Vanguard as advisors?

[Paige]

After years of "sort of" being our own financial advisors, we finally hired a "fee-only" advisor and then in the process of putting our money in this fund, that fund, this brokerage account within Vanguard, I was hesitant to admit that I thought this guy would just find us mutual funds in Vanguard. Long story short, there were all of these addendums to everything...if this happens with the stock market, do this, if interest rates rise....

Anyway, my latest thought is that I pay 250.00 flat fee to have Vanguard help me decide where to put my money.(That is how much an adviser costs.) Someplace simple. We are not good at monitoring things and the last shot at this was overwhelming. I'm 53 and not that far away from retiring. I need to stop worrying, and my dh just doesn't really pay attention. I think it overwhelms him much more than me. Good idea? Bad idea?

[CeciliaW]

Go over to http://www.mrmoneymustache.com/forum/ and search on VSTMX or VSTAX and read all the posts about index funds. It's simpler than me retyping it all here.

[Paige]

Thanks, I will.

[Birdie]

You might also check out this link on investing at Bogelheads.com. http://www.bogleheads.org/forum/viewtopic.php?f=1&t=6211

They have a lot of information on investing with Vanguard funds and lots of suggestions on personal investing and how to educate yourself. I have used the advisors at Vanguard to tune up my portfolio and will continue to do so.

[lhamo]

You might also want to consider the target retirement funds at Vanguard. The fees are a little higher than their basic index funds, but they will automatically rebalance for you and change your allocation to be weighted more toward bonds as you get closer to the target date.

Disclosure: I have my 403b rollover and our Roth IRAs invested at Vanguard. I have been happy with both their service and their returns so far.

[Rogar]

I think using a Vanguard adviser is probably better than little or no planned management. I've not used them, but would guess for $250 you probably will just get some numbers plugged into a computer with not too much personalization. I like Vanguard funds and own some.

If you are able to spend some time with it, my choice would be to read one of William Berstein's recent books on investing and self manage your accounts. He is one of the index fund gurus and his books are among a few that are the gold standard for index fund investors. If you wanted to think of it this way, you could say you are paying yourself $25/hr by spending 10 hours reading his books as an alternative to spending $250 at Vanguard.

I have used Fidelity advisers before and they are not too bad, but with a little self-knowledge they don't do anything magical and little more than what common sense will do. I have not always agreed with their advice and think I have done better with my own personalized plan. It seems to me like most people spend more time planning a week long vacation than their finances for 20 or 30 years of retirement. With index funds and a mix of bond funds and other fixed income it really isn't too hard to come up with your own plan.

I also think if you don't want to spend a much time with things that the target retirement funds are a good choice. You just pay a little more in fees.

[frugal-one]

I was able to get a free evaluation from Vanguard a while back based on the money I was investing. I was totally UNIMPRESSED!!!!! All they suggested was to put money in about 4 basic funds. Totally a "canned approach". Not at all tailored. IMO don't waste your money. Do your own research as others suggested here. You will be farther ahead!

[bUU]

In several other forums, we're discussing if there is any way to actually, reliably get "farther ahead". Apparently there is one, but it isn't a "tailored" approach (and it isn't even clearly going to get you "farther ahead"), and it is exceedingly expensive to pursue, so I'm not sure what you were looking for for free.

[frugal-one]

BUU... Vanguard offered to give me free advice based on the amount I was depositing. I did not solicit them. I would have thought they would have done a better job since they wanted me to continue to use their service. BTW... I did go to a fee based financial planner and the first session was free. He did an EXCELLENT job directing me in the right direction. I did go see him again based on his free consultation. My point in all of this is my experience with the Vanguard advisors was dubious, at best. YLMV Also, you can do the same on your own by just checking some of the sites listed above.

[bUU]

They do what they do. Sounds to me like you were expecting them to provide a service other than what they offer, but it is pointless to discuss preferences.

Was any of the advice they provided factually wrong or otherwise objectively faulty? If so, please elaborate.

[frugal-one]

Ok... BUU.... Vanguard had me provide all financial information. They did not even include all the information I provided in their "analysis". I had to go back and say ... "hey, you did not add this". It turned out that what they were doing is having those with least seniority provide this "service". I did not keep their recommendations but remember it was something like put your money equally in the Total Bond fund, Total Stock market, Total World, and Total World except US. Duh... anyone could have done this. Again, the OP asked for input and others here gave actual forums where this question has been asked before.

As Rogar wrote above ... "If you are able to spend some time with it, my choice would be to read one of William Berstein's recent books on investing and self manage your accounts. He is one of the index fund gurus and his books are among a few that are the gold standard for index fund investors. If you wanted to think of it this way, you could say you are paying yourself $25/hr by spending 10 hours reading his books as an alternative to spending $250 at Vanguard." Also, Morningstar offers free online information and classes. I reallocate my portfolio using the free Morningstar access from my local library (Portfolio Analysis). I can do this at home from my computer. Or, if you have all your portfolio at Vanguard, the analysis is right on your account. BTW .... I use Vanguard as my broker.

[bUU]

Thanks for the detail. That's pretty sad.

It makes me wonder about all those folks who say Vanguard is as good or even almost as good as Fidelity. Fidelity did a great job for us.

[frugal-one]

I had Fidelity and think Vanguard is better in that their costs are much lower. I did not use Fidelity's advisory service so can't speak for that. I believe you are better using a fee based financial planner for advice since they do not have a vested interest in the products they are promoting.

[bUU]

Just make sure that it is clear from the start that you'll be making all the trades yourself.

[frugal-one]

Just make sure that it is clear from the start that you'll be making all the trades yourself.

??? I gather you are referring to the fee based financial planner.... You can get advice as many times as you feel necessary. It is not necessary to have them touch your portfolio. I went once because they gave information tweaking my estate plan and gave advice on how to streamline some of my record keeping. The second visit was to verify I had all my ducks in order. It was definitely worth the price! They also reiterated that it was not necessary for us to have someone manage our money ... which was nice to hear.

[bUU]

??? I gather you are referring to the fee based financial planner.... You can get advice as many times as you feel necessary. It is not necessary to have them touch your portfolio.Precisely my point. With that made clear in advance, your FP won't be as inclined to over-emphasize recommendations with significant loads and 12b-1 fees.

[frugal-one]

Precisely my point. With that made clear in advance, your FP won't be as inclined to over-emphasize recommendations with significant loads and 12b-1 fees.

That is the whole point of using a fee-based financial planner.... they do not have a vested interest and, therefore, will recommend the best ... not based on earning those significant load charges or fees.

[bUU]

That was my impression as well, though I've been informed that just making sure that your relationship is fee-based instead of based on a percentage or commissions isn't enough. You need a fiduciary agreement signed-off. Otherwise, the FP still may be driven to propose loaded funds and funds with large 12b-1 fees, that somehow they benefit from. I've asked (http://www.savingadvice.com/forums/investing-banking/72641-please-review-portfolio-proposal.html#post358033) for details on precisely how that works (because like you I'm also interested in how that could be) and I have yet to get an answer. I'll let you know what the poster says.

[frugal-one]

bUU... You and I are talking apples and oranges. I do not believe in having any brokers (fee based or otherwise) handling my money. The only thing I want from them is information, therefore, I am not interested in how a fiduciary agreement works.

[bUU]

The poster admitted that there was no relevance to what he was saying to our situation.

[frugal-one]

"Our" situations are not the same.... as I have been trying to tell you.

[bUU]

Whatever you say.

[frugal-one]

end of discussion

[bUU]

:doh: