Vanguard Financial Plan Review: (1) The Questionnaire

I filled out the questionnaire for getting a Vanguard Financial Plan last week. I will document how it works so you can decide whether it’s worth doing.

The plan is free once per rolling 12 months if you have $500k or more in qualifying assets with Vanguard. It costs $250 if you have $50k or more.

After you make the request (call 800-547-3332 or send secure message in your account), you would receive a link to a questionnaire in your secure message box. You fill out the questionnaire online. You can save the unfinished work and resume as needed.

The Vanguard concierge rep told me currently they have two different questionnaires, one for the one-time financial plan and another for the new Personal Advisor Services that includes a plan, ongoing management, and continued access to the advisor for a 0.3% fee. They are working toward unifying the two questionnaires into one. This article is still about the current/old questionnaire for the one-time financial plan.

Personal Information

The questionnaire auto-populates your name and date of birth after you agree to let it access your Vanguard accounts. There is a checkbox to add a column for a spouse or partner. It asks for each person:

  • salary and other income
  • any planned employment income during retirement, and for how long

It also asks your marginal tax rate and your total tax loss carryover. It takes you through a risk tolerance quiz identical to this one on their website.

Accounts

The questionnaire auto-populates your Vanguard accounts. For each outside account you add, it asks for:

  • account type (401k, IRA, Roth, taxable, etc.)
  • where it’s currently held
  • for each holding, the symbol/name, the value, and the cost basis if it’s in a taxable account
  • if it’s a 401k account, other available options in the plan

Note: By law Vanguard can’t give specific advice about a 401k plan if your plan has Vanguard funds as an option, whether you currently invest in them or not. If you want to get specific advice, don’t list Vanguard funds as available options. Replace them with similar funds from a different company, say Fidelity. This limit only applies to employer plans, not to IRA or taxable accounts.

Retirement Savings

The questionnaire asks for the employee and employer contributions to 401k plans and your contributions to IRAs and savings to taxable accounts.

Retirement Income

It asks for your estimated Social Security benefits in today’s dollars, with a link to the quick calculator on Social Security’s website. The quick calculator only gives the early retirement benefit at age 62. You will have to calculate the benefit at age 67 or age 70 yourself. It also asks for any pension and other income during retirement.

Expenses In Retirement

You fill out your estimated annual expenses in retirement. It also asks whether you need to save for future college expenses.

Free-Form Comments

There is a box at the end for free-form comments that don’t fit anywhere in the questionnaire.

What It Didn’t Ask

I think the questionnaire is quite thorough in some areas, not thorough enough in others. I noted what it didn’t ask that I thought would be useful for a financial plan:

  • basic expenses versus nice-to-have expenses
  • size of home equity and any plan for downsizing
  • whether/when any mortgage will be paid off and thus reduce cash needs in retirement
  • any irregular expenses such as replacing cars every X years
  • insurance coverage (life, disability, long-term care)

Next Steps

After I submitted the questionnaire, the computer assigned my case to a specific advisor. I was able to see a calendar of her availability for reviewing my plan. I picked a day and time for my 45-minute appointment. I’m able to reschedule if necessary.

She will work on my plan and send me the draft before the appointment.

[Follow-up post: Vanguard Financial Plan Review: (2) The Plan]

[Photo credit: Flickr user SalFalko]

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Comments

  1. Paul says

    I did the financial plan routine and it didn’t impress me very much. I’ve since gone with the .3% plan and, so far, I like it better. The regular financial plan is a one-shot deal while the .3% plan enables you to speak to “your advisor” by making an appointment. I’ll assess the effectiveness of the plan after one year to see if the .3% is justified. The biggest change made was to go from target retirement funds to the individual funds underlying the target retirement funds. Since then, no changes have been made and none are anticipated unless the balance between bonds and stocks gets out of whack.

    • Harry says

      Paul – Thank you for sharing your experience. Are the content structure of the two plans the same? Does the 0.3% plan include more information or analysis?

  2. Sam R says

    @Paul – Like TFB, I also want to know if the content structure of the 2 plans the same. Pls share if by paying 0.3% fee the plan includes more info or analysis.

