Vanguard Personal Advisors Services

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abishop512
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Re: Vanguard Personal Advisors Services

Post by abishop512 » Tue Jun 23, 2020 1:49 pm

galawdawg wrote:
Sun Jun 21, 2020 9:37 am
here 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.
Newcomer here. This is my first post. After reading quite a few posts about VPAS, I wanted to share my experience.

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.

nanameg
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Re: Vanguard Personal Advisors Services

Post by nanameg » Tue Jun 23, 2020 7:33 pm

Thanks for sharing that. This is the first I’ve heard of an advisor using more that the standard four funds..but it seems like you’re in a lot!

Why are you moving funds out of PAS?

CarlZ993
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Re: Vanguard Personal Advisors Services

Post by CarlZ993 » Tue Jun 23, 2020 9:26 pm

I signed up for Vanguard's service at the end of 2018. I had no problems or worries about me handling our accounts w/ Vanguard (DW & I both had IRAs, Roth's, & after-tax TSM Index). I'd rebalance our funds about once a year to our 50/50 split. Nothing too difficult or time consuming. I had always told my wife to contact Vanguard to have them manage the portfolio should I predecease her (I expect to outlive her, tho). She has never been actively involved in our investments. I finally decided that I would go ahead and set up the Advisory service in advance so that would be one less item for her to deal with should I die first. I have no complaints with the service so far. He did streamline our portfolio quite a bit (at least mine). I had a slice & dice portfolio with a lot of index funds in it. My wife's portfolio was already streamlined.

Overall, we are a very low-maintenance client for VG. I even sent my SIL & her husband over to them when she retired. They've been pleased as well.
Carl Z

Miriam2
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Re: Vanguard Personal Advisors Services

Post by Miriam2 » Tue Jun 23, 2020 11:04 pm

nanameg wrote: Thanks for sharing that. This is the first I’ve heard of an advisor using more that the standard four funds..but it seems like you’re in a lot!<<== Nanameg - your exclamation indicates that you equate a good portfolio with lots of other funds, and perhaps that's one of the reasons you're having such difficulty with your PAS decision.

Part of Vanguard's portfolio construction depends on what you bring to PAS. Are you bringing your pot of money for them to suggest a good, simple, low cost portfolio that you can understand, that you can keep during market downturns, and won't take a :moneybag fortune to maintain? Or are you bringing your portfolio with a collection of funds and perhaps other investments that you've acquired over the years and become quite attached to - and the simple PAS portfolio may just seem too simple to get used to?

Are you having difficulty parting with funds that you bought years ago when you created your own personal portfolio?

Vanguard uses the standard four funds as the basis of their PAS portfolios because Vanguard believes they are the basis for a good, simple, highly diversified portfolio suitable for just about everyone. Vanguard also excels in low cost, high quality actively managed funds. Jack Bogle started Vanguard and he created the first index fund for retail investors at Vanguard. Vanguard is the leader in the industry with their index funds. So what else would you expect from Vanguard PAS?

However, actually it's not accurate that PAS only uses the four index funds. Our Bogleheads local chapter has had Vanguard Personal Advisors from PAS at our local meetings on two occasions and we also had a Vanguard Senior Relationship Manager who works with PAS at another meeting. All of them have expressly said they do not "use a 4-fund cookie cutter approach regardless of your wishes." Our local chapter Bogleheads discussed the variety of PAS portfolios they have.

Indeed, our Vanguard reps were asked these questions with regard to other Vanguard funds and outside funds and they said that PAS first tries to determine why you own those funds, what place they had for you in your portfolio, then if you really wish to keep them, PAS will try to work those funds into their portfolio suggestion for you. However, if your other fund is a high expense fund such as a .65 or .75 ER, they discourage you continuing with the fund due to its high expense ratio. If you have lots of junk bonds or some alternative investment or a big tilt, that's simply not the Vanguard way.

Nanameg, you have posted so many times about your March panic corona virus market plunge cash-out at 3:00 am :( and you have repeatedly acknowledged that you would benefit from advisor help going forward. You have also posted that in the past, you had a terrible experience with a private advisor. You know a lot about investing and can discuss your portfolio goals. So why not give Vanguard PAS a try?

Stop the indecision and just go with PAS for a year. You won't have to spend your time re-inventing your portfolio or worse yet, worry or panic about it. If you don't like PAS, then tell them thanks, but I'm out, and go back to managing your portfolio yourself :happy

nanameg
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Re: Vanguard Personal Advisors Services

Post by nanameg » Wed Jun 24, 2020 5:32 am

Miriam2 wrote:
Tue Jun 23, 2020 11:04 pm
nanameg wrote: Thanks for sharing that. This is the first I’ve heard of an advisor using more that the standard four funds..but it seems like you’re in a lot!<<== Nanameg - your exclamation indicates that you equate a good portfolio with lots of other funds, and perhaps that's one of the reasons you're having such difficulty with your PAS decision.

