VANGUARD DIGITAL ADVISOR®

Frequently asked questions

Learning the basics

It’s a robo-advisor that you interact with completely online. It’s easy to use and can help you:

 

  • Design your own vision of financial independence—and create a long-term savings plan to achieve it.
  • Reach your goals. Retirement is only the beginning. You can include a new home, a dream vacation, or any other goal that’s important to you.
  • Reduce or eliminate debt.
  • Improve your chances for investment success. Digital Advisor will professionally manage your money according to the timeline tied to each of your goals, while also focusing on your tolerance for risk.

Start by setting your own personal retirement goal (for example, when you want to retire and how much you want to have in savings). Then add any goals you want to achieve before you retire—like taking a dream vacation or buying a new home. Digital Advisor will create a plan just for you. Your individualized plan will:

 

  • Incorporate your savings, income, marital status, time horizon, and comfort with risk.
  • Include a broadly diversified mix of investments designed to help you meet all your goals—using the funds available in your retirement plan.
  • Reduce risk as the timeline for your goals approaches.

Digital Advisor will then invest your savings, keep a close eye on your investment mix, and automatically rebalance when needed. As your goals evolve, your plan will too. You can set it and forget it, or set it and check in as often as you want. (You can also keep us updated as your life and goals change.)

 

You’ll get the peace of mind that comes from knowing your money is working hard for you—without all the time and effort it takes to do everything yourself.

Robo-advisor is a term used to describe services like Vanguard Digital Advisor. It’s an online platform that gives you advice and manages your investments automatically. Robo-advisors use complex computer calculations, known as algorithms, to create your investment plan and manage your money.

 

Digital Advisor’s algorithms are based on Vanguard’s 45 years of investment expertise. And they’re used to build a portfolio personalized just for you, monitor your investments, and rebalance them as needed.

 

To learn more, check out our "How Digital Advisor works" video.

Vanguard is one of the most trusted names in financial services. This money management service gives you:

 

  • High-tech financial planning and portfolio construction. You’ll benefit from Vanguard’s practical and time-tested investment strategies: discipline, a long-term focus, low costs, and diversification.
  • The ability to incorporate outside accounts in your goal planning. With this more complete view of your financial picture, Digital Advisor can give you more comprehensive financial projections.
  • Personalized portfolios with an evolving investment mix. A mix of stocks, bonds, and other investments (also known as an “asset mix”) that’s adjusted automatically can help you reach your goals faster and increase your likelihood of investment success.
  • Low fees. The cost of Digital Advisor is about half the industry average.3
  • A focus on building retirement savings. You can also access other important resources that go beyond retirement, including our debt payoff tool.

And Digital Advisor will continue to add new features to help you with your financial planning needs.

To be eligible for Digital Advisor, you must have one of the following:

 

  • $5 or more in your employer-sponsored retirement plan at Vanguard.
  • $3,000 or more in IRAs and taxable accounts—owned individually or as joint tenants with rights of survivorship—at Vanguard.

You must also:

 

  • Be in a retirement plan that offers Digital Advisor.
  • Be a U.S. resident or have an APO/FPO/DPO mailing address.
  • Not be a company insider or control person.

Note: Other eligibility requirements may apply.

Managing your money

Digital Advisor can manage these types of accounts at Vanguard:

 

  • Certain employer-sponsored retirement plan accounts, like 401(k) accounts, with balances of at least $5.
  • Taxable accounts with balances of at least $3,000. These accounts must be owned individually or as joint tenants with rights of survivorship.
  • Traditional, Roth, and rollover IRAs with balances of at least $3,000.

Digital Advisor can’t manage accounts at other financial institutions. But you can link those accounts to Digital Advisor’s financial planning tools. Linking the accounts is free and will:

 

  • Give you a complete view of your investment portfolio and financial progress—all in one place.
  • Let you add outside balances to your retirement goal.

Digital Advisor can manage:

 

  • Your retirement goal, if you plan to retire a year or more from now. Digital Advisor can use money in any account, including money in a 401(k) or an IRA, to fund this goal.
  • Other nonretirement goals—like buying a home, paying for college, or saving for your dream vacation—as long as those goals are at least 18 months away. Digital Advisor will only use your nonretirement accounts to fund these goals. At this time, it only supports nonretirement goals you’d like to achieve before you reach age 59½.

Digital Advisor will calculate:

 

  • A target investment mix for each goal that you set.
  • The current investment mix for each account that support your goals.
  • The adjustments needed to align your current mix to the targets.

Digital Advisor typically checks your investments every day that the market is open. It will automatically rebalance for you whenever your stock and bond holdings have shifted more than 5% from your target investment mix. Shifts like this can happen because of normal market ups and downs, which can cause the value of your stock or bond holdings to change significantly.

 

By rebalancing your portfolio, Digital Advisor makes sure that the mix of investments in your portfolio stays on target.

Understanding fees

You'll pay no advisory fees for the first 90 days.1 After that, you’ll pay about $15 a year for every $10,000 we manage for you.2 That’s about half the industry-average cost for advice.3

 

The fee won’t come out of your paycheck. And you won’t pay out of pocket. Digital Advisor will deduct the fee quarterly from the investments we manage in your 401(k) account.

There are no other fees to use Digital Advisor. But whether you use Digital Advisor or not, you will have to pay expense ratios for the funds you invest in. The expense ratio covers the cost of running the fund and is taken from the fund’s earnings. So you don’t pay it out of pocket. (Keep in mind that some funds may charge other fees as well.)

 

To help keep costs down, Digital Advisor generally recommends using low-cost Vanguard funds. To learn more, check out our video on low-cost investing.

No. There are no penalties or fees to unenroll. And there’s no time commitment, either. Stopping your Vanguard Digital Advisor service at any time is as easy as logging in to your account and clicking a button.

Exploring all your options

Yes! Digital Advisor is our advice and money management service—available entirely online. But you may also be eligible for these other services:

  • Vanguard Personal Advisor®. This premium advice and money management service combines digital advice with a human touch. Our advisors will listen to you and help you identify your goals. Then they’ll build a plan just for you and manage your money to keep you on track. And if you have questions or want to make changes, our advisors are always ready to help. This service is available to investors with at least $250,000 in their retirement account.4
  • Vanguard Situational Advisor™. This advice-only service connects you with an advisor when you need one. You can get help with any financial situation—from buying a home to planning for retirement, and everything in between. We’ll give you advice that you can put into action.

Take a look at a side-by-side comparison of all our services.

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Whenever you invest, there's a chance you could lose the money.

Vanguard Digital Advisor's services are provided solely by Vanguard Advisers, Inc. (VAI), a registered investment advisor. Please review the Vanguard Digital Advisor and Personal Advisor brochure for important details about these services. Vanguard Digital Advisor’s and Personal Advisor's financial planning tools provide projections and goal forecasts, which are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

Vanguard Situational Advisor is provided by Vanguard Advisers, Inc. (VAI), a registered investment advisor. Eligibility restrictions may apply.

1Eligibility periods for fee waivers are tied to the enrollment of ...  Read more