What is Vanguard Personal Advisor?
Vanguard Personal Advisor is a hybrid advisor service that combines the digital advise of Vanguard's Digital Advisor, with the human touch of a financial fiduciary from Vanguard. It is a good way to get access to Vanguard's low cost investment funds, while also having access to human advisors who can create a complete financial plan for you.
How does Vangaurd Personal Advisor work?
Since Vanguard Personal Advisor is a hybrid service, it works using two pieces - a
robo advisor and a human advisor. The robo advisor portion is called Vanguard Digital Advisor, which is Vanguard's in house robo advisor. Similar to other robo advisors, you will have to fill out a questionaire when you first sign up.
The questionaire will gather information such as your age, income,
risk tolerance, investment goals, overall assets and more. Using this information, the Digital Advisor will build and recommend a pre-built investing portfolio using low cost investment funds from Vanguard.
What's unique is that Vanguard will allow you to schedule a meeting with one of their human advisors before you decide to invest in the portfolio that their Digital Advisor recommended to you. This advisor will be able to better understand your situation and give you some advice before you commit to the service. This is the second piece to the Vanguard Personal Advisor service.
Once you meet with an advisor to decide if Personal Advisor is right for you, you can make the required minimum deposit of $50,000 into a Vanguard account to get started. From there, you will have unlimited access to Vanguard's team of advisors to help you create a financial plan as needed.
So, you fill out a questionaire, get a recommended portfolio of investments, meet with a human advisor if you want to, deposit the required $50,000 into an investment account, and unlock a team of advisors from Vanguard to help you over time.
A Quick Summary
Brokerage accounts
Retirement accounts
Digital Advisor
Personal Advisor Select
Account Types
Standard brokerage accounts: A standard brokerage account simply allows you to hold the investment portfolio Vanguard recommends for you. Vanguard offers Individual or joint tenants with rights of survivorship (JTWROS) Brokerage accounts.
Retirement accounts: IRAs (individual retirement accounts) are designed specifically to help you save and invest for retirement, and often come with tax benefits. Vanguard offers a Roth, Traditional, and Rollover IRA.
Connect other accounts: Vanguard also recommends that you connect any other Vanguard or Non-Vanguard accounts that you have. This will allow the advisors at Vanguard to get a complete picture of your financial life so they can provide the best advice possible for you.
Fees and Account Minimum
You will need at least $50,000 to use the Personal Advisor service. You can use just the robo advisor portion of the service if you have at least $3,000 and grow your account balance to $50,000 to unlock access to human advisors if you don't currently have $50,000.
Vanguard charges a gross advisory fee of 0.35% if you opt to invest in index funds, or a 0.40% if you opt to invest in a mix of index and mutual funds. These fees are often lower as Vanguard credits you the revenue that they make from the expense ratios (fees) of the investment funds within your account.
Also keep in mind that you will have to pay the expense rates on the investments that Vanguard's robo advisor recommends for you. However, Vanguard is known for having low cost investment funds, and the expense ratio fee typically averages out to about 0.07%.
Access to Advisors
Vanguard allows you to reach their human advisors via email , phone or video conference by using the Personal Advisor Dashboard. Most of Vanguard's human advisors are certified financial planners (CFP) and are held to fiduciary standards.
This means that Vanguard's advisors are legally required to act in your best interest. Additionally, advisors are paid with a salary and not commissions. This eliminates the conflict of interest that can arise if an advisor is paid off of commissions and tries to place you in an investment to boost their commissions.
Services Offered
1. Robo advisorThe first service you get is the digital advice of Vanguard's robo advisor. The robo advisor does a good job of building an investment portfolio using Vanguard's low cost investment funds. The ability to review your recommended portfolio with a human advisor before giving Vanguard $50,000 sets the service apart from other notable
digital advisors.
2. Human advisorsAll things considered, the Personal Advisor service does give you access to human advisors for a relatively low cost. According to Vanguard, advisors can help you with changes in income, unexpected expenses, goal prioritization, tax strategies, spending in retirement, healthcare costs, and debt management.
