INVEST for Amex by Vanguard & "Personal Advisor"

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
DONZI
Posts: 28
Joined: Thu Sep 02, 2021 7:38 pm

INVEST for Amex by Vanguard & "Personal Advisor"

Post by DONZI »

I have been trying different brokerage firms and want to try Vanguard.

I realize this strays from fundamental BH form (which I find attractive), but since I am going to create a Vanguard account for a test drive I figure that maybe I'll go ahead and try their robot -- Digital Advisor.

I'm self directed and like the control so my motivation is curiosity and to evaluate Vanguard and some of their services.

I did some quick study of the nuts and bolts of the partnership and considering my Amex has a 1.1% cash out into Schwab, it boils down to paying $150/yr for "Personal Advisor" service based on the current rates.

Considering there is a lot of Vanguard customer service criticism here, and the possibility that unlimited PA service might be helpful in that regard (and I may find use for the robot) -- I'd be okay dropping $150/yr for that if there is value.

It seems there was advisor level renaming (?) -- "Personal Advisor" (Service) Vs "Personal Advisor Select" and both aka PAS here.
My conclusion after studying the Vanguard + Amex data led me to assume the "Vanguard advisor" and "Enjoy unlimited access to consultations when you have $50,000 or more in your account(s) managed by INVEST." refers to the "Personal Advisor" level service that is normally $300-$350/yr.


For reference, here is my logic on the $ cost/value of the "INVEST" package:

Invested = $100,001 (req. for 25,000 MR)
Amex HYSA = $50,000

Fee = ~$500/yr
HYSA Perk = ($75)
MR Cashout = ($275)

My plan is to initiate creation of a taxable account myself direct with Vanguard (as opposed to the INVEST page signup). The DA + PA Amex deal can be bolted on later.

I welcome any comment on the "Personal Advisor" level service or robot investor. Not really in any rush to hand my money to some AI, but at least there is waiver of the fee for 90 days and a clean exit path.
Topic Author
DONZI
Posts: 28
Joined: Thu Sep 02, 2021 7:38 pm

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by DONZI »

FWIW, I jumped in with money that was sleeping in a 0.01% deposit account.

Kind of a painful Q&A getting the robo taught. This will be an isolated investment since I didn't want to link other FI so I tried a little coaxing the AI but ultimately ended up with a all-index Stocks 73% Bonds 27% Cash 0% reccomendation of:

Code: Select all

VTI - Vanguard Total Stock Market ETF -		Index	$43,805.76	43.8%	0.03%
VXUS - Vanguard Total International Stock ETF -	Index	$29,203.83	29.2%	0.07%
BND - Vanguard Total Bond Market ETF -		Index	$18,902.48	18.9%	0.03%
BNDX - Vanguard Total International Bond ETF -	Index	$8,101.06	8.1%	0.07%
I could bump it one 'level' less or more agressive (EG: Stocks 79% Bonds 21% Cash 0%) but figured I'd let it ride as suggested until I speak with someone there and inform them of my other considerations, etc.

There is also a TLH toggle for this type of management I can choose at will. Leaving it off since I have existing candidates elsewhere.

Along the way it mentioned that there would likely be a fee credit to bring it to 0.45% once the 90 day waiver is spent -- will see, maybe.

Come monday I guess it'll go ahead and populate the account although the actual ACH has not competed.
the_wiki
Posts: 2848
Joined: Thu Jul 28, 2022 11:14 am

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by the_wiki »

Honestly it's just Vanguard digital advisor with an added 0.35% fee that goes to American express. So you are getting the same product you could get for 0.20% at Vanguard and paying Amex 0.50% for it.

The perks only really work right at $100k and that requires keeping $50k at Amex savings, too. For pretty much any other balance, the fee is much, much higher vs just going direct to Vanguard, and your investments are exactly the same. Calculating it at $200k balance and you get double the fee at Amex. If you lost a few bucks and were under $100k, it costs double vs Vanguard. If you hit the next tier up at $500k, the fee is still double Vanguard even after the higher bonus. So I just don't see the appeal.
User avatar
Wiggums
Posts: 7027
Joined: Thu Jan 31, 2019 7:02 am

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by Wiggums »

I buy Vanguard at Vanguard and I have no complaints. You are right. What you are doing is not very Boglehead. I also would not do this in a taxable account.
"I started with nothing and I still have most of it left."
anil686
Posts: 1316
Joined: Thu May 08, 2014 12:33 pm

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by anil686 »

