Vanguard Digital Advisor review

A prime candidate for retirement investors, but prepare for a $3,000 minimum.

As a well-established brokerage, Vanguard boasts high-quality funds and a platform geared towards retirement investments. But its fees are so-so, and its minimum deposit requirement is higher than most.

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What we think of Vanguard Digital Advisor

Those who want to build a retirement nest egg without the hassle of hands-on portfolio management will want to check out Vanguard Digital Advisor. This robo-advisor offers both traditional and Roth IRAs, and its signup questionnaire is inarguably geared towards establishing retirement goals.

That said, if you wanted to try a robo-advisor and didn’t necessarily want to open a retirement account, Vanguard’s Digital Advisor can accommodate. You’re welcome to open a taxable account, and the service is designed to manage your investments for you no matter your financial goals.

Its primary drawbacks? It has a $3,000 minimum deposit requirement, and it doesn’t offer tax-loss harvesting.

The lack of tax-loss harvesting isn’t the end of the world: This feature is only helpful for investors with an annual income above $40,000 aiming to reduce their long-term capital gains tax. But it could be a deterrent — especially since competitors like Betterment and Wealthfront offer it.

How does Vanguard Digital Advisor work?

Vanguard’s Digital Advisor is the automated investing arm of the Vanguard brokerage. It’s no different than most robo-advisors on the market — you answer questions about your financial goals, and the service uses your answers to pull together an investment portfolio.

You’ll need at least $3,000 to open an account, and once funded, Vanguard purchases investments on your behalf and monitors your investments to make sure they stay in line with your goals. When you open an account, you have taxable, traditional and Roth IRAs to choose from.

Vanguard Digital Advisor fees

Vanguard’s pricing is fairly straightforward — investors can expect to pay 0.15% to 0.20% annual fee for its robo-advisor service. This fee is charged to manage your investments and represents a portion of your overall portfolio holdings. Vanguard also imposes a $3,000 minimum, which could be a barrier to entry for new investors.

Are Vanguard’s Digital Advisor fees competitive? Yes and no. Its annual fee isn’t outrageously high — but it’s also not the cheapest service on the market. Major competitors Betterment and Wealthfront both charge more at 0.25% per account. But services like M1 Finance and SoFi don’t have any management fees.

It’s worth noting that Vanguard offers a free trial in the form of a 90-day advisory fee waiver for those who sign up for its Digital Advisor. You’re not locked in to any form of contract and are free to unenroll at any time.

Pros and cons

This robo-advisor’s healthy balance of benefits and drawbacks means you have plenty to consider before you sign up.

Pros

  • Free trial. Explore Vanguard’s robo-advisor free of charge for up to 90 days.
  • Vanguard ETFs. Gain direct access to high-quality low-fee Vanguard ETFs.
  • Hands-free investing. Let Vanguard handle the nitty-gritty of managing your portfolio for low-maintenance investing.

Cons

  • $3,000 minimum. You’ll need to deposit at least $3,000 to open an account.
  • No tax-loss harvesting. Vanguard Digital Advisor isn’t equipped to offer tax-loss harvesting — a perk several of its competitors offer.

What do current users say?

Vanguard receives an A- rating from the BBB as of June 2021, though feedback from customers on the site is less positive. It’s received 154 complaints in the past three years and receives a 1.1 out of 5 star rating after 30 customer reviews.

Its Trustpilot feedback is limited but lukewarm — it maintains a TrustScore of 2.6 out of 5 after seven reviews. It also has 20 complaints to its name with the Consumer Financial Protection Bureau.

Negative reviews cite delayed transfer requests and frustrating experiences with slow-to-respond customer support. Positive feedback frequently mentions the informative, educational content offered through Vanguard’s website. Redditors praise the platform’s low fees but complain of its high minimum deposit requirement and clunky user interface.

How do I get started?

To sign up with Vanguard Digital Advisor, you’ll need to create an account by entering your email address and password. The application process only takes a few minutes, and you’ll need to be prepared to supply some personal information, including your full name, date of birth and Social Security number.

You’ll also need to fill in some information about your finances and investment goals, including your annual household income, your current savings, how much you plan to contribute towards your retirement and current household spending habits.

Next, Vanguard will assess your risk tolerance by presenting you with a handful of scenarios in which you’ll be asked to indicate how comfortable you are with the potential losses and gains presented. Vanguard will use your responses to determine your risk tolerance strategy.

  1. Select Get Started and Create an Account.
  2. Enter your full name, date of birth and email address.
  3. Create a username and password.
  4. Review Vanguard’s Terms of Use and select Agree & Continue.
  5. Answer Vanguard’s financial questionnaire and risk tolerance assessment.
  6. Review your personalized Retirement Outlook and select Continue.
  7. Select the type of account you’d like to open.
  8. Enter your Social Security number, residential address and phone number.
  9. Complete the application process by funding your account.

Alternatives to Vanguard Digital Advisor

The Vanguard Digital Advisor is a solid play as far as robo-advisors are concerned. But it has a few shortcomings that may be deal breakers for some investors. If that’s the case, you’ll want to explore your Digital Advisor alternatives.

If you’re seeking an account with a more manageable minimum deposit requirement, the $5 minimum for an Acorns account may pique your interest.

Or maybe you’d prefer something that gives you a little more autonomy over your investments? If that’s the case, check out M1 Finance: It lets you handpick slices of your portfolio and adjust your asset allocation strategy on the fly.

Either way, you’ll want to review your platform options by comparing features, fees and investor feedback to find the robo-advisor best suited to your needs.

Name Product Available asset types Annual fee
Acorns
ETFs
$1 per month
Invest your spare change. Anyone can grow wealth.
SoFi Automated
Stocks, Bonds, ETFs
$0 per month
Put your money to work. Let SoFi build and manage a portfolio for you. Pay zero SoFi management fees.
Titan
Stocks
1% on balances of $10,000+
While not technically a robo advisor, Titan offers a hands-off investment platform that seeks to outperform the market.
Betterment
ETFs
0.25% on balances up to $99,999

0.4% on balances of $100,000+
Betterment's automatic investment site aims to improve your returns and support good financial habits with passive investing and financial planning support.
Stash Invest
Stocks, ETFs
$1 per month
Stash is more than an investment app. You’ll have access to tools that can help you become a confident investor.
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Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

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