What's It Really Like to Work With Vanguard's Personal Advisory Service?

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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

drzzzzz wrote: Tue Mar 09, 2021 8:36 pm
michelef wrote: Tue Mar 09, 2021 3:32 pm Unfortunately, my brother who died suddenly and unexpectedly at 56 late last year, did not have a good experience after I referred him to PAS. I referred him because he had very little investing knowledge, was prone to selling with market volatility and had been sold poor commission products in the past.

PAS managed his traditional IRA, Roth IRA and brokerage accounts for exactly one year. After his death, we were informed that none of his accounts had beneficiaries named. An old Fidelity 401k and IRA held at an insurance company both had beneficiaries listed. In his case, this resulted in most of his assets being inherited by an estranged relative who he never would have chosen to leave the money to.
This is unfortunate and a crime to me - I would hope Vanguard at least would have brought this up when they spoke to your brother as well as sent multiple emails asking him to name beneficiaries on his account.

A few years back, we used PAS for about 9 months to and left after multiple conversations related to tax loss harvesting and their approach. We were disappointed that Vanguard's marketing sounds better and more sophisticated than what they will actually do - their responses on a few issues included no recommendation especially with anything related to tax advice. We also found, at that time, that they were fairly rigid in their approach and not willing to compromise although I offered a variety of ideas to reach a mutually agreeable solution.
Vanguard will legally not provide any aspect of tax planning.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by lostdog »

abuss368 wrote: Tue Mar 09, 2021 9:21 pm
lostdog wrote: Tue Mar 09, 2021 9:14 pm In our IPS my wife is instructed to contact Vanguard PAS if I start becoming mentally disabled or I die suddenly.

I'm setting up their four fund portfolio to make the transition easy. I'll add BNDX later.

My wife has no interest in managing the portfolio.
I thought you were Total World? Moved to four total funds?

Tony
I was total world in our IRA's but decided to separate it into VTI and VXUS because it's so cheap. .05% cost on the entire portfolio.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FIREchief »

Tattarrattat wrote: Tue Mar 09, 2021 8:00 pm
FIREchief wrote: Tue Mar 09, 2021 7:51 pm
formerlybroke wrote: Tue Mar 09, 2021 6:49 pm One stop in my search was PAS. We were discussing a +$10 million portfolio. The Vanguard advisors’ solution was a three fund portfolio.

That may be just fine for many. It’s was well, well below my expectations.
What were you expecting? Was the three fund too cheap or too simple? :confused
Three (or even two) fund portfolio is perfect for 10 million, or even a hundred million dollars.
I don't disagree, but I trend even simpler than that. As I've shared many times, my LMP is 100% TIPS and my RP is 100% total US market. Is that "one fund" or "1.5 fund" or ??? I never rebalance. If I had $10M (I don't), I would do exactly the same thing. I just threw out the three fund as an example of what the PAS was recommending to the previous poster.
The common strategy for financial advisors is to produce a complex portfolio to intimidate the client into thinking it's too difficult to do it yourself. Those complex portfolios will not perform better than a two or three funder. There are reasons to not use PAS, but a simple portfolio is not one of them.
Yep. I found it interesting that the previous poster had shared that he/she spent a career as a financial advisor (likely selling what you've described), and was now seeking somebody else to set up a similarly complex portfolio. I may have misunderstood, but he/she hasn't responded. I guess to his/her credit, he/she believed in what they had sold others. Most here wouldn't agree with that costly strategy, but that's okay. 8-)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

lostdog wrote: Tue Mar 09, 2021 9:25 pm
abuss368 wrote: Tue Mar 09, 2021 9:21 pm
lostdog wrote: Tue Mar 09, 2021 9:14 pm In our IPS my wife is instructed to contact Vanguard PAS if I start becoming mentally disabled or I die suddenly.

I'm setting up their four fund portfolio to make the transition easy. I'll add BNDX later.

My wife has no interest in managing the portfolio.
I thought you were Total World? Moved to four total funds?

Tony
I was total world in our IRA's but decided to separate it into VTI and VXUS because it's so cheap. .05% cost on the entire portfolio.
Interesting plus you gain rebalancing opportunities.

Then you added Total Bond and Total International Bond correct? Total International Bond is outperforming Total Bond!

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

FIREchief wrote: Tue Mar 09, 2021 9:30 pm
Tattarrattat wrote: Tue Mar 09, 2021 8:00 pm
FIREchief wrote: Tue Mar 09, 2021 7:51 pm
formerlybroke wrote: Tue Mar 09, 2021 6:49 pm One stop in my search was PAS. We were discussing a +$10 million portfolio. The Vanguard advisors’ solution was a three fund portfolio.

That may be just fine for many. It’s was well, well below my expectations.
What were you expecting? Was the three fund too cheap or too simple? :confused
Three (or even two) fund portfolio is perfect for 10 million, or even a hundred million dollars.
I don't disagree, but I trend even simpler than that. As I've shared many times, my LMP is 100% TIPS and my RP is 100% total US market. Is that "one fund" or "1.5 fund" or ??? I never rebalance. If I had $10M (I don't), I would do exactly the same thing. I just threw out the three fund as an example of what the PAS was recommending to the previous poster.
The common strategy for financial advisors is to produce a complex portfolio to intimidate the client into thinking it's too difficult to do it yourself. Those complex portfolios will not perform better than a two or three funder. There are reasons to not use PAS, but a simple portfolio is not one of them.
Yep. I found it interesting that the previous poster had shared that he/she spent a career as a financial advisor (likely selling what you've described), and was now seeking somebody else to set up a similarly complex portfolio. I may have misunderstood, but he/she hasn't responded. I guess to his/her credit, he/she believed in what they had sold others. Most here wouldn't agree with that costly strategy, but that's okay. 8-)
So you invest in Total Stock and TIPS only? No international?

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by lostdog »

abuss368 wrote: Tue Mar 09, 2021 9:32 pm
lostdog wrote: Tue Mar 09, 2021 9:25 pm
abuss368 wrote: Tue Mar 09, 2021 9:21 pm
lostdog wrote: Tue Mar 09, 2021 9:14 pm In our IPS my wife is instructed to contact Vanguard PAS if I start becoming mentally disabled or I die suddenly.

I'm setting up their four fund portfolio to make the transition easy. I'll add BNDX later.

My wife has no interest in managing the portfolio.
I thought you were Total World? Moved to four total funds?

Tony
I was total world in our IRA's but decided to separate it into VTI and VXUS because it's so cheap. .05% cost on the entire portfolio.
Interesting plus you gain rebalancing opportunities.

Then you added Total Bond and Total International Bond correct? Total International Bond is outperforming Total Bond!

Tony
We went from 100/0 to 80/20 because we're close to our goal and we don't need to take the risk of a 100/0 anymore. Very close. I haven't added BNDX yet. Still pondering.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FIREchief »

abuss368 wrote: Tue Mar 09, 2021 9:34 pm So you invest in Total Stock and TIPS only? No international?

Tony
Absolutely. True for years. :beer

(and, I track the very simple progress with a spreadsheet my friend :P :P )
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

lostdog wrote: Tue Mar 09, 2021 9:34 pm
abuss368 wrote: Tue Mar 09, 2021 9:32 pm
lostdog wrote: Tue Mar 09, 2021 9:25 pm
abuss368 wrote: Tue Mar 09, 2021 9:21 pm
lostdog wrote: Tue Mar 09, 2021 9:14 pm In our IPS my wife is instructed to contact Vanguard PAS if I start becoming mentally disabled or I die suddenly.

I'm setting up their four fund portfolio to make the transition easy. I'll add BNDX later.

My wife has no interest in managing the portfolio.
I thought you were Total World? Moved to four total funds?

Tony
I was total world in our IRA's but decided to separate it into VTI and VXUS because it's so cheap. .05% cost on the entire portfolio.
Interesting plus you gain rebalancing opportunities.

Then you added Total Bond and Total International Bond correct? Total International Bond is outperforming Total Bond!

