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Vanguard Personal Advisor Services Review 2022

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Vanguard Personal Advisor Services builds investment portfolios exclusively with Vanguard’s own exchange-traded funds (ETFs). Your assets may be divvied up, depending on your risk tolerance and goals, among four or five funds. In our evaluation, a middle-aged man with a moderate risk tolerance got a portfolio stocked with the following four ETFs:

  • Vanguard Total Stock Market ETF (VTI), expense ratio 0.03%
  • Vanguard Total International Stock ETF (VXUS), expense ratio 0.08%
  • Vanguard Total Bond Market ETF (BND), expense ratio 0.035%
  • Vanguard Total International Bond ETF (BNDX), expense ratio 0.08%

Alternatively, you may choose Vanguard’s new five-fund “active equity” portfolio, including active ETFs, for potentially greater returns—and higher expense ratios.

This simple approach provides sufficient diversification while keeping your expenses as low as possible. Competitors like Betterment or Wealthfront may place you twice as many funds, or more.

To meet your long-term financial goals, Vanguard Personal Advisor Services will manage all of your enrolled Vanguard accounts, including those outside of Vanguard Personal Advisor Services proper, in coordination with your risk tolerance and needs. It’ll also assess any non-Vanguard accounts as part of your larger financial picture, though it won’t directly manage these.

You don’t necessarily need to chat with a financial advisor if you’d prefer to simply have Vanguard set up your affairs, but it’s a good idea, especially since you’re paying a higher fee than you would with the no-frills Vanguard Digital Advisor.

Vanguard Personal Advisor Services doesn’t offer tax-loss harvesting, but it does employ something called the “MinTax cost basis method.” Whenever Vanguard sells assets from your portfolio—say, for rebalancing purposes—they’ll identify which of them would be eligible for preferential tax treatment. If one chunk of assets you own has a short-term capital loss and another has a long-term capital gain, they’ll likely sell the assets with a loss to maximize your tax efficiency.

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