My Experience With the Vanguard Advisory Services

This review of Vanguard Personal Advisor services is based on my actual experiences.  I migrated my spouse’s portfolio to Vanguard and considered using its advisor service to maintain that portfolio.  The portfolio was held at a large, full service broker and was being charged an annual fee of 1.5% of assets under management.  By comparison, Vanguard charges 0.3% for their service, but it’s a very different service.

What are Vanguard Personal Advisor Services?

For those subscribing to its optional Advisor service, Vanguard provides consistent investment advice per its philosophy of low cost index fund investing.  For the accounts being managed, Vanguard will automatically reallocate investments when the allocation drifts more than 5% from desired goal percentages.

For customers with assets of $500,000 or more, a dedicated Vanguard account representative is assigned.  For customers with $50,000 to $500,000, a team is assigned — so you might not get the same person each time you call in with a question.   However, all Vanguard advisors are on the same page and dispense the same advice per the low cost index fund investing playbook. To participate with Vanguard Advisors, Vanguard must manage at least $50,000 of your assets.

Vanguard Advisors is a great option for someone who wants to pick up the phone and speak to an advisor about his/her portfolio.  When I first engaged Vanguard, my expertise level with personal finance was limited.  I knew that lower fees were better than higher fees, but I didn’t feel comfortable taking responsibility for my spouse’s retirement portfolio.  I really liked the idea of being able to discuss investment selections with a professional.

What Vanguard Advisors is NOT

Vanguard’s advisor service is certainly different from a traditional big-broker advisor. Of course, those others commonly charge 1% or more for their market-beating expertise.

By contrast, Vanguard doesn’t claim to have unique predictive powers, able to outperform the market year in and year out.   Instead, after a detailed intake process, Vanguard aims to propose an appropriate asset allocation and savings rate that has a high probability of attaining the objectives you have identified.

Unlike a “robo-advisor,” Vanguard features actual humans!  In my experience, the people I dealt with were articulate and extremely helpful.  The Vanguard employees don’t work on commission and I never felt they were pushing solutions for their benefit.  I really sensed a sincere desire to find a solution that best met my needs.

According to Vanguard:

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The Vanguard Intake Process and Questionnaire

My first step was calling 877-527-4942 (Monday to Friday 8 a.m. to 8 p.m., Eastern time).  I wanted to confirm that the consult was really free and that I’d actually receive a detailed asset allocation plan, even if I didn’t sign-up.

My first phone call lasted almost an hour as I asked plenty of additional questions about the service. I shared my frustration by how much my spouse was spending each month at the full service broker.  The Vanguard representative was extremely patient and didn’t try to rush me off the phone.

Once satisfied, I was directed to the Vanguard website to complete the intake questionnaire.  If you are not already a Vanguard customer, you’ll have to create a free account first. Then, you can access the questionnaire.

Though the immediate task at hand was transferring my spouse’s portfolio, Vanguard needed detailed information about both of us to formulate a plan.

My spouse’s portfolio was all in retirement assets, but Vanguard wanted to know about my assets and joint household objectives as well. I provided:

  • a detailed inventory of all assets (those at Vanguard, the other broker, my workplace 401k, etc.)
  • Desired retirement ages for both of us
  • Current income and savings rates
  • Any non-retirement savings objectives

Then, an appointment was scheduled with a Vanguard Advisor for a telephone conference call. On that call, we planned to review the questionnaire and discuss our objectives.

That call also lasted 45 minutes, as I’m very chatty.  Vanguard then needs a few weeks to develop the plan.  We scheduled the next conference call for 3 weeks to review the proposed plan.

We Didn’t Want to Wait…

Once I showed my spouse the cost involved with the 1.5% advisory fee, he was likewise anxious to leave the old broker and move the portfolio to Vanguard.  Since it was going to take 3 weeks for Vanguard to prepare its plan, we decided to work with the Vanguard Asset Transfer Team. That way, we could initiate the transfer immediately. His funds would then be at Vanguard and ready for investment, per the plan.

Asset Transfer Team

The asset transfer representative was equally articulate and helpful.