Part of Vanguard's portfolio construction depends on what you bring to PAS. Are you bringing your pot of money for them to suggest a good, simple, low cost portfolio that you can understand, that you can keep during market downturns, and won't take a :moneybag fortune to maintain? Or are you bringing your portfolio with a collection of funds and perhaps other investments that you've acquired over the years and become quite attached to - and the simple PAS portfolio may just seem too simple to get used to?

Are you having difficulty parting with funds that you bought years ago when you created your own personal portfolio?

Vanguard uses the standard four funds as the basis of their PAS portfolios because Vanguard believes they are the basis for a good, simple, highly diversified portfolio suitable for just about everyone. Vanguard also excels in low cost, high quality actively managed funds. Jack Bogle started Vanguard and he created the first index fund for retail investors at Vanguard. Vanguard is the leader in the industry with their index funds. So what else would you expect from Vanguard PAS?

However, actually it's not accurate that PAS only uses the four index funds. Our Bogleheads local chapter has had Vanguard Personal Advisors from PAS at our local meetings on two occasions and we also had a Vanguard Senior Relationship Manager who works with PAS at another meeting. All of them have expressly said they do not "use a 4-fund cookie cutter approach regardless of your wishes." Our local chapter Bogleheads discussed the variety of PAS portfolios they have.

Indeed, our Vanguard reps were asked these questions with regard to other Vanguard funds and outside funds and they said that PAS first tries to determine why you own those funds, what place they had for you in your portfolio, then if you really wish to keep them, PAS will try to work those funds into their portfolio suggestion for you. However, if your other fund is a high expense fund such as a .65 or .75 ER, they discourage you continuing with the fund due to its high expense ratio. If you have lots of junk bonds or some alternative investment or a big tilt, that's simply not the Vanguard way.

Nanameg, you have posted so many times about your March panic corona virus market plunge cash-out at 3:00 am :( and you have repeatedly acknowledged that you would benefit from advisor help going forward. You have also posted that in the past, you had a terrible experience with a private advisor. You know a lot about investing and can discuss your portfolio goals. So why not give Vanguard PAS a try?

Stop the indecision and just go with PAS for a year. You won't have to spend your time re-inventing your portfolio or worse yet, worry or panic about it. If you don't like PAS, then tell them thanks, but I'm out, and go back to managing your portfolio yourself :happy
Actually, no I don’t think having a lot of funds is something good. It may be good for others perhaps but it’s not something I want at all. I want simple. I thought Vanguard was all about simplicity and my explanation point expressed surprise only.

Yes I’ll stay with PAS for the short term but I’m leaning toward a fund of funds ...greater simplicity. I’m not sure which one and I also don’t want to choose something I can’t confidently stay with forever so I’m waiting till I learn more.Meanwhile yes, I’m staying with PAS and have another appointment to speak with the advisor July 6 to ask why he arranged the two funds the way he did.

nanameg
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Re: Vanguard Personal Advisors Services

Post by nanameg » Wed Jun 24, 2020 5:44 am

What’s interesting too is that it’s come up in this thread that the minimum PAS will manage is 500k. I’m going to ask about that as well. Right now he is managing 2 accounts of the three we have and maybe he can manage only one. I have to manage the larger more active account on my own since it’s an employer account my husband owns and Vanguard is the custodian of the account. If I have to manage one, might as well do 2 since it’s a rollover Of mine and I’m not contributing to it any longer.

Elysium
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Re: Vanguard Personal Advisors Services

Post by Elysium » Wed Jun 24, 2020 7:06 am

nanameg wrote:
Wed Jun 24, 2020 5:44 am
What’s interesting too is that it’s come up in this thread that the minimum PAS will manage is 500k. I’m going to ask about that as well. Right now he is managing 2 accounts of the three we have and maybe he can manage only one. I have to manage the larger more active account on my own since it’s an employer account my husband owns and Vanguard is the custodian of the account. If I have to manage one, might as well do 2 since it’s a rollover Of mine and I’m not contributing to it any longer.
$50K is the minimum needed for PAS, no more! I was surprised to learn this recently when I inquired about possibly using the option in case my spouse need support at some point in future to manage the accounts. I don't intend to do this myself ever, however, not everyone has interest or are capable to managing even the simplest of the portfolios. Vanguard PAS is a great option for people like that who would rather follow their other interests than manage a portfolio.

For a fee of 0.30% you are getting exactly what you want, low cost, minimal intervention, minimal interaction, minimal trading/re-balancing, yet someone else that will keep an eye on your accounts once a quarter or a year and keep you informed. That's exactly what I want for my spouse if I am not around to manage the portfolios. It works for Bogleheads. The best thing about the $50K minimum is that you can have a trial run with a portion of the money to see how things work before you expand it to rest of the accounts. There is almost no downside to PAS since we know it will be managed following low cost index / ETFs in a simple 4 fund structure that we are all familiar with. This option is great for people who otherwise have no interest or cannot do it.

As for OP, they want to think they are flying business class with Morgan Stanley that is their choice, but the only people flying business class are the folks at their investment management firm, with clients money.
Last edited by Elysium on Wed Jun 24, 2020 10:53 am, edited 1 time in total.

tj
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Re: Vanguard Personal Advisors Services

Post by tj » Wed Jun 24, 2020 7:57 am

nanameg wrote:
Wed Jun 24, 2020 5:44 am
What’s interesting too is that it’s come up in this thread that the minimum PAS will manage is 500k. I’m going to ask about that as well. Right now he is managing 2 accounts of the three we have and maybe he can manage only one. I have to manage the larger more active account on my own since it’s an employer account my husband owns and Vanguard is the custodian of the account. If I have to manage one, might as well do 2 since it’s a rollover Of mine and I’m not contributing to it any longer.
I believe 500k is the minimum to have a dedicated advisor rather than the "team".

palaheel
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Re: Vanguard Personal Advisors Services

Post by palaheel » Wed Jun 24, 2020 9:02 am

From

https://investor.vanguard.com/financial ... :FAS:6:PHP
The annual cost for Vanguard Personal Advisor Services is just 0.30% of the assets we manage for you. If we manage a substantial amount of assets for you, the cost of the services gets even lower. The yearly fee is broken into 4 payments, billed quarterly, with a $50,000 minimum.
Markets crash. Markets recover. Inflation takes your money FOREVER.

tj
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Re: Vanguard Personal Advisors Services

Post by tj » Wed Jun 24, 2020 9:15 am

palaheel wrote:
Wed Jun 24, 2020 9:02 am
From

https://investor.vanguard.com/financial ... :FAS:6:PHP
The annual cost for Vanguard Personal Advisor Services is just 0.30% of the assets we manage for you. If we manage a substantial amount of assets for you, the cost of the services gets even lower. The yearly fee is broken into 4 payments, billed quarterly, with a $50,000 minimum.
Are you suggesting that people with > $500,000 are not the only ones who have a dedicated advisor? Look at the brochure. https://personal.vanguard.com/pdf/vpabroc.pdf

Vanguard Personal Advisor Services offers different asset-based service models to clients enrolled in the service. Clients with Portfolio securities ranging in value from $50,000 to $500,000 are assigned to a team of financial advisors. Clients with Portfolio securities of more than $500,000 receive an assigned financial advisor.

palaheel
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Re: Vanguard Personal Advisors Services

Post by palaheel » Wed Jun 24, 2020 10:05 am

tj wrote:
Wed Jun 24, 2020 9:15 am
palaheel wrote:
Wed Jun 24, 2020 9:02 am
From

https://investor.vanguard.com/financial ... :FAS:6:PHP
The annual cost for Vanguard Personal Advisor Services is just 0.30% of the assets we manage for you. If we manage a substantial amount of assets for you, the cost of the services gets even lower. The yearly fee is broken into 4 payments, billed quarterly, with a $50,000 minimum.
Are you suggesting that people with > $500,000 are not the only ones who have a dedicated advisor? Look at the brochure. https://personal.vanguard.com/pdf/vpabroc.pdf

Vanguard Personal Advisor Services offers different asset-based service models to clients enrolled in the service. Clients with Portfolio securities ranging in value from $50,000 to $500,000 are assigned to a team of financial advisors. Clients with Portfolio securities of more than $500,000 receive an assigned financial advisor.
I am not suggesting anything. There seems to be some confusion about the minimum account value to use PAS. The minimum is $50k, as the quote from Vanguard states. There are other minimums for various levels of service and AUM fee reductions, but I did not address those topics.
Markets crash. Markets recover. Inflation takes your money FOREVER.

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Re: Vanguard Personal Advisors Services

Post by abuss368 » Wed Jun 24, 2020 10:53 am

tj wrote:
Wed Jun 24, 2020 9:15 am
palaheel wrote:
Wed Jun 24, 2020 9:02 am
From

https://investor.vanguard.com/financial ... :FAS:6:PHP
The annual cost for Vanguard Personal Advisor Services is just 0.30% of the assets we manage for you. If we manage a substantial amount of assets for you, the cost of the services gets even lower. The yearly fee is broken into 4 payments, billed quarterly, with a $50,000 minimum.
Are you suggesting that people with > $500,000 are not the only ones who have a dedicated advisor? Look at the brochure. https://personal.vanguard.com/pdf/vpabroc.pdf

Vanguard Personal Advisor Services offers different asset-based service models to clients enrolled in the service. Clients with Portfolio securities ranging in value from $50,000 to $500,000 are assigned to a team of financial advisors. Clients with Portfolio securities of more than $500,000 receive an assigned financial advisor.
Yes that is my understanding as well. I recently had family enroll and they do not have $500k at this time.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

Elysium
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Re: Vanguard Personal Advisors Services

Post by Elysium » Wed Jun 24, 2020 10:57 am

tj wrote:
Wed Jun 24, 2020 9:15 am
palaheel wrote:
Wed Jun 24, 2020 9:02 am
From

https://investor.vanguard.com/financial ... :FAS:6:PHP
The annual cost for Vanguard Personal Advisor Services is just 0.30% of the assets we manage for you. If we manage a substantial amount of assets for you, the cost of the services gets even lower. The yearly fee is broken into 4 payments, billed quarterly, with a $50,000 minimum.
Are you suggesting that people with > $500,000 are not the only ones who have a dedicated advisor? Look at the brochure. https://personal.vanguard.com/pdf/vpabroc.pdf

Vanguard Personal Advisor Services offers different asset-based service models to clients enrolled in the service. Clients with Portfolio securities ranging in value from $50,000 to $500,000 are assigned to a team of financial advisors. Clients with Portfolio securities of more than $500,000 receive an assigned financial advisor.
According to the communication I had with Vanguard it makes no difference whether you have a dedicated advisor or one from a pool of advisors because they all follow the exact same guidelines and have the exact same training. The whole point of PAS is to keep things simple with very minimal interaction, what you are getting is a BH type of portfolio, but some people simply cannot manage it or will not do it for lack of interest.

Elysium
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Re: Vanguard Personal Advisors Services

Post by Elysium » Wed Jun 24, 2020 1:18 pm

nanameg wrote:
Wed Jun 24, 2020 11:42 am
I have had a different experience in I that I have asked two different advisors if TDF ‘S will do the same as the funds the PAS suggests and both times they tried very hard to “ sell” what they offer as a service. The second time I felt I needed more support and said yes.

And it’s not very minimal interaction either. I’ve spoken to the advisor 4 times since April and he scheduled a June conversation on his own.

I think , as another poster has mentioned, it’s a money maker for Vanguard and they pursue it vigorously.
I am not understanding what the complaint is.

First, it is not wrong for VPAS to "defend" their service offerings, if you lead with a question that essentially says what they are doing is no more valuable than investing in a TDF. They add a value to many people who need them, and even many more people who don't think they need them can benefit based on all the panic posts. There is nothing ethically wrong in it for them to sell their offerings as you put it. They are not cold calling you at night, just answering your questions on a call you have initiated.

Second, Is more interaction good or bad in your opinion? I am not clear where you stand on it. I thought some people were complaining there isn't enough interaction, and to me that is a plus. If you are saying that is not true then is it not a good thing? do they force you to accept more calls than you need, and you cannot agree upon the number of calls and a schedule. I think it is possible, and don't see an issue.

Last, it is not wrong for VPAS to generate revenue by offering a competent service and sustain their business model. That is the way every business unit need to function. I don't know what is meant by pursue vigorously? I contacted them once asking about the option to do this, all I was given is a brief answer with a follow-up e-mail giving me contact information if I needed anything i future. I never heard from them ever again, they did not pursue after me since they knew I don't actually need it at this time.

The trouble I see is that people pay 0.30% in AUM and they think they have the right to ask and get answers for all kinds of questions under the sun, and get special treatment like the OP of this thread. It is a service at a very low cost for people who cannot manage their portfolios, there are many even on this forum who cannot, they save you thousands more than they charge by simply not letting your emotions get better of you in distress, that should be enough to justify the small fees.

