From Experience

lostdog
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by lostdog » Mon May 25, 2020 8:41 am

Xav2020 wrote:
Sun May 24, 2020 5:51 pm
All,

I do appreciate your valuable inputs.

Per my current advisor, his 1.25% fee is primarily for financial advice as opposed to portfolio management... At 45, I’m considering the following options If I decide to do it myself:
VTWAX (100%, E/R: 0.1%)
VTSAX (80%, E/R: 0.04%), VTIAX (20%, E/R: 0.11%)

I’m not sure how to effectively manage the transition though… (e.g. when to sell the current assets and buy the new ones... After selling the current assets, should I immediately put the money in the new funds?).

I read https://jlcollinsnh.com/stock-series/

If you decide to go with VTWAX, you could go world market cap allocation with VTSAX and VTIAX in taxable and VTWAX in your IRA's. There was a foreign tax credit issue with VTWAX in taxable last year. To avoid this, use the seperate funds in taxable.

Add Total Bond when you're at that point in your investment life. Easy....
Global Market Cap Equity/1 Year Cash/Bonds || 25x Expenses

Dasnyc
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Dasnyc » Mon May 25, 2020 8:49 am

Jack FFR1846 wrote:
Fri May 22, 2020 6:56 am
Absolutely move it. If you add the ER cost to that 1.25%, you're paying over 6 times the annual cost that I pay in total. And my portfolio is over $2.5MM. PAS is a good first step. Your second baby step (not Dave Ramsey) would be to dump PAS and go to a target date fund. Finally, when you're ready, go to the individual funds or ETFs and take the whopping 15 minutes a year to manage the portfolio by doing a rebalance back to target.
+1

pennywise
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by pennywise » Mon May 25, 2020 9:42 am

nanameg wrote:
Sat May 23, 2020 6:17 am

I don’t want to oversimplify things and make mistakes that way. But it seems to me that saying someone enjoys other things other than messing around with investments COULD be like saying someone enjoys other things other than paying bills. I mean people who are wealthy enough hire people to do that too. I don’t want to hire someone to do something I could easily do myself.

Same with a PAS advisor...why hire someone to do basically nothing? Once you have set your AA and buy appropriate index funds , you rebalance once a year
As with many other things in life, whether an advisor is useful or not depends on your personal situation.

We chose to use PAS this year because we wanted a 10,0000-foot view in organizing a variety of our life's financial aspects. The Vanguard advisor helped us navigate two 403b rollovers and advised on investing the profit from the sale of a house. We asked them to strategically incorporate managing those with non-Vanguard assets including a pair of TIAA traditional accounts and retirement income from several sources including pensions, social security and rental proceeds.

So we have been dealing with not only transfers and allocations but tax implications of several very different financial items and how to choose appropriate investments to support our retirement and hopefully leave an inheritance for our kids some day. For us having Vanguard advice on all that has been most welcome.

An unexpected benefit was that having set everything up in January, in February-March when the markets imploded our advisor quite tactfully helped me avoid my own instincts and has done some appropriate rebalancing to deal with the situation

So while for some it may be as simple as just a pot of money one can shift as one decides, for others an advisor is a very useful pro to add to the team.

lostdog
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by lostdog » Mon May 25, 2020 9:44 am

If I die or become cognitively disabled, my wife will have PAS take over the portfolio.
Global Market Cap Equity/1 Year Cash/Bonds || 25x Expenses

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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by bertilak » Mon May 25, 2020 9:54 am

standard7 wrote:
Fri May 22, 2020 12:38 pm
Like many people, managing investments is not something that she would enjoy.
Enjoying it can be even more dangerous!
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet

nanameg
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by nanameg » Mon May 25, 2020 12:57 pm

pennywise wrote:
Mon May 25, 2020 9:42 am
nanameg wrote:
Sat May 23, 2020 6:17 am

I don’t want to oversimplify things and make mistakes that way. But it seems to me that saying someone enjoys other things other than messing around with investments COULD be like saying someone enjoys other things other than paying bills. I mean people who are wealthy enough hire people to do that too. I don’t want to hire someone to do something I could easily do myself.

Same with a PAS advisor...why hire someone to do basically nothing? Once you have set your AA and buy appropriate index funds , you rebalance once a year
As with many other things in life, whether an advisor is useful or not depends on your personal situation.

We chose to use PAS this year because we wanted a 10,0000-foot view in organizing a variety of our life's financial aspects. The Vanguard advisor helped us navigate two 403b rollovers and advised on investing the profit from the sale of a house. We asked them to strategically incorporate managing those with non-Vanguard assets including a pair of TIAA traditional accounts and retirement income from several sources including pensions, social security and rental proceeds.

