Vanguard Personal Advisor Services Review - MagnifyMoney
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Vanguard Personal Advisor Services Review

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Vanguard Personal Advisor Services is the investment advisory service offered through Vanguard Advisers, a wholly owned subsidiary of Vanguard, Inc., one of the world’s largest investment management firms. Vanguard Personal Advisor Services focuses on serving individual investors, including high net worth individuals, who can invest at least $50,000. Clients work with human advisors but also have access to Vanguard’s digital advice platform.

The bottom line: Vanguard Personal Advisor Services is part of investing behemoth Vanguard, offering personalized portfolio management and financial planning to individual investors.

  • Portfolios generally consist of passive index funds or ETFs
  • Fees are far lower than the industry standard
  • Mainly interacts with clients digitally

All information included in this profile is accurate as of September 16, 2021. For more information, please consult Vanguard Personal Advisor Services’ website.

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Overview of Vanguard Personal Advisor Services

Vanguard Personal Advisor Services is the investment advisory arm of Vanguard Advisers, a wholly owned subsidiary of Vanguard. The advisory part of the business launched in 2015, decades after Vanguard was founded in 1975 by the late John “Jack” Bogle.

Vanguard Personal Advisor Services is focused on providing ongoing advisory account services for individual investors as well as point-in-time financial planning for retirement plan participants. Vanguard Personal Advisor Services currently oversees $$148.6 billion of Vanguard Advisers’ total $276.5 billion in assets under management.

A look at the founder of Vanguard

John Bogle, the founder of Vanguard, is a legend in the investing world. He introduced the first-ever index fund to retail investors and encouraged them to buy and hold a diverse basket of low-cost investments. His philosophy was that, over the long term, low-cost index funds outperform more expensive active fund managers.

Bogle wrote a number of books throughout his career, including “Bogle on Mutual Funds” and “Common Sense on Mutual Funds.” He stepped down from Vanguard as chief executive in 1996, staying on as chairman until 1999. Bogle passed away in 2019.

Vanguard Personal Advisor Services’ pros

  • Dedication to low fees: Vanguard literally invented index investing, and the firm remains dedicated to keeping its fees low. While the average annual fee among investment advisory firms ranges from 0.50% to 1.25% of assets under management, Vanguard Personal Advisor Services’ highest rate is 0.30%.
  • Excellent industry reputation: Vanguard is one of the most well-known investing brands in the world. Vanguard Personal Advisor Services in particular was named “Brand of the Year ” in 2019 for digital investing by the Harris Poll EquiTrend Study, which determines brand quality ratings. The title was awarded based on consumer devotion and respect.
  • Fee-only model: Advisors at Vanguard Personal Advisor Services don’t receive commissions for selling products or making recommendations, so they do not have a financial incentive to do so, which can pose a conflict of interest. Instead, firm’s advisors only earn money through the fees clients pay for their services.

Vanguard Personal Advisor Services’ cons

  • Less potential upside: Because Vanguard’s investment philosophy is built on a buy-and-hold strategy composed of low-cost funds, you can expect your investments to perform in line with the markets, but advisors aren’t actively trading to try to “beat the market.”
  • Limited investment options: With Vanguard Personal Advisor Services, you’re limited to Vanguard index funds and exchange-traded funds (ETFs). You won’t have access to individual stocks or alternative investments such as private equity, which may not suit some investors’ needs.
  • Large digital component: While you’ll work with a human advisor at Vanguard Personal Advisor Services to create your initial plan, future check-ins may take place via the platform’s digital interface. Clients with $500,000 or less in assets do not have an assigned financial advisor, though they can call to schedule an appointment at any time by phone or video. For investors who prefer true in-person interaction with an advisor, Vanguard may not be ideal.

What types of clients does Vanguard Personal Advisor Services serve?

Vanguard Personal Advisor Services clients may include:

  • Individuals
  • High net worth individuals
  • Participants in eligible employer-sponsored retirement plans

The firm primarily serves individuals, including high net worth investors and those who get services through their workplace retirement plans. For reference, the SEC defines high net worth individuals as those with at least $750,000 under management or a net worth above $1.5 million.

The individual investors either come for financial planning via their workplace 401(k) plans, or they are retail investors with an IRA or other account with Vanguard. In the latter case, there’s a minimum investment requirement of $50,000.

Eligible account types for retail investors are:

  • Individual accounts
  • IRAs
  • Roth IRAs
  • Joint accounts
  • Trust accounts

Clients who have self-directed brokerage accounts cannot take advantage of the Personal Advisor Services offering.

Services offered by Vanguard Personal Advisor Services

Vanguard Personal Advisor Services offers financial planning and point-in-time advice to participants in Vanguard workplace retirement plans. Those participants are not eligible for managed account services for assets in those plans.

Clients who have an IRA or other retail account worth at least $50,000 with Vanguard can use Vanguard Personal Advisor Services to get a customized financial plan and enroll in the firm’s “ongoing advised account services.” That gives an advisor the authority to make trades on the client’s behalf in accordance with their agreed-upon plan. It also allows participants to call advisors about advice on financial issues that arise as they hit life’s milestones, such as buying a new house or having grandchildren.

