Vanguard question.

[Cattusbabe]

Looking for advice. DH and I are currently with a “full serviced” brokerage house that we “inherited” following my MIL’s death. After leaving things as is for the past two years we are considering moving our assets to Vanguard for the lower fees. However Vanguard offers various levels of services. Hence our dilemma. How much service to too much? We are not “active investors” and are more interested in holding good dividend producing stocks as we live off of the income from our investments and not spend down the principal. We are also conservative investors and want to limit our tax exposure. We just want to stay ahead of inflation. Out side of initially working with their planner to allocate our assets we would only likely rebalance the portfolio once per year. We have enough assets to consider their Asset Management Services but that may be over kill for us. Any suggestions?

 

[FUEGO]

I think if you have a half million or a million you get a free financial plan. Maybe less if you are transferring in a large amount. Call em and ask.

That Asset Management service is something like 0.35% expenses for management on top of fund expenses. Probably not needed if you can get a free financial plan from them.

You may be in luck on taxes. Everything your MIL had in taxable accounts would be stepped up in basis, so you could probably sell that without too many capital gains (maybe even a loss!) and put the proceeds in some low cost VG funds.

They have a good selection of tax efficient index funds and some good tax managed funds. Also some good muni funds that may make sense depending on what tax bracket you are in. Otherwise they have tons of great bond funds with very low expenses.

For equities that pay good dividends, you'll probably end up heavy on value index fund, financials index, utilities index, or one of their equity income/dividend funds. They have some solid choices for those too.

 

[explanade]

For equities that pay good dividends, you'll probably end up heavy on value index fund, financials index, utilities index, or one of their equity income/dividend funds. They have some solid choices for those too.

Is this a good time to get into any funds which have heavy holdings in financials?

Lehman is teetering.

I'm thinking of buying into Wellesley Admiral. I can do it through eTrade with $20 commission or presumably there would be no commission if I transferred money to Vanguard directly?

 

[REWahoo]

Is this a good time to get into any funds which have heavy holdings in financials?

Lehman is teetering.

I'm thinking of buying into Wellesley Admiral. I can do it through eTrade with $20 commission or presumably there would be no commission if I transferred money to Vanguard directly?

Now is as good a time as any to buy some Wellesley. Or not.

Whether you buy or not, do yourself a favor and stop watching [-]financial porn[/-] CNBC.

 

[explanade]

Hmm, I see there may be benefits to buying through Vanguard rather than eTrade.

Asset Management services are expensive though, .75% a year up to the first million in assets.

Yeah I have to start some time with Wellsley. It's just the 23% holdings in financials which makes me pause somewhat. For about a year, people keep hoping the worst is over but the other shoe keeps dropping ...

 

[FUEGO]

Is this a good time to get into any funds which have heavy holdings in financials?

Lehman is teetering.

Not sure if now is a good time or not. I was just suggesting that a mutual fund investor seeking income from a primarily equities portfolio would be invested in financials, utilities, and other value stocks either explicitly through a sector mutual fund or implicitly through a dividend fund or equity income fund.

Today is definitely a much cheaper price to get into financials than say, 3 months ago or a year ago.

No opinion on Lehman.

 

[FUEGO]

Asset Management services are expensive though, .75% a year up to the first million in assets.

You can manage your own assets for free at Vanguard, FYI.

 

[explanade]

Maybe asset management means different things?

If it's just rebalancing once or twice a year, not really worth what they charge.

I would have expect more though, like they're regularly swapping munis or individual stocks. Not that that's necessarily a good approach.

 

[Moemg]

Vanguard does offer a free financial plan and they offer an update yearly . When they did my first plan I had them answer tons of my questions and they were very helpful . Their web site is also a great source of information. I've used them for twenty years and no complaints .

 

[friar1610]

Vanguard does offer a free financial plan and they offer an update yearly . When they did my first plan I had them answer tons of my questions and they were very helpful . Their web site is also a great source of information. I've used them for twenty years and no complaints .

I echo the sentiments above.

I think you are entitled to the free financial plan if you are a "Voyager" level customer. You definitely are if you are a "Flagship" level.

Based on the original poster's characterization of his/her financial situation and goals, my sense is that he/she doesn't need the advisory services. (But only he/she knows how much hand-holding they want.)

Between the on-line asset allocation questionnaires and the yearly financial plan, I feel I have all I need. (I am a pretty passive investor these days - no individual stocks and no need to take a lot of risk.)

One other thought: use the on-line tools from a number of mutual fund companies and compare the recommendations on asset allocation. (TIAA-CREF used to have a good one, albeit a bit conservative in my opinion.) Then make your own decision on AA but use the annual financial plan as a reality check.

 

[Nords]

After leaving things as is for the past two years we are considering moving our assets to Vanguard for the lower fees. However Vanguard offers various levels of services. Hence our dilemma. How much service to too much? We are not “active investors” and are more interested in holding good dividend producing stocks as we live off of the income from our investments and not spend down the principal. We are also conservative investors and want to limit our tax exposure. We just want to stay ahead of inflation. Out side of initially working with their planner to allocate our assets we would only likely rebalance the portfolio once per year. We have enough assets to consider their Asset Management Services but that may be over kill for us. Any suggestions?

If you already have an asset allocation plan, then you could transfer your current holdings "in kind" to Vanguard and just choose the lowest level of service. The caveat is making sure that Vanguard won't charge you any custody or transaction fees for holding/selling whatever you're bringing to them.

