Vanguard Personal Advisor Review 2024

You can divide the universe of robo-advisors into two camps: light touch and heavy touch. Light touch robos come with low account balance requirements, fully automated investing and low fees. Vanguard Digital Advisor, Vanguard’s more entry-level robo, is one example.

Meanwhile, heavy touch robo-advisors offer users access to live financial advisors and more bespoke investing strategies, in exchange for heftier minimum balances and potentially higher fees. Vanguard Personal Advisor falls into the latter category, which Vanguard refers to as a hybrid service.

You need $50,000 in investable assets to open a Vanguard Personal Advisor account. Fortunately, this minimum balance can include funds you may already have in a Vanguard brokerage account or individual retirement account (IRA), though you still must have at least $50,000 held in Vanguard accounts. The platform charges an annual advisory fee equal to 0.30% for your first $5 million in assets under management. Fees decrease further for larger balances.

While these requirements put Vanguard Personal Advisor out of reach of most investors who are just starting out, the competitive annual fee should be very attractive to anyone in search of a premium robo-advisor with a human touch. For context, Vanguard Personal Advisor’s account minimum is half the $100,000 minimum required by Personal Capital and Betterment Premium, and Vanguard charges lower fees than either.

As with most robo-advisors, you begin your Vanguard Personal Advisor journey by completing a questionnaire regarding your financial life. It takes about 15 minutes, covering the basics (Are you married? When do you want to retire?), income and current expenses, risk tolerance and how much you have to invest.

You can—and should—link your other investment accounts to Vanguard Personal Advisor. Looping in your 401(k), individual retirement account (IRA) or 529 account can give Vanguard’s financial advisors a full picture of all your resources so they can better guide you to reaching your financial goals.

After completing the questionnaire and linking up your outside financial accounts, Vanguard schedules an appointment for you with one of its financial advisors. The advisor discusses your current situation and helps you refine your financial goals, using Vanguard’s technology to fashion an investment portfolio that’s tailored to your needs.

Those with between $50,000 and $500,000 will be assigned to a team of financial advisors, but you have no assurances of building a long-standing relationship with any particular advisor. If you have more than $500,000, though, you’ll be placed with a specific advisor to handle your financial matters.

It’s important to note that Vanguard’s financial advisors are all fiduciaries. They don’t earn commissions on their recommendations, meaning they have no vested interest in you picking one product over another, and they’ll manage your portfolio for as long as your Vanguard Personal Advisor account is active.

Vanguard Personal Advisor 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 0.07%
• Vanguard Total Bond Market ETF (BND), expense ratio 0.03%
• Vanguard Total International Bond ETF (BNDX), expense ratio 0.07%

Alternatively, you may include ESG funds or 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 will manage all of your enrolled Vanguard accounts, including those outside of Vanguard Personal Advisor 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 employs tax minimization strategies. 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.

Vanguard Personal Advisor charges relatively low fees compared to its rivals. The annual advisory fee is tiered:

• 0.30% on assets less than $5 million
• 0.20% on assets between $5 million and $10 million
• 0.10% on assets between $10 and $25 million
• 0.05% on assets greater than $25 million

You’ll also pay the expense ratios of the funds you are invested in—but again, those fees are very low.

By comparison, Betterment Premium, which also allows for unlimited contact with financial advisors, charges a 0.40% advisory fee with a $100,000 account minimum. Personal Capital has the same minimum but charges an 0.89% advisory fee.

Vanguard Personal Advisor is tailored to the needs of well-heeled investors who are beginning to amass significant savings in their different investment accounts and want some help planning out the next few decades of their life from a financial advisor. You’ll receive individualized advice on aspects of your financial present and future and be set up with a financial plan to guide your portfolio. The $50,000 minimum, which may be out of reach for some investors, is much less than a typical human financial advisor requires to manage your money.

Most importantly, though, you’ll be spared the high cost of using a traditional financial advisor or even leading competitors with comparable offerings. Vanguard Personal Advisor is about 25% cheaper than Betterment Premium and almost a third the price of Personal Capital. While each of those services has something to offer, the savings keep more of your money invested and growing over time.

Nevertheless, there are some downsides. The chief issue with any robo advisor that offers access to human advisors is that you’ll have to pay for that service. Vanguard Personal Advisor is roughly twice as expensive as Vanguard Digital Advisor. While Personal Advisor has a more sophisticated offering (they help manage trusts, for instance, and offer tax minimization features), you should think long and hard about whether that extra cost is really necessary for you.

While Vanguard Personal Advisor offers an easy-to-read financial plan, it lacks some of the robust budgeting options of Personal Capital.