GmanJeff
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Re: Vanguard Personal Advisors Services

Post by GmanJeff » Wed Jun 24, 2020 2:04 pm

nanameg wrote:
Tue Jun 23, 2020 7:33 pm
Thanks for sharing that. This is the first I’ve heard of an advisor using more that the standard four funds..but it seems like you’re in a lot!
I also have more than 4 funds. Some have fewer than 4 funds. The number of funds, the funds used to construct a portfolio, and the proportions of bond to equity funds vary depending on client circumstances and goals. With a reported $161B in assets under management, it's inevitable that some client portfolios will resemble some others but not all client portfolios resemble all others, despite what some here like to assert. Searching prior PAS-related threads may prove informative, but the best source of definitive information about PAS is PAS itself.

abishop512
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Re: Vanguard Personal Advisors Services

Post by abishop512 » Wed Jun 24, 2020 2:19 pm

nanameg wrote:
Tue Jun 23, 2020 7:33 pm
Thanks for sharing that. This is the first I’ve heard of an advisor using more that the standard four funds..but it seems like you’re in a lot!

Why are you moving funds out of PAS?
I'm thinking of moving a small Roth IRA account with one fund out of PAS. Want to discuss the implications, if any. Just curious about trimming costs. Part of my "look for quarters under the sofa cushions" initiative while I'm stuck at home, if you get my drift.

Live
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Re: Vanguard Personal Advisors Services

Post by Live » Wed Jun 24, 2020 2:29 pm

I agree with others that the specific advisor likely makes a big difference. I use the service, and I have been very happy with my specific advisor. I think the fee is reasonable, and having the advisor does keep me from worrying enough to do any (more) panic selling, especially as retirement approaches.

I have also used the relationship reps for Flagship through the years before using the advisors service. Some reps have been great, some not so much, and they have often changed without warning.

While Vanguard itself is a wonderful institution, the people there still are important and somewhat variable part of the experience no matter what they try to do to homogenize the experience.

dbr
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Re: Vanguard Personal Advisors Services

Post by dbr » Wed Jun 24, 2020 3:55 pm

nanameg wrote:
Wed Jun 24, 2020 3:34 pm

In 2018 when I asked the advisor if a TDF was a good idea rather than the portfolio he came up with with the same four funds he said no, the TDF would be more expensive than holding 4 funds in admiral shares. I did not subscribe to the service then and just followed the plan they had devised.

In 2020 I panicked and sold. Again I asked if I should just be in TDF’s. This was a different advisor. He said no, because when I begin withdrawing it would be more advantageous to be in 4 funds rather than one...I could sell the fund that was doing well. All of our accounts are tax advantaged. Posters on this forum have said that the difference is trivial ...especially if I’m paying for the service.

So from my experience 2 different advisors have discouraged me from using TDF’s when I asked. Make of that what you will.
The first advisor said the TDF is more expensive. That is true but the difference is trivial.

The second advisor gave you an answer that doesn't make any sense considering TDFs are continually rebalanced. Someone making statements such as you appear to have been given should not be in that job.

However, the question of whether or not one should hold assets that are all in a tax advantaged account in a TDF or in a selection of individual funds is so far away from all the things that are important I don't understand why you are hung up on it. Both advisors probably should have said that the difference is not very important and given you a run down on what is important. I am not sure 0.3% gets you the service of educating you about investing.

nanameg
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Re: Vanguard Personal Advisors Services

Post by nanameg » Wed Jun 24, 2020 4:23 pm

Yes it seems it does not.

I wanted to go to TDF’s twice and twice was advised against doing so by advisors with the PAS. That’s why I’ve been “ hung up “ on it. I’m confused.

And now with this advisor the conversation has been getting us to change to the brokerage platform... fine that was a non event ... and changing to ETF’s. Again it’s a distraction that’s not all that important right now. At least it seems that way to me.

I think time would be better spent understanding our risk tolerance and why he chose 45/55.

I’m happy to be back in the market, I’m happy he helped us do that and I’ll continue talking to him but I don’t know if this relationship really serves us all that well long term.

tj
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Re: Vanguard Personal Advisors Services

Post by tj » Wed Jun 24, 2020 4:26 pm

dbr wrote:
Wed Jun 24, 2020 3:55 pm
nanameg wrote:
Wed Jun 24, 2020 3:34 pm

In 2018 when I asked the advisor if a TDF was a good idea rather than the portfolio he came up with with the same four funds he said no, the TDF would be more expensive than holding 4 funds in admiral shares. I did not subscribe to the service then and just followed the plan they had devised.

