Why is Vanguard so Intent on Selling Advisory Services?

[ejman]

Quote:

Originally Posted by 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

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]

Quote:

Originally Posted by ejman ...I'll keep a weary eye on this. ...

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

[ejman]

Quote:

Originally Posted by pb4uski 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.

[Spanky]

Like another other business, Vanguard wants to maximize their profits. I only receive a few emails from them regarding the advisory services. The number of emails, however, from all other business establishments has grown so much to the point of madness -- . - almost 100 emails a day. Trying to unsubscribe or tagging them as spam has not resolved this issue. Luckily, I have multiple email accounts - one for friends and family, one for business, and another for everything else (which has the most spams).

[mickeyd]

I have noticed a few VG emails on this subject also. One that I recall indicated that the sender @ VG was replacing my current Flagship rep. This was not true of course and I reread the post and it only implied that the sender (a registered rep not a CFP) was my new point of contact @ VG. I spoke with my Flagship rep yesterday and there was no change.

I think that this was only a marketing effort aimed @ current clients. I ignored all of it. Pay 30 bps for what?

[travelover]

Quote:

Originally Posted by 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.

+1. I think this is reasonable. I'd hate to see DW thrown to the wolves after I croak, though I've left instructions to stick it all in Wellesley and just withdraw 4% until RMD time.

[cooch96]

Quote:

Originally Posted by churchill 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?

I do mine solo and I hold DW's hand but make sure she's the one clicking away on her phone for her accounts. She considers this something between bitter medicine and mild harassment. To be clear, she could do it entirely on her own; I kinda put her in charge of filing our taxes, since she's much more thorough and organized than me, and she does that without complaint. But she would literally hang out with the dentist than think or learn about car or finance maintenance.

So what happens if I get hit by the proverbial bus? Not sure, this topic is verboten for DW. I'm optimistic she'll consolidate all accounts into her vanguard 2050 Roth account and take her car into the mechanic to stop any idiot lights and inevitable funny grinding noise. Fingers crossed!

[ejman]

Quote:

Originally Posted by travelover +1. I think this is reasonable. I'd hate to see DW thrown to the wolves after I croak, though I've left instructions to stick it all in Wellesley and just withdraw 4% until RMD time.

Yes, this sounds reasonable ( and in fact I've suggested same to my DW) but what if Wellesley is not the answer going 20-40 years forward? Just looking at the YTD in Van Retirement income vs Wellesley gives me some room for thought - maybe the index boys at Vanguard really do know something?

[LOL!]

We have been hit up with Vanguard PAS advertising: E-mails, Real hardcopy mail, pop-up ads. We have some money at Vanguard, but below Voyager Select status.

I see this as a way of making their CFPs happier and retaining good employees. I also see it as a way of not losing market share to other robo-advisors.

However, it seems that PAS is just for an investing plan and not really a financial plan. Or can one get questions answered like
"When to collect Social Security?"
"How to save for college? How much?"
"How to sequence withdrawals from my nest egg in retirement?"
"What is the best mortgage for me? And for my vacation home?"
"How much life insurance should I have?"
and a host of many more financial planning questions. Has anybody had such questions answered by Vanguard people?

Did anyone else notice that VPAS is run by Goliath, Inc.?

[JoeWras]

Quote:

Originally Posted by 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.

There's not cost for having an "representative" at Flagship status. At least that is what they call my guy, a "representative". He's fine, but pretty much directs me elsewhere in the company for stuff, including to the CFP at personal adviser services to get my advice.

Maybe something changed, or maybe I didn't ask for the right thing.

[swakyaby]

I too think things have changed recently at Vanguard. I recently requested transferring a SEP-IRA from T.RowePrice to Vanguard, an amount of $200K. The Vanguard rep transferred me to someone named Ed from "concierge services," not sure what that means. After confirming that I wanted to simply transfer in kind to Vanguard, he requested a copy of my most recent statement. He called me back after receiving it and informed me that I needed to do the following:

Fill out Vanguard's application form for a new account with a Medallion signature guarantee from my bank, get on the phone with T.RowePrice and Ed simultaneously, liquidate my old SEP-IRA account, and pay an $8 fee to Vanguard for the transaction and possible other fees from T.RowePrice. Regarding the $8, I said I have not experienced a mutual fund company charging a fee for receiving an IRA. Ed said it was not a fee, it was the cost of the transaction to its shareholders. (Huh?) He said it was also because we were dealing with a SEP-IRA instead of a Traditional IRA. (Never saw anywhere in Vanguard's materials that it made a difference.) So he mailed the account application and I received it yesterday.

The package said "Here are the materials you have requested." It contained a BROKERAGE application for a brokerage IRA, a description of fees and commissions, and a prospectus for a fund we had not discussed. Ed never mentioned the word "brokerage" in our entire phone conversation. Is this really the only option for transferring a SEP-IRA to Vanguard? I don't think I'm getting full disclosure from this Vanguard employee.

[John Galt III]

Quote:

Originally Posted by 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.

Not from Vanguard, but from Fidelity, I've been getting snail mail urging me to sign up with some similar advisory service, *Financial Engines* (Fidelity 401K). Same fee: 0.3 % of assets, per year. I declined. What a crock......

[prudent_one]

I'm glad Vanguard is offering this. It's something I can recommend to people who ask for advice on handling their investments and don't want to put in the time to learn how to do it themselves.

