Vanguard rating

Vanguard Wealth Management Review


2024 Vanguard Personal Wealth Management review: advisor fees, pros and cons, performance, account minimum investments. Is it a safe and legitimate firm?


Vanguard Wealth Management Review


The Vanguard Group, Inc. delivers many financial services through a collection of subsidiaries that includes operations in asset management, broking services, education, financial planning, and more. Among its many services is an investment-advisory program that this review will analyze and judge.


Overview of Vanguard’s Advisory Program


Vanguard offers both discretionary and non-discretionary accounts in its investment-advisory service. There are several packages available with varying minimums and fees. There are multiple Vanguard subsidiaries that take on the responsibility of offering and managing the many advisory accounts that are available. In all cases, these firms carry the Vanguard name and are registered with America’s securities watchdogs (namely, FINRA and the SEC).

Vanguard’s managed accounts are also protected by SIPC, the country’s major insurer for securities investing. On top of SIPC coverage, Vanguard has a supplemental policy with London Company Insurers and Lloyd’s of London that provides more insurance in the event that SIPC coverage were exhausted. This back-up policy is valid for advisory accounts.


Vanguard Wealth Management


The first investment-advisory service we will explore is Vanguard’s Wealth Management program, which is the highest tier, judged by account minimum. That is $5 million. In return for this rather steep minimum investment amount, Wealth Management customers pay just 0.30% on that first five million dollars. Higher balances get lower prices. Above $25 million, the annual advisory fee is just 0.05%, a great value for old-school management.

Although Wealth Management clients at Vanguard don’t pay very much, they do get a lot of services in return. These include:

  • Investment management
  • Wealth transfer advice
  • Collaboration with third-party financial professionals, such as accountants and attorneys
  • Periodic reviews of a customized financial plan
  • Tax advising
  • Charitable giving assistance
  • Trust services
  • Client events
  • Income planning for retirement
  • Behavioral coaching

As the top-tier investment program at Vanguard, the Wealth Management program is the only one that offers access to a dedicated team of financial specialists in addition to an assigned individual advisor. It also is the only one to offer access to private equity investments. This is a rare service, as all of the managed accounts we’re going to look at invest mostly or exclusively in Vanguard funds (including the Wealth Management program).


vanguard Wealth Advisory Review


Vanguard Personal Advisor


Investors who don’t have $5 million to fork over may want to check out Vanguard’s Personal Advisor program. It only requires $50,000 in investable assets, and the annual management fee is the same (just 0.30% across balance tiers). The advisory fee could be higher for some investment products.

But Personal Advisor clients lose some of the available services that Wealth Management customers get. For example, the Personal Advisor program doesn’t have a dedicated financial planner attached to each account, which obviously eliminates the one-on-one attention Wealth Management customers get. Investment decisions in a Personal Advisor account are made by a computer program, meaning that it is a robo service.

Despite the digital management, the Personal Advisor setup offers free phone calls with human advisors. However, Personal Advisor also offers no trust services, estate planning advice, or help with charitable giving.

Another downside of the Personal Advisor program is the lack of investment products. It doesn’t offer trading in anything other than Vanguard ETFs and mutual funds. However, some of these funds are actively-managed products.


Find a Financial Advisor


If you are looking for a professional money management service in your area, you can find a Financial Advisor on the Echo Trade.

Try Echo Trade


Vanguard Personal Advisor Select


A middle ground between the two programs already seen is the Personal Advisor Select configuration. This one does have a dedicated human advisor who develops a financial plan and makes investment decisions in the account, which means it’s not a robo program. It also offers trust services. However, only Vanguard funds are traded, which is a major downside.

Vanguard Personal Advisor Select requires $500,000 to get started and charges a flat 0.30% across all balance tiers.


vanguard Wealth Management Review


Vanguard Digital Advisor®


Vanguard customers who have less than $50,000 to invest but still want the securities firm to make trading decisions for them should consider the Digital Advisor program. This is Vanguard’s robo-investing service that we saw in the Personal Advisor program. It has a $3,000 minimum deposit requirement.

The automated-investing program loses most advisory services, including the available consulting service in Personal Advisor, but it does have the lowest cost—just 0.15%, and the first 90 days are free. This advisory fee could vary based on the exact portfolio chosen (some options are as high as 0.25%). It’s also possible to receive rebates from some Vanguard ETFs in the program. And, yes, Vanguard ETFs are the only investments available.

Despite the budget nature of the robo program, it does come with ESG (environmental, social, and governance) investing choices. Plus, tax-loss harvesting will be available by mid-2024, according to company reports.


Margin


Vanguard does not offer margin trading in its advisory accounts.


Opening an Account


All of Vanguard’s managed accounts can be opened online, or at least it’s possible to begin the application online. A further step may be required in some cases, which will typically be a phone call with a financial planner.

And this is where the weakness of Vanguard’s investment-advisory service really shows. The securities firm has no branch locations, so it’s not possible to have a traditional sit-down relationship with a financial advisor. Consultations must be conducted over the phone or Internet, which means Vanguard’s human-advisory services are not completely traditional.

Prospect advisory customers who have any questions or need any help opening an account should call 855-365-6908. For Wealth Management clients, the number is 866-327-8915.


Vanguard Funds


As already mentioned multiple times, Vanguard creates and manages its own collection of mutual and exchange-traded funds, and every advisory program (with the sole exception of the Wealth Management service) invests only in Vanguard funds. The Wealth Management program itself invests primarily in these funds.

Vanguard funds are available in self-directed accounts at Vanguard and in self-directed accounts at most other brokerage firms. Vanguard funds have no loads, and trades of them at Vanguard carry no transaction fees. The brokerage firm recently added fractional-share trading in Vanguard-branded ETFs, and many other brokerage firms offer this service in self-directed accounts. Some broker-dealers may charge transaction fees on purchases and sales of Vanguard mutual funds.


Recommendations


Beginners: An investment-advisory account through any channel at Vanguard would be a good way to start a financial journey. We suggest a program that has a human advisor in the mix in some capacity.

Small Accounts: Every managed account option at Vanguard requires $3,000 or more. Other robo programs have smaller minimums (M1 Finance's automated program, for example, requires just $10 to start investing).

Equity Trading: Outside of the Wealth Management program, trading in individual stocks is not offered. And we don’t think stock trading will be very common in a Wealth Management account, either. It is possible inside a self-directed account at Charles Schwab.

Mutual Funds: A self-directed Vanguard account can trade Vanguard and non-Vanguard mutual funds.

Long-Term Investors and Retirement Savers: Vanguard’s Wealth Management program is the top choice for long-term planning needs.


Vanguard Wealth Management Review Judgment


Vanguard succeeds in offering multiple investment-advisory options. However, they have steep minimums, and there aren’t many available securities to invest in. To top it off, the human-managed accounts don’t come with any local branch offices, so there is no traditional sit-down one-on-one experience here. Nevertheless, those investment programs do have very low fees, so they might be a good option for investors looking for a good value. It is quite easy to find other advisory programs out there today that don’t have Vanguard’s disadvantages, so it may pay to shop around.


About the Author
Arthur Chachuna is a professional personal finance blogger, and the owner of Brokerage-Review.com. He has been an avid investor for 25 years, and has a background in both applied math and programming.