Vanguard Digital Advisor Review (Why I Loved It UNTIL I Actually Used It)
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- Опубліковано 1 сер 2024
- I was convinced I'd live Vanguard Digital Advisor. It seems to check all the boxes. It uses low cost index ETFs. The service itself has a very reasonable cost of about 15 basis points. And it rebalances your investments for you, as you would expect from a robo-advisor.
After using the service, however, I reached a very different conclusion. There were numerous technological issues and its user interface is poorly designed. More importantly, it offers very few features and imposes limitations that make no sense.
Frankly, it's nothing more than a dressed up target date retirement fund and twice as expensive.
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ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
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Here's my take on the best overall robo-advisors available today: robberger.com/best-robo-advisors/?UA-cam&Video+Comment&Vanguard+Digital+Advisor
Great review! However It looks like Vanguard fixed most of your criticisms of their product, I’m currently using it in 2023. It might be worth a revisit.
Thanks Rob. You do intelligent and fair comparisons in your videos. The financial planning industry needs a lot more of that integrity. Being an x adviser from Australia, I'm enjoying your perspectives on investing.
I was about to initiate a transfer from M1 to Vanguard robo and glad I joined the Monday show (always do) where you mentioned you would be releasing a video soon. Phew! - Ryan from Haymarket
Currently retired and have a managed Vanguard IRA. Considered the robo adviser route with them but after your review no way ! Appreciate your advice and reviews.
Thank you for doing the research for us! Very good analysis!
You are Great! Thanks for reviewing this. I for one would never use a Robo advisor but I'm sure many others might and you have saved them a huge mistake. Thanks
I am seriously considering using Vanguard because of fees but this is making me rethink things. Thanks for this video, Rob! Just subscribed
Fantastic review, Rob. Thanks for saving me time!👍🏼
This robo advisor tool seems to be in the beta stages. I have my 401k through Vanguard and when I need to make allocation changes it takes me to old website. Originally I had a target date fund but after a while it started getting too conservative by having almost 28% on bonds with about 16 years to retirement. So I would recommend to push back your retirement date for a more aggressive portfolio. Now, thanks to your free shared knowledge, I created my own portfolio the way I felt was best using Morning Star, Portfolio Analyzer and Personal Capital plus I opened a Roth IRA to diversify even further and take advantage of the tax free investments. Thank you Mr. Berger
Rob. Excellent review and I agree that the other “evaluators” probably didn’t actually use the service. I think Vanguard has gone a little too far in cost cutting and needs to work on customer service a bit more (even if we have to pay for it).
I got a few good chuckles from your video. Thanks. A three fund portfolio with a simple spreadsheet meets my needs just fine.
Bravo, Rob, for you due diligence on this subject. Great insight as always. You are my "must watch" for all things Investing. I will still download and read the Morningstar report but you have given me an objective "eye" in which to evaluate their conclusions. Always great research with a laugh or two along the way......with some chess talk and Turkish Getup (what ? ) chatter as well.
Rob, Extremely helpful review. Thank You
Excellent video and a very detailed review. Love the insight of this video.
Thanks for making this video Rob. Great stuff here
Great review, very thorough 👍
I recently opened up a Vanguard retirement account about two months ago and after a few weeks my money rolled over from my employer retirement accounts, and I signed up for the digital advisor. I have since had a change of heart because after selecting the four different types of funds, I noticed that it left a couple hundred dollars just sitting in my settlement account, and a few weeks later they purchased some ETFs with it. I recently moved over some more money from my employer account and once again they left a couple hundred dollars sitting in the settlement account so after watching this video, I’m going to disenroll,
Rob,
I agree with your conclusions about Vanguard Robo Advisor (VRA) and I would not use it myself, but you may have missed one nuance. You scored VRA lower because you couldn't change the "Glide Path" or keep it steady and could not sufficiently change your profile to re-specify the allocation. Seems to me if you want to specify the allocation and changes in allocations and possibly the funds invested, etc. then you are not a customer for VRA. I would think this is for people who don't know much about investing and/or don't want to be bothered with investing and they might consider some of that a plus. There are likely better alternatives (as you said), but I thought to some degree you were looking at it through your lens rather than theirs.
I like your videos and learn a lot from them. Keep up the good work.
Good video, thanks for the good quality content.
Hi, great video!!Are you going to do an update to this video? I really would like to know if they have new features and your feelings on it. Thanks!
