Author Topic: Vanguard Financial Advisor question  (Read 3315 times)

eddieryan

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Vanguard Financial Advisor question
« on: February 15, 2017, 10:37:13 AM »
Does anyone have experience dealing with a Vanguard financial advisor? I understand they only offer this service if you have 50k or up with them. I'm wondering exactly what this service entails. I currently have a financial advisor who set me up with some MFS mutual funds and I'm considering moving them into Vanguard and I'm curious if the Vanguard advisor will want the full picture of our financial situation as I'm interested in an in-depth advisory role from Vanguard, not a generic, cursory overview. Anyone with experience please comment. Thanks!

smoghat

  • Stubble
  • **
  • Posts: 239
Re: Vanguard Financial Advisor question
« Reply #1 on: February 15, 2017, 02:51:35 PM »
I have flagship level from them since I have 3.5 million there. It's generic. Invest in the total market, in bonds, international, and international bonds via their main funds. You already know what they are. Figure out the percentages yourself.

SeattleCPA

  • Handlebar Stache
  • *****
  • Posts: 1551
  • Age: 60
  • Location: Redmond, WA
    • Evergreen Small Business
Re: Vanguard Financial Advisor question
« Reply #2 on: February 15, 2017, 06:56:44 PM »
You might find my experience with the free Vanguard personal financial plan interesting or useful:

http://evergreensmallbusiness.com/does-the-vanguard-personal-financial-plan-work-for-small-business-owners/

BTW, I don't think they do the free plan anymore. But you might check...

oldtoyota

  • Magnum Stache
  • ******
  • Posts: 3170
Re: Vanguard Financial Advisor question
« Reply #3 on: February 15, 2017, 07:16:50 PM »
Does anyone have experience dealing with a Vanguard financial advisor? I understand they only offer this service if you have 50k or up with them. I'm wondering exactly what this service entails. I currently have a financial advisor who set me up with some MFS mutual funds and I'm considering moving them into Vanguard and I'm curious if the Vanguard advisor will want the full picture of our financial situation as I'm interested in an in-depth advisory role from Vanguard, not a generic, cursory overview. Anyone with experience please comment. Thanks!

Read blog posts by jimcollinsh: http://jlcollinsnh.com/stock-series/.

Helped me a lot. Good luck!

PhysicianOnFIRE

  • Bristles
  • ***
  • Posts: 458
  • Age: 44
  • Location: Up North
    • Physician On FIRE
Re: Vanguard Financial Advisor question
« Reply #4 on: February 18, 2017, 11:10:44 AM »
There are a number of threads on Bogleheads from people who have used the service. You'll get a recommandation for variations on a three fund portfolio. It's pretty easy to replicated yourself.

Cheers!
-PoF

Spork

  • Walrus Stache
  • *******
  • Posts: 5750
    • Spork In The Eye
Re: Vanguard Financial Advisor question
« Reply #5 on: February 18, 2017, 11:27:41 AM »
They assigned me an advisor years ago but I've only talked to her once -- when I was calling to have something else done.  I told her what my plans were (FIRE, laddering a traditional into a Roth and aging it 5 years).  She'd never heard of such a thing and advised me to talk to an estate attorney or a CPA.  Um.  Yeah, thanks.  In other words: I wasn't asking for her advice, but what I got was less than stellar.

I think they are very knowledgeable about Vanguard funds, procedures for moving things around, rolling things over, etc.  My 5 minute conversation pretty much turned me off on actual financial advice.

eddieryan

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: Vanguard Financial Advisor question
« Reply #6 on: February 24, 2017, 10:41:24 AM »
Does anyone have experience dealing with a Vanguard financial advisor? I understand they only offer this service if you have 50k or up with them. I'm wondering exactly what this service entails. I currently have a financial advisor who set me up with some MFS mutual funds and I'm considering moving them into Vanguard and I'm curious if the Vanguard advisor will want the full picture of our financial situation as I'm interested in an in-depth advisory role from Vanguard, not a generic, cursory overview. Anyone with experience please comment. Thanks!

Read blog posts by jimcollinsh: http://jlcollinsnh.com/stock-series/.

Helped me a lot. Good luck!

Thank you for the link to Jim's website. Jim actually posted an article analyzing a real scenario on a Vanguard rep's recommendation to allocate up to 6 or 7 different Vanguard funds. Jim pointed out the fallacy of the recommendation, showing that the funds overlapped and were merely increasing the costs by duplicating efforts when less funds would do the same job. I'm 34 and have decided to hold only VTSAX and SP500 admiral shares. I don't need anything else and will let it ride until I'm 60. End of story. Thank you!


Car Jack

  • Handlebar Stache
  • *****
  • Posts: 1527
Re: Vanguard Financial Advisor question
« Reply #7 on: February 24, 2017, 11:30:23 AM »
All of the recent stories I've heard have said that the FAs put everyone into the funds that match a target date fund (4 funds: US stock, US bond, international stock, international bond).  If you want to avoid the phone call, look at what % of each is in a target date that you like and buy that way.  Or just buy the target date fund.  Certainly cheaper than a "let's steal as much of the client's money as possible" financial advisor.

