Well, that eliminates one of my reasons to switch to Fidelity. Now if VG had a decent CMA and 2% cash back CC like Fidelity , that would eliminate the other reasons. Other than of course the sheer hassle of moving everything over and the loss of my Advisor , whom I like.
I can’t understand Fidelitys’ Advisory Fee though. Seems like it goes from 0.35% to 1.5%.
Why not use both?
Because I’m trying to cut down on the number of financial institutions I’m involved with. I’m already by geographic necessity a member of two CUs plus VG.
Problem is this Fidelity deal seems too good to pass up. I could move everything to Fidelity but I like my Advisor at VG and he’s doing a good job for me.
A First World problem for sure.
I don’t use paid professional advisors, I’ve listened to the pitch from Vanguard, Fidelity and others and prefer my own judgement to theirs.
In terms of what institutions and how many I choose to use, I think the principle of diversification applies to financial institutions and investment portals as well as what you choose to invest in.
ie: I prefer to have some places I can walk or drive to get some of my money and I’m OK with waiting a week to receive some of it.
I use a 20%-40%-40% (20% cash - 40% paper investments - 40% brick & mortar real estate) strategy. Cash is immediate access, paper investments are 1 day to a week and real estate is 2 weeks to six months.
I did not know VG had a personal advisor. Are you paying the fee to have them manage your fund? I would love an advisor, and i feel i am on my own at VG.
They do have a Fiduciary Advisor service for which they charge 0.03% or to look at it another way 1/3 of 1% on your total balance. It does not apply to cash , like if you have a bunch of money in one of the Money Market funds.
Very reasonable until until you have a Million or so then even 0.03% on the total starts to add up. You can actually get “one time” Fiduciary advice for free. In case you haven’t been listening to Clark , Fiduciary means they can only give you advice that is in your best interest not VGs.
For the 0.03% they set up a balanced financial plan for you and then they will keep it in balance for you. I’m sure it’s all done with computers but directed by your Financial Advisor and his “Team”.
One of the things I like about it is the extra layer of security it gives to my account. I can’t do anything with my ETFs, INDEX or Mutual funds without my Advisors concurrence. However , that’s not true with the Money Market accounts. You can withdraw from those on your own.
They also have a Robo Advisor for less cost that you can use , but last I looked you can’t use that if you’re already retired. Don’t know why.
You will probably want to take their “Risk Tolerance Quiz” before you talk to an Advisor.
I’ve been with VG for 10 years and I’m happy with their service.
Having said that I’m going to open Cash Management Account with Fidelity and leave Navy Fed CU. 0.15% interest on my checking just doesn’t cut it.
Fidelity CMA has Money Market interest rate, about 4% right now, Checking, Bill Pay, Debit card with free ATM, 2% Cash back Credit Card and Fraud Protection. Hard to beat. Can’t beat it in fact. I’ll use it where the Costco card only gives me 1%
Wow you have done your homework. I was with scottrade, and then they became ameritrade, and they became schwab. I have a guy who helps me navigate websites, and gives good advice on their products. they have an age-related ETF fund called intelligent, with a tiny management fee, but i do not pay my representative, but when my daughter inherits, i will ask her to have it managed, if it is stock heavy. She is not inclined to research. I may have been better off had I had it managed, but did well on my own, regardless of my Intel, GE, Garmen, etc. I held too long. Trading often can incur taxes, but sometimes you have to bite the bullet. I like my advisor, but he cannot tell me what to buy, but he can describe some of the offerings. I tell him what I hear on my political podcasts that may affect an industry. Lots of talk about Nuremberg 2 which could affect some of the drug stocks, and I have a drug mutual fund with VG. On my VG funds and stocks they said that I averaged 8% this year, and I do not consider that too good, as some of my funds are making more. BRK B has done the best for me over the years.
It would be good to compare a managed portfolio with unmanaged. I would be curious about huw much trading that they do within the portfolio.
If a person just has the intelligent fund or the star fund they manage themselves.
Is a cash managed fund, just using CDs Bonds and money markets?