Almost same experience for me. Had to complete the enrollment on the phone with a human customer service rep. Also frequently experience the issue others have noted in comments that funds will just sit in the settlement account for a week or more before a transaction occurs. Also had to install the Vanguard app to view asset allocation.
Vanguard Exec: "Everybody else has a robo-advisor - we need one right away. Can it be ready in four weeks?"
Vanguard IT Exec: "No problem sir, we'll take care of it"
Vanguard IT Manager: "This doesn't make any sense at all - there are no specs. How can we start programming while they develop requirements?"
Vanguard IT Exec: "Well, it has to be done in four weeks, just do the best you can"
Vanguard IT Manager: "OK, we'll try.:
Vanguard Programmer: "This is crap, but it's the best we can do in four weeks. At least we'll have a job for years fixing this mess."
Vanguard Exec: "Maybe we should hire consultants...."
Hey Rob. Loved the video. You talk a lot about Personal Capital. Did you plan on trying them out? I use them currently and wondered what your thoughts were?
Great video, Rib! I saw from different video you own SCHD…what type of account do you hold it? And what percentage?
Honest and useful review! Isn't Vanguard still offering their Personal Advisor Service at 30bp? Yeah I know they have a $50K minimum, but that is another option and I believe it's much more flexible than this Digital Advisor.
Yes but a PA for a $50,000 investment will be one who’s getting on the job training. He will be cutting his teeth on your hard earned money!
Rob, does one of your other videos go into more detail on why you don't want bonds in a taxable account (mentioned during glide path segment)? Thank you for your videos!
great video; I LOVE Vanguard but love DIY even better and less fees; worry about this service and fees/selling/buying, Isn't robo-advising going to automatically rebalance and change stock/bond ratio over time though? Thought this was a given...
Ok. I am a Vanguard customer and I know what not to do. Does anyone know which company offers the automatic (or intelligent) asset allocation??
Thank you. This is so helpful. I have a 2025 Target fund, but Vanguard keeps sending me emails promoting the digital advisor. I was unsure if that was a better option. After your video, I have decided against it. I am wondering now that I am close to 2025, can I transfer my account to one of the future targeted funds, such as the 2030 fund?
Hi Rob: another outstandingly helpful video! Do you anticipate reviewing the new PAS Vanguard actively managed funds?> I think I read there are five? Also, what do you think of Vanguard PAS service?
Rob, can you educate us on securities-based lines of credit (SBLOCs)? And preferred lenders/banks to establish a relationship to eventually take out a SBLOC? I see Schwab offers it (pledged asset line of credit) but would like to know your recommendation(s). Thanks!
Yeah, they recently changed my 401k’s interface, and I have a lot of the same complaints. Personally, I’m not comfortable just assuming the UI is the B team and the money coders are the A team.
What are your thoughts about making changes now or waiting? to makes changes to 457 account. It’s already lost $11,000 since January 😬.
Can you also try out Fidelity’s FidFolios?
Have considered Digital Advisor since I fired my Vanguard Personal Advisor. Thanks to this video I’m not going to use it. I like the idea of target date fund. Cheaper than paying their PA’s for bad advice after they claim to be your fiduciary. Thanks Rob, I’ve made my decision.
Pretty cool to see Irina, Wesley and Magnus in the back there. Cant tell who the middle player is, Pragg maybe?
Rob, Avantis Investors ETF deep dive please. PS I miss the chess puzzles.
Difference between VG Target Funds, VG Life Strategy Funds, and AOR?? Please!
Talked to a Vanguard rep today and it sounds like the Digital Advisor continuously adjusts the mix on your behalf based and your personal profile, unlike a Target fund. He said it is not "daily", but it sounds like it does make adjustments when appropriate.
Great review? I currently open the minimum with Schwab and learned to open the Intelligence portfolio they require 5k but than you can request a withdraw which I did and only currently have $1800
Really makes you wonder who is in charge of the development of that service. Seems they clearly rushed it to market and likely have, pardon the technical term, a crap load of future changes to make it better. Thank you for suffering thru that to save many others the agony. I'm sticking with Personal Capital for my data aggregator and doing my research legwork manually using Schwab account and their screening tools.
Can you make a review video about schwab intelligent portfolios?