Tony
We went from 100/0 to 80/20 because we're close to our goal and we don't need to take the risk of a 100/0 anymore. Very close. I haven't added BNDX yet. Still pondering.
My family member has the Vanguard Four Fund Portfolio and uses PAS. Loves it.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

FIREchief wrote: Tue Mar 09, 2021 9:41 pm
abuss368 wrote: Tue Mar 09, 2021 9:34 pm So you invest in Total Stock and TIPS only? No international?

Tony
Absolutely. True for years. :beer

(and, I track the very simple progress with a spreadsheet my friend :P :P )
Wow! And here for some reason I thought you were Total Stock and Total International!

Any regrets about no international? Worked out well?

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by lostdog »

abuss368 wrote: Tue Mar 09, 2021 9:43 pm
lostdog wrote: Tue Mar 09, 2021 9:34 pm
abuss368 wrote: Tue Mar 09, 2021 9:32 pm
lostdog wrote: Tue Mar 09, 2021 9:25 pm
abuss368 wrote: Tue Mar 09, 2021 9:21 pm

I thought you were Total World? Moved to four total funds?

Tony
I was total world in our IRA's but decided to separate it into VTI and VXUS because it's so cheap. .05% cost on the entire portfolio.
Interesting plus you gain rebalancing opportunities.

Then you added Total Bond and Total International Bond correct? Total International Bond is outperforming Total Bond!

Tony
We went from 100/0 to 80/20 because we're close to our goal and we don't need to take the risk of a 100/0 anymore. Very close. I haven't added BNDX yet. Still pondering.
My family member has the Vanguard Four Fund Portfolio and uses PAS. Loves it.

Tony
:sharebeer
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by SxSW »

gwe67 wrote: Tue Mar 09, 2021 1:08 pm Lots of young people on that list. I would have a hard time turning things over to someone born in the '90s. Then again, I would question the abilities of someone older than me, given that the person is apparently not successful enough to be retired.
So . . . investing is easy, but a young person can't learn it, while an older person is too old? What exactly is the right age range?
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FIREchief »

abuss368 wrote: Tue Mar 09, 2021 9:45 pm
FIREchief wrote: Tue Mar 09, 2021 9:41 pm
abuss368 wrote: Tue Mar 09, 2021 9:34 pm So you invest in Total Stock and TIPS only? No international?

Tony
Absolutely. True for years. :beer

(and, I track the very simple progress with a spreadsheet my friend :P :P )
Wow! And here for some reason I thought you were Total Stock and Total International!

Any regrets about no international? Worked out well?

Tony
Yep, my past posts tell my story. 8-)

You would be hard pressed to find anybody with regrets about avoiding international these days. :P

I have nothing against international. I'm sure there will be years when it will outperform US. I don't care. I've been 100% US TMI (or S&P 500) for most of the last 30 years and I'll stick with the horse that got me here. I did go through a phase where I waded out into international for two to three years (never more than 20% IIRC), but I didn't like those waters and quickly returned to the domestic shore. To each their own. :beer
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

FIREchief wrote: Tue Mar 09, 2021 9:58 pm
abuss368 wrote: Tue Mar 09, 2021 9:45 pm
FIREchief wrote: Tue Mar 09, 2021 9:41 pm
abuss368 wrote: Tue Mar 09, 2021 9:34 pm So you invest in Total Stock and TIPS only? No international?

Tony
Absolutely. True for years. :beer

(and, I track the very simple progress with a spreadsheet my friend :P :P )
Wow! And here for some reason I thought you were Total Stock and Total International!

Any regrets about no international? Worked out well?

Tony
Yep, my past posts tell my story. 8-)

You would be hard pressed to find anybody with regrets about avoiding international these days. :P

I have nothing against international. I'm sure there will be years when it will outperform US. I don't care. I've been 100% US TMI (or S&P 500) for most of the last 30 years and I'll stick with the horse that got me here. I did go through a phase where I waded out into international for two to three years (never more than 20% IIRC), but I didn't like those waters and quickly returned to the domestic shore. To each their own. :beer
I agree and have learned to appreciate that from investors. It is what you can sleep with at night that matters.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by orcycle »

cowdogman wrote: Tue Mar 09, 2021 7:30 pm
Here's from the Flagship Select page I cited above:
We'll give you the tools and support to help you succeed. Offered through Vanguard Personal Advisor Services® for a low fee, we can also help you navigate the complexities of wealth management by providing expertise in areas like investment advice, wealth and estate planning, trust services, family legacy planning, tax strategies, and philanthropy. We'll also work with your family office and other third parties to make doing business as easy as possible.

All of these services, combined with personal attention and the opportunity to expand your relationship team to include a dedicated financial advisor from Vanguard Personal Advisor Services, will help empower your family and simplify the complexities that come with significant wealth.
But when I look at the document you link (and which I also cited above) the only services discussed are a pretty narrow set of investment advisory issues. For example, go to the document you link and search the word "estate." No matches. In fact search "legacy," "wealth," "philanthropy" and the other keywords from the quotation above and you won't find any discussion of those topics.
We got an email from our Flagship rep today, she said she reviewed our portfolio and she's suggesting we set up a phone call to discuss the following topics:
* Vanguard’s commentary on current market conditions
* Your asset allocation and investments
* Charitable giving and tax strategies
* Legacy planning
* Beneficiary review
* Required minimum distributions (RMD)
* Account options
* Additional security features
* Updating addresses, phone numbers and e-mail addresses
* Any other topics of interest to you

She said it would take 30-45 minutes. As it happens, we are in the process of developing a roadmap of sorts with a fee-only financial advisor, mainly so my wife has someone to go if I die prematurely. I found the FA on the Garrett Financial Network, not sure if it will work out but it's much cheaper than PAS fees for a flat annual fee.

But I'm tempted to schedule this call to see what she has to say. I do know it's a given she will recommend PAS because the bottom of her email has disclosures, saying her email is "promotional in nature" and references PAS among other services. She is a new rep for us, they seem to rotate them every few years, maybe she's more aggressive than our previous reps who never pushed any services on us.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FoolStreet »

abuss368 wrote: Tue Mar 09, 2021 9:23 pm
drzzzzz wrote: Tue Mar 09, 2021 8:36 pm
michelef wrote: Tue Mar 09, 2021 3:32 pm Unfortunately, my brother who died suddenly and unexpectedly at 56 late last year, did not have a good experience after I referred him to PAS. I referred him because he had very little investing knowledge, was prone to selling with market volatility and had been sold poor commission products in the past.

PAS managed his traditional IRA, Roth IRA and brokerage accounts for exactly one year. After his death, we were informed that none of his accounts had beneficiaries named. An old Fidelity 401k and IRA held at an insurance company both had beneficiaries listed. In his case, this resulted in most of his assets being inherited by an estranged relative who he never would have chosen to leave the money to.
This is unfortunate and a crime to me - I would hope Vanguard at least would have brought this up when they spoke to your brother as well as sent multiple emails asking him to name beneficiaries on his account.

A few years back, we used PAS for about 9 months to and left after multiple conversations related to tax loss harvesting and their approach. We were disappointed that Vanguard's marketing sounds better and more sophisticated than what they will actually do - their responses on a few issues included no recommendation especially with anything related to tax advice. We also found, at that time, that they were fairly rigid in their approach and not willing to compromise although I offered a variety of ideas to reach a mutually agreeable solution.
Vanguard will legally not provide any aspect of tax planning.

Tony
Can you give me an example?

When you have a super duper 3 fund portfolio (I hear they actually recommend 4), then I think that Tax Loss Harvesting is pretty critical, and would be shocked if you are saying they don’t include Tax loss harvesting as part of their business model. Maybe I am over dramatizing if positions have been long standing such that there are little to no losses to harvest...but it is exactly this kind of tax lot tracking minutiae that I would want to take off my plate.

Similarly, I would expect them to advise on fund placement across taxable, tax deferred and Roth, even more so if IRAs were inherited and had 5 and 10 year tickers. How could they not provide the tax advice regarding withdrawals from each?

