Updated on Wednesday, September 30, 2020
Vanguard Personal Advisor Services is a hybrid investment option that incorporates both human and robo-advisory services into one convenient package. Investors get the benefits of professional expertise and automated investing for a low relatively annual fee. However, there is a $50,000 minimum required to open an account, which may put it out of reach for some.
|Management fee||0.05% to 0.30% annual fee, depending on assets under management|
|Accounts offered||Taxable brokerage accounts, traditional IRAs, Roth IRAs, trusts|
|Access to human advisors||Yes|
Vanguard Personal Advisor Services offers a unique take on robo-advisory investing. While your portfolio is shaped using the algorithm method favored by other robo-advisor platforms, Vanguard Personal Advisor Services first gives you the opportunity to speak with a human advisor. You tell a Vanguard advisor what your goals are and fill in the details of your financial situation, and that information is then used to craft your customized automated investment plan.
In addition to the accounts available with Vanguard Personal Advisor Services â which includes taxable brokerage accounts, traditional and Roth IRAs and trusts â you can also get guidance on 401(k) and 403(b) accounts, 529 accounts, UGMA/UTMA accounts and other investment accounts you hold outside of Vanguard.
|Investment options||Low-cost Vanguard ETFs and mutual funds|
|Tax loss harvesting||(though not automatic)|
|Socially Responsible Investing|
Vanguard Personal Advisor Services builds client portfolios using Vanguardâs selection of Mutual funds and exchange-traded funds (ETFs). These funds can include a diverse mix of assets, such as domestic and international stocks, bonds and short-term reserves.
Clientsâ assets are allocated based on the information they provide about their financial goals, time horizon for investing and risk tolerance. If youâre closer to retirement or already retired, for instance, you may be offered a portfolio composed of 60% bonds, 35% stocks and 5% short-term reserves. On the other hand, Vanguard may recommend a split that leans more on stocks if youâre at the beginning or middle of your investing journey and have more time left before retirement.
Vanguard reviews your portfolio on an ongoing basis, automatically rebalancing when needed to ensure that your investments still align with your goals and risk tolerance. Additionally, Vanguard provides some simple online tools that allow you to explore âwhat ifâ scenarios to see how making changes to your investment plan could result in different outcomes.
Tax management is an important part of investing â the more you can minimize taxes, the more of your investment returns you get to keep. One way to manage taxation is tax loss harvesting, a strategy that involves selling off stocks that have declined in value to offset capital gains.
With Vanguard Personal Advisor Services, tax loss harvesting is available, though it is not automatic; instead, it is offered on a client-by-client basis. Clients can choose from one of two tax strategies: the average cost method, which divides your gains and losses equally across all shares you own, or the minimum tax (MinTax) basis method, which clients must opt into. While the MinTax method is designed to enhance tax efficiency by identifying specific securities to sell, Vanguard acknowledges that it may not do so in every case.
Additionally, Vanguard offers help with tax planning as it relates to estate planning and charitable giving if youâre interested in creating a lasting legacy of wealth to pass on. The goal with those efforts is to maximize tax savings for things like gift tax, estate tax and inheritance tax so you have more wealth to leave to your heirs or the charities of your choice.
Vanguard Personal Advisor Servicesâ fees are tiered based on the amount of assets you have under management. As you can see, the cost of Vanguard Personal Advisor Services could end up being much lower if you have a higher account balance:
There are also separate fees to consider for the products you invest in, namely Vanguardâs Mutual funds and ETFs. The average expense ratio for Vanguard Mutual funds and ETFs offered through Personal Advisor Services is 0.10%. Expense ratios represent the cost of owning a particular fund over the course of a year, so the lower the expense ratio, the more of your investment earnings youâre able to keep.
Vanguard Personal Advisor Services takes a comprehensive approach to financial planning. Your portfolio is built around your risk tolerance and time horizon, as well as your goals. In your initial discussion with a Vanguard advisor, they will create a plan for you that outlines your specific goals (i.e. saving $2 million for retirement or stashing away $100,000 for college savings) and includes a timeline and specific numbers or milestones to aim for along the way.
Additionally, Vanguard Personal Advisor Services can offer specific assistance with tax planning, estate planning and charitable giving planning.
