Go to Jeff Salisbury LWGate Home Page.From: "Porter, Jim R" <jrporter@switch.com>
Subject: RE: Vanguard advisory service
Date: Wed, 13 May 1998 16:08:11 -0400
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John, perhaps I'm biased, but that sounds like a lot of money for this service. I agree with your concern -- you may interpret a question in a way that doesn't correspond with their interpretation, and this could affect the answers. I'm not making a specific recommendation, but I'll tell you what I did. I contacted American Express IDS and got a similar service for about half of that price. But I got to meet face-to-face with a rep, so we could discuss the nuances of the questions. I think talking through the questions with someone is mandatory. A hypothetical example: if you are asked to rate your tolerance for investment risk on a 1-to-10 scale, how could you know that your answer of (let's say) "5" means what they think it should mean? What was involved? Many, many questions. I was starting to wonder what I was paying for, because it seemed like I was doing all the work. But that's what has to be done in order to come up with sound, tailored recommendations, and I'm glad that they asked all those things. To name but a few: when do you want to retire, how much money do you want to spend per year in retirement, do you have interim savings goals (how much do you need and when will you need it), how much do you expect your salary to increase per year, how much do you think inflation will be, how many years to you want to finance your retirement for (do you want to be prepared to live to 90?), what kind of disability insurance do you have, etc.,etc. Now, I knew up front that IDS will recommend their own funds and to avoid any hard feelings I told the rep up front that as far as I was concerned, I was paying only for the financial plan and their recommendations, and that I wouldn't feel obligated to implement any part of the plan through IDS. What I got back was about 60 pages of relevant analysis, naturally filled with charts and graphs, that made specific recommendations that should help us reach our goals. Not only do I think it was money well-spent, but just going through the exercise forced us to more closely examine some of our longer-term goals that were not well defined. I'll close by saying that instead of trying to get answers to the questions you raise (and they are certainly good ones), meet with someone _in person_ and just avoid having to wonder if your answers will be interpreted correctly, as well as having the opportunity to raise any specific concerns you may have that, for whatever reason, didn't happen to find their way on to a preprinted questionnaire. I don't think you'll have to spend any more than what Vanguard is charging for a what may be a completely computerized service. Best of luck. > -----Original Message----- > > Date: Tue, 12 May 1998 21:46:18 +0900 (JST) > From: jdennis@po3.nsknet.or.jp (John D. Dennis) > Subject: Vanguard Pers-fin Advisory Service > > Vanguard has recently introduced a personal financial advisory service. > For > a one time fee of $500 they'll review your investment portfolio, your > retirement plan, etc. I realize this is new, but has anyone had any > experience with this service? I called them, and now a 20 page > questionnaire is apparently on its way to me. I'm thinking there may be > different ways to fill out this form, and that some answers may "place" me > in a category which may not be appropriate--does anybody have any > suggestions for what the "key" questions might be? Or, how to best avoid > being pigeon-holed by a few of your answers and having the rest ignored? > Also, regarding this or other such "services," what are the do's or > don't's > or other pros or cons to keep in mind? > - -
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