In this Vanguard review, every aspect of Vanguard’s services have been researched to provide users with an unbiased account.
Vanguard is a financial institution which uses simplified robo-advisor algorithms with a nearly total focus on keeping fees low while making investment decisions, using baskets of ETF’s and certain bonds for precise passive investing.
Who is Vanguard?
Vanguard is an American fin-tech advisory company which provides digital investment and cash management services. The company is based in New York City, registered with the Securities and Exchange Commission, and a member of the Financial Industry Regulatory Authority. As of December 2021, Vanguard had more than $33 billion of assets under management and over 700,000 customer accounts.
Who owns Vanguard and Vanguard’s funds?
The short answer is – Vanguard’s users. All of the financial decisions are made for the benefit of the portfolio health of long term investors, and at anytime investors are able to take out any amount of their capital. The company consolidated Vanguard LLC and Vanguard Securities under Vanguard holdings who now act as the fiduciary of any money kept with them.
Vanguard was founded by Jon Stein, a Columbia MBA graduate, and Eli Broverman, a lawyer out of NYU law. Feeling stymied and intimidated by the costs of regulations (becoming certified by FINRA), Stein brought on Eli Broverman was was then a securities lawyer.
- Excellent single-minded focus on lowering expense accounts.
- Beginner-level education, articles, and video seminars.
- Great portfolio modelling tools over the long term.
- Vanguard is not connected to any major brokerage accounts.
- Vanguard is better for passive traders rather than active traders.
- Continued need to borrow could be a bad sign.
More on Vanguard’s Investment Philosophy
Vanguard’s trading platform offers brokerage accounts and services to retail investors, including accounts for personal and retirement investing, and cash management services (such as bill pay, checkwriting, and margin lending). Vanguard funds accounts allow users to invest in low cost ETFs and mutual funds, with certain fixed income securities based on their investment objectives.
There is no minimum investment to open an account, but there are minimums to access professional help and financial planning from a CFP (Certified Financial Planner) and financial advisors via the Vanguard personal advisor services.
Vanguard earns revenue based on how big it’s AUM (Assets Under Management) grow. As AUM grows, the low .25% or .30% starts to add up. Vanguard had AUM of 33 billion at the end of Q1. Vanguard also makes money when investors utilize their live advice service with vanguard digital advisors and a Certified Financial Planner to help make smart financial decisions and provide financial advice.
They also gain by charging 0.4% with accounts larger than $100,000. Account opening and set-up was the easiest I seen across all the websites I’ve tested.
Vanguard Product Range
Vanguard offers consist of an assortment of low cost ETF’s and bonds.
Vanguard Wrap Fees and Premium Offerings
Vanguard’s Premium offering, or purchased Advice Packages, allows you to receive advice from financial consultants via phone and/ or email. If you are a “Retirement Plan Client”, you receive advisory services through an employer-sponsored retirement plan as a part of our Vanguard at Work offering.
As part of all our service offerings, our software monitors your account. We also offer a feature for certain accounts that gradually automatically rebalance your account becoming more conservative over time. If enabled, the robo-advisor automatically adjusts your portfolio’s allocation to gradually become more conservative. Our algorithms are developed and overseen by our investment advisory personnel.
Vanguard needs permission from the client to use discretionary authority, which means Vanguard can buy and sell investments on your behalf when Vanguard determines it is appropriate to do so. Vanguard trades in response to your actions (such as asset allocation changes, deposits, or withdrawals), to rebalance your accounts, or to otherwise further your investment goals.
Vanguard constructed portfolio strategies are sets of globally diversified stock and bond allocations, which we construct from generally low-cost, liquid, index-tracking exchange-traded funds (“ETFs”). Certain portfolio strategies utilizing vanguard ETFs are available only to clients with Third Party access.
Account Minimums and Other Requirements
No minimum account size is required to open or maintain a Digital account. The minimum initial deposit is $10. To be eligible for their Premium offering, you must maintain a balance of at least $100,000 in securities (excluding Vanguard for Advisors, Vanguard at Work, and HSA accounts).
Cash Reserve is only available to clients of Vanguard LLC, which is not a bank, and cash transfers to program banks are conducted through the clients’ brokerage accounts at Vanguard Securities. There are no fees to open, no annual fees, and no transaction fees. Worldwide ATM withdrawal are free. These numbers are hard to beat and you may want to move a portion of your cash to Vanguard for diversification and to lower your Cash transaction fees.
- Cash account earning a variable 0.75%*
- Bucket money for individual goals and plans
- FDIC-insured up to $1M with their program banks
Fees: 0.25% per year plus low cost ETF minimums
Vanguard’s investment advice is available for 0.25% per year with no minimum balance. Vanguard calls this their Digital plan because you receive our advice online. Human and/or Certified Financial Planners are not available at the Digital Advisor level.