In 2020 I panicked and sold. Again I asked if I should just be in TDF’s. This was a different advisor. He said no, because when I begin withdrawing it would be more advantageous to be in 4 funds rather than one...I could sell the fund that was doing well. All of our accounts are tax advantaged. Posters on this forum have said that the difference is trivial ...especially if I’m paying for the service.

So from my experience 2 different advisors have discouraged me from using TDF’s when I asked. Make of that what you will.
The first advisor said the TDF is more expensive. That is true but the difference is trivial.

The second advisor gave you an answer that doesn't make any sense considering TDFs are continually rebalanced. Someone making statements such as you appear to have been given should not be in that job.

However, the question of whether or not one should hold assets that are all in a tax advantaged account in a TDF or in a selection of individual funds is so far away from all the things that are important I don't understand why you are hung up on it. Both advisors probably should have said that the difference is not very important and given you a run down on what is important. I am not sure 0.3% gets you the service of educating you about investing.

When I had my free consult with VPAS, I asked the advisor why the glidepaths are different than the target date funds, I was essentially told that the glidepaths for PAS are more flexible and can be tailored to the individual's specific circumstances based on the inputs, which I thought was a perfectly valid answer. I'm 20-30+ years away from retirement though.

nanameg
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Re: Vanguard Personal Advisors Services

Post by nanameg » Wed Jun 24, 2020 4:38 pm

tj wrote:
Wed Jun 24, 2020 4:26 pm
dbr wrote:
Wed Jun 24, 2020 3:55 pm
nanameg wrote:
Wed Jun 24, 2020 3:34 pm

In 2018 when I asked the advisor if a TDF was a good idea rather than the portfolio he came up with with the same four funds he said no, the TDF would be more expensive than holding 4 funds in admiral shares. I did not subscribe to the service then and just followed the plan they had devised.

In 2020 I panicked and sold. Again I asked if I should just be in TDF’s. This was a different advisor. He said no, because when I begin withdrawing it would be more advantageous to be in 4 funds rather than one...I could sell the fund that was doing well. All of our accounts are tax advantaged. Posters on this forum have said that the difference is trivial ...especially if I’m paying for the service.

So from my experience 2 different advisors have discouraged me from using TDF’s when I asked. Make of that what you will.
The first advisor said the TDF is more expensive. That is true but the difference is trivial.

The second advisor gave you an answer that doesn't make any sense considering TDFs are continually rebalanced. Someone making statements such as you appear to have been given should not be in that job.

However, the question of whether or not one should hold assets that are all in a tax advantaged account in a TDF or in a selection of individual funds is so far away from all the things that are important I don't understand why you are hung up on it. Both advisors probably should have said that the difference is not very important and given you a run down on what is important. I am not sure 0.3% gets you the service of educating you about investing.

When I had my free consult with VPAS, I asked the advisor why the glidepaths are different than the target date funds, I was essentially told that the glidepaths for PAS are more flexible and can be tailored to the individual's specific circumstances based on the inputs, which I thought was a perfectly valid answer. I'm 20-30+ years away from retirement though.
Again, isn’t that a relatively trivial thing? For the price you pay? Although people keep saying PAS is cheap I don’t think .03% of AUM as “ cheap”.

It’s much much more expensive to bail but paying for this after that fact just may not be worthwhile. I’m probably better off choosing a TDF and forgetting about it. Then I’ll stop paying attention and worrying just like I used to.

tj
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Re: Vanguard Personal Advisors Services

Post by tj » Wed Jun 24, 2020 4:41 pm

nanameg wrote:
Wed Jun 24, 2020 4:38 pm
tj wrote:
Wed Jun 24, 2020 4:26 pm
dbr wrote:
Wed Jun 24, 2020 3:55 pm
nanameg wrote:
Wed Jun 24, 2020 3:34 pm

In 2018 when I asked the advisor if a TDF was a good idea rather than the portfolio he came up with with the same four funds he said no, the TDF would be more expensive than holding 4 funds in admiral shares. I did not subscribe to the service then and just followed the plan they had devised.

In 2020 I panicked and sold. Again I asked if I should just be in TDF’s. This was a different advisor. He said no, because when I begin withdrawing it would be more advantageous to be in 4 funds rather than one...I could sell the fund that was doing well. All of our accounts are tax advantaged. Posters on this forum have said that the difference is trivial ...especially if I’m paying for the service.

So from my experience 2 different advisors have discouraged me from using TDF’s when I asked. Make of that what you will.
The first advisor said the TDF is more expensive. That is true but the difference is trivial.

The second advisor gave you an answer that doesn't make any sense considering TDFs are continually rebalanced. Someone making statements such as you appear to have been given should not be in that job.