We basically had two choices:

  1. Sell the 81 investments that comprised the portfolio at the old broker and then transfer the cash to Vanguard.  During the transfer period, we would be in cash for 5 to 7 business days.  It would have taken longer if the ‘from’ broker didn’t accept electronic requests.  Because the 1.5% fee at the old broker covered all transaction fees, there would be no cost to liquidate the portfolio there.  If the market went up during that period, we would miss out on all the gains.  Of course, if the market went down, being all in cash would protect us.
  2. The other choice was to transfer these 81 items as-is to Vanguard.  Under this option, we wouldn’t be out of the market at all, but if Vanguard wanted us to sell everything, we’d pay Vanguard per-item to sell.  Depending on how much money you have at Vanguard, trades could be free or $7, and some ETF’s could be $35 per stock trade.  You can determine the trade cost in advance with the ticker symbol on Vanguard’s website.

Related: 5 Advantages of ETFs over Mutual Funds

Spoiler Alert

Nearly every item in the existing portfolio had a very high expense ratio and was incompatible with the Vanguard low cost philosophy.  Therefore, Vanguard ultimately proposed that we sell everything and invest in the low cost allocation of index funds.   In retrospect, I wish we sold everything at the old broker and ported over the cash.  We ended up paying about $550 in fees to liquidate the portfolio, once we transferred to Vanguard.

Being Online Helps

The conference with the Vanguard Advisor can be done by telephone or by video conference.  I recommend the video conference because the vanguard advisor can display helpful slides to illustrate various points.  My favorite slide — which convinced my spouse to sell his beloved (and expensive) water sector fund — depicted the top 10 performing sectors over time.

During the asset transfer, you will be directed to the Vanguard website to complete various tasks. This is where you will be opening accounts, agreeing to terms, etc.

Wow! What a Nice Investment Plan!

Our customized Vanguard Investment Plan was 33 pages and contained an amazing level of detail:

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It contained:

  • Detailed summary of our current asset allocation across all accounts (both our Vanguard accounts and my workplace 401k)
  • Proposed asset allocation (e.g. 80% stock, 20% bonds)
  • Specific buy/sell recommendations
  • Retirement goal summary (goal retirement dollars and date for each of us)
  • Proposed savings strategy (required savings rate/month)
  • Planning horizon (ours:  ‘til age 100)
  • Filing status (married filing jointly)
  • Marginal tax rate
  • Priority of goals
  • Income (employment income until age ~67)
  • Social security and pension (starting at age ~67)

An Actionable Plan

The list of buy/sell recommendation was basically a roadmap of how to transform the existing chaos into a coherent portfolio with an appropriate asset allocation:

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Probability of Attaining Retirement Objective and Asset Mix

Based on the proposed savings rate and allocation, the estimated portfolio balance at retirement was expressed as a series of probabilities (much life snowfall total predictions on the weather channel).

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The report had a significant educational component.  It included a spectrum of rates of returns based on asset allocations:

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Re-Allocation Over Time

Though Vanguard Advisors intends to speak with its clients every year, to review progress and adjust for any life changes, the plan depicts changing allocation percentages over time. These include reducing stock exposure over time as you approach the retirement years.

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So, Why Didn’t I Sign Up?

During the period that I was interacting with Vanguard Advisors, I did a deep dive into the world of personal finance.  I binge-listened to 200+ episodes of the Dough Roller podcast and read  “The Bogleheads’ Guide to Investing”.  After doing that, I felt completely comfortable with Vanguard philosophy, the concepts of asset allocation, and rebalancing our portfolios.  I didn’t think I needed to pay Vanguard to rebalance my accounts on an ongoing basis.

I briefly considered perhaps letting Vanguard Advisors manage $50,000 so I’d be able to pick up the phone and ask them questions.  That seemed like a bargain: $50,000 * 0.3% = $150 / year.  However, during this same period, I became active in the Bogleheads Forum (https://www.bogleheads.org/forum/index.php).  I was amazed by the quantity and quality of the answers to the questions I posted there, all from like-minded buy & hold index fund investors.

