Vanguard Personal Advisor Services Review

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Vanguard is a globally recognized no-load mutual fund provider. You can choose from many ETFs and no-load mutual funds. They also offer financial planning and other services as a stock broker.

They also offer Vanguard Personal Advisory Services An investment management service that is in addition to traditional financial products. The PAS offers a mix of human and algorithmic investment advice for client funds.

Other robo-advisors that are successful include: Wealthfront and Betterment), many investment firms and brokerages are initiating their own automated investing services.

Continue reading to find out more about Vanguard’s Personal Advisor Services, and how to get started with their hybrid-robot advisor.

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Vanguard Personal Advisor Services Review

Vanguard Quick Facts

Began Operations May 1, 1975
Oldest Fund Wellington Fund (July 1, 1929)
Total Assets About $6.2 trillion in global assets under management, as of January 31, 2020
Number Of Funds About 190 U.S. funds (including variable annuity portfolios) and about 230 additional funds in markets outside the United States, as of January 31, 2020
Number Of Investors More than 30 million investors, in about 170 countries, as of January 31, 2020
Average Expense Ratio 0.10% (U.S. asset-weighted fund expenses as a percentage of 2019 average net assets)
Chairman & CEO Mortimer J. Buckley
Number Of Employees (Crew) About 17,600 in the United States and abroad, as of January 31, 2020
Core Purpose To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success

Vanguard Personal Advisor Services excels in its investment mix, high-performing minimal fund expense ratios using Vanguard’s branded ETFs and unlimited access to financial advisors.

The Vanguard Total Stock Market ETF was the first ETF that the company introduced to the market in 2001. Since 2001, they have enjoyed a meteoric rise to overtake State Street at the second spot in the ETF market. 

In the future, there are motions set to continue their market dominance and are likely to challenge industry behemoth BlackRock for the top position. Vanguard’s ETF assets total were worth more than $1.2 trillion.

Vanguard will continue its legacy of disrupting the financial market with the entry of Vanguard’s Personal Advisor Services to the burgeoning market for robo-advisors. Vanguard has an impressive portfolio of assets that total more than $161 billion as of December 31, 2019. This gives it the foundation to continue its growth.

Vanguard Personal Advisor Services Summary

Minimum Account $50,000
Management, planning and subscription fees Higher account balances result in a lower management fee.

For account balances less than $5,000,000: 0.30%

The percentage of an account balance between $5 million and $10 million: 0.2%

The 0.10% rate is for accounts with balances between $10 million and $25 million.

For accounts with balances exceeding $25 million, 0.05%

Onboarding or setup fee None
Account fees None
Access to and credentials for advisors Unlimited appointments by phone, email, or videoconference

Many advisors are certified financial planners. All are fiduciaries.

Investors with accounts balances between $50,000 and $500,000 receive a team of advisors. Investors with balances greater than $500,000 receive a dedicated advisor.

Services in financial planning Can create and advise a portfolio to suit a variety situations such as retirement savings, college savings, or family vacation homes.These services include:

Optimizing social security, dynamic spending, tax efficiency and high-level guidance regarding estate planning, charitable giving and Roth conversions.

Investment expense ratios The average asset-weighted is 0.1%
Options for brokerage Vanguard requires clients to move their money.
Portfolio construction You can customize your order on a client-by-client basis.
Supported accounts Accounts for individual and joint brokerage.

Roth, traditional, rollover SEP, SIMPLE IRAs

Trusts

Tax strategy To maximize taxes, assets are strategically divided between tax-advantaged and taxable accounts. Tax-loss harvesting is done client-by-client.
Support options for customers (includes transparency on the website) Hours of customer service are Monday through Friday, 8am-8pm Eastern Time.
Promotion There is no promotion at the moment

How Does It Work?

What can Vanguard Personal Advisory Services do? They will help you create a customized investment plan that is based on your personal goals. Then, they will manage your investments so that your portfolio preferences are met.

You can view your portfolio, investment performance, and goals online or via the Vanguard mobile app once you become a client. You can also chat with a Vanguard advisor whenever you like.

Advisors can be reached by phone, email, and videoconference between 8:00 AM and 8:00 PM Eastern Time.

An annual report is included and Vanguard will rebalance your portfolio if it moves more than 5%. This helps you maintain your target asset allocation and your target asset. You also pay 0.3% of assets under administration – approximately $150 per $50,000 invested. You can cancel at any time.

SIPC insurance covers Vanguard accounts are covered up until $500,000, with additional coverage from Lloyd’s of London up up to $50,000,000 per account.

Services can be self-cleared Vanguard Brokerage Services uses self-clearing for all transactions and trades.

Pricing

Vanguard Personal Advisor Services charges an annual fee depending on how much assets are managed. A flat fee of 0.30% is charged for all assets under management. This amounts to $150 per account , or $1500 per annum for a portfolio worth half a million dollars.

The fees are less expensive the higher your investment. Keep in mind, however, that fees are billed to your account quarterly.

0.30% First $5 million assets
0.25% Assets between $5 million and $10 million
0.10% Assets between $10 million and $25 million
0.05% Assets above $25 million

Additionally, the management fee of 0.30% is paid. The expense ratios for underlying mutual funds or ETFs within a client’s portfolio average 0.10%. This is lower than other advisory services. Vanguard advisors only use Vanguard ETFs. These ETFs do not attract brokerage commissions from Vanguard.

Should You Apply For Vanguard’s
Personal Advisor Services?

Vanguard is a good option if you have $50,000 to invest. Vanguard’s Personal Advisor Services is more expensive than others but offers more to your account. Vanguard’s advisors combine both the advantages of a robo-advisor and personalized financial planning.

Pros and Cons of Vanguard

Pros

Automated Deposits: Vanguard allows its clients to make automatic deposits every week, bi-monthly or monthly.

Outstanding Investment Pedigree: Vanguard has excellent investment options. Vanguard’s ETFs have some of the highest performance and lowest costs on the market. Vanguard’s ETFs have been so well-received that even their robo advisor competitors include them in their services.

Diverse Options for Investment: Vanguard takes a modern approach to investing, diversifying its investments to maximize investment returns and reduce losses. Vanguard’s portfolio mix includes bonds to provide its clients with a wide range of investments and great portfolio diversity.

Unlimited Access To Live Human Financial Advisors: Vanguard has human financial advisors available for clients, unlike other robo-advisors. Their clients can rest assured that their financial affairs are being handled by a human advisor and not an algorithm-based robot.

Financial advisors are available to investors with more than $500,000 in assets. Premium investors have more opportunities to establish a relationship and maintain contact with advisors.

Individual Tax Optimization and Minimization Plans: Sometimes, robo-advisors will incorporate tax optimization and minimization in their automated services. One size doesn’t always fit all. Vanguard creates tax harvesting packages for each client on a client-by-client basis.

This allows you to maximize your savings. Vanguard can also design a portfolio which strategically allocates assets between tax-advantaged accounts and taxable accounts.

Insurance is available for accounts: Vanguard’s accounts can be covered up to $500,000 through SPIC insurance, and up to $50,000,000 through a TFIP policy Lloyds of London To give their clients a feeling of security.

Access to Admiral Class Shares: Vanguard will replace regular Investor Shares with Admiral(tm), which are much cheaper, for many funds. Admiral Shares usually have a charge of 0.10% less than comparable investor class shares. This is a huge benefit. Access to Admiral Shares was previously only possible if you had a $10,000 account threshold.

Cons

For small investors, it is not possible to access: This service will not be available to those who have less than $50,000. Other robo-advisors such as Wealthsimple and WiseBanyan are also available.Wealthfront And Betterment They have very low account minimums or none and are more suitable for small investors who have a limited capital pool.

Vanguard charges account management fees on all accounts: Vanguard charges a flat fee of 0.30% for account management to individuals who have made investments up to $5,000,000.

This is not an issue for you. Schwab’s Intelligent Portfolios and Schwab’s Wealthfront do not charge any management fees. Wealthfront does not charge account management fees for deposits below $10,000.

However, they will no longer manage $10,000 free of charge for new clients beginning April 1, 2018. They do charge a flat rate 0.25% for accounts above that amount.

For Account Management Fees Discounts, High Buy-in: Vanguard will not give discounts on account management fees if you have invested more than $5,000,000. This limit is prohibitively high for many people.

Vanguard’s financial advisors should consider the financial details of clients when advising them on how to best suit their financial situation.

Clients must be proactive in disclosing financial information. Clients who fail to disclose critical considerations such as college savings plans and 401K plans can lead to a mismatch in the ability of their portfolios to meet these goals.

There are no fractional shares:Vanguard doesn’t offer this option, unlike some other services that allow clients to only invest in a small percentage of a company. The owner will not earn returns on any excess funds left after a purchase.

There are no in-person meetings:Vanguard offers ways to communicate with your financial advisor but no in-person meetings. They do however offer face-to–face meetings via videoconferencing.

Bottom Line

Vanguard Personal Advisor ServicesIt is a strong hybrid advisor. This is the best option for large account balances, accessing financial advisors, or for people who want comprehensive financial planning. It does require a minimum of $50,000 to be eligible for the program.

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