Vanguard Digital Advisor uses an algorithm to create and manage a personalized portfolio centered on Vanguard ETFs.
Vanguard; Insider
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Vanguard Digital Advisor® is an automated investing service that manages your portfolio for you.
The service has a $3,000 minimum and 0.20% annual net advisory fee.
Vanguard Digital Advisor centers its personalized portfolios on Vanguard ETFs®.
Vanguard Digital Advisor
Bottom line: Vanguard Digital Advisor is best for passive investors looking for personalized, automated investment portfolios. However, its account minimum is on the higher side, and the platform isn’t the best option for those in search of features like tax-loss harvesting.
Overall rating
FeatureInsider rating (out of 5)Fees4.25Investment selection4.50Access4.16Ethics4.50Customer service4.75Overall score4.43
Is Vanguard Digital Advisor right for you?
Vanguard has long been a behemoth in the online brokerage and trading arena. The investment platform offers a range of wealth-building products, including self-directed brokerage, retirement, and automated accounts.
Among those is its Vanguard Digital Advisor automated service. This account — unlike its hybrid Vanguard Personal Advisor Services account — uses an algorithm to create and manage a personalized portfolio that’s centered on Vanguard ETFs on your behalf.
If you’re new to investing or simply prefer to take the automated route, keep reading to see if Vanguard Digital Advisor is right for you.
Vanguard Digital Advisor vs. Fidelity
Vanguard Digital Advisor
Fidelity Investments
Min. Investment
$3,000
Min. Investment
$0
Fees
0.20% (annual net advisory fee)
Fees
0%, $3/month, or 0.35%/year
Investment choices
Centered on Vanguard ETFs
Investment choices
Fidelity Flex mutual funds
Vanguard Digital AdvisorFidelity
Vanguard Digital Advisor and Fidelity Go both create and manage personalized portfolios for you. The two differ, however, when it comes to minimum account requirements, fees, and investment choices. There’s no minimum requirement with Fidelity Go, and you won’t have to pay any advisory fees if you have a balance below $10,000.
With Vanguard Digital Advisor, on the other hand, you’ll run into a $3,000 minimum and 0.20% annual net advisory fee regardless of your balance. In addition, Vanguard uses its own ETFs while Fidelity Go relies on its own mutual funds. While Vanguard’s ETFs have expense ratios (costs), Fidelity Go’s mutual funds don’t.
Vanguard Digital Advisor vs. Wealthfront
Vanguard Digital Advisor
Wealthfront
Min. Investment
$3,000
Min. Investment
$500
Fees
0.20% (annual net advisory fee)
Fees
0.25% (0.06% to 0.13% for fund fees)
Investment choices
Centered on Vanguard ETFs
Investment choices
ETFs, index funds, Grayscale Bitcoin Trust, and Grayscale Ethereum Trust
Vanguard Digital AdvisorWealthfront Investing
Wealthfront’s advisory fee is slightly higher than Vanguard Digital Advisor’s, but it has a lower minimum requirement. This investment app could be a good option if you’re primarily in search of automated advice. Plus it offers a wider range of portfolio features, including socially responsible portfolios, tax-loss harvesting, direct indexing, and more.
However, Vanguard is a better option for investors interested in opening other self-directed, wealth-building accounts. While its robo-advisor strictly serves hands-off investors, you can also dabble in other DIY accounts if you choose, thanks to Vanguard’s expansive account selection.
Vanguard Digital Advisor
Ways to invest with Vanguard Digital Advisor
Automated investment management
Vanguard Digital Advisor is best for passive investors who like the idea of having their investments managed for them. The automated advisor creates a portfolio that aligns with your investment timelines, risk tolerance, and goals.
When it comes to account types, Vanguard Digital Advisor manages the following:
Individual or joint tenants with rights of survivorship (JTWROS)Traditional IRAsRoth IRAsRollover IRAsEligible Vanguard-administered 401(k) retirement accounts
Though Vanguard Digital Advisor only manages these types of accounts, the automated advisor also lets you connect other Vanguard and external accounts to generate more accurate goal growth projections. If you’re wondering which instruments the automated platform uses, though, it centers your portfolio on a mix of broadly diversified Vanguard ETFs compatible with your risk tolerance. More on that below.