If you're planning to use Vanguard to select stocks then, before you start an account with them, you may want to work through their website and see if it's something you want to live with. If you're trying to translate your current holdings to their equivalent Vanguard funds/ETFs then posters could probably recommend Morningstar or Vanguard tools to help with the selection. There are plenty of websites out there to help with rebalancing, too, so you don't need Vanguard for that.

Fidelity offers various services but I've never felt the need to use them. I certainly wouldn't pay a retainer for the option to use them, either. But I like their free reinvestment of dividends and I've never been ambushed with a fee.

 

[VaCollector]

If you call Vanguard, will they contact your current [-]blood sucking [/-] high cost providers....walking you thru the transfer process??

 

[SecondCor521]

If you call Vanguard, will they contact your current [-]blood sucking [/-] high cost providers....walking you thru the transfer process??

I don't think so. They'll help you walk through it with the other company and will do everything on their end to cooperate, but they don't have the authority to initiate the transfer. After all, it is your money, despite what the other company thinks.

I would also add to the OP that you may be able to transfer the investments over "in kind" -- meaning you wouldn't have to sell. This would be useful to avoid incurring capital gains if you have any.

2Cor521

 

[explanade]

Vanguard does offer a free financial plan and they offer an update yearly . When they did my first plan I had them answer tons of my questions and they were very helpful . Their web site is also a great source of information. I've used them for twenty years and no complaints .

For Voyager Select and up, which requires $500k in assets, you get the free financial plan plus what they call "Annual Checkup."

Is that the yearly updates?

For Voyager, which is $100k to $500k, it's $250 for the FP and the Annual Checkups are "Not Available."

https://personal.vanguard.com/us/accounttypes/advice/ATSAdviceVFPFeesContent.jsp

There are other benefits for the higher levels but is it worth investing more to save the $250 and get the "Annual Checkups"?

 

[socca]

Vanguard is great for do-it-yourself types. The question is how much hand-holding you need above 100% do-it-yourself. Given what you've said, it's possible that you can get by with no Vanguard investment advice whatsoever (my preferred scenario). Nowadays, there is a wealth of investment info available, so I wonder whether you really need VG advice or asset management services.

If I were in your shoes, I'd open up a small VG account, become accustomed to using the VG website, and see how you like it. Once you become comfortable, you can begin moving assets from your predatory broker to VG.

Good luck!

BTW, you can head to the VG website and easily get a list of all of the various funds available. You can then browse the funds for additional info. Also, morningstar.com has an active "Vanguard Diehards" forum where you can get useful advice and swap stories with other VG customers.

 

[Moemg]

There are other benefits for the higher levels but is it worth investing more to save the $250 and get the "Annual Checkups"?

I'd have to say no . The first time I had them do a plan for me even though I had more than $500,000 invested it cost me $250( that was when they charged for plans ) . That plan was worth every cent of $250.00 . The Planner spent time with me explaining why you needed the various asset groups and basically gave me an education in investing . The plans I've gotten since then for free have been good but not worth $250.00. They do answer my questions but not to the depth the first planner did . Maybe it is the planner or maybe it is the cost ?

 

[73ss454]

The plans that Vanguard are doing now are not as in depth as the ones they did a few years ago. I'm do for my annual checkup next month.

 

[explanade]

Do you actually meet in person?

Do they have planners all over the country or they're contracting out these services to independents?

What do the annual checkups provide, just a reminder to rebalance?

 

[73ss454]

No, no in person interviews, unless you want to go to Pennsylvania.

No independents, they are planners who work for vanguard and are not on commission.

Pretty much rebalance after the initial set up. Although you do get to speak with the planner and have all questions answered.

Pretty good deal actually.

 

[LOL!]

Nowadays, you can go with Vanguard and get all the hand-holding you need over at the bogleheads forum: Bogleheads :: View Forum - Investing - Help with Personal Investments

So you don't really need to be do-it-yourself, but you must be willing to write anonymous posts about your situation and do a little work on your own to read the answers and implement them.

 

[FinanceDude]

Nowadays, you can go with Vanguard and get all the hand-holding you need over at the bogleheads forum: Bogleheads :: View Forum - Investing - Help with Personal Investments

So you don't really need to be do-it-yourself, but you must be willing to write anonymous posts about your situation and do a little work on your own to read the answers and implement them.

We do that on here all the time.

 

[Cattusbabe]

Thank-you so much for all of the responses. We did have contact with a representative from Vanguard where we discussed their Asset Management Service. DH an I were quoted a figure and the resulting "sticker shock" led to my seeking advice form all of you.

From the advice and resources given we will go back to the drawing board and look at Vanguard's Financial Planning Services. That may be more in line with what we are looking for.

Another wrinkle. The current company we are dealing with is going the charge us for closing the account. That stinks and we are currently going over the fine print to see if we can lessen the blow.

 

[explanade]

I would go to the Finra web site to see if your current advisor or his firm has complaints against him.

And maybe consider filing one yourself.

 

[FUEGO]

Cat, if the charge is something like $50-75, then that is a typical charge that many places will hit you with upon closing an account. Also, if you have "B" class shares of mutual funds, then you may get hit with a "contingent deferred sales charge" (CDSC) that will usually decrease the longer you have held it. This CDSC can really add up in some cases.