May 21, 2018

Vanguard Personal Advisor Review: Is It Good?

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Typically, robo-advisors mean strictly online portfolio management with no human interaction. Vanguard Personal Advisor Services set out to be the face of change by combining the two services. Is it all it's cracked up to be?

Overall Score

3.6

Annual Fee

4.5

Minimum Deposit

1.0

Human Advisors

5.0

Customer Service

4.0
5-point scale (the higher, the better)

Pros and Cons

  • Professionally managed by human advisors
  • Low annual fee
  • Backed by prestigious brand
  • High minimum investment
  • Extra transaction fees
  • No continuous tax loss harvesting

Bottom Line

Hybrid robo and human advisor providing personalized advice for low fees, for investors with $50k to start

Vanguard Personal Advisor Services offers personal investment advice at a fraction of the cost of standard financial advisors. They promise the perfect combination of a personal touch with technologically advanced features. The hands-off investor who wants a little personal interaction now and then may enjoy the services the Vanguard Personal Advisor offers.

Is the service all that it promises? Should you jump on board with one of the oldest names in the investment industry? Keep reading to learn more about this robo-advisor.

How Does Personal Advisor Work?

The Vanguard Personal Advisor Services starts off the same way as any other robo-advisor. You sign up for an account and answer a slew of questions pertaining to your income, assets, goals, and age. If you have any current investments, you'll answer questions about them as well. This is how Vanguard creates your personalized financial plan.

After you answer the questions, Vanguard takes approximately three weeks to formulate your plan. So don't think this is something you are going to decide today and put into action. You'll have to sit by idly and wait for your consultation appointment, which can take place over the phone or video chat with a personal advisor.

Once you have your consultation and decide to move forward, your advisor builds your portfolio with the recommended allocations. It usually consists of low-cost stocks and bonds, but each portfolio is different as it's based on your goals.

You are able to view your portfolio at any time via the online dashboard or the mobile app. You don't have to worry about managing the portfolio, though; a Vanguard advisor will do it for you. This helps keep your portfolio on track. Most of the work is handled by Vanguard's software, but you have the peace of mind that your portfolio is also overseen by a human.

What Are the Fees?

At first look, Vanguard's Personal Advisor fees may seem steep. They charge 0.3% of your managed assets. If you have $50,000 invested (which is the minimum allowed), that's a fee of $150. Comparing this fee to Betterment or Wealthfront, both of which charge 0.25%, it might automatically seem higher. But the difference is Vanguard offers human interaction at no cost. It's better compared to services with personal financial advisors, which average around 1% or $500 on a $50,000 investment.

Don't forget that you'll also pay expense fees for the traded assets, though. Typically, Vanguard only trades commission-free ETFs, but there are still expenses involved that may range from 0.04% to 0.12%. This is pretty typical of many advisors, though.

Is Vanguard Personal Advisor worth it?
If you are a "big investor," meaning you are not just starting out and have at least $50,000 to invest, Vanguard offers a great service at a low cost. If you don't want to be actively involved in managing your portfolio and don't have the time or want to pay the fees of a personal advisor, it gives you the best of both worlds. You have access to a personal advisor who can give you advice and will monitor your portfolio rather than just relying on an algorithm and online platform.

How's the Platform?

The personal advisor side of Vanguard Personal Advisor Services isn't its only perk. They do offer advanced technology as well. Their online dashboard is user-friendly and accessible 24/7. You can get a real-time snapshot of your portfolio and review your goals. You can also track your investments' performance and see if you are still on track to meet your goals.

You can view the platform on any device, be it PC, tablet, or smartphone. You will see the same information and have the same tools at your disposal anywhere.

If you prefer video chats vs telephone conversations, you can access the video chat tools right in the dashboard, giving you access to a personal advisor from your own home.

Is Vanguard Personal Advisor safe? Vanguard is covered by SIPC insurance. This provides you with protection of up to $500,000 should the broker fail. It is not protection against market losses or bad decisions. Vanguard also offers extended protection from Lloyd's of London for specific clients.

