Why is Vanguard so Intent on Selling Advisory Services?

[ejman]

I've been getting emails and now phone calls about signing up for Vanguards advisory service which I guess from the literature provides asset allocation and periodic rebalancing services for .3% on assets under management. This is certainly a reasonable rate compared to the more usual 1%+ charge. However, given Vanguards ownership structure why this big push? I did a quick calculation and this .3% gets to be real money real quick. What do I get for that?

I guess there could be some value if advise covers such things as tax planning, inheritance issues and such but I suspect it does not.

 

[gauss]

I have seen the hard push too. Has there been a senior level management change?

That is normally when the culture and priorities of a company changes.

-gauss

 

[pb4uski]

I haven't seen a hard push at all. Maybe you guys are higher flyers.

 

[gauss]

It was very prominent on the front page of the web site and I also received direct mailings. I briefly looked into it and realized it was a paid service.

-gauss

 

[athena53]

It's likely a response to services such as Betterment, which are more computer-driven with less human interaction. Rather than lose the accounts that were paying 1% for full service, they're offering a similar lower-cost option.

 

[RunningBum]

I've had a couple of direct emails about it, and it seems to be mentioned in about every correspondence or when I go to their site. In the last email, instead of an unsubscribe option, they said to stop getting such emails to call a number or send an email to a given address. I tried the email and got back a message that it wasn't a monitored address. They better not get any more aggressive with this.

 

[user5027]

Hopefully they generate a lot of revenue from all of the clients using the service and keep my expenses low.

 

[ejman]

Hopefully they generate a lot of revenue from all of the clients using the service and keep my expenses low.

Well, I hope that's it. I just haven't seen Vanguard be "pushy" about anything before. It seems out of character.

 

[ejman]

I haven't seen a hard push at all. Maybe you guys are higher flyers.

Well, from the surveys I've seen of folks at this site I think I'm middling. Certainly don't have the AA problem of the poster with the $24M. Which is kind of why I'm wondering why the Vanguard push.

 

[bingybear]

I'm not so sure it is really about the robo-advisers, but a way to try to pull those using other adviser setups or providing more help. They may have hit a plateau and are looking for a way to draw in other clients. To set this up and have it work, they need to get some level of customers using it to cover the added employee costs. This does as some people cost as there are more customer interfaces and face/phone time with these clients.

I don't really have an opinion of is this good or bad... just why they might be doing it.

I'm sure they have clients that have accounts that are not real well invested... . so they may see this as a way to add value.

 

[ETFs_Rule]

asset allocation and periodic rebalancing services for .3% on assets under management.

Asset allocation? I know of 2 free websites that do that. It isn't rocket science to just subtract your age from 120 to figure out a good percentage to put in stocks.
Rebalancing isn't rocket science. I'd rather do it on my own and save .3% per year.

 

[travelover]

Asset allocation? I know of 2 free websites that do that. It isn't rocket science to just subtract your age from 120 to figure out a good percentage to put in stocks.
Rebalancing isn't rocket science. I'd rather do it on my own and save .3% per year.

As would most of us. For people that freak out and sell low, then want to buy back high, it may be a worthwhile investment.

 

[hnzw_rui]

Asset allocation? I know of 2 free websites that do that. It isn't rocket science to just subtract your age from 120 to figure out a good percentage to put in stocks.
Rebalancing isn't rocket science. I'd rather do it on my own and save .3% per year.

Well, even Vanguard offers automated asset allocation advice based on a simple risk assessment questionnaire (normally a 4-fund portfolio for higher balances, LifeStrategy or Target Retirement for lower balances).

Besides, from some of the comments of folks who've used the service, aside from investment advice and asset management, it also includes CFP services.

Personally, I'm considering it for when I retire (or when I'm close to retirement). I'll just rollover my 457b balance to a traditional IRA at Vanguard to help ease the transfer to my beneficiaries (as inherited IRA) when I croak. They need handholding and robo advisors like Betterment just won't cut it.

 

[Midpack]

I haven't seen a hard push at all. Maybe you guys are higher flyers.

Well, I hope that's it. I just haven't seen Vanguard be "pushy" about anything before. It seems out of character.

