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Vanguard to enter the "advisor" business
Old 12-09-2014, 02:19 PM   #1
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Vanguard to enter the "advisor" business

It will be interesting to see if the advice is really custom for each customer.



https://www.bogleheads.org/forum/vie...ewpost=2286745
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Vanguard to enter the "advisor" business
Old 12-09-2014, 02:53 PM   #2
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Vanguard to enter the "advisor" business

I've got a Financial a Times subscription, had to log in to get the article.

Basically says they'll charge 0.3% for web based, facetime type support. Targeting smaller/younger investors, for now.

IMHO, can't see the even 0.3% being worth it over 70% VTI 30% BND or something similar.

Although this article says they took in $3.5 BILLION in the last year.
http://www.investmentnews.com/articl...ng-competitors


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Old 12-09-2014, 05:56 PM   #3
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gee what a surprise.

is it any wonder since vanguard released their own study that showed the typical small investor gives up as much as 3% in return by not using an advisor to keep them on the straight and narrow.
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Old 12-10-2014, 06:25 AM   #4
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Originally Posted by gcgang View Post
IMHO, can't see the even 0.3% being worth it over 70% VTI 30% BND or something similar.
It isn't unless people start reacting to every market swing and whichever financial porn they heard last.

It would be far cheaper to buy Millionaire Teacher and Investors' Manifesto. That would mean taking personal responsibility for your own life which most people seem to not want to do.

At least the 0.3% fee, especially for a small investor, is well below the competition. I have heard of people that charge 1% but won't accept your account if it isn't at least $1MM. Of course, then there are the hedge funds. Best of all, I doubt Vanguard will push variable annuities.

I don't see where there would be much customization for the customers. First, there isn't much customization that's needed for most investors especially the small ones. Second, the brokerage wrap accounts supposedly based on close relationships typically don't have much customization unless the accounts are in the several millions.
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Old 12-10-2014, 07:34 AM   #5
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The only people that should use Vanguard's service are those that say, "what should I do?" and don't have any idea how to invest. Vanguard will put them in total stock, total bond and that's about it UNLESS you push for more or have an account over 1m. They'll addjust for age, time line to hold the investments,etc. I doubt anyone on this blog would need this service.....however, if a young person knows nothing, this can save them from a serious mistake.
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Old 12-10-2014, 08:46 AM   #6
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Would be interesting to read a legal dissection of the financial services industry.

I don't intend to use the service. We have an allocation to index funds now. Would be pointless to add .3 back in to the expense ratio, as we've seen expenses drop steadily over the last few years. Getting into admiral funds helped.

I wonder how well the inherent conflict of interest will be handled?

Isn't this similar to investing in a target fund, where an additional expense fee is charged on top of the included funds or ETFs?
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Old 12-10-2014, 09:56 AM   #7
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Won't let you read the article on the FT website unless you subscribe....

.3% is not a bad price to get professional assistance with your investments (if you need or want it). Most people won't take the time to get a basic understanding about a key area of one's financial future. Helps Vanguard also keep customers in-house (some financial advisers will look to put your money where it does "them" the most good).

We are VG Flagship, but have always controlled our investments from the beginning. However, there was a time when I could have used their advice. When we first started out, I almost allowed a financial advisor at our Credit Union (where my wife worked) to put our funds in some fairly risky, high fee investments. I felt things just didn't look right (thank God), which started my self-discovery journey through the world of investing. FYI - I learned afterwards that the financial advisor was not an employee of the Credit Union. He was a salesperson for an independent financial services company working the crowd at a desk in the CU office with their blessing.
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Old 12-10-2014, 10:04 AM   #8
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I wonder if vanguard sees any benefit to reducing churn in it's fund with it's advisory service (e.g. it certainly tell people to stay the course).
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Old 12-10-2014, 10:20 AM   #9
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I hesitate to to even approach the total cost of 'my education/investment advice'.

1966 - 70's Dean Witter Broker. Then AAII New Orleans chapter - great coffee and pastries at the meetings. Onward to DRIP's, Moody's Handbook of Dividend Achievers, pssst Wellesley, Bogle on Mutual Funds, slowly getting less dense, etc.

Meanwhile back at the ranch my un-watched 'Bogle's Folly' (401k) silently marched on to victory.

heh heh heh - sooo will the advisor threaten to smack the client around the head and ears with a wet squirrel if they even think about deviating from balanced index and staying the course? Hindsight as to the cost of my learning curve, the price may be right.
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Old 12-10-2014, 12:23 PM   #10
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I'm amused by the references to "most people" -- most people do this, most people do that.

Those stats come from ... where?
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Old 12-10-2014, 12:57 PM   #11
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I'm amused by the references to "most people" -- most people do this, most people do that.

Those stats come from ... where?
As Jerry would say "Who are these people".
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Old 12-10-2014, 04:57 PM   #12
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I'm amused by the references to "most people" -- most people do this, most people do that.

Those stats come from ... where?
Anecdotes from friends, people we work(ed) with, neighbors, relatives, etc.

Like the SIL who told her hubby to slow contributions to a trickle during the last meltdown because "it's all just losing money anyway". This is the one I refer often to as "Spendarina" because among other things she's never kept a new car long enough to replace the tires. Not all are quite that foolish but a few are even worse.
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