    Last May I put 500k into Vanguard and got the ‘free’ financial plan to check if our asset allocation is good to retire early (in 2 yrs). They said we could retire young in 2 years, but they didn’t recommend any of the high-yield CDs posted in TFB. For fixed income, they recommended total bond market index. No high-yield CDs, no high-interest checking. Thus, I feel the advice is cookie cutter.

    @TFB – I look forward to reading what you think of their advice to your situation, because I think you know more of how to ‘get the most bang for your buck’.

    Thank you.

  3. indexfundfan says

    I went through the same thing with Vanguard last year. There’s nothing very important that you don’t already know. However it does earn me credibility with my spouse that we are on the right path in managing our finances. :-)

    Oh, you get to see the advisor on video conference during the session.

    • Harry says

      Like a wellness visit to a doctor, I’m not expecting major issues. No news is good news. I also want to test it out for my wife in case she’s the one needing help one day.

  4. Paul says

    The essential difference between the two approaches, as I see it, is that the free plan is a one-shot deal. You get the results and you decide whether or not to implement them after a discussion with the creator of the plan. I don’t use the word “advisor” here because it is a one-time deal, not a continuing relationship. With the .3% plan, you fill out a questionnaire (as you do with the free plan) and then you discuss it with the advisor and he takes control of your assets – you no longer have the ability to buy or sell in the managed accounts. You have to go through the advisor to do that. You then have an ongoing relationship with the advisor – you make an appointment and you talk or you exchange e-mails. If you are financially savvy and know what you want to do with your assets, go with the free plan. If you think you could benefit from advice from a CFA, go with the .3% plan. As I wrote, I’ll assess where I stand at the end of one year and make a decision then if the money was well-spent.

  5. Rob says

    I was a very long term vanguard customer and also with fidelity. Since I’m retiring is decided to consolidate all my investments with one firm. I’m well over the investment level for assets and compared the two firms.

    After the repeated phone transfers and very long “silent holds” that vanguard reps who couldn’t help me due to my investment level, I chose fidelity.

    Being low cost is important to to me but having someone at vanguard who could answer questions without putting me on a very long “silent hold”. (Not that elevator hold music would have helped but they are so low cost I guess they can’t afford that… Or hire enough people with knowledge to help)

    • Harry says

      When you have sizable assets, both Vanguard and Fidelity offer a different phone number for customer service. Vanguard has Voyager Select and Flagship; Fidelity has Premium Services and Private Client Group. You usually get faster service at those premium phone numbers.

      I have accounts at both Fidelity and Vanguard. Depending on what you choose at Fidelity, the cost could be comparable to Vanguard or it could be substantially higher. If it’s costing me $20k per year I would put up with a silent hold or find the right phone number to call. You get a good deal at Fidelity only if you know what you are doing.

    • mike f says

      exact same thing happened to me this week, i called the number on the website for advice, asked a simple question, got multiple indirect answers, so asked to be transfered to schedule an appt, ended up not doing that as we could decide whom to schedule with cause they could not answer what they offer clearly, suggested I email my flagship person, then the silent hold, i just hung up, after 20 minutes, and could not cut through the politeness, to tell me, clearly my choices, email’d them asked them to reset my questions, and will just do that again, since it’s free for me

  6. Lars says

    Interesting comments. I have over 500K at Fidelity through my 401K with my employer. I’ve never spoken to a rep or known that I may have access to one… Would that type of service be available to me, and if so how does one access it? Thanks.

    • Harry says

      Unfortunately 401k assets don’t count.

      “Fidelity Premium Services is generally available to investors whose eligible retail household relationship assets are at least $250,000. Eligible Fidelity retail accounts generally include those maintained by Fidelity Brokerage Services, or which are held in Portfolio Advisory Services accounts (excluding assets maintained through Fidelity recordkept retirement savings plans, such as 401(k) or 403(b) assets). Household relationship assets will be determined by aggregating the assets of eligible retail accounts held by the investor and their immediate family members who reside at the same address.”

      - Fidelity Premium Services
      - Fidelity Private Client Group

  7. Steve F says

    I was going to give this a try but was disappointed that the NY 529 plan (administered by Vanguard) did not qualify towards the $500K minimum. I’m a bit short without it. The phone rep implied that paying for a one-time consult isn’t an option either as they are directing those <$500K to their 0.3% service option.

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