Here is a full list of services offered by Vanguard Personal Advisor Services:

  • Investment advisory services/portfolio management
    • Asset allocation strategies
  • Financial planning
    • Retirement planning
    • Estate planning
    • Charitable giving
    • Succession planning
    • Tax planning and management

How Vanguard Personal Advisor Services invests your money

All participants in Vanguard Personal Advisor Services get a financial plan, including the creation of a portfolio with a diverse asset allocation that reflects your personal financial situation, goals and risk tolerance.

To create that plan, the advisors rely on an algorithm that recommends an investing track and glide path, or asset allocation strategy, that meets your needs. The investment tracks range from very conservative to very aggressive, and the glide paths adjust over time, depending on your goals.

Each portfolio the firm creates includes a variety of Vanguard passive index funds with holdings in a specific asset class, such as international stocks or U.S. bonds. The firm generally does not recommend investment individual stocks or bonds, certificates of deposit (CDs), any kind of alternative investments or other non-Vanguard securities Generally, Vanguard will recommend varying combinations of the following funds, or their respective ETF share classes:

  • Vanguard Total Stock Market Index Fund
  • Vanguard Total International Stock Index Fund
  • Vanguard Total Bond Market Index Fund
  • Vanguard Total International Bond Index Fund

Clients who have $50,000 to $500,000 invested are assigned to a team of financial advisors, while clients with more than $500,000 will get an assigned advisor.

In addition to diversification, the portfolios the firm builds take taxes into account, aiming to keep the investments as tax-efficient as possible. In general, Vanguard encourages a long-term, low-cost buy-and-hold approach, rather than switching strategies based on market performance.

Fees Vanguard Personal Advisor Services charges for its services

For clients of Vanguard Personal Advisor who don’t have a workplace retirement plan and are enrolled in the ongoing advised services, the firm charges a percentage of assets under management. Rates run from 0.30% for accounts of less than $5 million to 0.05% for accounts over $25 million, as outlined in the table below:

Vanguard Personal Advisor Services Fee Schedule
Assets under management Annual rate
Under $5 million 0.30%
Between $5 million and $10 million 0.20%
Between $10 million and $25 million 0.10%
Over $25 million 0.05%

In addition to the above fees, clients may also pay fund fees, annuity fees, account fees or retirement plan fees.

Vanguard Personal Advisor Services disciplinary disclosures

While the Vanguard Personal Advisor Services arm does not list any disciplinary disclosures in its brochure, the broader Vanguard firm does, on its Form ADV, report disclosures related to specific individuals and other affiliates. For example, Vanguard Advisers lists that, in the past 10 years, the firm or an affiliate has been convicted or pled guilty or “no contest” to a domestic, foreign or military court felony. The firm also notes that an advisory affiliate has been involved in a violation of investment-related regulations or statutes.

All registered investment advisors are required to disclose any legal, regulatory or criminal events in the Form ADV documents they file with the SEC. For more information on the firm, you can visit its IAPD page.

Vanguard Personal Advisor Services onboarding process

  1. Learn more or set up an account online: To learn more about working with Vanguard, you can call 800-523-1877 to speak with an advisor, or create an account online to begin the process. If you need help setting up the account, you can call 888-531-1933.
  2. Get assigned an advisor(s): If your portfolio is worth less than $50,000, you’ll work with a team of advisors. Those with a portfolio worth more than $500,000 will have a specific, dedicated financial advisor.
  3. Discuss your financial specifics and get a plan: In your initial conversation, you’ll discuss your financial situation and goals, and share information about all of your financial accounts. Your advisor(s) will spend a few weeks creating a plan, and then you can decide if you want to implement that plan and allow them to manage the account on your behalf.
  4. Check in regularly: Advisors will check on your portfolio on a quarterly basis, making adjustments as needed to your asset allocation. You can check in online or call your advisor or team at any time.

Where Vanguard Personal Advisor Services is located

Vanguard Personal Advisor Services mainly works with clients through the platform’s digital interface or by phone or video. That being said, the larger Vanguard Advisers does list the following office locations in its Form ADV:

  • Malvern, Pennsylvania
  • Scottsdale, Arizona
  • Charlotte, North Carolina

Is Vanguard Personal Advisor Services right for you?

Vanguard may be a good choice if you’re an investor with at least $50,000 looking for a low-cost, low-maintenance way to manage your money (or your employer has chosen Vanguard as its retirement plan provider). Vanguard Personal Advisors offers extremely low fees and boasts a clean disciplinary record.

Investors who have less than $50,000, or who are looking for a more active approach to asset management, may not find what they’re looking for with Vanguard Personal Advisor Services. The firm has a large digital focus, and it sticks to a buy-and-hold strategy composed of low-cost funds, which may not be the right fit for everyone. In order to find an advisor who meets your needs, make sure to take the time to research multiple firms to find the right advisor for you.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.