3. Digital toolsFinally, Vanguard does offer some digital tools to further assist you. The digital tools are not out of this world, but they do provide some additional support. Some of the tools include the investor questionarie, retirement expenese worksheet, college cost projector and more.
Customer Support
Vanguard offers phone support Monday through Friday 8 am to 8 pm Eastern time. For frequently asked questions or general inquiries outside of the Personal Advisor service, Vanguard does have an online help center that is easy to navigate.
Other Advisor Options
Digital AdvisorIf you don't have the required minimum of $50,000 lying around to use the Personal Advisor service, you could start with just the digital advise of Vanguard's robo advisor. Unlike the Personal Advisor, you only need $3,000 to get started.
You can choose to invest in a range of index funds, or a a mix of
index and mutual funds. Vanguard charges a 0.20% annual fee if you opt to invest in index funds and a 0.25% fee if you opt to invest in a mix of index and mutual funds. When you first enroll, Vanguard waives the fees for your first 90 days.
Additionally, the Digital Advisor uses both portfolio rebalancing and tax loss harvesting. Portfolio rebalancing is a strategy in which the Digital Advisor will adjust your investments as needed to stay in line with your goals. Tax loss harvesting is a strategy in which investments are intentionally sold at a lost (when it makes sense to do so) to reduce the amount of taxes you owe.
Personal Advisor SelectPersonal Advisor Select is Vanguard's premier advisory service. With this service, you get a dedicated financial advisor that acts under a fiduciary role and is not paid with commissions. You will need at least $500k of assets to use the service and will pay a 0.30% annual advisory fee.
Advantages of Vanguard Personal Advisor
1. Low cost
The main advantage of Vanguard's Personal Advisor are the low costs. All things considered, getting unlimited access to fiduaciary human advisors for a fee of 0.35% per year or lower is hard to beat. Vanguard is also able to keep the fees, or expense ratios, of the investments within your recommended portfolio low due to their size.
2. Portfolio built by Vanguard funds
Vanguard is known for creating low cost investment funds and pioneered the idea back in 1975 with the introduction of the First Investment Trust - Vanguard's first mutual fund. If you are a long term investor, you can't really go wrong holding onto well established Vanguard investment funds when using the Personal Advisor service.
3. Access to advisors before you sign up
Getting access to a human advisor before committing to the Personal Advisor service is great. Afterall, handing someone $50,000 should not be a casual decision. Once you fill out the inital questionaire, you can opt to meet with a human advisor who can help you understand the investments recommended for you, as well as create a plan to implement even if you don't opt to use the service.
Disadvantages of Vanguard Personal Advisor
1. Higher minimum requirement than other hybrid advisor solutionsWhen compared to other hybrid advisor services, the minimum requirement is a bit steep. It is double the amount you need to use for the equivalent service at
Charles Schwab. It is not that high of a number when compared to traditional advisor services, but if you are comparying hybrid advisors, it is a bit high.
2. No 24/7 customer supportAlthough it is not a huge knock, Vanguard does not offer 24/7 customer support where as other hybrid advisor services do. Additionally, it would be beneficial if Vanguard expanded their customer support options to include a live chat feature as other advisor services do.
Is Vanguard Personal Advisor right for You?
Vanguard Personal Advisor is right for you if:
You want a low cost advisor solution
You have a nest egg of $50,000 saved and want both digital and human help to invest and manage it
You are a long term investor who can appreciate Vanguard's strong investment funds
Alternatives to Consider
Read our full reviewConsider using Fidelity for no fee mutual funds
Fees
0.35% annual fee
Minimum Required
$25,000
Take me to the reviewConsider using Facet for flat fee advisors
Fees
$2,400 to $8,000 per year
Minimum Required
$0
Read our full reviewConsider using Vanguard for an affordable advisor solution
Fees
Varies by advisor
Minimum Required
$150,000 - can vary