[MooreBonds]

Quote:

Originally Posted by swakyaby The package said "Here are the materials you have requested." It contained a BROKERAGE application for a brokerage IRA, a description of fees and commissions, and a prospectus for a fund we had not discussed. Ed never mentioned the word "brokerage" in our entire phone conversation. Is this really the only option for transferring a SEP-IRA to Vanguard? I don't think I'm getting full disclosure from this Vanguard employee.

No biggie on a "brokerage account" - every other firm would do that, unless you were buying their own in-house funds. But even then, many would still hold it in the brokerage account. Vanguard used to have separate mutual fund accounts, but they recently started transitioning to putting everything ina brokerage account when they dumped Pershing and formed their own clearing agent.

However, it is a bit of an annoyance factor to be dinged the $8. Technically, he's correct - since Vanguard is a non-profit, quasi 'credit union' (in the sense that it's not run to make a profit, but rather serve the customers), any costs they charge account holders are, in fact, "reimbursements" to the other customers. HOWEVER....I've never heard a firm charging you to open a decently sized SEP IRA. A SEP IRA isn't anything special.

And a bit of a PIA that you have to call TRP and get Vanguard on the phone at the same time, etc. Really ludicrious since you also have to get a medallion guarantee! I'm sure a Medallion Guarantee trumps any voice recording of some anonymous person saying "Yes, I'm Jane Doe at TRP and this person is closing their account".

Of course, I had my own PIA factor in opening up my solo 401k with TD AMeritrade. So there are annoyance factors everywhere you go.

[swakyaby]

Quote:

Originally Posted by MooreBonds No biggie on a "brokerage account" - every other firm would do that, unless you were buying their own in-house funds. But even then, many would still hold it in the brokerage account. Vanguard used to have separate mutual fund accounts, but they recently started transitioning to putting everything ina brokerage account when they dumped Pershing and formed their own clearing agent. However, it is a bit of an annoyance factor to be dinged the $8. Technically, he's correct - since Vanguard is a non-profit, quasi 'credit union' (in the sense that it's not run to make a profit, but rather serve the customers), any costs they charge account holders are, in fact, "reimbursements" to the other customers. HOWEVER....I've never heard a firm charging you to open a decently sized SEP IRA. A SEP IRA isn't anything special. And a bit of a PIA that you have to call TRP and get Vanguard on the phone at the same time, etc. Really ludicrious since you also have to get a medallion guarantee! I'm sure a Medallion Guarantee trumps any voice recording of some anonymous person saying "Yes, I'm Jane Doe at TRP and this person is closing their account". Of course, I had my own PIA factor in opening up my solo 401k with TD AMeritrade. So there are annoyance factors everywhere you go.

Thank you for commenting. But I'm still wondering about a brokerage IRA at Vanguard. I have several existing non-brokerage SEP-IRAs at Vanguard, and it entails no transaction fees or commissions whenever I want to move the money around. I'm almost certain there will be transaction fees if I do the same inside a brokerage IRA. Or am I wrong about this?

[JoeWras]

I transferred E*Trade to Vanguard brokerage. For starters, I had a Vanguard brokerage account already opened, so no need to open anything.

My flagship rep transferred me to Concierge services. He asked about all my holdings. Apparently some holdings require more hoops to jump through. In any case, mine didn't, so no medallion signature was required.

HE called E*Trade while I was on the phone. No need for me to do it. We then had a mutual conversation with my approvals.

it went well. Everything transferred without error and also included all the cost basis info back to 1998. I didn't get any fee on Vanguard's side -- maybe because I'm flagship? E*Trade charged me their standard share transfer fee.

[swakyaby]

Quote:

Originally Posted by JoeWras I transferred E*Trade to Vanguard brokerage. For starters, I had a Vanguard brokerage account already opened, so no need to open anything. My flagship rep transferred me to Concierge services. He asked about all my holdings. Apparently some holdings require more hoops to jump through. In any case, mine didn't, so no medallion signature was required. HE called E*Trade while I was on the phone. No need for me to do it. We then had a mutual conversation with my approvals. it went well. Everything transferred without error and also included all the cost basis info back to 1998. I didn't get any fee on Vanguard's side -- maybe because I'm flagship? E*Trade charged me their standard share transfer fee.

Thanks, Joe. I have Flagship service level as well, but was still told there was a charge to open a SEP-IRA account at Vanguard and transfer the $200K. He did not ask about any of my other accounts (which include several Vanguard non-brokerage SEP-IRAs). It was a Flagship rep who transferred me to him after they held a brief conversation about what I wished to accomplish. I thought the whole experience was somewhat odd, and a push to open an account with expenses attached, when it seemed I had other options which Ed did not disclose.

[JoeWras]

Quote:

Originally Posted by swakyaby Thanks, Joe. I have Flagship service level as well, but was still told there was a charge to open a SEP-IRA account at Vanguard and transfer the $200K. He did not ask about any of my other accounts (which include several Vanguard non-brokerage SEP-IRAs). It was a Flagship rep who transferred me to him after they held a brief conversation about what I wished to accomplish. I thought the whole experience was somewhat odd, and a push to open an account with expenses attached, when it seemed I had other options which Ed did not disclose.

I think the one common thing between your experiences and mine is that we are finding services at Vanguard to be inconsistent. As I explained, I asked for my "free plan" but got something else compared to what others have described.

One wonders if perhaps Vanguard has grown too fast.