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Has anyone used VG advisory? The quandary of professional wealth management
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I advised my mom to not use Vanguard Advisory Services, and to just set her allocation and leave it alone other than adjusting on a yearly basis. I think VAS charges .3%, which while it's not a lot compared to other brokerages/wealth advisors, does add up over a career. For example, a $1,000,000 portfolio invested for 30 years with 20k added per year and a return of 8% gives you $12.5 million after 30 years. Subtracting the .3% to a 7.7% return gives you $1 million less after 30 years. As another example, if you used a more general wealth advisor cost of 1% of AUM, your return would be about $3 million less after 30 years with the same stock market returns.
I don't see any reason to add the .3% headwind to my personal investing. But, for people that don't want to invest the time and effort (like 2 hours a year really) it could be the handholding needed to set up a plan and have someone in your corner to keep you from selling when the market drops and you get nervous.
You may want to check out the book A Simple Path to Wealth by JL Collins. It provides a pretty simple do it yourself approach to using Vanguard Total Stock Market Index (VTSAX) and Vanguard bond index (VBTLX). Another good resources is Bogleheads personal finance message board:
https://www.bogleheads.org/forum/viewforum.php?f=2&sid=c13f465324f19c74a2c0d167d17c8143
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A nice way to go in my mind is to sign up for the motley fool list and just routinely follow their recommendations ~ over time they have done very well. Another service worth the investment is Zacks ~ their number 1 ranked stocks also have a very good track record of outperformance.
If you are going to hire a model portfolio manager just make sure that they have a verifiable track record history of outperformance to justify the fee, and that the person responsible for the track record is still handling the money. -
On the Mount Rushmore of investors, Jon Bogle HAS to be on the list for the advent of the index fund and how many trillions he's made investors who have simply bought and held them as their investment philosophy.
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One word of caution on these services...they can be really, really good for folks that don’t want to mess with or don’t fully understand it. But I’ve known 3 people now who have been taken to the cleaners by wealth management folks, all with different stories. Including my grandmother who lost what I’m guessing was several million twenty years ago now...her guy retired and the new people churned her account dry.
Don’t ever assume because you hire these people that you don’t have to pay close attention to it or that they always have your best interest at heart...they have their own drivers as well. -
Here is the track record of Zacks research and i have followed them for years as a service ~ what i mean is that i have been aware of them [not following their research recommendations, simply aware of their service] and i'm convinced that their research capabilities are real. This would still mean religiously following the additions and removals from the number 1 list and acting accordingly which is a lot more than a lot of people would want to do, but it is an option.
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You can always compare your track record against those of managers. If the delta exceeds fees, it’s a no brainer to not have to do the work.
Most good managers should be getting you >15-20%, and should have access to funds that would otherwise tell you to fuck off. -
Wow. You’re an actual autistic financial “genius.” I’m shocked.FireCohen said:
Creep seems like u done well for yourself u don’t need those morons to touch ur $. Most of them don’t do individual stock picking anyways. They tell you some bullshit that you need a diversified portfolio blah blah and how much you should be paying them.creepycoug said:
Are you saying it's different if they are picking stocks?FireCohen said:Idk paying wealtmanagers to pick funds is a fucking waste of money and drag on return. Only worth if you are lazy
I guess the real question is whether professional money management is worth the AUM?