Sometimes, the best questions are, what don’t they do, that us Do it Yourselfers do ourselves?
Last edited by FoolStreet on Wed Mar 10, 2021 1:34 am, edited 1 time in total.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by palanzo »

Taylor Larimore wrote: Tue Mar 09, 2021 12:46 pm Small Law Survivor:

My partner is a PAS investor. Several years ago, she had a problem with PAS. Vanguard flew her PAS representative to Miami to fix the problem.

Taylor
Jack Bogle's Words of Wisdom: "The best advisors can help you develop a long-range investment strategy and an intelligent plan for its implementation."
Hello Taylor,

Do you think Vanguard would do that for "ordinary" investors?
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Northern Flicker »

With a minimum of $250K of assets at T Rowe Price, you get free financial planning services. An investment plan can span assets not at TRP as long as you meet the minimum at TRP.

https://www.troweprice.com/personal-inv ... index.html

I have zero experience with this and zero knowledge of anyone using it, but paying TRP ERs on $250K of assets to get free planning seems like a fair enough deal. Hiring a fee-for-service planner is probably similar in cost to the excess ER, though the TRP planner might be cheaper depending on funds held at TRP.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by snowox »

I used a PAS advisor for years at Vanguard and was very pleased. I interviewed them and I never found them to be trying to sell me things I dont need and if I brought ideas etc.. would explain in great details both sides of doing so. So I would have to score mine as an A and not because of just return results but I just didnt feel it was scripted and was really designed for our personal needs. Mind you mine was there for 25 years and had the ability at times to just do things as having to wait to get things approved. So I would not feel afraid at all to use one to protect equities if something were to happen .
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by chiliagon »

My two cents:

I almost went with PAS a few years ago. I talked on the phone with a PAS advisor for about 30 minutes, he sent me a plan a few days later, I mulled it over for a day or two, and then I called back, telling him I would do it myself. He was slightly disappointed, but he did not put any pressure on me and was gracious about the whole thing.

Now, if I die, my wife is instructed to go with PAS. They won't do anything for you that you can't do yourself if you are already reading Bogleheads. But if you have no interest in investing (like my wife), then it seems to me that PAS is a good way to go. It's .3% + the fund fees, which will be no more than .1%, since they are using cheap Vanguard index funds. So, you get a grand total of, say, .4%. While .4% can add up (e.g., it's 4k per year on a million dollars), it's a lot better than what happens with other financial advisors. Sure, it's not going to be great when it comes to tax loss harvesting and other optimizing strategies. But, if you want a setup that is optimizing, then you're going to end up with a financial advisor situation that will cost more than .4%. I have family members with hands-on, optimizing financial advisors where they have it as low as .65% once the advisor fee and the fund fees are added together. That is pretty good, and I doubt that anyone can do better than that. But I'd still rather go with the .4% at PAS for my wife if I die. I think that will be more cost-effective in the long run than trying for the hands-on, optimizing financial advisor.

Here's a summary way to make my point. You can point to the drawbacks of PAS, and those are real. But any other solution will also have drawbacks. And I think PAS will probably win out as the best solution overall, even if it is imperfect.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Small Law Survivor »

Lot of interesting observations here, thank you all. Like most complex decisions in life, perfect clarity is lacking - there are pros, there are cons. Some people have had good experiences, others not so good. Like many things in life, you have to make decisions based on imperfect information.

Small Law Survivor
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by MikeG62 »

Small Law Survivor wrote: Tue Mar 09, 2021 11:52 am I've told my wife and daughter that if I kick the bucket they should sign up for Vanguard's personal advisory service (PAS). However, I can't get rid of a nagging doubt about this. I'm wondering what it's really like to work with these people? There are a lot of them, around 500 (https://vanguard.com/pdf/r130.pdf). With that many advisors Vanguard can't let them have much discretion, can it? It must be cookie cutter -the four "Totals" - for everyone, is that right? What if you don't like your advisor can you switch? How skilled are these people?

If you have $5MM invested with Vanguard, you're paying close to $15,000 a year for this service. At $500/hour (I know that's high), that's 30 hours of attention a year. Does Vanguard spend anything close to that with a client (or on a client's affairs) with that much money invested?

Personal experiences appreciated. Thanks in advance.
A couple of thoughts.

See this thread here for more thoughts on using VPAS (including my experience helping to transition my SIL to VPAS):

viewtopic.php?f=1&t=339284&p=5808169&hi ... s#p5808169

In terms of what "I have" done to prepare, a while back I developed a word document setting forth in detail the steps for DW needs to take should I predecease her as well as how to manage her financial affairs going forward. It also includes a list of all of our financial accounts.

She has read it (more than once) and has even asked me questions where things were not clear to her. I think this has helped "to a degree". I should probably have her read it periodically (once a year or once every other year) to really solidify the points in her mind.

One good thing is every time I establish a relationship with a new financial institution (typically taking advantage of promo CD offers or in pursuit of bank or brokerage transfer bonuses) her only comment after an eye roll is “make sure you add it to the list”.

On the investment management side, I’ve advised she hire a financial advisor and have indicated what she should look for in a financial advisor. Preference is to use a low cost CFP who charges a reasonable annual retainer (someone like a James Osborne) - not a planner who charges a fee based upon a % of assets under management (unless is it a very low %). I lean in this direction, because I think my wife may need a fair amount of hand-holding - likely more than she can get from a firm like Vanguard. We do have two adult daughters so she may be able to enlist their assistance.

it's not a perfect solution, but it's the best plan I have been able to come up with.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by dbr »

So far we seem to have no idea if VPAS actually advises and manages on tax issues (which tax issues?), estate planning, or income issues such as Social Security plan, or more complex investment issues such as IRA conversions. There seem to be statements that tax and estate advice is a no-no though exactly that is listed in some promotional material. Nor does it seem to be clear to what degree they consider or in addition advise what to do with assets not a Vanguard. I sense some confusion between ordinary investors with modest portfolios and those who have large amounts of money on account.

It would seem clear that they do provide a one-time retirement plan that probably considers all a person's assets with objectives and risks assessed. They then do invest the assets that are at Vanguard in a cookie cutter portfolio of index funds. Maybe they keep that rebalanced and we aren't sure if they help with tax loss harvesting at all. It is clear that the VPAS client will not end up holding anything they should not have or that will cost too much aside from the fee.

One worries that the amount of time actually available from the service for any given customer is not very much relative to the fee paid. For example 0.3% on $1M is $3000. If this is spread over two or three hours in the year they are earning at a rate of $1000-$1500 per hour.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by formerlybroke »

FIREchief wrote: Tue Mar 09, 2021 9:30 pm Yep. I found it interesting that the previous poster had shared that he/she spent a career as a financial advisor (likely selling what you've described), and was now seeking somebody else to set up a similarly complex portfolio. I may have misunderstood, but he/she hasn't responded. I guess to his/her credit, he/she believed in what they had sold others. Most here wouldn't agree with that costly strategy, but that's okay. 8-)
You are quite full of assumptions aren’t you? You do know that financial services has a broad array of positions, client facing and not?

And, exactly contrary to your hypothesis, understanding what a great advisor (and there are some, believe it or don’t) can do - beyond investment selection - is exactly why I chose to hire one.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by GmanJeff »

dbr wrote: Wed Mar 10, 2021 8:12 am So far we seem to have no idea if VPAS actually advises and manages on tax issues (which tax issues?), estate planning, or income issues such as Social Security plan, or more complex investment issues such as IRA conversions. There seem to be statements that tax and estate advice is a no-no though exactly that is listed in some promotional material. Nor does it seem to be clear to what degree they consider or in addition advise what to do with assets not a Vanguard. I sense some confusion between ordinary investors with modest portfolios and those who have large amounts of money on account.

It would seem clear that they do provide a one-time retirement plan that probably considers all a person's assets with objectives and risks assessed. They then do invest the assets that are at Vanguard in a cookie cutter portfolio of index funds. Maybe they keep that rebalanced and we aren't sure if they help with tax loss harvesting at all. It is clear that the VPAS client will not end up holding anything they should not have or that will cost too much aside from the fee.