Investment choices
Vanguard Digital Advisor’s ETF investment selection includes the following:
Vanguard Total Stock Market ETF (0.03% expense ratio)Vanguard Total International Stock ETF (0.07% expense ratio)Vanguard Total Bond Market ETF (0.03% expense ratio)Vanguard Total International Bond ETF (0.07% expense ratio)
Note: Expense ratios above accurate as of 09/07/2022.
Expense ratios represent the annual operating expenses of assets like ETFs and mutual funds. As shown above, you’ll mainly incur a couple of fees: The annual 0.20% net annual advisory fee (estimated) and the expense ratio costs (ranges from 0.03% to 0.07%).
Account setup and user interface
Vanguard asks multiple questions about your investment timelines, risk tolerance, and financial goals when determining how to design your portfolio. The automated advisor also uses an 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.
When it comes to navigability, the Vanguard Digital Advisor interface is quite simple to use. It not only lets you view progress toward financial goals (eg. retirement), but it also offers a financial outlook feature that shows you how much you’ll need to invest to meet those goals.
Vanguard
In addition, the platform allows you to connect external accounts so you can view all of your assets at once.
Is Vanguard Digital Advisor trustworthy?
Personal Finance Insider evaluates company trustworthiness by reviewing each company’s Better Business Bureau profile. Vanguard Digital Advisor is affiliated with Vanguard Advisers, Inc., which doesn’t currently have a BBB profile.
However, Vanguard Marketing Corporation, Vanguard’s affiliated broker-dealer, has an A+ rating with the Better Business Bureau.
But as mentioned on the BBB website, the bureau’s ratings don’t ensure a company will be reliable or perform well. This is why it’s always important to do your own due diligence.
Vanguard Digital Advisor — Frequently asked questions (FAQ)
What is Vanguard Digital Advisor?
Vanguard Digital Advisor is online brokerage Vanguard’s most basic automated investing service. After you answer a series of questions about your financial situation and investing preferences, the robo-advisor creates a self-managing portfolio for you. It mainly uses Vanguard ETFs.
How much does Vanguard Digital Advisor cost?
You’ll need at least $3,000 to set up Vanguard Digital Advisor, and you’ll be responsible for a 0.20% advisory fee.
Can you make money with a robo-advisor?
Yes. You can earn competitive returns while sticking with a risk tolerance, investment strategy, and time horizon that work for you. However, you can also lose money with robo-advisors, as with any investment.
Disclosure: Vanguard Digital Advisor’s services are provided by Vanguard Advisers, Inc. (“VAI”), a federally registered investment advisor. VAI is a subsidiary of VGI and an affiliate of VMC. Neither VAI nor its affiliates guarantee profits or protection from losses.
Vanguard Digital Advisor is an all-digital service. Digital Advisor’s annual net advisory fee is approximately 0.15% across your enrolled accounts for a typical ETF investment portfolio, although your actual net fee will vary depending on the specific holdings in each enrolled account. Vanguard Digital Advisor charges a 0.20% annual gross advisory fee to manage Vanguard Brokerage Accounts. However, we’ll credit you for the revenues that The Vanguard Group, Inc. (“VGI”), or its affiliates receive from the securities in your Digital Advisor managed portfolio (i.e., at least that portion of the expense ratios of the Vanguard funds held in your portfolio that VGI or its affiliates receive). Your net advisory fee can also vary by enrolled account type. The combined annual cost of Vanguard Digital Advisor’s annual net advisory fee plus the expense ratios charged by the Vanguard funds in your managed portfolio will be 0.20% for Vanguard Brokerage Accounts. For more information, please review Form CRS and the Vanguard Digital Advisor brochure.
For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or,if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.Vanguard Marketing Corporation, Distributor of the Vanguard Funds.