+1. I haven't been targeted at all, guess our assets fly below the radar too.

 

[RE2Boys]

We've got way more at Vanguard than at Fidelity but my wife is currently being badgered by Fidelity to "manage" her old 401k money. We must have not hit Vanguards threshold yet for targeting.

 

[Bestwifeever]

Not a peep out of Vanguard to sell us this service. I don't even notice the content on their website when I log in to check balances, so that's not very effective on me. It actually would appeal to DH who would rather pay a small fee than do this himself.

 

[churchill]

I've gotten the Vanguard e-mails, and I just take it as something of a response to Personal Capital/Wealthfront/Betterment. I suspect they're seeing if there is a real market, and they don't have to deal with venture capital like many of these new online services. If I were Vanguard leadership I'd possibly consider buying up Personal Capital IP for the dashboard and fee analyzer, etc. Or at least developing something of the sort for themselves.

As someone who largely manages the finances of my parents after pulling them from their long-time financial adviser (1% + some occasional front load high ER funds), I suspect I'd be willing tell my parents to sign up for Vanguard services in the event of my demise, as long as the fee says so low. I'm also certain I'd have to tell my wife to have someone re-balance and tax harvest for her. Sure I've told her the what and whys of our money, but she just says she's glad I think about these things because she certainly won't. I'm just happy that she's more than willing to do what it takes for FIRE.

Of all the folks on the board, do your partners have any involvement in the investment, or do you just do the bulk of it?

 

[target2019]

Would you prefer that vanguard not compete with others offering advisory services? I ignore their ads for the most part. You can opt out of those emails. Can also block specific I frames on their site if really upset by this.

 

[JoeWras]

I suspect I'd be willing tell my parents to sign up for Vanguard services in the event of my demise, as long as the fee says so low.

DW and I already discussed that. She doesn't like managing money, so her instructions are to call up Vanguard and get on the adviser train should I meet my demise.

Now, about the services...

It used to be that you could get some sort of "plan" or something like that from Vanguard as a Flagship customer on a yearly basis.

I tried to sign up for such, but instead got a "meeting with Personal Adviser Services", for free. I'm not sure if this is a change, or it was always this way. I thought people said they got something written down in the past.

Not so in my case. The adviser looked at my allocations, verbally discussed our ability to retire, and gave me some advice on allocations for tax purposes. It was well worth my time, but very informal. I will continue to drive the allocations myself.

He did not push the services, but did mention they could do it for us if we signed up and then there would be the fee. DW was in on the call and this is when we agreed on her using this in the event of my demise.

 

[gauss]

The fact that this (advisory campaign) is happening concurrently with the effort to convert all mutual fund accounts over to brokerage accounts again has me concerned that Vanguard may be drifting off their core path. I hope that I am wrong on this.

-gauss

 

[ejman]

The fact that this (advisory campaign) is happening concurrently with the effort to convert all mutual fund accounts over to brokerage accounts again has me concerned that Vanguard may be drifting off their core path. I hope that I am wrong on this.

-gauss

Indeed. I certainly hope that Vanguard stays on the path laid out by Bogle. I'll keep a weary eye on this. I'm thinking of actually calling back and finding out more to see if my paranoia is justified or not. (Just because one is paranoid doesn't mean they aren't out to get you...)

On the plus side, I recently saw a notification that a couple of funds reduced their fees, so there is hope...

 

[pb4uski]

...I'll keep a weary eye on this. ...

Man, go get some sleep. I'll keep a wary eye on it for you.

 

[ejman]

Man, go get some sleep. I'll keep a wary eye on it for you.

Thanks, need all the help I can get...

 

[Dog]

I've used the Flagship Advisor in the past and they provided a written plan.
I have so recieved emails regarding the Advisory Service and yesterday a letter from Vanguard. It doesn't mention costs.


Sent from my iPhone using Early Retirement Forum

 

[jerome len]

Vanguard primarily offered the advisory service for a small fee because so often, the DH would die and the DW had no idea on how to manage their investments.....so, here comes FIDO charging over 1% and placing her in expensive managed funds.......other financial firms can even charge more......now Vanguard can manage money......they told me of their service, I told my DW......and, she will call them if something happens to me. I'm glad they offer this service.