So Being In 2023 How Do You All Feel About The Digital Advisor It’s My First Time Investing In Something Like This And I Want To Know Would This Be A Good Decision As Far As “Digital Advisor”
Thanks Rob, if your analysis was not a genuine evaluation, it could have been a great proposal for an SNL skit, WOW. It's astonishing how badly they failed. I really appreciate the due diligence you did to try the service, make all of the timely phone calls when you ran into the dead ends online and stick with the service even after making an assessment, just to see if it improves. How much fairer could you be?
In August of 2023, vanguard’s robo advisor does offer tax loss harvesting. I appreciate your work. Big thank you.
I don't have Digital Advisor, I have had Personal Advisor Service. Weird you're having those errors. I think that may be a browser issue, or maybe it's that website. I believe the Digital Advisor Service is fairly new, as about a year ago or so they sent an email out to all PAS members asking questions regarding a new advisor service, new names for the services, etc. About a ten minute questionaire. With PAS you can add goals, but it requires you to have a phone call so the advisor sets everything up, although, I've never done so as my portfolio is only for retirement.
There isn't a separate website as far as I know for PAS. It's the same website for a taxable/ira account, but when I log in I'm automatically brought to the PAS dashboard which shows my goal, performance, total investments (which I can add my outside accounts, they just don't manage them, but adds them to your goal) etc - which is nothing you can see because it looks like the java or flash is giving you errors. I wonder if you tried on a different broswer, maybe chromium-based? I use Brave. But maybe it is that new site that's still not fully baked.
Vanguard requires $50,000 to enroll for Advisor Services, and you pay up to 0.30% (30 basis points) of your balance annually. I am happy so far.
Yeah... The end really summed it up. The last part was the most important in this video, IMO. I was thinking about those target date accounts the whole time you were reviewing this.
Wonder if the Vanguard robo advisor was more from marketing.
Hopefully they watch your channel
I just signed up for the 90 day free trial. Some issues are fixed but jury is still out
Time value of money, opportunity cost, a comic interface without key info/dashboard, lack of control?! I would have difficulty being as content as GM Wesley So appears in the background. Asset allocation by total portfolio versus every account is where this breaks down the most for me.
Hi Rob, just a hunch, but did you create your account listing your age as older than 59 years old? I see your "Target Retirement Age" is 94 (94 - 30 = 64?) on your profile. -- A lot of the problems your noticing may be stemming from the fact the Digital Advisor Service does not currently support individuals older than 59 years old. Additionally, the "Additional Goal" functionality is only supported for those less than 59 years old, which is I why I suspect it was not working for you. -- A lot of this behind-the-scenes information, as well as how your funds/added cash will be allocated, is provided in the "Digital Advisor Brochure" or FAQ section within Digital Advisor.
Volume was a little low on this one, Rob.
I’m thinking about a target date fund.
Rob, I have a Betterment account. Have you started withdrawing yet? I asked it I could just take dividends and they said there is no way to do that. I just asked if I could not reinvest and they said no. Just sharing as that is a bit of a frustration for me.
Interesting. I'm working on my Betterment analysis now and will focus on that issue.
@@rob_berger Rob, when do you expect the Betterment video will be live?
Broadly speaking, Vangaurd has the best funds, but their platform is lacking in many ways. Makes sense when you consider the structure of the firm.
Hey Rob Berger:
I know Target Date Funds are not good for taxable accounts, but what do you think about the Vanguard Life Strategy Funds for a taxable account? These don’t have TIPS and so are more tax efficient. The LifeStrategy Funds could be like a “Robo Advisor” for taxable accounts!
(As a side question, you mentioned you had a Vanguard Target Date Fund in your taxable account, and I was wondering why?)
If I did I misspoke. I don't own a target date fund in a taxable account. LifeStrategy Funds are not ideal for taxable accounts if you have alternatives. The bond allocation is best in a traditional retirement account.
@@rob_berger Wow you take the time to respond to some of the comments.
The reason I ask about Life Strategy Funds is my wife does not know anything about investing, and if something happens to me I'd like a 1-Fund Portfolio for her that she could manage without an advisor...
The Tax Cost Ratio of VASGX (80% stocks 20% bonds) is only 0.87.
Comparable Vanguard 3-Fund Portfolio's Tax Cost Ratio I calculated to be 0.64.
The difference is only 0.23, which some may consider worth the simplicity no?
I was about to sign up for Vanguard DA. Thanks for your video. I am staying away from this.
“You get what you didn’t pay for.” I’m a long term Vanguard owner for past 25 years!
Yuck! Curious if they do asset placement correctly. ie. if you have a taxable + ira, will they put the bonds in the ira.
