Newcomer here. This is my first post. After reading quite a few posts about VPAS, I wanted to share my experience.galawdawg wrote: ↑Sun Jun 21, 2020 9:37 amhere are a few things to understand about Vanguard PAS that can help you and others decide if using that service is right for them.
First, know that Vanguard PAS takes a low-cost "cookie cutter" approach to investment planning. PAS will put you in their standard recommended portfolio of four funds, Total Stock Market, Total Bond Market, Total International Bond and Total International Stock. They will tweak the portfolio somewhat depending on the asset allocation they recommend for you (often, but not always, 60/40). But you'll still be invested in their standard recommended portfolio of those four funds.
Second, Vanguard PAS are not true financial advisors or planners. They will use a questionnaire you complete to tweak their recommended portfolio. They will not provide you with advice on taxes, insurance needs, estate planning, and other matters that fee only financial planners can often assist with.
Third, unless you have at least $500,000 in Vanguard PAS managed assets, you will not have a dedicated PAS advisor, rather your account will be handled by a pool of Vanguard PAS advisors. That may explain the different experiences shared by Bogleheads about the responsiveness and competence of the PAS advisors.
Fourth, the primary value added by Vanguard PAS, according to Vanguard, is coaching for clients. Put another way, they will encourage you to "stay the course" if you call during market downturns or volatility seeking to sell positions. If you are able to stomach market downturns and stay the course, this may not be of value to you.
I'm not surprised that some report that their PAS advisor regularly contacts them to "check-in" and is very easy to contact. Vanguard PAS is a significant profit center for Vanguard and their PAS advisors receive a share of the profits every year. Vanguard reported that as of December 2019, they had $161 billion dollars in assets in Vanguard PAS. When you consider the AUM fee of 0.3%, Vanguard rakes in $483 million per year in Vanguard PAS fees. And at last report, they have approximately 700 Vanguard PAS advisors. You can do the math!
Each investor should carefully consider the benefits and costs of Vanguard PAS as they would any other investment advisor or product.
I've been with VPAS for 3 years now. I'm 66. I had always managed my own investments until then. I've been happy with my advisor and with the service. I'd invested with Vanguard for over 20 years and had used the free Flagship planning service a number of times. I joined VPAS because I was at a point where I needed to rebalance the portfolio, found I was having trouble doing that, and realized that I wanted some help with this "chore," which is what the portfolio management had become to me.
Besides the standard four recommended funds, my advisor has me in other funds as well, including Intermediate Term Investment Grade (VFIDX), Short-Term Investment Grade (VFSUX), Intermediate Term Tax-Exempt (VWIUX), and Long Term Tax-Exempt (VWLUX). My only point is that advisors aren't limited to recommending 4 funds.
When I sold a rental property, he gave me good advice on what to do with that cash. When I was looking at buying another home and needed a bridge loan, he had helpful suggestions. I've talked with him about Roth conversions and other questions. He did encourage me to stay the course a few months ago, a reassurance which I appreciated. He's been very responsive.
That said, I'm getting ready to have a conversation with him about moving a couple of the retirement accounts out of VPAS while leaving in others. Any feedback/suggestions/tips on that?
Anyway, that's been my experience so far. I sleep better at night having him on my team.