One worries that the amount of time actually available from the service for any given customer is not very much relative to the fee paid. For example 0.3% on $1M is $3000. If this is spread over two or three hours in the year they are earning at a rate of $1000-$1500 per hour.
PAS provides tax-sensitive asset allocations, and will take tax considerations into account when capital gains come into play. PAS financial plans attempt to take income taxes into consideration for forecasting purposes.

PAS portfolios are constructed with reference to Vanguard's proprietary Capital Markets Model, a financial simulation tool.

PAS can provide guidance around the timing of Social Security claiming, using a 3rd-party analysis tool from Social Security Solutions, Inc.

PAS will recommend and engage in tax loss harvesting.

PAS does not engage in estate planning as that term is used to refer to legal advice.

PAS does take into account non-Vanguard assets and will provide advice around reducing positions in single assets which present a risk of overconcentration.

The financial plan and portfolio are reviewed quarterly and updated as a client's circumstances change.

PAS rebalances managed portfolios when trigger points are reached.

Based on responses from customers in prior threads, PAS portfolios vary from as few as two funds to as many as eight.

PAS is available to address questions in between quarterly reviews.

The advisory component is what separates PAS from pure robos which limit themselves to asset allocation, rebalancing and sometimes TLH.

Clients obviously feel PAS provides value for its fee; PAS is said to have over $170B under management. Non-clients evidently disagree. It's not possible to know which group tends to achieve better net results but PAS is tracked by Backend Benchmarking, which may provide a basis for comparing one's self-managed portfolio to those offered by PAS and by a range of pure robos: https://www.backendbenchmarking.com/the-robo-report/
Last edited by GmanJeff on Wed Mar 10, 2021 1:41 pm, edited 2 times in total.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

tibbitts wrote: Tue Mar 09, 2021 9:22 pm Not only finding the right planner, but recognizing that with most planners/firms there will be a minefield of potential threats to overcome over many years as a client. Although I'm not sold on PAS, I believe you'll probably get about the same advice no matter if your rep moves on or is otherwise unavailable. That's probably not the case with many other investments firms. Smaller firms can be bought out by other firms, and management can significantly change directions. Maybe the latter point isn't a strength of Vanguard; I know Vanguard has changed its allocation models and there have been reports here of them not handling the migration very elegantly. But at least it hasn't completely gone off the fairly simple, mostly-low-cost rails.
Agreed on the issue of consistency of advice with PAS, but my issue is the scope of PAS services. Are they limited to investment advising, and even further limited to choosing in which Vanguard index funds to invest and the allocation among those funds--or is PAS offering something more than that? If not, that is where the financial planner would come in--not to replace PAS, but to supplement it.
abuss368 wrote: Tue Mar 09, 2021 9:23 pm Vanguard will legally not provide any aspect of tax planning.
Then why does Vanguard say PAS will provide “tax strategies”? See my post above quoting Vanguard’s marketing materials. Again, what services exactly are provided by PAS?
orcycle wrote: Tue Mar 09, 2021 10:57 pm
We got an email from our Flagship rep today, she said she reviewed our portfolio and she's suggesting we set up a phone call to discuss the following topics:
* Vanguard’s commentary on current market conditions
* Your asset allocation and investments
* Charitable giving and tax strategies
* Legacy planning
* Beneficiary review
* Required minimum distributions (RMD)
* Account options
* Additional security features
* Updating addresses, phone numbers and e-mail addresses
* Any other topics of interest to you

She said it would take 30-45 minutes. As it happens, we are in the process of developing a roadmap of sorts with a fee-only financial advisor, mainly so my wife has someone to go if I die prematurely. I found the FA on the Garrett Financial Network, not sure if it will work out but it's much cheaper than PAS fees for a flat annual fee.

But I'm tempted to schedule this call to see what she has to say. I do know it's a given she will recommend PAS because the bottom of her email has disclosures, saying her email is "promotional in nature" and references PAS among other services. She is a new rep for us, they seem to rotate them every few years, maybe she's more aggressive than our previous reps who never pushed any services on us.
Sounds like a message I got a couple years ago from our Flagship rep when he wanted us to have a call with a PAS rep. It was a very good call, but ended up being limited to balancing/allocation. Maybe that was my fault. If you do the call, I would suggest one question would be “Do you provide the following advisory services: <list of financial advisory services you care about--see above posts for possible list items>?”

To be totally clear, we have had the bulk of our investments at Vanguard for 30+ years and have been happy with the services (with the occasional exception). And I have nothing against PAS. I just can’t figure out the scope of its services. Is PAS something I can point my wife towards without her needing a supplemental financial advisor (for things like social security, life insurance, sale of residence, etc.)--or is she going to need (1) PAS and (2) a financial advisor for issues that PAS doesn’t/won’t address.

How hard can it be for Vanguard to be clear as to what it is offering to do under PAS?
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

cowdogman wrote: Wed Mar 10, 2021 9:23 am
tibbitts wrote: Tue Mar 09, 2021 9:22 pm Not only finding the right planner, but recognizing that with most planners/firms there will be a minefield of potential threats to overcome over many years as a client. Although I'm not sold on PAS, I believe you'll probably get about the same advice no matter if your rep moves on or is otherwise unavailable. That's probably not the case with many other investments firms. Smaller firms can be bought out by other firms, and management can significantly change directions. Maybe the latter point isn't a strength of Vanguard; I know Vanguard has changed its allocation models and there have been reports here of them not handling the migration very elegantly. But at least it hasn't completely gone off the fairly simple, mostly-low-cost rails.
Agreed on the issue of consistency of advice with PAS, but my issue is the scope of PAS services. Are they limited to investment advising, and even further limited to choosing in which Vanguard index funds to invest and the allocation among those funds--or is PAS offering something more than that? If not, that is where the financial planner would come in--not to replace PAS, but to supplement it.
abuss368 wrote: Tue Mar 09, 2021 9:23 pm Vanguard will legally not provide any aspect of tax planning.
Then why does Vanguard say PAS will provide “tax strategies”? See my post above quoting Vanguard’s marketing materials. Again, what services exactly are provided by PAS?
orcycle wrote: Tue Mar 09, 2021 10:57 pm
We got an email from our Flagship rep today, she said she reviewed our portfolio and she's suggesting we set up a phone call to discuss the following topics:
* Vanguard’s commentary on current market conditions
* Your asset allocation and investments
* Charitable giving and tax strategies
* Legacy planning
* Beneficiary review
* Required minimum distributions (RMD)
* Account options
* Additional security features
* Updating addresses, phone numbers and e-mail addresses
* Any other topics of interest to you

She said it would take 30-45 minutes. As it happens, we are in the process of developing a roadmap of sorts with a fee-only financial advisor, mainly so my wife has someone to go if I die prematurely. I found the FA on the Garrett Financial Network, not sure if it will work out but it's much cheaper than PAS fees for a flat annual fee.

But I'm tempted to schedule this call to see what she has to say. I do know it's a given she will recommend PAS because the bottom of her email has disclosures, saying her email is "promotional in nature" and references PAS among other services. She is a new rep for us, they seem to rotate them every few years, maybe she's more aggressive than our previous reps who never pushed any services on us.
Sounds like a message I got a couple years ago from our Flagship rep when he wanted us to have a call with a PAS rep. It was a very good call, but ended up being limited to balancing/allocation. Maybe that was my fault. If you do the call, I would suggest one question would be “Do you provide the following advisory services: <list of financial advisory services you care about--see above posts for possible list items>?”

To be totally clear, we have had the bulk of our investments at Vanguard for 30+ years and have been happy with the services (with the occasional exception). And I have nothing against PAS. I just can’t figure out the scope of its services. Is PAS something I can point my wife towards without her needing a supplemental financial advisor (for things like social security, life insurance, sale of residence, etc.)--or is she going to need (1) PAS and (2) a financial advisor for issues that PAS doesn’t/won’t address.

How hard can it be for Vanguard to be clear as to what it is offering to do under PAS?
Tax strategies may involve low cost total market index funds rather than active funds. Stocks in taxable and bonds in tax advantage. Infrequent trading perhaps. Tax exempt bonds if needed. I am not sure if they tax loss harvest.