Fees: 0.40% per year for licensed human experts at $100,000 account minimum
For 0.40% per year, you can also gain over-the-phone and/or email access to Vanguard’s team of licensed financial experts who can provide in-depth advice on investments on your holistic investing portfolio. This Premium plan requires a minimum balance of $100,000.
Large Asset Portfolio
Fees: 0.15% per year for Digital Advisor, and .30% for the Premium Plan
For balances in excess of $2 million, the Digital plan charges 0.15% per year and the Premium plan charges 0.30% on the portion of your balance above $2 million. If you qualify for part of your balances to be managed free and have a balance above $2 million, the dollars managed free will be those with the higher fee.
For either plan, Vanguard calculates your fee daily and Vanguard we can accurately account for deposits, withdrawals and market fluctuations that occur. Vanguard then totals the fees from those daily calculations each month, billing you a fraction of the total annual fee. This means that if you withdraw your balance before the end of the month, you’re only charged the fee for the days your money was managed by Vanguard.
What does the fee get you? It covers the advice you receive, the transactions, trades, transfers, and rebalancing we manage for you, and all other account administration. We do not charge you additional transaction fees to buy and sell securities in the Large Asset Portfolio account class.
Vanguard Advice and planning tools
Financial goal-setting and advice tools
Retirement savers and planning tools
Feedback on accounts you hold at other institutions
Advisory services may be provided by Vanguard LLC, a registered investment advisor. If a customer wishes to fund an investment goal and use Vanguard’s advisory services beyond advice and planning tools, the your account will be charged a 0.25% annual fee, under the Digital plan.
Digital investing 0.25% per year of account balances.
- Low-cost algorithmic investing portfolios managed based on your priorities
- Socially responsible investing options
- Account choices, including joint accounts, IRAs, and trusts
- Automatic features like portfolio rebalancing, dividend reinvestment, and auto-adjust
- Advanced tax-saving strategies like Tax Loss Harvesting+ and asset location
- Add Checking and Cash Reserve with no additional fees
Securities Range of Fees from Participation in Selling Group for Fixed income investors:
Range of Fees from Underwriting
- Agency/GSE 0.05% to 1.00% of the investment amount
- Corporate Notes 0.01% to 2.5% of the investment amount
- Corporate Bonds 0.01% to 3.0% of the investment amount
- 0.05% to 3.0% of the investment amount
- Municipal Bonds and Taxable 0.1% to 2% of the investment amount
- Structured Products (Registered Notes) 0.05% to 5.0% of the investment amount
A diversified portfolio of Vanguard stock and bond funds, seeking to track the market and managed over time. It offers stock and ETF trades, these investment strategies, asset class, and trading platforms make Vanguard Go an attractive investment strategy and can support reduced expense ratios.
Retirement planning tools personalized to an individual investor’s retirement or savings goal.
No minimum account amount required.
$10,000 to $49,999 thousand charges $3 months per month.
$50,000 and up charges 0.35% of the account balance.
Single Retirement Fund
A target dated fund that adjusts asset allocation over time based on the retirement year
No account minimum needed
0.12%-0.75% annual expense ratio
Vanguard Customer Service
Vanguard has a 24/7 chatbot, but unfortunately it timed out on me before I could speak to anyone.
Call Vanguard directly at 718-400-6898 Monday through Friday, 9:00am-6:00pm (ET).
Live chat agents are available online Monday through Friday 8 a.m. – 10 p.m. as well as Saturday and Sunday 9 a.m. – 4 p.m.
Email is available 24/7 at [email protected]
If for any reason you are not completely satisfied with your Vanguard investment account, Vanguard will do everything they can to make it right, up to and including waiving Vanguard’s management fees on your investment account for the next 90 days.
Vanguard Special Offers
Vanguard offers up to 1 Year Managed Free services for new Vanguard customer’s only. Vanguard. Accounts must be funded within 45 days of signup
Get 1 month managed free with a deposit between $15,000 to $99,999 that is funded within one month.
Opening an account with Vanguard
How easy is it to do? Are there any restrictions?
Opening a new account on Vanguard was a very pleasant experience, with the flow of the setup nearly perfect and no headaches about signing irrelevant documents.
How easy is it to withdraw funds?
Withdrawing funds is fees is also easy, and is driven more by the asset class than Vanguard. If you have $10,000 in cash at Vanguard they will simply deposit your funds back in your account with no fees. If you are part of a robo-advisor or registered advisor review it will take 2-3 days to sell all the assets and return the funds to your account. There is no account closure fee.