I had a similar tech glitch with Vanguard when I was simply trying to open an IRA account. I got various error messages and a ticket needed to be opened to look into it. About a week later, I got a message saying my account was fixed and ready to go, but when I tried again --- still an error. I ended up going with Fidelity, whose customer service is excellent and whose website works great. I really wanted to use Vanguard, as I have many of their funds, but the problems in trying to set up an account just turned me off.
I opened my IRA pretty fast. The only thing that took time was the transfer of my money to them. This was last year.
My 401k is with Vanguard through my company. This is the 3rd company I've been with and so the 3rd 401k I've had and rolled over. I hate the Vanguard website. It's the hardest one I've had to navigate. I'm having a really hard time finding the investments I want. I have to flip through pages and it opens new pages. Ugg I'm loosing money because of this and I don't want to pay for a digital advisor.
Would love to hear your take on Fidelity Go
I tried it for a while and I was not a fan. First of all, do not use Fidelity Go for a taxable account. It uses proprietary mutual funds. When I transferred out, I had to liquidate my holdings and realize capital gains. Another issue I had was with its automatic rebalancing. One time, it decided to sell lots that were about a week away from being long-term. I would have much rather allowed my portfolio to be out of balance for a few more days and rebalanced by selling long-term lots.
Thanks for the video. I don’t see the value in this. I own a vanguard TDF in my IRA. This adds costs and doesn’t offer the features (account aggregation) that could justify the price. I also think that if the digital advisor was appealing then VPAS is a steal.
Too bad... I have used Vanguard for years and really like them but this problem with technology (read...website clumsiness) is ridiculous in this day and age. I recently set up a Schwab account to invest in their SCHD etf... WHAT A DIFFERENCE! Very well designed site.
But Schwab is sneaky they want to keep 6% of your money in cash, that is 6% that is not being invested. For me it was a deal braker.
Rob,
This is an unrelated question.
Since SIPC insurance caps at $500,000 should I keep all my accounts under that amount?
I am single and I have a Vanguard account that exceeds the SIPC maximum.
Does prudence say I need to open up an account at another firm so as to stay below the $500,000 limit?
JC
Hey Vanguard, it's Kodak and Blackberry calling. We are going down to Blockbuster to rent a VHS. Wanna come along? Call us back.
Vanguard will call you back on their Ericsson cell phone.
Jack Bogle would be profoundly unhappy with that.
The fact that MoringStar rated Vanguard's Digital Advisor number 1,
makes me question MorningStar
@Susan Colton stop spaminig you fool
Thanks, Rob but, those Target-date funds taxable got a big surprise with capital gains? My wife's TIAA 403b Vanguard TD 2020 dropped like a hot potato in December 2021 due to those awful cap gains?
Also, you never mention the (PAS) charge 0.30 % which we had for 1 year then we canceled it because you're limited to what the advisor commends only Vanguards core funds. The Wellington fund is #1 & has proven the test of time!
I went from Vanguard core funds(PAS) to Wellington Admiral(VWENX)VTI, VMBS & VXUS for both IRAs, Roths & cash. 76.8% Stock,12.3 Bond & 10.9 Cash. we are only 57 y/o I think most people should learn how to manage their own investments. Simple stupid.
Wow, I agree with you, what a wonky system.
Hello Rob, are you familiar with Binance US the crypto brokerage site? Thoughts?
Boom! Roasted
I had VFORX (target date 2040) and got dumped with capital gains end of last year. It was in a taxable account. Very frustrated with Vanguard that they distributed capital gains like this and impacted my taxes
I'm eying betterment and like its user interface alot but worry if their value titlt is a good idea. fidelity go doesn't tilt value and has outperformed betterment on returns, (but past performance doesn't predict the future) but on the other hand fidelity has a confusing user interface. also its possible value tilting hasn't panned out but will over time prove itself? I don't know. then there is m1 finance where I could create my own and they have an okay user interface, better than fidelity, not as good as betterment, but from what I've read they don't have near as good customer service, and that's a big deal. if I have potentially thousands of dollars with a company and something goes wrong, I want a competent human on the phone stat. fidelity wins on that front but betterment apparently is close behind and with a much better user interface. so I still haven't made up my mind where to do my IRA.
The last several years have not been good for value. Growth has been on a huge run. Value underperforming growth for extended periods of time is neither unexpected nor unprecedented. It has happened before. If you look at multi-decade time scales, the value premium is much more reliable. It tends to come in relatively short periods of very strong performance. No one knows when or why it will happen so it is best to have a tilt toward value all the time. That way you don't miss it.