So we have been dealing with not only transfers and allocations but tax implications of several very different financial items and how to choose appropriate investments to support our retirement and hopefully leave an inheritance for our kids some day. For us having Vanguard advice on all that has been most welcome.

An unexpected benefit was that having set everything up in January, in February-March when the markets imploded our advisor quite tactfully helped me avoid my own instincts and has done some appropriate rebalancing to deal with the situation

So while for some it may be as simple as just a pot of money one can shift as one decides, for others an advisor is a very useful pro to add to the team.
What’s difficult about the advisor with PAS is you don’t get to choose whom you have. It seems to be a random assignment after you fill out the questionnaire.

I’ve had 3 conversations with our advisor and I think he certainly knows more than I do of course but does he know enough to be worth the fee?

I’m not completely confident in him. His answer as to whether we should invest in international stocks and bonds was very simplistic. I don’t think you can use an advisor if you don’t invest in international funds. I told him I thought we would use the 2 fund portfolio and he was dismissive of it. I’m not sure if that’s right. And he wasn’t dismissive of a 2 fund portfolio for the 401k he can’t manage for my husband since it’s employer owned.

He really was not helpful with Medicare questions. I don’t think he has any tax expertise and you seem to have an advisor who does. Perhaps the assignment depends on the size and complexity of the portfolio. Ours is relatively straightforward and in low 7 figures.

He can only manage 2 of our accounts and he recommended a TDF for the employer 401k my husband has. It’s 1/2 of our portfolio...so why not just use TDF for the entire portfolio? His response was when it comes time to withdraw in the next 5 years or so he can guide us better than simply withdrawing from the TDF. That Idea was debunked quite well by someone on the forum.

He also suggested a TDF for the 401k that has a 60/40 allocation while he has put us in a 45/55 AA. I also mentioned to him that particular TDF was 2x as expensive as the one I chose originally and his response was..I’m sorry I didn’t know that. I thought they all cost about the same.

He’s seems to be a very nice and intelligent young man but I’m not all that confident in his ability to make a significant difference for us.

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FIREchief
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by FIREchief » Mon May 25, 2020 6:02 pm

afan wrote:
Fri May 22, 2020 6:28 am
If you want to pay for something you don't need, better to pay 0.3% than 1.5% but the right figure is zero.
Yep. I think this pretty much sums it up.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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FIREchief
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by FIREchief » Mon May 25, 2020 6:07 pm

nanameg wrote:
Fri May 22, 2020 6:24 am
Be aware that they will most likely not allow you to use mutual funds and will put your money in ETF’s. I was told I will be transitioned to ETF’s by September and it’s one of the reason I’m discontinuing the PAS.
I'm pretty certain that this is entirely a marketing strategy. If the PAS advisor invested in the mutual fund flavor, it would fully expose how simple it all is. By using ETFs, with their associated buy and sell orders, it looks more "sophisticated." At the end of the day does it make any difference in returns? Not really...….
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Topic Author
Xav2020
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Xav2020 » Mon May 25, 2020 7:38 pm

Hi,

Below is the requested info.

Emergency funds:30k
Debt: $239543.0 (mortgage)

Tax Filing Status: Head of Household

Tax Rate:

Me (45 year old, 180k/year, IT professional): 24% Federal, 5.5% State, 3.2% (County)
My partner (36 year old, 40k/year, health aid): 12% Federal, 4.75% State, 3.2% (County)

# My partner is going to school to become an OTA (Occupational Therapy Assistant). She will be earning 55k+ a year with benefits after graduating within 2 years.
# We have a 4 year old girl and a 22 month old boy
# We plan to get married by 2023.


State of Residence: MD (Montgomery county)

Age:45,36

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks

Current retirement assets
05/25/2020: $331063.46 > $93266.46 (taxable) + $80453.00 (401k) + $151344.78 (Roll-over IRA) + $6000.00 (Roth IRA) # LPL Financial statements not available for detailed asset allocation info

04/30/2020: $318776.94 > $89774.25 (taxable) + $77137.69 (401k) + $145865.0 (Roll-over IRA) + $6000 (Roth IRA)

