Vanguard's white-hot 'hybrid robo' just added $4 billion in three months -- a heat that may cast a chill on 'pure' robos
Now at $21 billion, Vanguard Personal Advisor Services is cannibalizing as a segmentation strategy and emphasizing new technology that edges it toward a more robo-centric, less call center-oriented model
Related Moves
Alan Moore is the No. 2 busiest man in the RIA business and he just convinced the No. 1 busiest man to budget $200,000 to hire a 'rockstar' to replace him
Alan Moore is CEO of both XY Planning Network and AdvicePay -- and he has three young kids; Michael Kitces agreed to let him hire a full-time replacement CEO for AdvicePay -- with some giant reqirements for the new exec.
February 14, 2023 at 3:15 AM
RIA Quick Takes: Orion deepens DFA embrace by using it as portfolio manager-inside-ETF ~ Hardship withdrawals surge at Vanguard and Fidelity ~ Schwab hires 400 ~ Fidelity flips six funds into ETFs ~ Kitces makes list before Christmas ~ Amit Dogra has $1 billion of good news from his new Portland gig
Americans are struggling, though jobs are plentiful; Larry Fink's ESG zeal costs BlackRock another client, just as the Vatican issues ESG guidance; UBS says we didn't like you anyway to mass affluent and Michael Kitces and Craig Iskowitz join forces.
December 3, 2022 at 3:16 AM
UBS bets its 'wealth' future on ex-Schwabbie Naureen Hassan, a corporate digital A-lister, who analysts give a fighting chance to transcend PaineWebber's ossified culture
Still a $2-billion cash-flow cow, the Swiss bank's 6,000-broker, US-based wirehouse is milking aging broker relationships with aging investors but needs a new kind of human presence, empathy, mindset and smarts to draw in Gen Z.
July 16, 2022 at 1:35 AM
Five RIA Doubletakes: An RIA-only law firm breaks away • Kitces launches picker of 'best of breed' RIA software bundles • Vanguard targets 2070 just as media targets TDFs • SEC fishing for RegBI Scofflaws, including RIAs • CFP appoints first African-American chair
RIA Lawyers will reject RIA custodians• Kitces Nascar montage is now interactive and helpful • Vanguard's super long TDF draws critics• SEC supply lines are stretched with new battle front • Kamila Elliot is ex-DFA, diverse and calling CFP shots
January 12, 2022 at 3:13 AM
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Kitces.com
Consulting Firm
Top Executive: Michael Kitces
Stephen Winks
Vanguard Personal Advisor Services (VPAS) at 30 bps is a wakeup call for the brokerage industry as it transcends base point advisory services at a lower cost. This is the price Wall Street pays for not creating large scale institutionalized support for advisory services (expert authenticated advice in the best interest of the investing public or professional standing of its brokers entailing fiduciary duty). Vanguard is just a step away from supporting expert individualized advice which recognizes fiduciary duty. The difference between VPAS at 30 bps and retail brokers at 120 bps is now the revenues required to support large scale institutionalized support for fiduciary standing of brokers, if brokers are to actually act in the consumer’s best interest. Broker/dealers now face the very real characterization of being a high cost low value added alternative retail brokers. Given John Stumpt, CEO of Wells Fargo Bank (a Hathaway Berkshire Company), voiced his support of “robo technology” and the support of Jamie Dimon (CEO of JP Morgan Chase) and John Theil (President of Merrill Lynch) of fiduciary duty, it seems like the brokerage industry’s denial of the same consumer protections for “retail investors” accorded to all other investors is not sustainable. Prudent process, advanced technology and a far more modern approach to portfolio construction that give advisors control over their value proposition, cost structure, margins and professional standing is coming and it will not be from small undercapitalized novices in advisory services.
Large scale institutionalized support for fiduciary duty in the consumer’s best interest will prevail. It is a shame the brokerage industry is not the catalyst for innovation but in opposition finds itself vulnerable.
Consumers get it and advisors understand market share is at play.
SCW
Stephen Winks
Paladin Registry
A major brand name helps. So does offering integrated planning and investment advisory services for 30 bps. And, don’t forget investors have easy online access to their data and a financial advisor of dubious quality. This is a formula for success that cannot be duplicated by many firms starting with an exceptional brand name and a second revenue stream when clients invest in Vanguard products. This should be an Internet marketing wake-up call for financial advisory firms. As more investors use the Internet to find advisors (Robo, Virtual, Traditional) they need to develop effective digital marketing strategies and productive of webs. They can learn a lot from the better Robos starting with Vanguard.
