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Tailored Personal Advisor services have always been popular in the US, but today’s savvy investors demand a little more than traditional financial advisors and basic financial planning. The market is monitoring investor trends, and the most innovative investment companies are expanding their portfolio management service types to include state-of-the-art “Digital Advisor” offerings that enable investors to keep track of their finance situation and investments online.
One of the most talked-about financial advisors right now is Vanguard – a longstanding investment management provider that has traditionally ranked highly in top money expertise guides for decades. Right now, Vanguard provides an advisory service that combines traditional “human” Vanguard Personal Advisor services with an innovative “Robo Advisor”, providing customers with the best of both physical and digital advisory services.
Let’s take a look at how Vanguard’s Robo Advisor works and what it could mean for your investment portfolios in the long term.
- Investors get two-in-one, comprehensive portfolio management
- Overall advisory fee costs are lower than many competitors
- Access to both human financial advisors and Robo Advisors
- Investment selection and asset allocation are top-notch
- There is no tax loss harvesting available
- The account minimum of $ 50 000 might be too much for smaller investors
- Vanguard’s website can be a little confusing
- Investors must switch their portfolios over to Vanguard to participate
Here at Investoralist we’ve seen a lot of innovative, low cost account management solutions on the market targeted squarely at investors. But few offer the two-in-one convenience, $ 50 000 account minimum and low cost advisory fee charges of the Vanguard corporation’s latest offering – which is ideal for big money investors.Vanguard provides an investment management service that’s perfect for banking investing, raising money for student loans and virtually all other investor needs. It’s also affordable in the long term and very competitive as far as management fee charges are concerned – especially if you have built up hefty savings.
That said, while Vanguard Personal Advisor services offers plenty of tax minimization strategies, the fact that investors can’t pursue tax loss harvesting is a major downside. What’s more, the quirky website functionality means that keeping track of your Vanguard funds and assets under management isn’t always so straightforward when compared to competitors.
The Bottom Line
In all, we would definitely recommend the latest Robo Advisor / human advisor offering from Vanguard, on account of the innumerable benefits on offer. However, we’d ask readers to please review what the competitors are offering before signing up, as Vanguard might not be the best option for everyone – especially if tax loss harvesting is important to you or your savings are in the sub $ 500 000 mark.
At a Glance
First founded in 1975 over in Valley Forge, Pennsylvania, Vanguard has been a household name in financial planning for decades, so you certainly don’t have to worry about reputation when considering this giant’s Robo Advisor, Digital Advisor and Human Advisor services.
If you need to keep better track of banking investing mortgages insurance and more, Vanguard can certainly help, but how? Let’s take a brief look at what investors can expect from the latest “Human Financial Advisor meets Robo Advisor” service – and how it compares against Vanguard’s most basic Digital Advisor only service, which simply grants investors a standard online investment account.
The two-in-one service we’re focusing on predominantly in this review, which combines the best of both words, is known as Vanguard Personal Advisor Services (Vanguard PAS).
Vanguard Personal Advisor Services: The Basics Explained
|Standard Vanguard Digital Advisor||Vanguard PAS (two-in-one)|
|What is it?||A standardized online investment service||A two-in-one service combining trained human advisors and digital Robo Advisors|
|What is the minimum investment amount?||$ 3 000||$ 50 000|
|What are the top features?||● Online retirement planning interface|
● Low fee Vanguard ETFs
|● Customizable investment plans|
● Fully driven by human advisors and Robo Advisors
|What does the fee structure look like?||● 0.15% of AUM for the Digital Advisor only service||● 0.30% AUM on account balances less than $ 5 million|
● 0.20% AUM on account balances between $ 5 and $ 10 million
● 0.10% AUM on balances between $ 10 and $ 25 million
● 0.05% AUM on balances of $ 25 m or higher
|Are there any set-up or onboarding fees?||No||No|
|What accounts are available?||● Individual investment accounts|
● Joint investment accounts
● Traditional accounts
● Simple/rollover IRAs
|● Individual investment accounts|
● Joint investment accounts
● Traditional accounts
● Simple/rollover IRAs
|What investment funds are available for asset allocation?||4x Vanguard stock exchange traded funds and bonds available||A broad and varied selection of low fee stocks and bonds on offer|
|Do I get any additional services for free?||Yes – a wide selection of educational resources||Yes – a wide selection of educational resources|
Pros and Cons of Vanguard Robo Advisor
We briefly looked at the pros and cons of Vanguard Personal Advisor Services at the beginning of this review, but let’s dig a little deeper and explore what the Robo Advisor – Human Financial Advisor hybrid really offers to investors.