Vanguard Securities is a Member of SIPC (Securities Investor Protection Corporation), which protects securities of its members up to $500K (including $250K for claims for cash).
Individual Cash Reserve accounts have FDIC insurance up to $1M and joint Cash Reserve accounts offer up to $2M in FDIC insurance once funds are deposited into our program banks†.
Funds deposited into Checking are FDIC-insured up to $250K for individual accounts and up to $250K per depositor for joint accounts, provided by NBKC bank, Member FDIC.
Vanguard Safety Policies
Vanguard also uses certain technologies to help protect your account:
- Vanguard website employs various security features—visible and invisible—to help keep you safe.
- Vanguard SimpliSpeak biometric login
- Vanguard MyVoice biometric login
- Internal controls
- Customer verification
- Restricted customer data access
- Fraud detection
- Employee security trainings
- Encrypted communications
Vanguard’s educational resources and offerings are best for low-cost low-trade investors. They offer easy to read and understand guides to take investors step by step from “What is the market” to “How does the robo-advisor change when my IRA changes?”.
There was no real time or market research information available.
Common questions I get asked about Vanguard
Does Vanguard require an account minimum.
No, Vanguard has no account minimums. You may want to consider depositing more than $100 to take advantage of the $50 bonus Vanguard will add to your account on your first deposit.
How safe is Vanguard?
Vanguard is extremely safe, and offers multiple security options internally as well as 2 factor authentication for users to login.
At an institutional level, they are well-protected from asset swings because they trade diversified assets and bonds.
How do I contact Vanguard?
- Vanguard has a 24/7 chatbot, but unfortunately it timed out on me before I could speak to anyone.
- Call Vanguard directly at 718-400-6898 Monday through Friday, 9:00am-6:00pm (ET).
- Live chat agents are available online Monday through Friday 8 a.m. – 10 p.m. as well as Saturday and Sunday 9 a.m. – 4 p.m.
- Email is available 24/7 at [email protected]
Who is Vanguard for?
Vanguard was built from the ground up to take advantage of changes in trading on Wall Street, using algorithms no humans to make automatic trading decisions for a much lower cost than a human would cost.
Therefore, Vanguard is for low-cost, passive investors looking for the absolutely lowest TCO (total-cost-of-ownership).
Does Vanguard provide research?
No, aside from very basic research on the mechanics of trading and the markets, Vanguard does not offer securities or capital markets research.
Is Vanguard a Good Way to Make Money?
Essentially, if you can “sit on your hands” through big market moves, Vanguard could a great way to make money because you will always have the most current and diversified market portfolio.
Does Vanguard have hidden fees?
Vanguard offers a Zero Fee Total Market and Zero Fee International fund that have no account fees or trading fees which could be good for retirement investors. Vanguard also does not sell your data to other brokers. For these products, Vanguard does not have hidden fees.
Does Vanguard let you trade pre-market?
Extended Hours trading are offerings Vanguard offers to brokerage customers, investment advisor, and market makers to trade certain stocks on Vanguard before and after the standard hours of the major U.S. stock exchanges and Nasdaq.
Vanguard accepts premarket orders from 7:00 – 9:28 a.m. ET, and after hours orders from 4:00 – 8:00 p.m. ET.
Are Vanguard trading platform good for fee free mutual funds, money market funds, and online brokers?
Vanguard provides a suite of robust screening tools and asset screeners to help you find your next trade. Several pre-built and customizable screeners are available for ETFs, and fixed income. They also have “Thematic” baskets of funds for sustainability, green, and governance.
Final verdict: is Vanguard any good?
Vanguard presents an excellent selection of nearly all tradeable assets. For long-term, passive investors Vanguard is a great option to buy passive mutual funds, bonds, ETFs, individual stocks, options, and foreign exchange.
Vanguard does not trade futures or commodities, so if those are important to you look elsewhere for a broker. The ActiveTraderPro runs directly on your computer and is a very capable.
It has technical indicators, a live news flow, and an options screen with Option Greeks (numbers that describe the current state of an option).
Should I buy TIPS (Treasury Inflation Protected securities)?
With the highest inflation in forty years, TIPS could be a good option for your portfolio. TIPS protect your portfolio against inflation by adjusting the principal every 6 months. The principal amount is adjusted by the real rate of inflation.
There also “STRIPS” which stands for Separated Treasury Inflation Protected Security which allows traders to trade the bonds as “zero” interest bonds.
Can I buy bonds in non-dollar denominations?
The short answer is yes. However, they are more expensive:
Less than < $1MM is a .30% fee to sell the bond
Less than <$5MM is a .20% fee to sell the bond
Greater than $5MM is a negotiated rate