+3 - I would pursue VG through VG at lower cost for the same service and programs. I have no problem with the PAS advice as I think an investor’s biggest enemy can be their own emotions and PAS may help with staying the course which (again IMO) can offset their fees for poor market timing and rash investor behavior. I do think the program with Amex is a good one for somebody who ordinarily would be investing with an adviser charging 1% AUM in a non Boglehead way - but that does not seem to be you…. JMO though….
Topic Author
DONZI
Posts: 28
Joined: Thu Sep 02, 2021 7:38 pm

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by DONZI »

the_wiki wrote: Sun Apr 09, 2023 12:45 pm Honestly it's just Vanguard digital advisor with an added 0.35% fee that goes to American express. So you are getting the same product you could get for 0.20% at Vanguard and paying Amex 0.50% for it.
I may have missed something, but I think the PA managed service would be 0.30%. Amex get's a cut, presumably something like 0.15% while Vanguard would get the standard 0.30% for the PA service.

EDIT: ah, I see. The 0.20% would be the retail price for the DA service, presumably that would come to 0.15% if an all-index batch of 4 like I got.
the_wiki wrote: Sun Apr 09, 2023 12:45 pm The perks only really work right at $100k and that requires keeping $50k at Amex savings, too. For pretty much any other balance, the fee is much, much higher vs just going direct to Vanguard, and your investments are exactly the same. Calculating it at $200k balance and you get double the fee at Amex. If you lost a few bucks and were under $100k, it costs double vs Vanguard. If you hit the next tier up at $500k, the fee is still double Vanguard even after the higher bonus. So I just don't see the appeal.
This is a test for the most part. My initial and first ever Vanguard account opened about a month ago and the value I realize is reduced by using INVEST.

The $50k in the amex HYSA could be better positioned, and perhaps will be if within the 90 day advisory fee waiver I decide to unenroll from INVEST -- a simple click, done.

I like Amex and continue to get great value from their products and stock. The fact that they make money from INVEST doesn't bother me. I was curious to see how the INVEST is integrated in Vanguard's service as I evaluate Vanguard. The INVEST website format is a little more pleasing than the standard form IMO, but shifts to core Vanguard UI for most DIY tasks.

This is a 2(3+) birds with one stone approach for me. To satisfy my curiosity about DA, PA, Vanguard and INVEST and contemplate if future consolidation at Vanguard will be one of my options.

I'm partial to handling my own investments still, but unless there is some major issue(s) within 90 days, or a year; I'm okay with paying for a bit before I return to a DIY and lower expense arrangement.
Last edited by DONZI on Sun Apr 09, 2023 7:47 pm, edited 1 time in total.
Topic Author
DONZI
Posts: 28
Joined: Thu Sep 02, 2021 7:38 pm

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by DONZI »

Wiggums wrote: Sun Apr 09, 2023 1:07 pm I buy Vanguard at Vanguard and I have no complaints. You are right. What you are doing is not very Boglehead. I also would not do this in a taxable account.
I have no other option at the moment but to use a taxable account.
Topic Author
DONZI
Posts: 28
Joined: Thu Sep 02, 2021 7:38 pm

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by DONZI »

anil686 wrote: Sun Apr 09, 2023 5:49 pm +3 - I would pursue VG through VG at lower cost for the same service and programs. I have no problem with the PAS advice as I think an investor’s biggest enemy can be their own emotions and PAS may help with staying the course which (again IMO) can offset their fees for poor market timing and rash investor behavior. I do think the program with Amex is a good one for somebody who ordinarily would be investing with an adviser charging 1% AUM in a non Boglehead way - but that does not seem to be you…. JMO though….
I recently dismissed a reputable firm that handled 2 of my accounts when covid brokeout. Their 0.60% AUM fee I thought was reasonable given the circumstances.
afan
Posts: 8169
Joined: Sun Jul 25, 2010 4:01 pm

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by afan »

I do not see the appeal of adding AMEX to the Vanguard PAS service. Higher costs and ??? in return? Some points that reduce the cost, but force you to hold a large cash position in an account one might not otherwise want?

Why would someone want this?
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
Topic Author
DONZI
Posts: 28
Joined: Thu Sep 02, 2021 7:38 pm

Re: INVEST for Amex by Vanguard & "Personal Advisor"

Post by DONZI »

AFAIK the PAS level is not part of the INVEST program. PAS requires $500k invested.

I have no idea if someone were to fund INVEST with $500k that the PA service would ascend to the PAS level. I suppose if someone did put that much into INVEST Vanguard would document something about what happens. As it stands, INVEST is bound to PA level AFAIK.

FWIW, I think there is a better reduction in cost now. My initial calcs IIRC were based on the HYSA being 3.00% APY. While 3.75% for the HYSA isn't the best available, it is FDIC and in my case, in place in order to reap what rebates are available in the event that I decide to maintain the thing a full year.
Post Reply