Thinking out loud here.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FoolStreet »

abuss368 wrote: Wed Mar 10, 2021 10:13 am
cowdogman wrote: Wed Mar 10, 2021 9:23 am
tibbitts wrote: Tue Mar 09, 2021 9:22 pm Not only finding the right planner, but recognizing that with most planners/firms there will be a minefield of potential threats to overcome over many years as a client. Although I'm not sold on PAS, I believe you'll probably get about the same advice no matter if your rep moves on or is otherwise unavailable. That's probably not the case with many other investments firms. Smaller firms can be bought out by other firms, and management can significantly change directions. Maybe the latter point isn't a strength of Vanguard; I know Vanguard has changed its allocation models and there have been reports here of them not handling the migration very elegantly. But at least it hasn't completely gone off the fairly simple, mostly-low-cost rails.
Agreed on the issue of consistency of advice with PAS, but my issue is the scope of PAS services. Are they limited to investment advising, and even further limited to choosing in which Vanguard index funds to invest and the allocation among those funds--or is PAS offering something more than that? If not, that is where the financial planner would come in--not to replace PAS, but to supplement it.
abuss368 wrote: Tue Mar 09, 2021 9:23 pm Vanguard will legally not provide any aspect of tax planning.
Then why does Vanguard say PAS will provide “tax strategies”? See my post above quoting Vanguard’s marketing materials. Again, what services exactly are provided by PAS?
orcycle wrote: Tue Mar 09, 2021 10:57 pm
We got an email from our Flagship rep today, she said she reviewed our portfolio and she's suggesting we set up a phone call to discuss the following topics:
* Vanguard’s commentary on current market conditions
* Your asset allocation and investments
* Charitable giving and tax strategies
* Legacy planning
* Beneficiary review
* Required minimum distributions (RMD)
* Account options
* Additional security features
* Updating addresses, phone numbers and e-mail addresses
* Any other topics of interest to you

She said it would take 30-45 minutes. As it happens, we are in the process of developing a roadmap of sorts with a fee-only financial advisor, mainly so my wife has someone to go if I die prematurely. I found the FA on the Garrett Financial Network, not sure if it will work out but it's much cheaper than PAS fees for a flat annual fee.

But I'm tempted to schedule this call to see what she has to say. I do know it's a given she will recommend PAS because the bottom of her email has disclosures, saying her email is "promotional in nature" and references PAS among other services. She is a new rep for us, they seem to rotate them every few years, maybe she's more aggressive than our previous reps who never pushed any services on us.
Sounds like a message I got a couple years ago from our Flagship rep when he wanted us to have a call with a PAS rep. It was a very good call, but ended up being limited to balancing/allocation. Maybe that was my fault. If you do the call, I would suggest one question would be “Do you provide the following advisory services: <list of financial advisory services you care about--see above posts for possible list items>?”

To be totally clear, we have had the bulk of our investments at Vanguard for 30+ years and have been happy with the services (with the occasional exception). And I have nothing against PAS. I just can’t figure out the scope of its services. Is PAS something I can point my wife towards without her needing a supplemental financial advisor (for things like social security, life insurance, sale of residence, etc.)--or is she going to need (1) PAS and (2) a financial advisor for issues that PAS doesn’t/won’t address.

How hard can it be for Vanguard to be clear as to what it is offering to do under PAS?
Tax strategies may involve low cost total market index funds rather than active funds. Stocks in taxable and bonds in tax advantage. Infrequent trading perhaps. Tax exempt bonds if needed. I am not sure if they tax loss harvest.

Thinking out loud here.

Tony
If I were to pay a 3rd party, I would want them to build a spreadsheet to show me how much Roth conversions to do in my 60s before taking Social Security. Is that an unrealistic expectation?
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

FoolStreet wrote: Wed Mar 10, 2021 10:32 am
If I were to pay a 3rd party, I would want them to build a spreadsheet to show me how much Roth conversions to do in my 60s before taking Social Security. Is that an unrealistic expectation?
For PAS I would guess yes, it would be unrealistic.

Why?

1. It would require in depth knowledge of your federal and, possibly, state tax situation. Given how inter-related tax provisions are now, it's not really practical to come up with a strategy on one tax issue without running an entire tax return. E.g., if you're collecting the PTC that could effectively add a hidden 10% (9.78%) in taxes for a Roth conversion (or a Roth conversion could cause you to not qualify for the PTC).

2. Whether to do a Roth conversion is a judgment call. Running the numbers at the end of the year (when you do a draft tax return in December) is relatively easy. Deciding to it is the tough part.

I'm sure PAS could advise you to consider doing it and maybe even suggest a methodology, but doing the calculation is more a task for a CPA/tax advisor IMO.

Even I wouldn't expect PAS to do that. :happy
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FIREchief »

formerlybroke wrote: Wed Mar 10, 2021 8:19 am
FIREchief wrote: Tue Mar 09, 2021 9:30 pm Yep. I found it interesting that the previous poster had shared that he/she spent a career as a financial advisor (likely selling what you've described), and was now seeking somebody else to set up a similarly complex portfolio. I may have misunderstood, but he/she hasn't responded. I guess to his/her credit, he/she believed in what they had sold others. Most here wouldn't agree with that costly strategy, but that's okay. 8-)
You are quite full of assumptions aren’t you?
Not really. I said "I may have misunderstood," "I guess," and "that's okay." That doesn't sound like a lot of assumptions.....
You do know that financial services has a broad array of positions, client facing and not?

And, exactly contrary to your hypothesis, understanding what a great advisor (and there are some, believe it or don’t) can do - beyond investment selection - is exactly why I chose to hire one.
To be honest, I have no idea what this broad array of financial services are that you are talking about. Perhaps you can educate us. You suggested that you were underwhelmed with the PAS recommendation of a three fundish portfolio. What then were you looking for if not a complex costly portfolio?
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Northern Flicker »

cowdogman wrote: Then why does Vanguard say PAS will provide “tax strategies”? See my post above quoting Vanguard’s marketing materials. Again, what services exactly are provided by PAS?
I believe it means they design the portfolio for tax efficiency-- tax efficient fund placement and use of muni bond funds when appropriate.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by afan »

I find it puzzling that so many bogleheads indicate they "instruct" their spouses how to handle finances after they are gone.

I don't think I have ever "instructed" my spouse to do anything significant. The closest has been if they are driving somewhere and only I know the way, I would say "turn at the next light".

For anything important, we have a discussion. Based on that, my spouse can make up their own mind.

I have a document with information about accounts. But I do not plan to issue orders to be followed once I am dead. I will be dead and my spouse is fully capable of managing the money. Probably would not do a BH level of obsession, but a three fund portfolio does not require much obsession.

Hard to imagine what PAS would provide that they would need. Not portfolio management. Not tax planning. Not estate planning. Not other financial planning. What else is there?
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

Northern Flicker wrote: Wed Mar 10, 2021 1:16 pm
cowdogman wrote: Then why does Vanguard say PAS will provide “tax strategies”? See my post above quoting Vanguard’s marketing materials. Again, what services exactly are provided by PAS?
I believe it means they design the portfolio for tax efficiency-- tax efficient fund placement and use of muni bond funds when appropriate.
Maybe, but here is the context:
we can also help you navigate the complexities of wealth management by providing expertise in areas like investment advice, wealth and estate planning, trust services, family legacy planning, tax strategies, and philanthropy
Sounds broader than just helping customers pick tax efficient Vanguard funds when appropriate.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

afan wrote: Wed Mar 10, 2021 1:24 pm I find it puzzling that so many bogleheads indicate they "instruct" their spouses how to handle finances after they are gone.
Yeah, that wouldn't go over well in my house.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by chiliagon »

cowdogman wrote: Wed Mar 10, 2021 1:28 pm
afan wrote: Wed Mar 10, 2021 1:24 pm I find it puzzling that so many bogleheads indicate they "instruct" their spouses how to handle finances after they are gone.
Yeah, that wouldn't go over well in my house.
I said "instructed" above. I don't think it's insufficiently egalitarian to instruct your spouse on certain issues. My wife instructs me all the time about things where she knows better than I do what should be done. Don't most spouses divide labor into different domains and then defer to the one that knows more in whatever domain is at issue? It doesn't mean the other person can't ask questions or disagree or just not follow the instruction. It just means that, in their relationship, instructing is part of the deal and is not viewed as diminishing mutual respect or as diminishing a mutual affirmation of the equal value of both parties in the relationship.

All that said, I can see why you may find the word off-putting. And that is fine. I'm just trying to explain what is going on inside my mind (and perhaps inside the minds of others who use the word).
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by abuss368 »

FoolStreet wrote: Wed Mar 10, 2021 10:32 am
abuss368 wrote: Wed Mar 10, 2021 10:13 am
cowdogman wrote: Wed Mar 10, 2021 9:23 am
tibbitts wrote: Tue Mar 09, 2021 9:22 pm Not only finding the right planner, but recognizing that with most planners/firms there will be a minefield of potential threats to overcome over many years as a client. Although I'm not sold on PAS, I believe you'll probably get about the same advice no matter if your rep moves on or is otherwise unavailable. That's probably not the case with many other investments firms. Smaller firms can be bought out by other firms, and management can significantly change directions. Maybe the latter point isn't a strength of Vanguard; I know Vanguard has changed its allocation models and there have been reports here of them not handling the migration very elegantly. But at least it hasn't completely gone off the fairly simple, mostly-low-cost rails.
Agreed on the issue of consistency of advice with PAS, but my issue is the scope of PAS services. Are they limited to investment advising, and even further limited to choosing in which Vanguard index funds to invest and the allocation among those funds--or is PAS offering something more than that? If not, that is where the financial planner would come in--not to replace PAS, but to supplement it.
abuss368 wrote: Tue Mar 09, 2021 9:23 pm Vanguard will legally not provide any aspect of tax planning.
Then why does Vanguard say PAS will provide “tax strategies”? See my post above quoting Vanguard’s marketing materials. Again, what services exactly are provided by PAS?
orcycle wrote: Tue Mar 09, 2021 10:57 pm
We got an email from our Flagship rep today, she said she reviewed our portfolio and she's suggesting we set up a phone call to discuss the following topics:
* Vanguard’s commentary on current market conditions
* Your asset allocation and investments
* Charitable giving and tax strategies
* Legacy planning
* Beneficiary review
* Required minimum distributions (RMD)
* Account options
* Additional security features
* Updating addresses, phone numbers and e-mail addresses
* Any other topics of interest to you

She said it would take 30-45 minutes. As it happens, we are in the process of developing a roadmap of sorts with a fee-only financial advisor, mainly so my wife has someone to go if I die prematurely. I found the FA on the Garrett Financial Network, not sure if it will work out but it's much cheaper than PAS fees for a flat annual fee.

But I'm tempted to schedule this call to see what she has to say. I do know it's a given she will recommend PAS because the bottom of her email has disclosures, saying her email is "promotional in nature" and references PAS among other services. She is a new rep for us, they seem to rotate them every few years, maybe she's more aggressive than our previous reps who never pushed any services on us.
Sounds like a message I got a couple years ago from our Flagship rep when he wanted us to have a call with a PAS rep. It was a very good call, but ended up being limited to balancing/allocation. Maybe that was my fault. If you do the call, I would suggest one question would be “Do you provide the following advisory services: <list of financial advisory services you care about--see above posts for possible list items>?”

To be totally clear, we have had the bulk of our investments at Vanguard for 30+ years and have been happy with the services (with the occasional exception). And I have nothing against PAS. I just can’t figure out the scope of its services. Is PAS something I can point my wife towards without her needing a supplemental financial advisor (for things like social security, life insurance, sale of residence, etc.)--or is she going to need (1) PAS and (2) a financial advisor for issues that PAS doesn’t/won’t address.

How hard can it be for Vanguard to be clear as to what it is offering to do under PAS?
Tax strategies may involve low cost total market index funds rather than active funds. Stocks in taxable and bonds in tax advantage. Infrequent trading perhaps. Tax exempt bonds if needed. I am not sure if they tax loss harvest.

Thinking out loud here.

Tony
If I were to pay a 3rd party, I would want them to build a spreadsheet to show me how much Roth conversions to do in my 60s before taking Social Security. Is that an unrealistic expectation?
Perhaps not but rather than a spreadsheet, they should have proprietary software.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by FIREchief »

chiliagon wrote: Wed Mar 10, 2021 3:00 pm
cowdogman wrote: Wed Mar 10, 2021 1:28 pm
afan wrote: Wed Mar 10, 2021 1:24 pm I find it puzzling that so many bogleheads indicate they "instruct" their spouses how to handle finances after they are gone.
Yeah, that wouldn't go over well in my house.
I said "instructed" above. I don't think it's insufficiently egalitarian to instruct your spouse on certain issues. My wife instructs me all the time about things where she knows better than I do what should be done. Don't most spouses divide labor into different domains and then defer to the one that knows more in whatever domain is at issue? It doesn't mean the other person can't ask questions or disagree or just not follow the instruction. It just means that, in their relationship, instructing is part of the deal and is not viewed as diminishing mutual respect or as diminishing a mutual affirmation of the equal value of both parties in the relationship.

All that said, I can see why you may find the word off-putting. And that is fine. I'm just trying to explain what is going on inside my mind (and perhaps inside the minds of others who use the word).
Good post. I wish I had a dollar for each time I've told DW to "just tell me what to do." I have no problem getting clear directions. 8-)
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by KeepingEyesOpen »

cowdogman wrote: Wed Mar 10, 2021 1:28 pm
afan wrote: Wed Mar 10, 2021 1:24 pm I find it puzzling that so many bogleheads indicate they "instruct" their spouses how to handle finances after they are gone.
Yeah, that wouldn't go over well in my house.
We have a longstanding agreement in our household. I make all of the "big" decisions and my wife makes the "small" ones.

Her decisions include how we spend money, where we live, where we go on vacation, school decisions for the kids ...

My "big" decisions include issues like policy regarding the China - Hong Kong relationship, post-BREXIT UK - EU policy and so on.
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by bertilak »

afan wrote: Wed Mar 10, 2021 1:24 pm For anything important, we have a discussion. Based on that, my spouse can make up their own mind.
My discussion was beforehand. I wrote an ISP (called an "Investment Plan") and used that as a basis for discussion. The first paragraph is:
Purpose of this Document
This document gives guidance to anyone who has taken on the responsibility of managing our investment portfolio. It explains how our assets are invested and why. It tells how to get spending money when needed.
It is about 8 pages.

Note "guidance" as opposed to "orders."

It also says:
If you are uncomfortable managing our portfolio, even with the help of this document, enroll in Vanguard’s Personal Advisory Service (PAS). Talk to a Vanguard rep to do this.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Tattarrattat »

Not sure why so many people think their widows will need PAS. Put the entire pot of money in a target date or conservative life strategy fund, or the Fido or CS equivalent. One single investment in the account. Not intimidating. Instruct spouse never to change it, for the rest if their lives, just withdraw what they need when they need it. If the spouse can transfer money from savings to checking, they should be able to learn to transfer from this one account to checking, and they won't ever have to worry about tracking it or evaluating it or balancing it, etc, at cost of 0.12% or so. You can practice with them before you depart. I have a spouse who is uncomfortable with this stuff. Her 401k has a single Fido target date index fund. She is very comfortable that she can essentially ignore it forever until she needs money, then it's a few clicks or a phone call to redeem or withdraw. If you feel your spouse will be gullible prey, PAS will certainly not save them. For that you will need trusted family or friends. PAS will never have the intimate relationship needed to protect them. It's naive to think it will.
drzzzzz
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by drzzzzz »

FoolStreet wrote: Wed Mar 10, 2021 1:21 am
abuss368 wrote: Tue Mar 09, 2021 9:23 pm
drzzzzz wrote: Tue Mar 09, 2021 8:36 pm
michelef wrote: Tue Mar 09, 2021 3:32 pm Unfortunately, my brother who died suddenly and unexpectedly at 56 late last year, did not have a good experience after I referred him to PAS. I referred him because he had very little investing knowledge, was prone to selling with market volatility and had been sold poor commission products in the past.