1. Low Management Fee
As you can see in the table above, Vanguard provides a low cost management fee that starts out at just 0.30% for entry level investors with between $ 50 000 and $ 5 million. That said, if your total savings and brokerage accounts across all account types add up to more than $ 5 million, you’ll get an even better deal, as the tiered fees just keep on falling the higher your savings climb – with no upper limit!
In our opinion, the Vanguard marketing corporation simply hasn’t done enough to shout about how great these fees really are. It’s worth noting that one of Vanguard’s key competitors in this arena, Schwab Intelligent Portfolios, charges a premium of $ 30 per month for their hybrid robo service, which in real terms actually equates to 0.72% in comparison to the 0.30% offered by Vanguard. What’s more, other advisors often charge an annual fee on top! The investment management service offered by Schwab does offer unlimited access to human investment planners, however, so is still worth considering as a viable alternative.
2. Investments and Expense Ratios
One thing we love about Vanguard Personal Advisor Services is the way this two-in-one service builds truly tailored portfolios for its clients. Whether you want stock exchange traded funds or bonds, Vanguard funds are consistently broad and varied, so you can be sure of top-notch asset allocation and excellent expense ratios.
In fact, money expertise guides and practically every investment website across the web have recommended Vanguard as one of the best financial planners on the market for expense ratios – and we tend to agree. Whether you’re looking for the best mutual funds and retirement accounts or just long-running financial advice and a state-of-the-art Robo Advisor investment service, Vanguard is a solid choice, even when compared to Schwab.
3. Comprehensive Management
With Robo Advisors at your fingertips and trained human financial advisors just a phone call away, asset management doesn’t get much more comprehensive than with Vanguard. You can expect Vanguard’s advisors to take direct portfolio management control of any retirement accounts, brokerage accounts or trusts you may hold. But the team will also go the extra mile when it comes to considering your other savings and assets, too.
As we mentioned earlier, Vanguard Personal Advisor Services will take a tailored approach each and every time, which means that if you tell your advisor about your student loans or college savings, 401 k or any other assets, these will all be incorporated into your overall financial plan. Now obviously, anything held in accounts owned by banks, companies or financial institutions other than the Vanguard group will not fall under Vanguard’s complete control – but you can still expect top-notch advice from both trained human advisors and Robo Advisors who understand the bigger picture.
4. Financial Advisors
Now, anyone looking solely for a Robo Advisor or Digital Advisor service wouldn’t be opting for this two-in-one package, so you’ll be happy to learn that human financial advisors make up a big chunk of what’s so great about Vanguard Personal Advisor Services. We all need someone to turn to for financial advice when our portfolio management needs get a little too hot to handle – which is why it’s super reassuring that Vanguard has some of the best trained financial planners in the business; human-wise, not robo!
1. Account Minimum
Compared to other investment management account types, the Vanguard Robo Advisor account minimum of $ 50 000 might be a little out of reach for smaller or more modest investors. It’s clear from the way the Vanguard Marketing Corporation has advertised the Vanguard PAS that the two-in-one product is aimed predominantly at wealthier savers with broad and varied portfolios.
Now, if you’re lucky enough to have $ 5 million, $ 25 million or even more stashed away, you’ll benefit immensely from those low cost AUM fee structures, but if your mutual funds, college savings and accounts total $ 500 000 or less, you might want to shop around to see whether Schwab or other investment management companies can offer you a better deal. And if you’re savings are sub $ 50 000, then Vanguard PAS won’t even be an option for you at all – which we think is a real shame.
2. Tax loss harvesting
One of the biggest pitfalls with Vanguard Robo Advisor services is that tax loss harvesting, which enables investors to sell securities at a loss to offset their capital gains from better-performing investments, is a complete and utter no-no. Fortunately, however, Vanguard does offer a handful of viable tax minimization alternatives, such as tax-advantaged investment strategies.
