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September 18, 2019 at 04:20 PM
Vanguard is preparing to enter the digital-only advisor space for retail investors with an offering that will charge far less than its Personal Advisor Services, which combines digital advice with a human financial advisor.
According to an initial disclosure brochure filed with the Securities and Exchange Commission, the service, called Digital Advisor, will charge 15 basis points, require a minimum $3,000 (PAS charges 30 basis points and requires a $50,000 minimum) and invest in a select number of Vanguard ETFs. Including the ETF costs, Vanguard expects total costs will be 20 basis points.
Digital Advisor is a discretionary service that has the authority to trade on behalf of clients and maintain a mix of recommended investments based on what clients have communicated about their investment goals, risk tolerance, time horizon, tax status etc. Investors must set at least one financial goal in order to enroll. The service will be based on a “personalized, goal-based financial plan.”
“Once you’ve agreed to ongoing management of your Portfolio, we will provide discretionary management based on the financial goal you set in the DA Website and Interface,” according to Vanguard’s SEC brochure.
The service will also be available to 401(k) account participants if their plan sponsor has approved the offering.
