PFC vs Vanguard PAS

Office Hours
#1

This has been experienced by @thberry10 so I hope for his input, but still going to put it out for the rest to chime in:

I had my second call with a Vanguard Personal Advisor Services (PAS) , I received my personalized plan which has as their key actions to:

  • Target allocation of 95% stocks and 5%bonds
  • Purchase taxable bonds
  • International stocks to be 38% of portfolio
  • Large Cap 40% of portfolio
  • US mid/small cap 17%

All the above is proposed to be accomplished by using ONLY 3 different ETF’s

  • Vanguard Total Stock Market ETF
  • Vanguard Total International Stock ETF
  • Vanguard Total Bond Market ETF

Without going into great details, I asked the Advisor, that this is basically almost the same I’m currently doing which is to have Target Date Index Funds ( 2045 and 2050 ) for the two accounts, and that I believe (with the knowledge gathered in PFC) that what they were proposing was basically the same, but could be a little more expensive due to the PAS fee of 0.30% on top of the expense ratio of the ETF’s , and he said, maybe yes, to which my question is that if it’s even worth it.

My first thought is that , well maybe I just keep paying my PFC Zoom / Office Hours indefinitely to be able to discuss and bounce ideas and only do TDIF because they are practical and I don’t have much time and just embrace that this is better than paying the advisor to pick other vanguard products

Any comments are welcome.

P.S. We currently have 3 accounts in Vanguard, 2xROTH IRA’s and 1 Brokerage, also moving my wife’s SIMPLE IRA into a Traditional IRA hopefully by this month and thinking of opening 2 custodial IRAS for the kids.

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#2

I think deep down you know the answer Fernando :slight_smile:

I’d stick with your TDIF strategy and save the .3% fee. The beauty of VPAS is also their downfall: the plan is so simple and low cost you can do it yourself!

Personally I decided to opt out and I’ve chosen to go with TDIF in my retirement accounts, and self-managed 3-fund portfolio for my brokerage.

Jeremy’s office hours will provide you with all of the guidance and value that a Vanguard personal advisor could, which is what further motivated me to opt out. The only reason I would consider moving forward with the service is because it seems like you may have a tendency to second guess or change strategies often (I do too) so working with VPAS may prohibit you from making impulsive decisions and staying the course long term. Can’t go wrong either way, .3% is about as low as an advisory fee as you’ll find if that’s the route you choose to go.

#3

Thank you Tom for responding I knew I could count on you :slight_smile:

And yes I won’t be using the PAS, like I told the advisor, “I need to bring this up at my Finance Club meeting” , I’m sure he was like … WTF is that … anyhow

I’m now having to decide what to do with the brokerage account, either do a TDIF and be done with it or do the 3-Fund portfolio and do something vanilla like what Jeremy showed us in the course or just VTSAX and chill… :stuck_out_tongue:

Just for a reference the Brokerage has $35K and is money that is not going to be used for a long time, the rest of the accounts are already in TDIF 2045 and 2050

#4

I’ll cover this in tonight’s office hours (2/10/2021) with the recording available afterwards on the course site!

If you’re not signed up for office hours, you can sign up here.

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