Vanguard has announced the phasing out of its automated financial advice program developed in collaboration with American Express, launched just last year. The program, known as Invest for AmEx by Vanguard, stopped enrolling new clients as of November 15 and is slated for complete discontinuation by February 29.
In light of this development, Vanguard is transitioning clients from the Invest for AmEx service to its other advisory offerings. Clients have the option to move to Vanguard Digital Advisor, an entirely digital advice platform, or to Vanguard Personal Advisor Service, which combines digital and personalized advisory services.
A Vanguard spokesperson highlighted that both alternatives offer high-quality, personalized advice tailored to individual investor needs and preferences. The reasons for the termination of the Invest for AmEx program were not disclosed.
Meanwhile, American Express has assured that it will continue to honor rewards for eligible customers within the framework of this program. The company also encouraged clients who have not yet utilized their complimentary initial financial planning session with Vanguard to schedule it before the end of February.
Initially unveiled in April 2022, Invest for AmEx represented a unique partnership, combining Vanguard's digital wealth management expertise with American Express's credit card rewards. Vanguard CEO Tim Buckley had described the initiative as an effort to broaden access to Vanguard's advisory services and attract more clients to its wealth management offerings.
Invest for AmEx was introduced with a $10,000 investment minimum and an annual gross advisory fee of 0.50%. This fee contrasted with Vanguard's Personal Advisor Service (PAS), which offers all-index investment options at a lower annual fee of 0.35% and a higher minimum investment requirement of $50,000. Additionally, Vanguard’s standalone digital advice service requires a minimum investment of $3,000 and charges an annual gross advisory fee of 0.20% for its all-index investment options.
The fee disparity between Invest for AmEx and Vanguard's other services did not go unnoticed in the industry.
Critics, such as Jeff DeMaso, the author of The Independent Vanguard Adviser newsletter, pointed out that the involvement of a third party in the Invest for AmEx arrangement might not be the most cost-effective approach for clients seeking to invest with Vanguard's Personal Advisor Service. DeMaso's perspective was clear: in the context of Vanguard's offerings, simpler might be better.
