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Vanguard Vanguard Digital Advisor is a powerful automated trading platform for comprehensive portfolio management and retirement planning guidance. Vanguard's ETFs offer some of the lowest expense ratios compared with competitor platforms.
Business Insider compared Vanguard Digital advisor to the best robo-advisors and found it an industry leader for retirement products.
Introduction to Vanguard Digital Advisor
Vanguard Vanguard Digital Advisor has long been a behemoth in the online brokerage and trading arena, providing holistic retirement planning solutions for all kinds of investors.
Automated Investing with Vanguard Digital Advisor provides traders with a diversified portfolio of Vanguard ETFs and mutual funds.
Some standout tools and features include ongoing account maintenance, automatic rebalancing, tax-loss harvesting, debt payoff features, and a goal optimizer tool. Digital Advisor can also connect to non-Vanguard accounts.
Vanguard Digital Advisor is best for retirement-focused investors who like having their portfolios managed for them. Although non-retirement accounts may benefit from the platform's suite of robust trading tools and financial planning resources, most of Vanguard's most notable features are centered on retirement planning.
If you're a beginner or passive investor looking to open a regular individual or joint brokerage account for non-retirement purposes, a different automated trading platform with a lower account balance — such as SoFi®or Fidelity — is a better option.
How Vanguard Digital Advisor Works
When it comes to account types, Vanguard Digital Advisor manages the following:
- Individual or joint tenants with rights of survivorship (JTWROS)
- Traditional IRAs
- Roth IRAs
- Rollover IRAs
- SEP & SIMPLE IRAs
- Trusts
- Vanguard-record-kept 401k plans
Though Vanguard Digital Advisor only manages these accounts, the automated advisor lets you connect other Vanguard and external accounts to generate more accurate goal growth projections.
Vanguard Investment Options
You can choose your preferred Vanguard ETFs and mutual funds to include in your Digital Advisor portfolio. Here are your investment options:
- All index investment options: Low-cost Vanguard ETFs that track the broad US and international stock and bond markets. Includes VTI, BND, BNDX, and VXUS.
- Active/index investment option: Active ETFs and mutual funds with increased risk and advisory for the possibility of a higher return. Includes VTI, VHCAX, VZICX, BNDX, VAIGX, and more.
- ESG investment option: Pre-screened ESG stock and bond funds defined by third-party index providers that encourage a risk and reward balance. It includes VCEB, ESGV, VSGX, and BNDX.
Vanguard Fees
Vanguard Digital Advisor has a $100 minimum balance requirement, with advisory fees ranging from 0.11% - 0.20%, depending on the assets in your account.
You'll also pay $25 for each Vanguard Brokerage account and each Vanguard mutual fund and this is only applicable for clients who do not opt-in for e-delivery.
Vanguard ETFs offer some of the lowest expense ratios in the industry. Mutual funds generally have higher expense ratios. The following Vanguard funds are eligible to be added to your Vanguard Digital Advisor account:
- Vanguard Total Stock Market ETF (VTI): 0.03% expense ratio
- Vanguard Total International Stock ETF (VXUS): 0.08% expense ratio
- Vanguard Total International Bond ETF (BNDX): 0.07% expense ratio
- Vanguard Advice Select Dividend Growth Fund (VADGX): 0.46% expense ratio
- Vanguard International Core Stock Fund Admiral Shares (VZICX): 0.38% expense ratio
- Vanguard ESG U.S. Stock ETF (ESGV): 0.09% expense ratio
Keep in mind that separate from Vanguard Digital Advisors required account minimum, certain mutual funds require their own investment minimum. For example, VZICX has a minimum of $50,000 to invest.
Note: Expense ratios above accurate as of 12/18/2024.
Pros and Cons of Vanguard Digital Advisor
Vanguard Digital Advisor Pros
- Comprehensive financial planning and portfolio construction
- Vanguard ETFs and mutual funds available
- Retirement-specific financial planning tools and debt payoff calculators
- Tax-loss harvesting available
- Can connect to non-Vanguard accounts
Vanguard Digital Advisor Cons
- Can't hand-pick individual stocks or bonds
- Education savings accounts are not available
Vanguard Digital Advisor Trustworthiness
Vanguard has a D- rating with the Better Business Bureau, the lowest possible rating. The rating is due to multiple unresolved complaints filed against the business. But as mentioned on the BBB website, the bureau's ratings don't ensure a company will be reliable or perform well.