Because I was so grateful to the advisor assigned to our case, I really wanted him to get credit for the “sign-up”.  However, once I built an Excel model for both our portfolios, trying to carve out $50,000 to be separately managed seemed like a messy complication.   Instead, I wrote a really nice thank you note and made him promise he’d show it to his boss.

I remain eternally grateful to the Dough Roller podcast, especially this episode which convinced me to contact Vanguard Advisors:  https://www.doughroller.net/investing/vanguard-investment-advisory-services/ .

Though I ended up nerding out on personal finance and acquiring the skills necessary to rebalance our accounts, I remain fully impressed and confident that Vanguard would have done a great job.  I did tell my spouse that if I get hit by a truck, he should have Vanguard Advisors manage both portfolios.

Vanguard Personal Advisor Services Alternatives

Robo AdvisorsBettermentWealthfront
Minimum Investment$0$500
FeesDigital – 0.15-0.25%/year; Premium – 0.30-0.40%/year0.25%/year
PromotionsUp To 1 Year Free$5k Managed for Free
ReviewBetterment ReviewWealthfront Review
Try BettermentTry Wealthfront

Read More: Robo Investing – Find out which one matches your investment needs.

Managing Your Investments

Regardless of whether you use Vanguard Advisory Services to manage some of your investments, you’ll want to stay on top of them, too. To do that, we recommend Personal Capital’s free financial dashboard.

Personal Capital enables you to connect all of your 401(k), 403(b), IRAs, and other investment accounts in one place. Once connected, you can see the performance of all of your investments and evaluate your asset allocation. It even works if your investments are at Vanguard and other brokers.

With Personal Capital’s Retirement Fee Analyzer you can see just how much your 401k and other investments are costing you. I was shocked to learn that the fees in my 401(k) could cost me over $200,000!

Personal Capital also offers a free Retirement Planner. This tool will show you if you are on track to retire on your terms.

Try Personal Capital

Topics: InvestingMoney Management Tools

25 Responses to “My Experience With the Vanguard Advisory Services”

  1. RETIRED LIMOMAN

    ISO of a Corporate Trustee to manage my Remaining $500k after My Death( Expected in the next 90 days from COPD/Ling Cancer that kills off 175k every yr in the USA)
    Q. Being mostly a Conservative Investor and Using VG’s Balanced And Bond Funds, will they do the same? ie: just keep the $ in my Wellesly and VBINX and VBILX? and hold off issuing $ to my Heirs for the 1st 5 yrs after my Death and then issue out 3% yr to them on their Birthdays? and that’s about it, other than maybe if they can pay my Final Debts and Let my Long Time CPA firm do my Taxes? Or If their Suggested (and Required) Port is similar as my 3 Bal Fnds? Fine with me.. This will be Extra $ for my Heirs and just alittle something for them after I’m gone, inorder to help them save more for Retirement. Their Ave Age if in the Mid to late 40’s( Nieces and Nephews that are doing well on their own)
    Wellelsy( VWINX/VWIAS) HAS BEEN MY WIFE’S ONLY INVESTMENT FUND AND MINE HAS BEEN USING VG’S BOND AND TRP’S- PRWCX FOR DECADES.. USING THE K.I.S.S. APPRAOCH SO WE CAN FOCUS ON Running our Successfull business that has allowed us to finacally retire at age 55′ on 05′, $ mostly from selling our RE( Real Estate) rental Holdings at the peack of the RE Market , getting 10 yr in advance $ for them then and we took & left The Chicago N. Shore for our Summer Cottage Home in Wi. and even had a briefcase with over $150k cash in it.. from selling Some other Assets people paid us cash for ..