I was thinking that VG uses all your sweep fund to give you the 4 + percent, but now i see that it has to be in a money market or CD, to make good interest.
Glad to share good tips,
This is anecdotal only. Of course. ETFs only. No Stock.
Started with VG Advisor in 2014. Advisor put me in Classic Booglehead 4 ETF Protfolio ,
They advise 50% Stock ETF , (US&World), 50% Bonds ETF, (US&World) for my particular situation.
But I decided on
60% Total US Stock ETF, Total World Stock ETF.
40% Total US Bond ETF, Total World Bond ETF
They rebalance for me. I could do that myself but I’m so lazy and such a dullard.
Against their advice I keep 10% in Money Market. Makes my wife happier.
With that mix,
Cumulative Return:
1yr. 17.8%,
3yr, 4.3%,
5yr, 6%,
10yr, 6.5%.
(Includes “Tax Loss Havesting”)
Ran “Schwab Intelligent” against my “VG Passive” for a year and VG was ahead by 1.5% for that year, plus “Schwab Intelligent” forces you to keep a % of portfolio in a very low interest savings account. At least my cash at Vanguard is getting MM Rate. Good for now at least.
With a 80-20 mix of VWENX - Star mutual funds, I got:
1yr. 20.8%
3yr. 5.4%
5 yr. 8.8%
10 yr. 8.3%
They have a cheaper roboadvisor and a PA service. Clark has failed to mention it but if you are retired you are not eligible for the lower priced roboadvisor. I thought I’d dip a toe in to PA but found that they wouldn’t answer questions about any money they did not manage- mostly what I needed advice on since they were already managing the rest. They provide you with their plan in advance and you actually could invest in those funds on your own without enrolling. In my case, they suggested 4 ETFs- total stock market, intern. stock mkt, total bond, intern. bond market. I don’t think that is rocket science, just common sense. All they did for me was invest in the 4 funds and let it ride while collecting quarterly fees.
The STAR fund has far higher expenses than most of VG funds. I’ve had it for many years after Clark’s advice in the 90’s but its performance doesn’t seem to be better, given the higher expense ratio, than many other funds.
Right, mm accts doing great now, and with all so expensive, it is a waiting game. I avoid bonds d/t losses in past. I have local CDs as i bank enough to be there when dates change. MMs doing as well as CDs so i am accumulating in Schwab MM. I just look at rate or tax advantage, and really do not know exactly what they are doing in their MMs.
My stock club guy once said partnerships are ok in you retirement, but paperwork still has to be done, so as good as the dividends are on partnerships, I am unloading for tax purposes. I just sold MAIN, as it shot up for a day yesterday.
When you say tax loss harvesting, is that when you trade a loser, to compensate for the winners tax wise? we do that in December, and you can buy back 30 days later, but unless a loser changes, I do not buy back.
Does vanguard have a “passive” account? who owns the STAR accounts?
if you are in eTF funds, you do not pay extra for an advisor, do you?
Yes you pay the Advisor the 0.03% on the whole portfolio except the cash (mm account)
You are correct as far as tax loss harvesting.
I believe Index funds like Total US Stock, are considered “Passive”
Hmmmm, they should have been rebalancing for you at least.
But you’re right PA is of questionable value.
I look at it more as an additional layer of security and opportunity for modest growth.
I’m more into asset preservation and to not do anything really stupid at this time in my life.
So the index funds are passive due to the computers do not churn too much, and are more tax efficient.
I am looking at Edmund Yan who makes trust funds, and you can get it free.
The whole reason to have the ETF funds is to prevent using a person to manage, as there is already a small built in fee.
You can buy ETFs on your own but if you are enrolled in PA and that is their plan for you, you pay the expense ratio for the ETFs as well as quarterly fees, approx. $75/ quarter on $100k.
Based on the higher tax bill last year, I believe they were rebalancing. But with only 4 funds I didn’t see much difference. Plus, in such a turbulent year, I didn’t see much profit. This wasn’t a retirement account. I asked about other funds for my self-managed investments but every time I spoke with a different advisor and no one was sure they could advise me. It seems they are not all on the same page about the rules.