PAS managed his traditional IRA, Roth IRA and brokerage accounts for exactly one year. After his death, we were informed that none of his accounts had beneficiaries named. An old Fidelity 401k and IRA held at an insurance company both had beneficiaries listed. In his case, this resulted in most of his assets being inherited by an estranged relative who he never would have chosen to leave the money to.
This is unfortunate and a crime to me - I would hope Vanguard at least would have brought this up when they spoke to your brother as well as sent multiple emails asking him to name beneficiaries on his account.

A few years back, we used PAS for about 9 months to and left after multiple conversations related to tax loss harvesting and their approach. We were disappointed that Vanguard's marketing sounds better and more sophisticated than what they will actually do - their responses on a few issues included no recommendation especially with anything related to tax advice. We also found, at that time, that they were fairly rigid in their approach and not willing to compromise although I offered a variety of ideas to reach a mutually agreeable solution.
Vanguard will legally not provide any aspect of tax planning.

Tony
Can you give me an example?

When you have a super duper 3 fund portfolio (I hear they actually recommend 4), then I think that Tax Loss Harvesting is pretty critical, and would be shocked if you are saying they don’t include Tax loss harvesting as part of their business model. Maybe I am over dramatizing if positions have been long standing such that there are little to no losses to harvest...but it is exactly this kind of tax lot tracking minutiae that I would want to take off my plate.

Similarly, I would expect them to advise on fund placement across taxable, tax deferred and Roth, even more so if IRAs were inherited and had 5 and 10 year tickers. How could they not provide the tax advice regarding withdrawals from each?

Sometimes, the best questions are, what don’t they do, that us Do it Yourselfers do ourselves?
Again we tried Vanguard PAS a few years ago and at that time they did not use specific ID on their PAS managed account mutual fund shares (which we do). Without that information, I don't know how you can tax loss harvest unless they only do it when the entire position is under water - the latter likely would never be the case for us because some of our positions had large embedded gains. I don't know what methodology they are currently using, but I can't see how to TLH unless you use specific ID. I even referred them to Vanguard's reference paper on TLH and the use of specific ID.

Since we had a prior position in VTSAX with a large embedded gain we tried to clarify the issue by transfering our VTSAX shares to a second brokerage account that they didn't manage so that the basis from those shares wouldn't be averaged in with any new VTSAX purchases to enable us to do cleaner TLH (even though they again were not using specific ID at that time).

They wouldn't provide us a dollar or percent number as to when they would TLH - is it a $1000 threshold loss or some percentage? How often would they TLH, just at quarterly reviews, or do they TLH regularly depending on what is happening in the market - couldn't get good answers to any of those questions.

They do recommend fund placement across accounts, but not sure they will recommend where to take withdrawals from except the obvious of RMD from your tax deferred, then I would imagine taxable, tax deferred , lastly Roth. We talked about ROTH conversions, but they werent interested in suggesting an amount or to what tax bracket (see your accountant we don't do taxes) - their response was more that it is a good idea for some people.

And don't get the impression that it was the PAS rep that we were using who was the issue - he wasnt. After multiple discussions with him and our Vanguard flagship rep, we then had a group meeting with the PAS supervisor which led no where as well - we felt they were inflexible and not hearing our concerns or meeting our specific needs. OF course after reading this you might just assume that we were the difficult and intransigent clients, but only if TLH issues aren't a concern to you.
tibbitts
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by tibbitts »

bertilak wrote: Wed Mar 10, 2021 5:54 pm My discussion was beforehand. I wrote an ISP (called an "Investment Plan") and used that as a basis for discussion.
I think you meant IPS? In any case I have a document, about 8 pages as well, but one thing I've had to remind myself is to constantly update it, sometimes daily. For example today I submitted a tIRA withdrawal request for Vanguard to USmail me an FBO check as part of a rollover to an employer plan elsewhere. If something happened to me tomorrow, I can easily see that six-figure amount being simply lost, because that amount wouldn't be in any account. Maybe somebody would find the check in the USmail; maybe not. If it doesn't show up, without a reference in that document, nobody would know to look for it, and it might end up as "unclaimed property" years from now.
BAM55
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by BAM55 »

I think it's pretty clear that most Bogleheads on this forum think it's a waste to hire anyone to do - almost - anything. It's been proved in thread after thread, including when discussing Vanguard PAS.

To each their own, and if you want to manage everything yourself, go right ahead. But at the same time, don't imply and outright say the service isn't worth it just because you don't want to pay the fee and/or it's just as easy to do it yourself with a 3 fund portfolio. Value is different for everyone and what you find of no value could be of great value to someone else.

There is really no wrong answer. Do the research and determine if it's right for you and your needs. Everything else - like in investing - is noise.
tibbitts
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by tibbitts »

BAM55 wrote: Wed Mar 10, 2021 11:16 pm I think it's pretty clear that most Bogleheads on this forum think it's a waste to hire anyone to do - almost - anything. It's been proved in thread after thread, including when discussing Vanguard PAS.

To each their own, and if you want to manage everything yourself, go right ahead. But at the same time, don't imply and outright say the service isn't worth it just because you don't want to pay the fee and/or it's just as easy to do it yourself with a 3 fund portfolio. Value is different for everyone and what you find of no value could be of great value to someone else.

There is really no wrong answer. Do the research and determine if it's right for you and your needs. Everything else - like in investing - is noise.
Valid point and as you say not limited to financial services. I do think Bogleheads often underestimate how much time and effort went into understanding as much as they do about investing, and how difficult that would be for someone starting from scratch to emulate.
Nutmeg
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Nutmeg »

michelef wrote: Tue Mar 09, 2021 3:32 pm Unfortunately, my brother who died suddenly and unexpectedly at 56 late last year, did not have a good experience after I referred him to PAS. I referred him because he had very little investing knowledge, was prone to selling with market volatility and had been sold poor commission products in the past.

PAS managed his traditional IRA, Roth IRA and brokerage accounts for exactly one year. After his death, we were informed that none of his accounts had beneficiaries named. An old Fidelity 401k and IRA held at an insurance company both had beneficiaries listed. In his case, this resulted in most of his assets being inherited by an estranged relative who he never would have chosen to leave the money to.
I am sorry to hear of the unexpected death of your brother. If his assets passed to an estranged relative, he must not have had a current will, which had to have made circumstances even more difficult for the administrator of his estate and his relatives.

It is quite possible that the PAS is not to blame for the lack of named beneficiaries. On a non-retirement account, there are several cases in which beneficiaries should not be named. One such situation is that in which the owner would like to name beneficiaries per stirpes, as Vanguard doesn’t permit an owner to do so. In other words, if an account owner has two sons, each of whom has children, and one son dies before the account owner does but she doesn’t change the listed beneficiaries, the owner’s entire holdings will pass to the living son, and the children of the deceased son will get nothing. Therefore, an owner who doesn’t want to cut off her grandchildren should not name beneficiaries for her non-retirement account, but should allow the funds to go to the estate, where the owner’s will can provide for the grandchildren in the event one son dies before the owner.
GmanJeff
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by GmanJeff »

BAM55 wrote: Wed Mar 10, 2021 11:16 pm I think it's pretty clear that most Bogleheads on this forum think it's a waste to hire anyone to do - almost - anything. It's been proved in thread after thread, including when discussing Vanguard PAS.

To each their own, and if you want to manage everything yourself, go right ahead. But at the same time, don't imply and outright say the service isn't worth it just because you don't want to pay the fee and/or it's just as easy to do it yourself with a 3 fund portfolio. Value is different for everyone and what you find of no value could be of great value to someone else.