However, the question of whether or not one should hold assets that are all in a tax advantaged account in a TDF or in a selection of individual funds is so far away from all the things that are important I don't understand why you are hung up on it. Both advisors probably should have said that the difference is not very important and given you a run down on what is important. I am not sure 0.3% gets you the service of educating you about investing.

When I had my free consult with VPAS, I asked the advisor why the glidepaths are different than the target date funds, I was essentially told that the glidepaths for PAS are more flexible and can be tailored to the individual's specific circumstances based on the inputs, which I thought was a perfectly valid answer. I'm 20-30+ years away from retirement though.
Again, isn’t that a relatively trivial thing? For the price you pay? Although people keep saying PAS is cheap I don’t think .03% of AUM as “ cheap”.

It’s much much more expensive to bail but paying for this after that fact just may not be worthwhile. I’m probably better off choosing a TDF and forgetting about it. Then I’ll stop paying attention and worrying just like I used to.
Well, I didn't purchase the service, so clearly I thought it was not worth the bps. Plenty would agree with you, hence this long thread:

viewtopic.php?f=10&t=287967

Elysium
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Re: Vanguard Personal Advisors Services

Post by Elysium » Wed Jun 24, 2020 5:02 pm

nanameg wrote:
Wed Jun 24, 2020 3:50 pm
Yes I agree, if I can have help managing fear that would be a very good thing. I think learning more is essential for quelling fear as well.

I was lulled into thinking a bull market goes on forever by the past 10 years or so, I’m closer to retirement, my husbands income was immediately shut down ...it was a toxic mix for me. I was just shadowing a TDF on my own without really understanding anything whatsoever about the risks of stocks.

A painful and expensive education. I think PAS does have value but it’s a bit late for me. I will stay for the short term at the very least as I learn more about investing.

By “pursue vigorously “I mean the constant ad for the service on their home page and the fact that two advisors discouraged me from using TDF’s which cost much less than PAS for essentially, in my case, the same portfolio as they recommended 3 different times.

I had a portfolio review in 2015,2018 and now in 2020 after a panic sell. Before March 2020 I had been holding pretty much the same funds since 2002.

I’m not sure I need PAS to hold my hand after this painful lesson, learning more and this forum for support but I’ll continue the service for the short term at least.
I understand what you are experiencing, hopefully you have learned enough not to make mistakes in future. Anyone who can follow the main principles on this forum do not need an external advisor. I was referring to those who either do not engage, or even after engaging on the forum refuse to learn the right things. You sound like more than capable of managing on your own. That said, do not overlook the value of controlling behavioral mistakes, that is where most people make costly errors, once they have gone through portfolio construction.

Regarding the specific advice, I do see some value in having separate funds than TDFs even if it is minimal, for one you do not need to go 40% Intl allocation as the TDFs boxes you in that AA, the other is ability to draw from separate funds which can be beneficial depending on some scenarios. These are small advantages, although given there is no downside risk to owning 3 or 4 separate funds compared to one TDF, and there are some small advantages, I would go for that option.

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Re: Vanguard Personal Advisors Services

Post by LadyGeek » Wed Jun 24, 2020 6:51 pm

nanameg has described a very different Personal Advisors Services experience. To avoid derailing this discussion and keep it focused on the OP, I have moved that interchange to a new thread. See: [Vanguard Personal Advisors Services - Pitched a "hard sell"]

Update 6/27: Fixed link.
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ellieH
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Re: Vanguard Personal Advisors Services

Post by ellieH » Fri Jun 26, 2020 1:13 am

I'm happy with PAS for the most part. I have five funds - the 4 funds plus an intermediate bond fund that I had when I transferred to PAS. My advisor calls me quarterly to review things and I rely on them to maintain the balance between my after tax and IRA accounts as well as process monthly withdrawals with consideration for tax implications. I had the more expensive advisor services and am not sorry that I switched to this lower fee/less hand-holding approach because I try to keep it simple. When the market dropped a few months ago, I called to talk to him about rebalancing. He said it would be done at the end of the quarter. That was different - under the previous more expensive advisor services, they would have rebalanced at my request. But I pay less for the cookie cutter approach. Do they still have the more expensive hand-holding advisor service?

tj
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Re: Vanguard Personal Advisors Services

Post by tj » Fri Jun 26, 2020 7:54 am

ellieH wrote:
Fri Jun 26, 2020 1:13 am
I'm happy with PAS for the most part. I have five funds - the 4 funds plus an intermediate bond fund that I had when I transferred to PAS. My advisor calls me quarterly to review things and I rely on them to maintain the balance between my after tax and IRA accounts as well as process monthly withdrawals with consideration for tax implications. I had the more expensive advisor services and am not sorry that I switched to this lower fee/less hand-holding approach because I try to keep it simple. When the market dropped a few months ago, I called to talk to him about rebalancing. He said it would be done at the end of the quarter. That was different - under the previous more expensive advisor services, they would have rebalanced at my request. But I pay less for the cookie cutter approach. Do they still have the more expensive hand-holding advisor service?
What is the more expensive handholding advisor service?

