Is Vanguard Digital Advisor® worth it?

Vanguard Digital Advisor® is an excellent low-frills robo-advisor that can help you put your investments on auto-pilot with top quality Vanguard ETFs and mutual funds. If you have at least $100 to invest and want a passive way to invest, Vanguard Digital Advisor® can be well worth it.

What are the requirements to use Vanguard Digital Advisor®?

To use Vanguard Digital Advisor®, you'll need a Vanguard brokerage account with at least $100 (or you can open a new one). You need to be a United States resident and at least 18 years old in most states.

Vanguard Digital Advisor® Review: A Low Costs Champ

Vanguard Digital Advisor® offers hands-free investing at an affordable price. With this robo-advisor, you have access to Vanguard's popular index funds without the hassle of creating your own portfolio strategy. Keep reading for our full Vanguard review.

Vanguard Digital Advisor® could be a good fit for you if:

You want a robo-advisor from a broker with a stellar reputation.
You're looking for a robo-advisor with low fees.
You're interested in tax-loss harvesting.

Ratings Methodology

Vanguard Digital Advisor®

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Our Rating:

Rating image, 4.5 out of 5 stars.

4.5/5

Bottom Line

With a low fee structure, this to-the-point platform is a great option for investors with at least $100 to start.

Fees:

0.20% to 0.25% fee

Account Minimum:

$100

Learn More for Vanguard Digital Advisor®

On Vanguard Digital Advisor®'s Secure Website.

Alternatives to consider

We believe in comparing options before committing. Here are two robo-advisors we recommend highly for you to compare side by side with Vanguard Digital Advisor® when deciding which robo-advisor is right for you:

Offer	Stash	M1 Finance
Rating	Rating Rating image, 4.0 out of 5 stars. 4.0/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	Rating Rating image, 4.5 out of 5 stars. 4.5/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Commissions	Commissions None	Commissions No commission, trading, or management fees for self-directed accounts. Platform fee of $3 monthly.
Account Minimum	Account Minimum $0	Account Minimum $100 for individual account, $500 for retirement account
Learn More	Learn More for Stash On Stash's Secure Website. Read Full Review	Learn More for M1 Finance On M1 Finance's Secure Website. Read Full Review

M1 is not a robo-advisor and only offers self-directed brokerage services.

Full Vanguard Digital Advisor® review

Vanguard Digital Advisor® is set up for hands-off investors seeking a low-cost investment solution. In this Vanguard Digital Advisor® review, we'll take a closer look at the pros and cons and how the robo-advisor works so you can decide if it's a fit for you.

Our ratings methodology

At Motley Fool Money, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and account types; however, we also take into account features like research, education, tax-loss harvesting, and highly rated mobile apps. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.

See our full methodology here: Ratings Methodology

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Top perks

Low fees

Vanguard Digital Advisor®'s all-in costs are 0.15% for investors who choose an all-index fund investment portfolio or 0.20% for the active/index option that combines Vanguard ETFs and actively managed mutual funds. Vanguard Digital Advisor®'s costs are among the lowest we've seen among robo-advisors. New members also get no advisory fees for the first 90 days.

Experienced index fund investments

Vanguard pioneered the passive index fund over 45 years ago with the idea that you don't need to do anything extraordinary (or pay extraordinary fees) to achieve sound investment results. Vanguard has been able to deliver on this approach with its popular index funds.

What could be improved

No access to real-live advisors

If you want access to a real-live investment advisor or personal financial planner, you may be better off with one of Vanguard's more feature-packed competitors. Several other robo-advisors have human advisors, though they're generally far more expensive than Vanguard Digital Advisor®.

$100 minimum investment

Vanguard Digital Advisor® requires a $100 minimum investment. This is not one of the highest minimum amounts compared to some robo-advisors, but it's higher than some. Several other top robo-advisors require no minimum investment.

How it works

How Vanguard Digital Advisor® works: To enroll in Vanguard Digital Advisor®, you'll need a Vanguard brokerage account with at least $100 in it that is either a standard individual (taxable) account or a traditional or Roth IRA.

Once you enroll in the all-index option, Vanguard will invest your assets in a portfolio of four different Vanguard exchange-traded funds (ETFs). Allocations are custom-matched to your age, risk tolerance, and other factors. Vanguard Digital Advisor's four ETFs are:

Vanguard Total Stock Market ETF
Vanguard Total International Stock ETF
Vanguard Total Bond Market ETF
Vanguard Total International Bond ETF

Vanguard also offers an active/index investment option and an ESG investment option. These offer different funds and charge slightly different fees, though never more than 0.20% annually.

Minimum investment

Vanguard Digital Advisor® has a $100 minimum initial investment, which is higher than some other robo-advisors we've seen. Several of Vanguard's competitors have no minimum investment.

Services offered

Vanguard Digital Advisor® is just a robo-advisor in the purest sense of the word. It offers some excellent automated features like tax-loss harvesting and automatic rebalancing. Competitors offer services like virtual meetings with financial planners, and other types of financial counseling. But, like most Vanguard products, Vanguard Digital Advisor® isn't intended to be a full-featured robo-advisor. For a bare minimum of expense, Vanguard will construct a portfolio of basic index funds and/or mutual funds that will be a good match to your investment needs.

That said, Vanguard also offers several personal finance resources that clients might find valuable. It has a debt payoff calculator tool that can help customers get on the path to paying off credit card and other types of debt. In short, Vanguard Digital Advisor® aims to keep investing simple, but focuses on its clients' overall financial well being.

Retirement

In addition to standard individual and joint brokerage accounts, Vanguard Digital Advisor® is available in both traditional and Roth IRA accounts for retirement savers who want to put their investment strategies on auto-pilot.

Vanguard Digital Advisor® doesn't only consider your age, it also uses other factors to construct your portfolio, like your personal risk tolerance. Essentially, Vanguard Digital Advisor® creates a custom-allocated portfolio of Vanguard index funds and mutual funds, which are known for their low costs.

Access to financial advisors

Vanguard Digital Advisor® doesn't include access to human financial advisors, which isn't so surprising considering the ultra-low fee structure. Some of Vanguard's competitors offer financial advisors, typically with a somewhat higher fee structure or a premium membership.

Pricing and fees

Vanguard is known for its low-cost investment options, and Vanguard Digital Advisor® is no exception. The index-only option has a 0.15% advisory fee, which means that on a $10,000 investment portfolio, you'll pay $15 in fees. There's an ESG portfolio option with a 0.15% management fee, as well as a portfolio that combines index funds and some of Vanguard's mutual funds for a 0.20% advisory fee.

TIP

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Customer service

Vanguard offers customer service by phone Monday-Friday from 8 a.m. to 8 p.m. EST. While robo-advisory clients tend to need less support than standard brokerage clients, some of Vanguard Digital Advisor®'s competitors offer 24/7 phone support, as well as app-based, email, or other forms of customer service. However, it's worth noting that Vanguard has a user-friendly app that allows for easy account management and has a 4.7 out of 5-star rating in the App Store.

FAQs

Vanguard Digital Advisor® is an excellent low-frills robo-advisor that can help you put your investments on auto-pilot with top quality Vanguard ETFs and mutual funds. If you have at least $100 to invest and want a passive way to invest, Vanguard Digital Advisor® can be well worth it.
To use Vanguard Digital Advisor®, you'll need a Vanguard brokerage account with at least $100 (or you can open a new one). You need to be a United States resident and at least 18 years old in most states.

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