# The breakdown below is based on the the April’s statements

Taxable

# BOFA saving act
3.13% $10000.0 (for investing – do not include emergency funds)

# Brokerage account with LPL Financial (as of 04/30/2020)
1.98% $6335.93 Alger Small Cap (AGOZX, 0.86%)
0.78% $2513.70 ALPS ALERIAN MLP ETF (AMLP, 0.85%)
3.78% $12052.92 AMCAP CL F2 (AMCFX, 0.59%)
1.13% $3612.60 GLOBAL X NASDAQ 100 COVERED CALL ETF (QYLD, 0.6%)
2.72% $8694.65 OPPENHEIMER INTL SMALL MID COMPANY CL (OSMYX, 1.07%)
3.83% $12227.49 ISHARES EDGE MSCI MIN VOLATILITY ETF (USMV, 0.15%)
0.81% $2587.96 MATTHEWS ASIA PACIFIC TIGER INVESTOR CL (MAPTX, 1.05%)
0.07% $254.46 NEW WORLD CL F2 (NFFFX, 0.72%)
2.03% $6480.18 PRIME CAP ODYSSEY GROWTH (POGRX, 0.66%)
1.5% $4796.96 SPDR S&P MID CAP 400 ETF (MDY, 0.23%)
1.87% $5991.60 VANECK VECTORS MONINGSTAR WIDE MOAT ETF (MOAT, 0.48%)
3.11% $9917.60 VANGUARD GROWTH ETF (VUG, 0.04%)
1.35% $4308.00 Cash

His 401k with Fidelity (as of 04/30/2020)
22.4% ($71435.70)VANG TARGET RET 2040 (VFORX) (0.14%)
1.78% ($5701.99) Fidelity 500 Index Fund (FXAIX) (0.015%) >> Switched to this fund on 2020/03/16
Company match: 6% ($10090.00)

His Rollover IRA at LPL Financial (as of 04/30/2020)
2.92% $9321.84 Alger Small Cap (AGOZX, 0.86%)
2.31% $7366.30 GLOBAL ROBOTICS & AUTOMATION (ROBO, 0.95%)
4.93% $15737.36 OPPENHEIMER INTL SMALL MID COMPANY CL (OSMYX, 1.07%)
1.48% $4725.60 ISHARES EDGE MSCI MIN VOLATILITY ETF (USMV, 0.15%)
4.17% $13303.5 ISHARES CORE S&P SMALL CAP ETF (IJR, 0.07%)
2.18% $6964.82 MATTHEWS ASIA PACIFIC TIGER INVESTOR CL (MAPTX, 1.05%)
3.37% $10752.02 MATTHEWS ASIA GROWTH INVESTOR CL (MPACX, 1.09%)
0.30% $987.00 NUVEEN ENERGY MLP TOTAL RETURN FUND (JMF, 1.53%)
5.10% $16258.00 PRIME CAP ODYSSEY GROWTH (POGRX, 0.65%)
2.16% $6895.63 SPDR S&P MID CAP 400 ETF (MDY, 0.23%)
1.18% $3792.00 VANECK VECTORS RUSSIA ETF (RSX, 0.67%)
2.34% $7489.50 VANECK VECTORS MONINGSTAR WIDE MOAT ETF (MOAT, 0.48%)
8.76% $27949.60 VANGUARD GROWTH ETF (VUG, 0.04%)
2.83% $9044.16 VANGUARD HEALTH CARE ETF (VHT, 0.1%)
1.64% $5252.20 Cash

Her Roth IRA with Vanguard (as of 04/30/2020)
1.88% $6000.00 CASH
#Not invested yet. The planned target is VTWAX or VTSAX (100%)

# We have a MD 529 account for each child with an annual contribution of $3000 per child. The current combined balance is $16372.00 (T. Rowe Price portfolio 2036, 0.69%). I plan to switch to their Equity Index 500 portfolio (0.21%).

[b]New annual Contributions

His 401k (also specify any employer matching contributions)
$19500.00 + $10260.00

His IRA/Roth IRA
# I don’t qualify for a Roth IRA and I didn’t take advantage of it when I was eligible.
# Answer of my Financial advisor about having a traditional IRA

“As to non-deductible IRA- what you will do with? You will not be able to convert it to Roth easily!  You have other Deductible IRA. Conversion should be proportionate. You cannot do cherrypicking -which account you convert and which not…That nondeductible money when grow, gets much complicated with taxation...”

Her Roth IRA
$6000.0
$xx taxable (for retirement, not short term goals)
$12000.00

#We’d be happy to leverage all tax advantaged options first (e.g. non deductible traditional IRAs, IUL, backdoor IRA conversion (complete a reverse rollover from my IRA to my Fidelity 401k before this year, open a traditional IRA with Vanguard in January of 2021, Fund it with 6k, open a Roth IRA with Vanguard a few days later, and complete the IRA conversion. Repeat the conversation each year for the maximum amount)

# I asked my advisor in 2017 whether LTC was appropriate for me and he sold me a 500k IUL policy touting the following benefits:

- Tax deferral or tax free if leveraging the loan option
- Downside protection (0% <= x <=10%)
- LTC (rider)

# He said I can consider leveraging it for retirement saving with the caveat that its yield could be similar to the one of a high yield saving account. I purchased the policy in 07/2017 and my monthly premium has been $269.00. Its cash value is $6023.31 and the surrender value is $11k.