In November 2023, an investor lawsuit was allowed to continue against Vanguard regarding allegations against the company's handling of target-date funds and a potential breach of fiduciary duty. The plaintiffs filed the original lawsuit in March 2022. Vanguard associates attempted to dismiss the lawsuit, but a federal judge in Philadelphia threw out that petition.
In April 2023, a former Vanguard employee filed a lawsuit against the firm for alleged gender, age, and religious discrimination that led to the eventual firing of the ex-employee. Joseph Rothman was aged 57 at the time of firing, and believes his age and Jewish faith to be part of the reason for his sudden termination. Vanguard has so far denied these allegations.
In 2022, Vanguard agreed to pay a $6.25 million settlement with Massachusetts Secretary of State William Galvin for allegedly failing to inform target-date fund investors of big tax bills.
Vanguard Digital Advisor Account Setup and User Interface
When determining how to design your portfolio, Vanguard uses its assessment tool to measure your risk profile (the amount of risk you're willing to take on with your portfolio).
Its risk tolerance measurement falls into five different risk attitudes: Very conservative, conservative, moderate, aggressive, and very aggressive.
Regarding navigability, the Vanguard Digital Advisor interface is quite simple to use. It lets you view progress toward financial goals (e.g., retirement) and offers a financial outlook feature that shows you how much you'll need to invest to meet those goals.
Vanguard Digital Advisor vs. Other Robo-Advisors
Let's see how Vanguard Digital Advisor compares to other top robo-advisors
Vanguard Digital Advisor vs. Fidelity Go
Vanguard Digital Advisor and Fidelity Go create and manage personalized portfolios for you. The two differ, however, in minimum account requirements, fees, and investment choices.
Fidelity Go has no minimum requirement, and you won't have to pay any advisory fees if you have a balance below $25,000 (a 0.35% fee for balances over $25,000).
With Vanguard Digital Advisor, you'll run into a $100 minimum and annual advisory fee between 0.11% to 0.20%. In addition, Vanguard provides both low-cost ETFs and mutual funds, while Fidelity Go invests only in mutual funds. So, Fidelity Go may be the better option for mutual fund investing as it does not charge expense ratios, rebalancing fees, trading fees, or transaction fees.
In contrast, Vanguard Digital Advisor best suits retirement investors interested in the buy-and-hold strategy. Moreover, Vanguard is the way to go if you're looking to invest in ETFs.
Vanguard Digital Advisor vs. Wealthfront
Wealthfront Investingis another powerful robo-advisor offering low-cost portfolio management and ESG funds that are great for passive and retirement-focused investors..
Wealthfront could be a good option if you're primarily searching for automated advice across hundreds of investment fund options, including crypto trusts.
Vanguard Digital Advisors offers robust retirement planning resources and investment strategies. Investors specifically focused on retirement savings may prefer Vanguard Digital Advisor's holistic and low-cost planning solutions for meeting long-term goals.
Why You Should Trust Us: How We Reviewed Vanguard Digital Advisor
We examined Vanguard Digital Advisor using Business Insider's rating methodology for investing platforms to compare pricing, account flexibility, ethics, security, and overall customer experience when reviewing investing platforms. Platforms are given a rating between 1 and 5.
Investing platforms offer multiple assets, trading tools, fees, and other resources. Some platforms are better for more advanced or active investors, while others may better suit beginners and passive investors. Vanguard Digital Advisor was evaluated, focusing on how it performed in each category.
Business Insider's Overall Vanguard Digital Advisor Rating
| Feature | Insider rating (out of 5) |
| Fees | 4.25 |
| Investment selection | 4.50 |
| Access | 4.16 |
| Ethics | 4.50 |
| Customer service | 4.75 |
| Overall score | 4.43 |
Vanguard Digital Advisor FAQs
Vanguard Digital Advisor personalizes your investment portfolio by assessing your responses to the introductory questionnaire about your goals, risk tolerance, and time horizon. Based on these answers, Digital Advisor creates a custom, diversified portfolio of Vanguard ETFs and mutual funds. Portfolios are continuously monitored and automatically rebalanced to maintain the target asset allocation.
You can get comprehensive, personalized retirement planning with Vanguard Digital Advisor. Many of the best tools and features — including Vanguard ETF portfolios and rebalancing mechanics — center on retirement planning and goal-building. Retirement-focused investors can benefit from Vanguard's holistic approach to finances to set realistic retirement savings goals and develop strategies.
Like all Vanguard services, Vanguard Digital Advisor adheres to strict security protocols to ensure that clients' investments and personal information are secure. Security and protection measures include two-factor authentication, advanced encryption technologies, and fraud monitoring. Investments are covered by SIPC insurance.
