Hello! For a variety of reasons, I would like to move from vanguard advisory funds to self manage my funds through vanguard. Wondering if people have advice because the portfolio is extremely (needlessly) complex with about 1.2m held in 6 mutual funds and 7 ETFs:
VANGUARD LTD TERM TAX EXEMPT ADMIRAL CL
VANGUARD TOTAL INTL STOCK INDEX ADMIRAL CL
VANGUARD TOTAL STOCK MARKET INDEX ADMIRAL CL
VANGUARD INTERMEDIATE TERM TAX EXEMPT ADMIRAL CL
VANGUARD LONG TERM TAX EXEMPT ADMIRAL CL
VANGUARD WINDSOR ADMIRAL CL
VANGUARD SMALL CAP GROWTH ETF
VANGUARD SMALL CAP VALUE ETF
VANGUARD S&P 500 INDEX ETF
VANGUARD MID CAP GROWTH ETF
VANGUARD VALUE ETF
VANGUARD GROWTH ETF
VANGUARD EXTENDED MARKET ETF
It makes my head spin to the extent that I have not moved awy from the advisory services for too long because of this!
Transitioning from Vanguard Advisory to self managed
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Re: Transitioning from Vanguard Advisory to self managed
It is a more complicated portfolio than the usual PAS portfolio. Did you have some of these funds before becoming a client?
Do you have a particular question to ask? This is a great way to start: https://www.bogleheads.org/wiki/Asking_ ... _questions
Do you have a particular question to ask? This is a great way to start: https://www.bogleheads.org/wiki/Asking_ ... _questions
Re: Transitioning from Vanguard Advisory to self managed
While you listed the funds that VPAS put you in, you didn't say what type of accounts they're in, but I'm guessing this is all in a Taxable account (given the presence of tax-exempt bond funds). If you owned any of these funds before having VPAS provide portfolio management, that's important to know because they will likely not sell anything you had previously to simplify as that would (again likely) incur an unnecessary tax bill. They might suggest a strategy to simplify if you explicitly ask to reduce your holdings count, but otherwise they know enough to work around what you already had.kelsterkel wrote: Mon Feb 03, 2025 12:57 pm Hello! For a variety of reasons, I would like to move from vanguard advisory funds to self manage my funds through vanguard. Wondering if people have advice because the portfolio is extremely (needlessly) complex with about 1.2m held in 6 mutual funds and 7 ETFs:
...
It makes my head spin to the extent that I have not moved awy from the advisory services for too long because of this!
We can only make some very rough suggestions because there's a lot of important information that's missing, which would be provided if you used the template for Asking Portfolio Questions.
Critical Questions to Provide Reasonable Advice:
a) What other accounts do you have that are for the purpose of retirement investments (Taxable, Trad Tax-Deferred, and Roth Tax-Free)?
b) What holdings are in this account and those other accounts by $ or % of the total of all accounts (e.g., sum of holdings = $1.2M if this is your only account, but sum of all accounts = 100%)?
c) What's your desired asset allocation (AA) among stocks & bonds for the entire portfolio (all accounts in total)?
d) What's your desired international exposure as a percentage of stocks?
e) What are your marginal Federal and State tax rates (not effective/average)?
Absent those answers, we could still suggest something simpler, but if this is in a Taxable account then there's probably a Tax-Cost to Switch Funds. If the tax-hit were not a concern (it's negligible or small enough you're willing to pay it to simplify), then a simple 3-Fund Portfolio would look like this:
1) ($672K) VANGUARD TOTAL STOCK MARKET INDEX (US Stock)
2) ($288K) VANGUARD TOTAL INTL STOCK INDEX (Int'l Stock)
3) ($240K) VANGUARD INTERMEDIATE TERM TAX EXEMPT (US Bonds)
The example dollar amounts in parentheses sum to $1.2M and represent an 80/20 AA with 30% of stocks in int'l... your suggested holdings may differ significantly based on your desired AA and your holdings in other accounts (bonds in Taxable isn't a great choice unless you run out of space in Tax-Deferred).
Any funds you hold that are not one of those three above would be sold, taxes paid, and the proceeds re-directed into one of those three funds per your desired AA (including a desired int'l exposure level). The tax hit might not be negligible and might even be quite large, so that would explain why VPAS would not just automatically simplify unless you explicitly asked and agreed to the estimated tax-bill to get to a simplified holdings set. If your started VPAS with all cash and let them invest it, I'd write a complaint letter because as you say this is needlessly complicated and doesn't match what we've seen with other VPAS portfolios that were built from scratch/cash (typically 4-6 index ETFs tops, no mutual funds).
If you have other accounts then you don't want the same ticker symbol (or even anything that is "substantially identical" in IRS lingo) between Taxable and another account as that can lead to inadvertent Wash Sales. We can help setup your portfolio across accounts to avoid that issue, but you have to tell us what other account types you have (along with your desired AA and int'l exposure).
A template spreadsheet (not your data) to help with asset allocation assessment and rebalance planning is linked below. Make a copy in your local GoogleSheets space to edit (or download to your local machine if you have Excel). Once you've arrived at a simplified portfolio setup, it should only take 10-15 minutes/year of looking at this spread sheet and then rebalancing (if even needed) to self-manage your portfolio.
Asset Allocation Sheet
AA Current and Proposed
Don't do what Bogleheads tell you. Listen to what we say, consider other sources, and make your own decisions, since you have to live with the risks & rewards (not us or anyone else).