Review of USAA’s Online Portfolio Recommendation Tool (2018)

Anyone who follows me knows I’m a fan of John Bogle and by extension Vanguard. (In full disclosure, I worked at Vanguard from 1998-1999, maybe 2000. Can’t remember the specific date I left.)

 

Vanguard Saves Investors Billions

Anyway, because of what Bogle has done investors have more money in their pockets, to the tune of billions of dollars. It’s just that simple. The investment industry hates the guy, of course.

But in the past few years, as Bogle’s shadow has lessened over Vanguard, Vanguard has become a bit more like the investment industry with a WIDE ASSORTMENT of offerings that I think Bogle is not fond of.

The investment industry too has become more like Vanguard by dropping fees and offering more passively managed accounts. There is STILL a lot of fee compression that has yet to happen though. I don’t think the good folks on Wall St. are anywhere near living as paupers. So, even with Bogle having been cast aside in 1999, Vanguard is still a force for good in the industry.

 

Vanguard’s Model Portfolios

It was with a bit of disappointment then that when I went to Vanguard’s website how cumbersome, no, impossible, it was to find an actual portfolio recommendation. I clicked and clicked, and clicked some more and was unable to locate an area that said I should invest in X, Y, and Z offering. Weird actually.

I was able to finally find a PDF that breaks down model portfolios WITH holdings. I’ve attached that link below. That PDF is fantastic actually. But if you asked me how I found it, I wouldn’t be able to tell you.

Vanguard’s Personal Advisory Service

Now, Vanguard does have an personal advisory service and I followed a bunch of links there but again was uanable to get a recommendation. It appeared I’d need to speak with someone. I don’t want to do that. Also, Vanguard didn’t state their fees for their advisory services, which I find problematic. However, I believe the Vanguard fees are around .35%. I also believe they use their ETFs too which average say .10%. To get a REAL LIVE HUMAN BEING to chat with and full investment services for less than .50% is incredible. Take heed investment advisors, your days of having your own personal jets are numbered, as witnessed by the amount of assets Vanguard has brought into their advisory services.

I can not stress how fundamentally good this is actually. If Vanguard can offer personal advisory services AND investment management for less than .50% the industry will need to change, and change quickly.

 

Not Comprehensive Financial Planning

Now, notice I didn’t say Vanguard offers full FINANCIAL PLANNING services. Vanguard’s advisory services are solely on investments, asset allocation and running some analysis on safe withdrawal rates. Nothing wrong with that. But it’s not comprehensive financial planning.

So, I’m hoping at some point Vanguard offers a service where a comprehensive financial planner, such as myself, can use their investment platform and still offer full financial planning for the client. That would be a triple win. Client certainly benefits. Vanguard too and of course, I would as well. But for now, Vanguard’s service is still a HUGE step in the right direction for the good guys.

https://retirementplans.vanguard.com/… https://investor.vanguard.com/home/ https://advisors.vanguard.com/iwe/pdf…

 

 

 

USAA provides portfolio recommendations just using their online tools.

I’m going to go over the various scenarios of the USAA Portfolio Planner, which is their recommendations of USAA mutual funds that clients can incorporate themselves.

I’m also going to review their “managed account” portfolio recommendations.

And finally, we’ll see what the recommendations are in using their Digital Investment Advisor (i.e. “robo-advisor”) service.

In the course of transparency, my family is 4 generations of USAA membership and I was an employee with USAA for nearly 10 years ending early 2017. So, to say the least I could be perceived as biased towards USAA.

However, I believe their tools leave a lot to be desired.

The Digital Tool seemed to be the best product they offer actually in terms of fee and diversification. (However, the fees on any of these services were not conspicuous. So bear that in mind, you’d need to d a bit more hunting to find the specifics there.)

So, give this video a watch and let me know what you think.

Here is USAA’s website. Pretty simple actually…www.usaa.com

 

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