Funds available in his 401(k)
BWG DYN US LGCPVL IS (LMBGX) (0.65%) 
FID 500 INDEX (FXAIX) (0.015%)
FID LC CORE ENH INDX (FLCEX) (0.39 %)
GLENMEDE LG CAP GRTH (GTLLX) (0.86%)
JPM GROWTH ADVTG R6 (JGVVX) (0.65%)
PIM RAE PLUS I (PXTIX) (0.93%)
VANG GROWTH IDX ADM (VIGAX) (0.05%)
FID MID CAP ENH INDX (FMEIX) (0.59%)
VANG MDCPGR IDX ADM (VMGMX)  (0.07%)
VANG MDCPVAL IDX ADM (VMVAX) (0.07%)
FID SM CAP ENH INDX (FCPEX) (0.64%)
TRP QM US SM-CP GR (PRDSX) (0.79%)
VANG SMCPVL IDX ADM (VSIAX) (0.07%)
FID EMERGING MKTS K (FKEMX) (0.8%)
FID INTL ENH INDEX (FIENX) (0.59%)
OAKMARK INTL INV (OAKIX) (0.98%)
VANG TOT INTL STK AD (VTIAX) (0.11%)
FID BALANCED K (FBAKX) (0.45%)
VANG TARGET RET 2015 (VTXVX) (0.13%)
VANG TARGET RET 2020 (VTWNX) (0.13%)
VANG TARGET RET 2025 (VTTVX) (0.13%)
VANG TARGET RET 2030 (VTHRX) (0.14%)
VANG TARGET RET 2035 (VTTHX) (0.14%)
VANG TARGET RET 2040 (VFORX) (0.14%)
VANG TARGET RET 2045 (VTIVX) (0.15%)
VANG TARGET RET 2050 (VFIFX)  (0.15%)
VANG TARGET RET 2055 (VFFVX) (0.15%)
VANG TARGET RET 2060 (VTTSX) (0.15%)
VANG TARGET RET INC (VTINX) (0.12%)
VANG RET SAV TRUST (0.47%)
CNB 401K BOND FUND (0.357%)

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Gui0507
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by Gui0507 » Mon May 25, 2020 8:13 pm

nanameg wrote:
Fri May 22, 2020 6:24 am
If you need handholding and someone to talk to yes. However, they only give you a sort of boiler plate plan...4 index funds which you can really do yourself. It may be worthwhile for you to have someone help you transition and then after you feel comfortable you can discontinue the advisory service.

Be aware that they will most likely not allow you to use mutual funds and will put your money in ETF’s. I was told I will be transitioned to ETF’s by September and it’s one of the reason I’m discontinuing the PAS.


Why are they forcing members with MF’s to go ETF?

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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by retired@50 » Mon May 25, 2020 8:17 pm

After reading your most recent post with full financial details, a few thoughts come to mind.

Your adviser has used the typical playbook to make investing confusing and expensive for you.

I'd suggest that you see if your current employer 401k plan allows rollovers. Since the money is presumably "pre-tax" or "tax-deferred" which is just two ways of saying the same thing, your current 401k plan might allow this money to come in the door. You could invest it in one of the low-expense ratio funds you have available in the 401k plan.

The idea here is that your current Rollover IRA at LPL is what is preventing you from conveniently using the back-door Roth IRA strategy that is discussed in the wiki page. Naturally, the financial adviser doesn't want to see this money leave his firm, because when that happens his "assets under management" fee will decrease.

If your workplace plan allows this, I'd suggest moving the account into your current 401k.

The remainder of the portfolio could be moved away from the current adviser and towards Vanguard PAS service if you feel the need to have an adviser. I suspect the general conclusion you've come to is that paying .30% is MUCH less expensive than paying what you currently do.

Once the money is at Vanguard, you'll be invested in low-expense, broadly diversified stock and bond index funds that are appropriate for your investing style and preferences.

The viability or usefulness of the IUL policy should also be questioned. I'm not an insurance expert, but given the track record of your adviser, I'm suspicious.

Regards,
This is one person's opinion. Nothing more.

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tooluser
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Re: Is Vanguard's Personal Advisor Service Worth It???

Post by tooluser » Mon May 25, 2020 8:58 pm

standard7 wrote:
Fri May 22, 2020 12:38 pm
So at the right time, it's a simple task to slide the entire portfolio into the PAS account and it will be managed in the manner that we are comfortable with, create spending accounts, RMDs etc.
That's the first time I've seen/heard of that. Even Vanguard doesn't advertise that, as far as I'm aware. What does "create spending accounts" mean?

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