Vanguard PAS encourages investors to focus on more tax-efficient approaches to investment from the outset and explore the potential of tax-exempt municipal bonds in taxable accounts. The Vanguard Group also works to reduce investors’ tax burden by selling off quantities of securities with the greatest losses, but this approach arguably isn’t as effective as the traditional kind of tax loss harvesting offered by Schwab and other competitors. Sadly, Vanguard’s tax strategies leave a lot to be desired, especially if you’re the kind of investor who prefers – or has grown used to – financial advisors carrying out day-to-day monitoring of tax harvesting windows to present you with solid savings opportunities as and when they arise. Consider taxes travel calculators a thing of the past.
3. Customer Feedback
The Vanguard group typically ranks highly across investment reviews websites and magazines or trade press ratings of financial advisor services. That said, our advice would be to please review any genuine customer experiences shared on sites like TrustPilot or other consumer-facing reviews sites. Full advertiser disclosure here: real people can sometimes be a more reliable source than a glossy advertorial in the Wall Street Journal, and it always pays to do your research before making any big decisions in regard to financial planners or your financial situation.
Vanguard is such a tried-and-tested name in US investment that you can’t go too far wrong, but it is worth noting that many consumers have complained about the Vanguard website being a little confusing or difficult to use compared to those of competitors. We’d recommend having a play for yourself before committing to Vanguard as your one and only robo advisor.
How Does the Vanguard Digital Advisor – Human Advisor Hybrid Compare?
So, we’ve examined the pros and cons of Vanguard Personal Advisor Services in real terms and the things you should probably think about before signing up. But with so many great investment platforms on the market, how does it compare to what competitors are bringing to the table? Let’s look at the top similarities and differences.
Robo Advisor Comparison
|Financial Planners||Commissions and Costs||Account Minimum||Current Promotions||Investoralist Rating|
|Vanguard PAS||Tiered management fee from 0.05% to 0.30%||$ 50 000||N/A||4/5|
|Schwab Intelligent Portfolios||$30 per month flat fee||$ 5 000||N/A||5/5|
|Betterment||0.25% management fee||$ 0||Get up to 1 year with no fees when making a qualifying deposit||4/5|
|Wealthfront||0.25% management fee||$ 500||Get up to $ 5 000 worth of assets managed absolutely free||5/5|
|Stash||$ 1 – 9 per month||$ 0||Get free cash credit up to $ 510 with a qualifying deposit||4/5|
|Ellevest||$ 1 – 9 per month||$ 0||N/A||5/5|
|Ally Invest Managed Portfolios||0% to 0.3% management fee||$ 100||N/A||4/5|
What is Unique About Vanguard?
Between the obvious reputation benefits of the Vanguard Group, its two-in-one advisors and highly rated customer service, there are a number of reasons you might want to consider Vanguard over its competitors. But we think the standout benefit is that Vanguard Personal Advisor services offers tiered management fees that are simply hard to beat for bigger money investors.
As you can see from our comparison, most financial planning companies will charge a flat monthly fee or a management fee of around 0.25% for using their digital advisor services – which might not always come combined with human financial support. However, Vanguard PAS’ sliding scale of management fees could see you paying as little as 0.05 % on mega AUM balances of more than $ 25 million – making it the obvious choice for wealthier investors who want to cut costs.
Is Vanguard Right for You?
Seeking any kind of financial advice, banking investing tips or portfolio management services will always be a personal affair. There is no one-size-fits-all approach to personal advisor services, but Vanguard’s two-in-one tailored customer service certainly does a fantastic job of trying to meet each client’s individual needs.
If you’re a big money investor with a hefty risk tolerance and a desire to cut down on management fees, Vanguard PAS is pretty much perfect for you. However, you’ll need to be happy to move your accounts into Vanguard funds and not particularly interested in tax loss harvesting in order for it to work. The tiered management fees offer great deals if you’re wealthy enough to slide up the scale, but people with sub $ 500 000 funds or those who can’t meet that $ 50 000 account minimum might want to investigate what other options are available.
Investoralist – Helping You Make Better Investment Decisions
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