Vanguard tests new robo advice tech for planners

Vanguard is closer to launching the robo technology for advisors it has been building for more than a year.

The $6 trillion asset manager is in the testing phase for its new advice software for planners, says Tom Rampulla, managing director of Vanguard's Financial Advisor Services division, who spoke on a webcast with financial advisors July 30. There are approximately two dozen planners testing the technology, he says, and Vanguard has been making new iterations based on feedback over the past six months.

“We built a great platform and we're taking the technology of that platform and re-architecturing it so we can make it available to you, our clients,” Rampulla told advisors

Rampulla first told Financial Planning Vanguard it was building out robo software for advisors last May, citing demand from the thousands of planners who utilize the asset manager’s funds and services. Approximately $2 trillion of Vanguard’s assets stem from financial advisor recommendations, Rampulla said on the call.

Vanguard has two robo advice solutions for clients: Personal Advisor Solutions, which has a 0.30% management fee and offers access to a CFP, as well as its new Vanguard Digital Advisor, which officially launched this year as a purely digital solution with an all-in management fee of 20 basis points.

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Vanguard’s Personal Advisor Services is the largest robo solution in the market, with over $148 billion in assets, according to Backend Benchmarking’s 2020 robo report from the first quarter.

Charles Schwab has also been building out its white-labeled robo technology for advisors, which it launched in 2015. Executives at TD Ameritrade, which Schwab says it will acquire before the end of this year, have said financial advisors aren’t interested in the technology.

Vanguard’s Rampulla says there is indeed demand. “We're really excited about what that could bring for your clients,” he says.

A Vanguard spokesman did not immediately return a request for more details.