Vanguard Personal Advisor Services is for investors with $50,000 (£32,800 ,€44,200) or more available for a managed portfolio. The launch follows a two-year pilot service for investors with assets of $100,000 or more, an initiative which attracted more than $7bn in new assets up until the end of March this year.
The hybrid service combines investment modelling technology with the personal relationship and judgement of a human adviser.
“Complexity of investing”
“This new service represents our continued effort to lower the cost and complexity of investing by giving investors access to affordable, high-value financial advice,” said Vanguard chief executive, Bill McNabb.
“Demographic and behavioural trends point to an increased demand for advice, and we believe this new service can help more of our clients reach their financial goals.”
Vanguard currently runs the world’s largest fund, the Total Bond Market Index Fund, which recently took the title from the actively-managed Total Return Fund offered by PIMCO.
The ‘robo-adviser’ concept has been around in the US for almost a decade and the country has a growing number of online platforms offering the service.
Stockbroking firm Numis argued in a note last week that the rise in robo-advice should not be ignored by advisory firms.
Vanguard’s Personal Advisor Services, which targets the baby boomer generation, charges 0.3% of a client’s managed assets per year.
In the initial stages, clients and advisers work together to create a financial plan before computerised asset allocation is used to build a portfolio, which the advisers monitor and rebalance as necessary.
Intermediaries are also available via phone or videoconferencing to help clients make decisions.
Clients can log onto their personalised profiles to check their performance and receive recommendations from advisers.
“Emotional circuit breaker”
Head of the new service, Karin Risi, said: “We value the role that an adviser plays in helping our clients achieve better results. In fact, Vanguard research quantifies the key role an adviser plays in constructing a portfolio and serving as a behaviour coach.
“In particular, an adviser can act as an emotional circuit breaker during periods of market volatility, make adjustments to a financial plan when a client’s financial situation changes, and counsel clients on other financial issues.”
The US-based firm is currently moving clients from its wealth manager, Vanguard Asset Management Services, to the new Personal Advisor platform in a bid to simplify its different advisory services.
According to research released last month, financial advisers will be the ‘biggest losers’ following the rise in digital technology.