Matt228822
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Re: Vanguard Personal Advisors Services

Post by Matt228822 » Mon Jun 29, 2020 5:50 pm

After my parents divorced I directed my mother to VPAS about 4 years ago. She was previously with an advisor who charged her 1% AUM, loaded funds, and bought a variable annuity with her entire IRA. This person was a long time family friend. She of course had no idea about any of this and was happy with the guy as she understands virtually nothing about investing. She was very stressed when I told her how bad she was getting screwed over and was very nervous to change to someone else. My parents had been with him for 15 years or so.

I recommended VPAS after some research. Since moving to VPAS she has been very happy and I don’t worry about her getting screwed over anymore. She has a lowIsh 7 figure account across inherited IRA, IRA, taxable, Roth and the advisor has optimized her investments well from a tax standpoint.

The account is basically a 4 fund portfolio with some leftover stuff with high capital gains that the advisor slowly sells. The biggest advantage of the service in my opinion is it takes away manager risk. The advisor has limits about what he can do and so even if he were to change the plan would be similar.

Overall, my mom has been very satisfied. He answers all her questions and she can send him an email and say “I need 10k” and he will sell the appropriate fund and transfer to her bank in a couple days.

One negative in the entire experience was transferring the initial funds in and transferring in an inherited IRA a couple years in. Unfortunately the advisor doesn’t have much to do with this and so you get connected with their transfer department. Different person every time and not all were that knowledgeable. However the positives outweigh this small negative

nanameg
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Re: Vanguard Personal Advisors Services

Post by nanameg » Mon Jun 29, 2020 6:25 pm

Matt228822 wrote:
Mon Jun 29, 2020 5:50 pm
After my parents divorced I directed my mother to VPAS about 4 years ago. She was previously with an advisor who charged her 1% AUM, loaded funds, and bought a variable annuity with her entire IRA. This person was a long time family friend. She of course had no idea about any of this and was happy with the guy as she understands virtually nothing about investing. She was very stressed when I told her how bad she was getting screwed over and was very nervous to change to someone else. My parents had been with him for 15 years or so.

I recommended VPAS after some research. Since moving to VPAS she has been very happy and I don’t worry about her getting screwed over anymore. She has a lowIsh 7 figure account across inherited IRA, IRA, taxable, Roth and the advisor has optimized her investments well from a tax standpoint.

The account is basically a 4 fund portfolio with some leftover stuff with high capital gains that the advisor slowly sells. The biggest advantage of the service in my opinion is it takes away manager risk. The advisor has limits about what he can do and so even if he were to change the plan would be similar.

Overall, my mom has been very satisfied. He answers all her questions and she can send him an email and say “I need 10k” and he will sell the appropriate fund and transfer to her bank in a couple days.

One negative in the entire experience was transferring the initial funds in and transferring in an inherited IRA a couple years in. Unfortunately the advisor doesn’t have much to do with this and so you get connected with their transfer department. Different person every time and not all were that knowledgeable. However the positives outweigh this small negative
That’s great to hear.
I’m not sure what u mean by removing manager risk. U mean that PAS follows pretty much the “ Vanguard “ line and won’t be selling stuff that’s commission based etc?

Matt228822
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Re: Vanguard Personal Advisors Services

Post by Matt228822 » Mon Jun 29, 2020 7:05 pm

nanameg wrote:
Mon Jun 29, 2020 6:25 pm

That’s great to hear.
I’m not sure what u mean by removing manager risk. U mean that PAS follows pretty much the “ Vanguard “ line and won’t be selling stuff that’s commission based etc?
Yes, the advisors act within the guidelines of the Vanguard PAS. It’s cookie cutter but that’s a good thing most of the time. One of my worries was finding a good fee only advisor but then that person retiring/dying and someone taking over that had a different philosophy. It was stressful for her to change and didn’t want her to have to do it again for a long time if ever. I explained that she might not always have the same advisor at Vanguard (assuming there would be higher turnover although it’s been the same guy from beginning) but that all of them would invest in the same way and none of them will do the bad stuff like “X” because they aren’t allowed.

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