  2. Vanguard’s service, in my experience, is great for someone who knows nothing or little about investing and/or doesn’t want to spend the time. I had been managing my own portfolio, held at Vanguard, for years on my own but needed a break. They immediately sold off funds that were doing well because they believed they were “high risk”. They didn’t mention until 2 years later that I could have kept the funds in a self-managed account. I regret not having stepped in because those funds would have been good to keep. The pros are: initial help with a plan; low fees; automatic rebalancing and a sensible and diversified approach. It definitely is a step up from Roboadvising. Having said that, if you have any investment smarts at all you may find Vanguard’s Personal Advisory Service very vanilla. And the advisors are scripted. I have given up setting up advisory appointments because I always different versions of the same scripted song when I express concerns: “Vanguard takes the long term approach………you’re in the appropriate funds, blah, blah, blah.” In other words, once they park you in their vanilla funds you will remain there forever unless you terminate the agreement. It doesn’t matter what’s going on in the market that may be better……even for a few years. It doesn’t matter if you ask them to move YOUR money that you’re paying them to profit from. And, to be clear, I am NOT an advocate of day trading. My other beef with the service is that “the long term” approach means something very different when you’re 37 versus 67. Their plan is predicated upon living to age 100. Really? How many people do that??????

  3. Lisa Spinelli

    My spouse and I are currently in the market for advisory services, and have narrowed it down to Vanguard and Fidelity. Fidelity is quoting 0.87% fees for advisory of services of a managed funds, and about 1.1% for an index fund portfolio! They state the returns will be higher, but it is difficult to get good historical #s from them, With Vanguards low 0.3% for Vanguard funds, we are leaning towards them. Does anyone have any history with fidelity they could share?

    • Yes! I met with one of their advisors and then he literally disappeared……wouldn’t return calls or emails. Looking back, I guess we weren’t a “big enough fish” for him. But it left a bad taste in my mouth so I stuck with Vanguard.

    • Joshua Boulware

      Hi Lisa,

      I’m a financial advisor at Edward Jones. Since we work with other companies like Vanguard and Fidelity to serve our clients’ investment needs, I’ve had the privilege of working with both. Overall they’re both wonderful companies. All financial companies have pros and cons, so it’s important to find out who is the best fit for you and your personal goals. Also, don’t forget that “you get what you pay for” can sometimes apply to your financial advisor as well. Just because you’re paying more doesn’t mean the service is better, anymore than does paying less. Despite what the talking heads say, passive (index funds) isn’t always better than active management, either. This coming from someone who has access to both, uses both and gets paid the same on both inside of a managed account. There’s a time and a place for everything. Interview multiple advisors and companies and find out who fits you the best. If you ever have questions, feel free to look me up. I’m always happy to help. Best of luck finding someone to partner with.

      • RICK FERRI

        It’s not “you get what you pay for” in financial advisors. It’s you get what you DON”T pay for. I would stay away from ALL brokers because they work on commissions and earn money based on products sales. How do you know you have a good adviser? They embrace index funds. They don’t you to index funds aren’t all they’re cracked up to be.

    • We have used the Vanguard advisor service twice to obtain a financial plan. The information was useful and gave us some feedback regarding the growth potential if we stick with the spending plan. We are not sure how much value an advisor would bring to our portfolio given that we are both in RMD land. We’re thinking we will hold for 9 months using the model provided by the plan and consider having an advisor next year when RMD will likely be higher. You are not obliged to engage a Vanguard advisor even after obtaining a financial plan. One private advisor we used for a number of years told us that the value for a Vanguard Advisor was not there even for 0.3%. A robot appears to manage rebalancing, which is not necessarily bad but gives us pause. A private financial advisor is typically around $250 for a one hour consult.

  4. I have been using Vanguard Advisory Services for about 5 years. We are consolidating and moving our retirement assets into one location and paying .03% vs. our LPL Advisory Fee of 1.25% is much easier to stomach. Our video/phone conversations are very efficient and I am comfortable with the advice and direction we are receiving — I have had only 2 different Advisors during the past 5 years. Our assets are at the level where we have a dedicated “Flagship Services” contact who I can reach by phone to answer quick questions which is helpful. Our Financial Plan for retirement can be adjusted with a quick visit to an online tool. We have been Vanguard Fund investors for many years so using their indexed funds with an appropriate asset allocation strategy and low cost fees is making sense to us. Having a low cost Advisor to help with tax strategy, rebalancing, and the emotional swings of market turbulence is working for us and we are planning to stay for the long haul.