Reasons We Like Vanguard Personal Advisor

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  • Vanguard sticks with mostly low-cost funds to minimize your expenses. A key benefit in investing with robo-advisors is keeping the fees down. Vanguard doesn't promise you won't pay any costs, but they do choose low-cost stocks and bonds that align with your goals.

  • Vanguard automatically rebalances your account. One of the largest benefits of robo-advisors is the reallocation of your investments that occur automatically. If your portfolio veers more than 5% away from your set goals, Vanguard steps in and reallocates your investments. This is mostly done by a personal advisor and not software algorithms.

  • You get access to Vanguard's Admiral Shares. Vanguard's Admiral Shares are usually reserved for high net worth investors, but clients of the Personal Advisor Services have access to these low-fee mutual funds.

  • You can get advice from a human. We can't talk about this benefit enough. The human interaction included with your Personal Advisor Service's account can be very useful. If you invest between $50,000 and $500,000, you are assigned a "team of advisors." If you invest more than $500,000, you are assigned one advisor. Either way, everyone is on the same page regarding your investments and can help you make appropriate decisions.

  • You can check your account 24/7 online or on the app. The personal advice combined with the technology Vanguard offers is the icing on the cake. When you are not speaking to a personal advisor, you can access your account at any time to check its progress, look at your investments, and make changes to your goals.

  • You can get advice on other accounts outside of the Vanguard accounts. Vanguard manages taxable and retirement accounts (IRAs). But that doesn't mean the advisors won't counsel you on other accounts you have. If you tell the advisor about your other investments, they may offer advice to help you understand the financial implications of all of your assets.

  • You will receive a progress report every quarter. Sometimes it's just nice to see how your investments are doing on paper. Vanguard sends you a quarterly progress report with these exact details. This is in addition to the conversations you have with a personal advisor.

  • You can have an investment plan created for you free of charge. You are under no obligation to move forward with the financial plan an advisor puts together for you after completing the questionnaire. Your initial consultation is free of charge. If you decide to move forward, you'll pay the annual fee and subsequent investment fees. If you decide to do it on your own or go elsewhere, it doesn't cost you a penny.

  • The personal advisor can prevent you from making emotional decisions. It is easy to get caught up in the emotions of investing. If an investment you made takes a solid turn in the wrong direction, it's easy to want to jump ship. Having the advice of a personal advisor to talk you out of it can help you stay on track with your goals or at least help you make sense of the situation.

  • A personal advisor can help you minimize your tax burden. Investing can mean high tax liabilities. A Vanguard personal advisor can help you by carefully diversifying your assets between taxable and tax-advantaged accounts.

Reasons You May Want to Look Elsewhere

  • You need a large initial investment. The initial $50,000 minimum investment can turn away many investors, especially those just getting started.

  • They don't offer continual tax loss harvesting. Unlike other robo-advisors, Vanguard does not participate in daily tax loss harvesting techniques. They claim to help minimize your tax burden by allocating your assets appropriately, but tax loss harvesting definitely has its benefits in certain situations.

  • You are responsible for any transaction fees. Vanguard claims to invest in mainly commission-free ETFs, but they don't avoid other investment types, such as mutual funds, if they could be beneficial to your portfolio. Many robo-advisors cover the commissions and transaction fees with their management fee, but Vanguard does not. You are responsible for any additional fees.

How It Compares

Vanguard Personal Advisor Services vs Personal Capital: Both Vanguard and Personal Capital provide access to a human advisor. But Personal Capital's services come at the higher cost of 0.89% if you have less than $1 million invested. They also require a minimum initial investment of $100,000.