@@thynnus2422 interesting. I guess time horizon might be a factor for value tilts. just like 5 years or less maybe should be more bonds and less stocks and 20 years, more stocks and less bonds, perhaps a certain length of time value tilts may win out. although I don't know what that time frame would be. could be a blended approach is safer but if the time horizon is long enough value wins out. I don't know, I'm just guessing. LOL
Sounds like you're beta testing their app... not all robo advisors have the same problem. One advantage is some do tax loss harvesting. In general I think robo advisors are more tax efficient, making them better than target date funds in taxable accounts. All those allocation changes in the target date funds result in taxes in a taxable account. A couple basis points in expenses can't make up for the tax consequences.
So an actual human advisor is the recommendation?
This should be embarrassing for Morningstar.
Yeah, that's Vanguard (the technical issues and rigidity).
Yeah, kind of just seems like a new wrapper on the same old target-date fund idea... but with a higher cost.
Given what you've shown, I can't imagine I'd be interested in it either.
Something that might make me change my mind though: If it could aggregate across different account types (taxable and retirement) and incorporate concepts like asset location and maybe tax-loss harvesting, that would be much more compelling... assuming they toss out the idea about using actively-managed funds.
Please deposit another $3,000 to utilize the chart feature
Even the basic functionality of the site is lacking; they need to get it together.
A year later, VG continues to push clients to roll-over their accounts to VG's robo platform, stating most robo managed funds earn 2%-5% over five years. (About the same as many current bank CD savings accounts, btw.) This, after earning 13% (!) via VG's basic previously employee-managed funds.
It's crazy - while VG says there are other reasons to use their robo platform besides performance (...huh?) I think most clients are looking for good returns. Or, at least above bank returns. That's what investing is all about.
At this point, VG isn't doing much to build client confidence, imo. Even as they expand their variety of robo funds, I wonder if they'll ever return to having the solid, reliable quality reputation they once had.
The poor Vanguard reps were probably minimally trained and told to expect calls from people with no investing experience that had absolutely no clue what they were doing.
Then, you kept calling.
Why even use a digital advisor if you can speak to someone for service?
It looks rushed to market without "on-par" functionality. However, we have to remember who this experience is targeting. Experienced investors like 90% of us watching this video or newbies who get intimidated and confused by too many options and nerd knobs?
Why use digital advisory if you don’t care about TLH , just go with target date fund
Seems like it's just marketing. All they're using is the Target funds.
Yet another reason why "Morningstar ratings" of funds and service providers are next to worthless. It's just a cheerleader service for the financial services industry. Every large industry player always gets a trophy.
These sorts of things and TDFs always remind me of prison jumpsuits. Sure, they "fit" everybody in the sense of covering your body and allowing movement. But they really aren't made for anyone in particular.
Na BTC is way way easier to be in control rather then have an algorithm (possible gov controlled) which can be shut down on you should the gov require it and best of all gov can't confiscate your BTC like they can in their fiat monies.... I'll just keep it where it actually grows
Love when a company wants you to invest thousands of dollars with them and can't even spend $50 to pay someone to fix their website 😂
Robo managed platforms may also be more susceptible to cyber attacks. I also experienced my first account lock-out after a hacking attempt, after VG went robo. This never happened before. And I had been with VG for several decades.
Vanguard’s robo advisor lack of customization just screams, “we know better than you so you should just listen to us.” Very disappointed because I was thinking of recommending that to my Mother in Law if it turned out to be passing.
Wow! That is simply terrifying and absolutely UNACCEPTABLE! I would avoid this Vanguard Digital Advisor. I would NEVER agree or feel this is a good option for anyone!!!!!
😂Mostly all deal breakers for me. I'll pass until they know how to utilize technology.
Wokesville never works perfect 😮
betterment is just like the one you just reviewed. You can not see your investments And they cost more No thanks
What a mess Vanguard has created. Wow.
Jack Bogle would roll over in his grave if he saw that hot mess his company put out. I am sure he would not like the inclusion of active funds either. Unfortunately, it is not Jack Bogle's Vanguard anymore.
What??? Digital Advisor is obviously not ready for prime time. I can only imagine the reaction of someone who knows next to nothing about investing and after reading Vanguard's website on this and decides to go this route. This is just seriously mediocre!!
WOW what a mess