    • A Quick question.
      For flagship services, they say for clients over 1M. Is that service for just one individual account in the household, or 1M combined household income before flagship service is available?

      Thanks!

      • Kenneth Hoen

        The household total is the amount Vanguard uses. My wife and I have separate IRA’s and other brokerage accounts with Vanguard and the sum of both is what they look at for the Flagship services.

  5. Mary Chase

    New Widow, my husband managed all of our finances. Per his suggestion (while he was sick), I contacted a fee for service personal finance adviser who reviewed everything, (his, hers, ours) and suggested I consolidate everything at Vanguard. She even listed out the funds and allocation. All in a nice report. My daughter the banker, said she would help me move stuff, but one day when I was feeling strong, I made the phone call to ask how would this be done. I was and am so impressed. They assigned someone to me for the express purpose of moving funds. She would make a three way phone call to the fund, ask about procedures and forms with me on the phone, and then walk me through the process. .. I have been at Vanguard now for five years. Last year I did some research on the Personal Adviser Service, and went ahead and signed up. Again, I am so satisfied. I moved to a retirement community and cash flow changed, the money appears in my account each month.. Wonderful service.

  6. As we are getting older we are consolidating our accounts in Vanguard to keep it simpler for the future. We went with their Personal Advisory Service. We were impressed with their financial plan for us and decided to move all the IRA’s to their management. Vgrd also created a spending account so we could withdraw $$ on a monthly basis to support our lifestyle. We also kept some assets that we manage ourselves. Everything went smoothly, once we had all the accounts set up I have spent a lot of time learning what was available to me on their website. Very impressive. All this was done at no cost to us and their fees are significantly less than all our other account managers. Our brokers knew what we were doing so the money was all transferred within a week and reinvested within 24 hours.

  7. sophie

    Thanks for sharing your experience. I set up a consulting appointment with vanguard and thought it was free. I got a bill for $250 consulting fee which I did not think it worth the money.

  8. I had Fidelity and my advisory fee was 1.2%. What a ripoff. Glad a switched to Vanguard. In my opinion, Fidelity tried to see me higher rate funds i.e. 0.75% average for expense ratio. Again, Vanguard is in the 0.15% expense ratio,

    • Hi,
      Would you mind telling me what the return is on your Vanguard account? I’m thinking of rolling over my IRA from Fidelity to Vanguard and was wondering if it was worth it. Thanks.

  9. Great review Michael! I’m glad you pointed out this is not a robo advisor. Do you and your wife still like it? Have you ever checked out Fidelity Portfolio Services? I think this is the same, for less cost.

  10. I’m exploring the possibility of trying them out so this is a timely article. Since there is no fee to start/stop the service, couldn’t you take advantage of the service only once every few years and manage your portfolio on your own in between “check ups” and save the 0.3% annual fee for those years?

  11. George Cohen

    You have an ad for Advisor World Annuities–paying some 13%–
    Have you vetted this company & their ads?
    Seriously, annuities are not for everyone, but are they legit?
    People put trust in your website– an inflated ad for a mediocre company can undermine trust.

    I’m just asking–THANK YOU!

    George Cohen, LCSW

  12. Brent Rufenacht

    I tried to open a Vanguard advisor account but could not accept their asset allocation that REQUIRED at least 20% allocation to bonds.
    That allocation did not fit my investor profile, so I did not open an account.
    I was told, it had to be “their way or the highway”. I chose to travel!

    • Katrina Goldberg

      That’s my hangup too! I would love to hear what others think of that bond requirement. I’ve never touched bonds and have never planned on it. Vanguard told me if I don’t want the bonds than they can’t work with me. Why? And am I missing something about bonds besides that the interest doesn’t even usually keep up with inflation?

      • Some level of bond exposure is part of a balance asset allocation. The amount depends on your age and risk tolerance. Given the Vanguard tools and methods it is likely they could not support a all equity approach. I would not conciser that to be a negative in general only that it wasn’t a fit for you,

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