MoonLiteNite

  • Bristles
  • ***
  • Posts: 413
Re: Vanguard Financial Advisor question
« Reply #8 on: February 25, 2017, 02:47:00 AM »
They assigned me an advisor years ago but I've only talked to her once -- when I was calling to have something else done.  I told her what my plans were (FIRE, laddering a traditional into a Roth and aging it 5 years).  She'd never heard of such a thing and advised me to talk to an estate attorney or a CPA.  Um.  Yeah, thanks.  In other words: I wasn't asking for her advice, but what I got was less than stellar.

I think they are very knowledgeable about Vanguard funds, procedures for moving things around, rolling things over, etc.  My 5 minute conversation pretty much turned me off on actual financial advice.

Same story here.
I actually posted this question, called them up. And basically was given the normal "invest in our index funds, do you have any 401k you can roll over, contact a tax CPA for those question"

Indexer

  • Handlebar Stache
  • *****
  • Posts: 1437
Re: Vanguard Financial Advisor question
« Reply #9 on: February 25, 2017, 12:45:47 PM »
Quote
Or just buy the target date fund.

If you are talking about a 401(k) plan, sure. Target date funds are not tax efficient. If you are talking about a taxable account or multiple account types, taxable/IRA/Roth, then a target date fund is going to have a big extra tax cost. You would want to use the underlying funds in a tax efficient manner.

Quote
Does anyone have experience dealing with a Vanguard financial advisor? I understand they only offer this service if you have 50k or up with them. I'm wondering exactly what this service entails. I currently have a financial advisor who set me up with some MFS mutual funds and I'm considering moving them into Vanguard and I'm curious if the Vanguard advisor will want the full picture of our financial situation as I'm interested in an in-depth advisory role from Vanguard, not a generic, cursory overview. Anyone with experience please comment. Thanks!

Moving to Vanguard is better than an advisor who uses MFS. That should be true with or without a Vanguard advisor. It doesn't hurt to meet with the advisor. The initial meeting is free to my understanding. They can tell you what it entails.

Quote
Thank you for the link to Jim's website. Jim actually posted an article analyzing a real scenario on a Vanguard rep's recommendation to allocate up to 6 or 7 different Vanguard funds. Jim pointed out the fallacy of the recommendation, showing that the funds overlapped and were merely increasing the costs by duplicating efforts when less funds would do the same job. I'm 34 and have decided to hold only VTSAX and SP500 admiral shares. I don't need anything else and will let it ride until I'm 60. End of story. Thank you!

After complaining about fund overlap you are using two funds that have a 70% overlap? I'm not criticizing, I'm just curious. There are actually good reasons to do this.

I have read the article where Jim criticizes Vanguard for overlap. They used Total Stock, 500 index, and Extended market index. 500 index+ Extended = Total stock, so you have 100% overlap. I was sad to see Jim never describes the portfolio beyond the fund selection. There are several reasons you would use those three funds even though they overlap.
1. If the client had a taxable account, pre-tax account(401k), and a Roth then those 3 funds make perfect sense. I use those 3 funds in my portfolio, knowing they overlap. You want your Roth to be your most aggressive account for ideal tax efficiency, and the Extended market index fund is very aggressive. Conclusion:Extended in a Roth, enough 500 index to balance the large/small cap suballocation back out, and then Total Stock after that thanks to the lower cost.
2. If the client already owned and had capital gains on the 500 index or Extended then it makes perfect sense. You wouldn't pay taxes to sell 500 index at a gain just to buy Total Stock. That would be asinine! If Jim told someone to do that he deserves a punch in the face. You would use Extended to build around the 500 index to get your large/small cap suballocation back in balance, and then use Total Stock going forward.
3. The client could also have a 401(k) where the 500 index is an option, but Total Stock isn't an option. You would use Extended to compliment the 500 index. I had an old 401(k) with that issue. This is currently the case in my HSA. I don't have Total Stock as an option, but I do have 500 index and Extended.

Jim's review the portfolio doesn't make me think less of Vanguard. It makes me think less of him for not digging deeper into the portfolio. You can't give everyone the same blind recommendations. People have different situations, especially when it comes to capital gains and asset location.

tj

  • Handlebar Stache
  • *****
  • Posts: 1255
  • Age: 34
  • Location: Maui
    • Arcadia Power
Re: Vanguard Financial Advisor question
« Reply #10 on: February 26, 2017, 10:37:22 AM »
Quote
Jim's review the portfolio doesn't make me think less of Vanguard. It makes me think less of him for not digging deeper into the portfolio. You can't give everyone the same blind recommendations. People have different situations, especially when it comes to capital gains and asset location.

+1