Vanguard vs DFA

[AlanS]

As I get close to pulling the trigger on ER, I am wrestling with the decision of managing my own portfolio using primarily Vanguard index funds or using an advisor in order to use DFA funds. I feel pretty comfortable in doing it myself, but some articles I have read seem to indicate that it may pay to use a low cost advisor in order to be able to access the DFA funds. Has anyone else looked at this?

Here are some of the articles.

http://www.fundadvice.com/FEhtml/BHStrategies/0006b.html

http://www.altruistfa.com/dfavanguard.htm

http://www.ifa.tv/Media/Images/PDF files/DFAvsVanguard.pdf

http://www.ifa.com/Media/Images/PDF files/bloombergwealthmanagerarticle.pdf

Thanks,
Alan

 

[wabmester]

I'd be tempted to go the DFA advisor route if I didn't have my own crazy ideas about investing. I noticed one that appears to be both sane and has reasonable fees here:

http://psinvest.com/fees.html

 

[ats5g]

Alan,

I don't think I'd go with an advisor just because I want access to DFA funds. I'd go with one b/c I want/need advice or help managing my investments. Certainly nothing wrong with that.

If you want to manage your own investments, you can pay for advice and a total financial review without paying the ongoing management fees. Eric Haas (aka. Altruist Advisor) has a couple of options. If I read it correctly, they start from around $400. Not bad in my opinion. Of course, I share a lot of similar views on investing with him.

I think Rick Ferri (who wabmester linked to), is an investment manager, not a full financial advisor , like Eric is. In Rick's book, "Protecting Your Wealth...", he said that he often refers people/clients to advisors through the Garrett Fee-only Financial Planning Network for non-investment matters (estate planning, etc.).

There could also be another option to explore. Jeff Troutner, of TAM asset management, offers a Non-discretionary relationship for those that want more control over their investments, but still want access to DFA funds.

There are some ways to get around having to use DFA's funds, particularly the value funds (which are admittedly more valuey than value index funds). DFA's large value fund is more mid-value. You could most likely get the same value exposure by using a mid-value index fund (like Russell's mid cap index ETF). Larry Swedroe has mentioned looking for passively managed funds with similar characteristics as DFA's funds. Note also that there are also "active funds" that are passively managed and are more valuey than the value indexes. Vanguard has a number of these: Windsor, Windsor II, etc. Dodge and Cox is also an example.

I don't think it would hurt to email or call them, tell them what you want, and see which is a better fit.

- Alec

 

[AlanS]

Alec and wabmester, thanks very much for the advice and links. They are very helpful.

Alan