 Personal Capital
 Visit Site
 

Vanguard Personal Advisor

Personal Capital

SPECIAL OFFER
Get Started with Personal Capital - Learn More

 

Benefits and Features

Annual Fee
0.3%
0.89% for first $1 million, 0.79% for first $3 million, next $2 million 0.69%, next $5 million, 0.59%, and 0.49% over $10 million
Minimum Deposit
$50,000
$100,000
Phone Support
Yes
Yes
Live Chat Support
No
No
Email Support
Yes
Yes
Human Advisors
Yes
Yes
Assets Under Management
$100+ Billion
$6.5 Billion
Tax Loss Harvesting
client-by-client basis
Yes
Goal Tracker
Yes
Yes
Automatic Deposits
Yes
Yes
Online Platform
Yes
Yes
iPhone App
Yes
Yes
Android App
Yes
Yes
Single Stock Diversification
No
Yes
Fractional Shares
No
No
Taxable Accounts
Yes
Yes
401k Plans
No
Yes
IRA Accounts
Yes
Yes
Roth IRA Accounts
Yes
Yes
SEP IRA Accounts
Yes
Yes
Trust Accounts
Yes
Yes
529 Plans
Yes
Yes
 Visit Site

Vanguard Personal Advisor: Pricing information from published website as of 04/04/2018

Personal Capital: Pricing information from published website as of 04/04/2018

Vanguard Personal Advisor Services vs Betterment: Betterment does not have a minimum requirement, and investors can invest with Betterment with any amount they have. They charge an annual fee of 0.25% for accounts with less than $100,000. This does give you in-app messaging privileges with a personal advisor. Accounts with more than $100,000 pay 0.4% but have unlimited access to a personal advisor over the phone.

 

Vanguard Personal Advisor

Betterment

 

Benefits and Features

Annual Fee
0.3%
0.25% for accounts under $100,000; 0.40% for accounts $100,000+
Minimum Deposit
$50,000
$0
Phone Support
Yes
Yes
Live Chat Support
No
No
Email Support
Yes
Yes
Human Advisors
Yes
Yes
Assets Under Management
$100+ Billion
$10 Billion
Tax Loss Harvesting
client-by-client basis
Yes
Goal Tracker
Yes
Yes
Automatic Deposits
Yes
Yes
Online Platform
Yes
Yes
iPhone App
Yes
Yes
Android App
Yes
Yes
Single Stock Diversification
No
No
Fractional Shares
No
Yes
Taxable Accounts
Yes
Yes
401k Plans
No
Yes
IRA Accounts
Yes
Yes
Roth IRA Accounts
Yes
Yes
SEP IRA Accounts
Yes
Yes
Trust Accounts
Yes
Yes
529 Plans
Yes
No

Vanguard Personal Advisor: Pricing information from published website as of 04/04/2018

Betterment: Pricing information from published website as of 04/04/2018

Vanguard Personal Advisor Services vs Wealthfront: If you only have $500 to invest, Wealthfront could be a better alternative as that is their minimum required investment. The tradeoff, though, is that you don't have the option to speak to a human. This service is completely reliant on the software algorithm.

 

Vanguard Personal Advisor

Wealthfront

 

Benefits and Features

Annual Fee
0.3%
0.25%
Minimum Deposit
$50,000
$500
Phone Support
Yes
Yes
Live Chat Support
No
No
Email Support
Yes
Yes
Human Advisors
Yes
No
Assets Under Management
$100+ Billion
$10+ Billion
Tax Loss Harvesting
client-by-client basis
Yes
Goal Tracker
Yes
Yes
Automatic Deposits
Yes
Yes
Online Platform
Yes
Yes
iPhone App
Yes
Yes
Android App
Yes
Yes
Single Stock Diversification
No
Yes
Fractional Shares
No
No
Taxable Accounts
Yes
Yes
401k Plans
No
No
IRA Accounts
Yes
Yes
Roth IRA Accounts
Yes
Yes
SEP IRA Accounts
Yes
Yes
Trust Accounts
Yes
Yes
529 Plans
Yes
Yes

Vanguard Personal Advisor: Pricing information from published website as of 04/04/2018

Wealthfront: Pricing information from published website as of 04/04/2018

Bottom Line

Vanguard Personal Advisor Services seems costly, but it has some serious benefits to back it up. If you are a high net worth investor looking for automation but with a personal touch, this service could be just what you want.

If you don't have the $50,000 to invest, though, you'll find yourself looking at the competitors, many of which don't require the minimum that Vanguard requires.

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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