There is really no wrong answer. Do the research and determine if it's right for you and your needs. Everything else - like in investing - is noise.
Most critics seem to assume that paying PAS fees will necessarily result in lower total returns compared to self-management. That is, there is an exclusive focus on the cost of the fees without reference to other factors which differentiate any self-managed portfolio from any PAS portfolio. Rarely stated explicitly, the implication is clear that a target date fund, or a self-devised and self-managed two, three or four-fund portfolio will achieve the same or better returns as a PAS portfolio with equivalent or less risk but without the PAS fee expense. That may or may not be a valid assumption but is usually presented here as self-evident.
Nowizard
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Nowizard »

Presumably, use of a PAS advisor would be based on expenses and convenience if invested primarily with Vanguard. One issue is choice of the advisor which appears to be limited. As with all complicated decisions where there are choices, investigate a variety of possibilities, as you are doing here. There are other advisors where you can make a specific choice. Expenses may vary, perhaps more than with a PAS advisor, but the best is not always the cheapest choice with many things. You have time now to establish a relationship with an advisor for a one-time consultation or plan, for example, without moving any assets. There are several well-regarded ones who post here, for example.

Tim
Puppy Lip Soup
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by Puppy Lip Soup »

Just to be proactive here, what I would like PAS to offer to my wife if I'm gone:

1. Investment strategy--a few index funds allocated properly is fine with me.

2. Annual advice as to which assets (after-tax and/or retirement) to liquidate to fund annual expenses, including taking into account minimizing cap gains tax. I would include in this item RMD advice.

3. One time advice on a social security strategy.

4. Advice on a reasonable annual draw-down amount--revisited from time to time (maybe annually).

5. Advice on gifting to children.

6. Advice on other similar issues that come up from time to time (e.g., somebody to talk to about issues arising in connection with selling a residence).

We have an estate attorney/firm and so don't really need any advice there, though I can imagine at some point our attorney and Vanguard will need to coordinate--and that should be covered by PAS.

That would be worth .20% to .30% IMO.

Cowdogman,
We have been Vanguard investors for over 30 years and have used PAS since Oct. 2019. For the previous 30 years we were DIY investors occasionally hiring financial advisors on an hourly basis. For 15+ years we also had a Flagship representative who wasn't worth a pound of salt. However, once we retired and our portfolio had grown large, our focus became de-accumulation, tax management, and more emphasis on asset location, such as Roth conversions, HSAs... What had previously kept us from hiring a PAS is that we didn't want to spend the annual equivalent of a car for these services. Once we interviewed our assigned PAS and expressed our concerns, he came up with a brilliant idea: split our portfolio where we manage 50% and he manages 50%. We chose to manage the easier stuff (already converted Roths that we won't access for many years...). This cut our expenses in half. Based on experience, I can't say enough good things about our PAS. During the April swoon, he helped us tax loss harvest ($40,000 loss) in a taxable account while legally placing us essentially in the same investment. He changed our settings so that we/he choose specific shares to sell rather than selling at average cost. Selling specific shares allows you to choose the oldest, highest cost basis for tax management purposes. He's helps us with Roth conversions (based on our CPA does tax projections to tell us how much to convert). Granted, we're pretty low-maintenance clients for our PAS. He calls us quarterly. Barring a big market swing like March-April '20, we don't need much hand-holding. Now that I know the benefits of a PAS, I can highly recommend. Finally, a PAS is going to access your portfolio and make changes, such as targeting (selling) specific shares on a cost-basis that will affect taxes. An outside financial advisor cannot do that for you.
logical synapse
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by logical synapse »

bertilak wrote: Wed Mar 10, 2021 5:54 pm
afan wrote: Wed Mar 10, 2021 1:24 pm For anything important, we have a discussion. Based on that, my spouse can make up their own mind.
My discussion was beforehand. I wrote an ISP (called an "Investment Plan") and used that as a basis for discussion. The first paragraph is:
Purpose of this Document
This document gives guidance to anyone who has taken on the responsibility of managing our investment portfolio. It explains how our assets are invested and why. It tells how to get spending money when needed.
It is about 8 pages.

Note "guidance" as opposed to "orders."

It also says:
If you are uncomfortable managing our portfolio, even with the help of this document, enroll in Vanguard’s Personal Advisory Service (PAS). Talk to a Vanguard rep to do this.
I did the exact same thing when we drafted our estate documents. I wrote an 8 page Investment Policy Statement which explained the rational for our investments and concluded by thanking the trustee for their service and advising them to contact Vanguard for advisory services if needed, or to consult a CFA or CFP for a fee-only consultation and ensuring that such advisor has a Fiduciary Duty to act in the trustee’s best financial interest.

Many here question whether Vanguard's PAS is worth the cost. I think the answer is: it depends. If you are one who has spent decades reading financial literature, perusing this forum, and self-directing your investments you probably won't get as much value from it. However, if you are a trustee or spouse who takes little interest in the nuances of financial management, or you are one who is prone to rash or emotional decision making, the small fee could save you in the long run. At the minimum you will receive good advice from a trusted source.

There also may be some value during drawdown / retirement which is admittedly a while away for me so I have given it little thought.
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cowdogman
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

GmanJeff wrote: Thu Mar 11, 2021 7:35 am Most critics seem to assume that paying PAS fees will necessarily result in lower total returns compared to self-management. That is, there is an exclusive focus on the cost of the fees without reference to other factors which differentiate any self-managed portfolio from any PAS portfolio. Rarely stated explicitly, the implication is clear that a target date fund, or a self-devised and self-managed two, three or four-fund portfolio will achieve the same or better returns as a PAS portfolio with equivalent or less risk but without the PAS fee expense. That may or may not be a valid assumption but is usually presented here as self-evident.
I'm not sure it is still a Flagship benefit (I just looked and couldn't find it), but Vanguard does (or at least did) free portfolio reviews periodically for Flagship customers. I've done a few over the years.

Assuming that service is still available, a self-managed portfolio will very closely match a PAS portfolio because the advice will, I am certain, be the same.

If Flagship has removed that benefit in a move to push customers to PAS that would not be a very customer-friendly move for those many of us who want to self-manage but like a reality check portfolio review every few years.
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cowdogman
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Re: What's It Really Like to Work With Vanguard's Personal Advisory Service?

Post by cowdogman »

Puppy Lip Soup wrote: Thu Mar 11, 2021 8:36 am Cowdogman,
We have been Vanguard investors for over 30 years and have used PAS since Oct. 2019. For the previous 30 years we were DIY investors occasionally hiring financial advisors on an hourly basis. For 15+ years we also had a Flagship representative who wasn't worth a pound of salt. However, once we retired and our portfolio had grown large, our focus became de-accumulation, tax management, and more emphasis on asset location, such as Roth conversions, HSAs... What had previously kept us from hiring a PAS is that we didn't want to spend the annual equivalent of a car for these services. Once we interviewed our assigned PAS and expressed our concerns, he came up with a brilliant idea: split our portfolio where we manage 50% and he manages 50%. We chose to manage the easier stuff (already converted Roths that we won't access for many years...). This cut our expenses in half. Based on experience, I can't say enough good things about our PAS. During the April swoon, he helped us tax loss harvest ($40,000 loss) in a taxable account while legally placing us essentially in the same investment. He changed our settings so that we/he choose specific shares to sell rather than selling at average cost. Selling specific shares allows you to choose the oldest, highest cost basis for tax management purposes. He's helps us with Roth conversions (based on our CPA does tax projections to tell us how much to convert). Granted, we're pretty low-maintenance clients for our PAS. He calls us quarterly. Barring a big market swing like March-April '20, we don't need much hand-holding. Now that I know the benefits of a PAS, I can highly recommend. Finally, a PAS is going to access your portfolio and make changes, such as targeting (selling) specific shares on a cost-basis that will affect taxes. An outside financial advisor cannot do that for you.
Thanks. That's helpful. I'm a little surprised that Vanguard was amenable to lowering the fee by splitting your assets. Are the non-PAS assets at Vanguard?

Even with a limited set of services PAS may be worth it for a spouse (or couple) who just doesn't want to deal with investments.

I'm going to make another effort with Vanguard to figure out what are exactly the baseline services of PAS.

Thanks again.
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