If you have a brokerage or retirement account through Vanguard, you can review its library of investment profiles. This allows you to analyze individual stocks or explore the finer details of thousands of Mutual funds from Vanguard and other firms.
Vanguardâs portfolio analysis tool allows you to check your portfolioâs risk level and performance. You can see how your portfolio has done historically and how your assets are currently allocated. This can be helpful in deciding whether any adjustments to your asset allocation are necessary to stay on track.
Beacon is Vanguardâs mobile app, which is available for download on Android and Apple devices. Introduced in 2020, the app is designed to serve as an upgrade of the existing Vanguard app. The updated app includes features like:
The mobile app is fairly straightforward and streamlined. You can easily check your balance and get an overview of how your portfolio is performing. The website has more features, including a large library of educational resources.
If you need help that the app isnât able to offer, you can contact Vanguard Personal Advisor Services support. Advisors are available by Phone at 800-414-8740 from 8 a.m. to 8 p.m. ET Monday through Friday. When you call, be prepared to verify your identity with a Vanguard representative before theyâre able to access your account.
If youâre just getting started with Vanguard Personal Advisor Services, you can start the account setup process online, then schedule an appointment to Chat with an advisor to discuss your financial plan.
Vanguard takes a number of steps to ensure your safety and security. The brokerage is SIPC-insured, up to $500,000 and including $250,000 for claims for cash.
Vanguard uses encryption and SSL certificate security to protect your information. If you log on to your account, Vanguard will automatically log you out after a period of inactivity. You also have the opportunity to take advantage of optional security features, including:
You can name a trusted contact who can access your account on your behalf if thatâs ever needed. Plus, you can set a PIN or password to verify your identity when calling Vanguard yourself.
Overall, Vanguard Personal Advisor Services could be a good fit for an investor who can meet the $50,000 minimum and is interested in low advisory fees while putting their investments on autopilot. Investors with higher net worths may appreciate the reduced advisory fee as their level of assets under management increases.
The higher minimum obviously makes Vanguard Personal Advisor Services less attractive for someone who is looking to invest on a smaller scale. If youâre a beginning investor or canât meet the $50,000 minimum, you may want to consider another robo-advisor to help with managing your money. We cover a couple alternative options below.
|Account minimum||Annual fee||Accounts offered|
|Vanguard Personal Advisor Services||$50,000||Minimum 0.30%; fees decline as assets under management increase||Individual taxable accounts, trusts, traditional IRAs, Roth IRAs|
|Betterment||$0 for Digital accounts; $100,000 for Premium||0.25% for Digital accounts; 0.40% for Premium||Individual and joint taxable accounts, trusts, traditional IRAs, Roth IRAs, SEP IRAs|
|Schwab Intelligent Portfolios||$5,000||None||Individual and joint taxable accounts, trusts, traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, rollover IRAs, custodial accounts|
Betterment offers personalized advice with robo-advisory services, but those come with a higher fee and a higher minimum balance requirement compared to Vanguard Personal Advisor Services. While you could open a Digital account with $0 at Betterment and pay just 0.25% each year, that only includes robo-advisor services without help from professional advisors.
On the other hand, Digital accounts at Betterment include both automatic rebalancing and tax loss harvesting, and you can invest in more than just Vanguard index funds. However, you may pay higher expense ratios with Bettermentâs fund selection compared to Vanguardâs low-cost options â Bettermentâs average expense ratio ranges from 0.07% to 0.15%, versus Vanguardâs 0.10% average.
When comparing Schwab Intelligent Portfolios vs. Vanguard Personal Advisor Services, there are a few things that stand out. First, you can start investing in a diversified portfolio of ETFs with as little as $5,000 with Schwab, a fraction of the $50,000 you need for Vanguard. There are no advisory fees and no commissions to trade either.
Automatic rebalancing and tax loss harvesting are included, another edge of Schwab Intelligent Portfolios over Vanguard. But you donât get one-on-one access to a financial advisor automatically: If you want that service, youâll have to upgrade to Schwab Intelligent Portfolios Premium, which requires a $25,000 minimum, a $300 upfront fee and a $30 monthly advisory fee. Compared to Vanguard, the initial investment is lower but you could still pay less in advisory fees with Vanguard if you had under $120,000 in your account.