The Malvern, Pennsylvania-based low cost giant Vanguard
is shaking up the industry again, this time competing in the arena of the wirehouses.
According to an excellent set of analyses published by RIABiz
, one earlier this week
and the other last month
, the Vanguard Personal Advisor Services
has 250 financial advisors certified to work with clients with as little as $50,000 up to the ultrahigh-net-worth category.
reports that the VPAS, which will remain in pilot until 2015, offers these services to clients for just 30 bps.
The service's development has been led by Karin Risi
, principal of advice services.
An initial set of investment recommendations is generated from clients answering an online questionnaire. After that, the client consults with an advisor by phone to calibrate these goals, according to the second RIABiz article
, taking note of such precise factors as the client's tone of voice.
The service then tiers the level of attention given to clients by size of account assets, according to RIABiz
. For example, VPAS clients with at least $500,000 get their own dedicated financial advisor, while those between $50,000 to $499,000 are assigned to a pool of advisors. Some ultrahigh-net worth clients get face time with advisors.
Sure, the service primarily uses Vanguard products, but the service refrains from selling legacy funds from other sponsors until explicitly given permission from clients.
also notes that, eventually, Vanguard will merge its $28 billion managed accounts offering with VPAS, offering those managed accounts clients broader services at a lower fee. This will give the program a boost for sure.
Will this burgeoning service kick the pants out of the wirehouses? Who knows. The public's perception of satisfactory wealth services is fragmented and evolving in a number of different directions.
What is certain is VPAS is going to kick up this evolutionary process, by at least a couple of notchs.
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