Everyone deserves the best possible start on the path to a brighter financial future.


Real Advice for All

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Most personal fee-only investment advisors have high account minimums (typically $250,000 to $1 million) because of the difficulty turning a profit on small accounts. Most full-service advisors charge 1% to 2% per year or more on assets managed. That means a $10,000 account only generates $100 to $200 per year. That doesn't even cover payroll costs. This is why even Vestory has $250,000 minimum account size for our full-service, wealth management.

What about those just getting started?

That question is one we have been asking ourselves since Vestory began. We hate the idea of turning everyone with smaller accounts over to the ravages of stockbrokers or insurance agents. It's hard to successfully invest in a product peddling environment (see next section, Brokers vs. Vestarter).

The perfect solution to this dilemma has eluded us until now. Thanks to a partnership with Charles Schwab, we are now able to offer a globally-diversified, evidence-based portfolio and a new level of personalized advice for investors with as little as $5,000 to invest. We call our new investment management service Vestarter. We think it's the best start to a brighter future at a very fair price, only 0.9% of assets we manage (plus fund fees - see below). That's just $90 per year on a $10,000 account ($1.73 per week is far less than the typical price of two bottled waters).

Brokers vs. Vestarter

As of 12/31/17. Data from Morningstar®. The Vestarter portfolio contains asset classes unavailable through American Funds, therefore portfolios are similar, but not identical. Hypothetical return assumes $10,000 one time investment. For complete list of funds used for comparison and other data and disclosure information,   please click here  .

As of 12/31/17. Data from Morningstar®. The Vestarter portfolio contains asset classes unavailable through American Funds, therefore portfolios are similar, but not identical. Hypothetical return assumes $10,000 one time investment. For complete list of funds used for comparison and other data and disclosure information, please click here.

Most novice investors begin building their portfolio through a friend, neighbor, or relative with a brokerage firm (such as Edward Jones or Ameriprise), local bank, or insurance company. Typically, clients are steered into actively-managed mutual funds that charge either a front-load (a commission deducted up front) or a sizable extra annual fee (called a 12b-1 fee) to make the fund appear to be a no-load offering. American Funds is the largest of these broker-sold fund groups.

At Vestarter, we independently create portfolios using true no-load, passive exchange-traded funds (ETFs) from Vanguard, Schwab, and others. These funds sport incredibly low fees. However, we do charge an annual advisory fee to pay for the personal services we provide both initially and throughout your investing life. Our clients never pay us commissions, and we receive no part of the fees charged to manage the funds. 

Despite the fact that we charge an advisory fee every year, our services can be far less expensive (and far more comprehensive) than a typical broker or insurance agent. Plus, all things being equal, paying less means more money down the road. 

However, we don't believe the potential returns are likely to be equal given the fact that we build our Vestarter portfolios based on decades of academic research by a host of financial scientists around the world. We don't try and guess the direction of markets or pick winners. We have taken the investment alchemy of old and replaced it with investing science.


Investing Science


We place our faith in science and data to drive our investment philosophy and decisions. Therefore, our investment strategy:

  1. Relies on the evidence. How have the markets actually worked in the real world? Decades of peer-reviewed inquiry by scientists and practitioners around the globe helps us continuously hone our understanding. 
  2. Makes sense. The strategy you adopt should be intuitively logical – not only to financial economists but to you, too. 

What does that mean?

There is no debate whether active management is better; it can’t be. That’s a matter of arithmetic, not a hypothesis. A simple way to think about it is: active managers can’t win at the expense of passive managers, because passive managers hold cap-weight portfolios of the entire market or of subsets of the market—which means, they don’t really respond to the actions of active managers.
— Professor Eugene Fama, Nobel Laureate

Good vs. Bad Advice


There are two types of financial advisers. One is sales-based. They only make money when you buy something from them. The other type is genuinely advisory and relational.

Insurance agents and most brokers are compensated through commissions deducted from your investments. This can create a conflict of interest that colors the quality of advice. Those who sell "loaded" mutual funds, annuities, and individual securities typically only make money when they can get you to sell one investment and buy another - from them.

The worst of these "advisers" are those who sell products like indexed annuities (or life), non-publicly traded REITs, precious metals, and more. If it sounds incredibly complicated or too good to be true - high returns, no risk - beware!

You would think that all providers of financial advice are required to always act in your best interests, and you'd be wrong. A 2015 study by Marketwatch, concluded that, of the 1.1 million financial advisers in America, only one percent (about 11,000) were always required to act in your best interests (as a fiduciary.) To put that in perspective; one hundred percent of doctors, lawyers, and CPAs are required to act as fiduciaries.

Working with a fiduciary adviser is critical to your future. Plus, paying a fee-only fiduciary adviser, can make you more money than can a stockbroker or doing-it-yourself. Two separate studies by Morningstar and Vanguard found fee-only advisers add up to 3% per year to your returns.

So, it seems that competent advice can cost less and make you more. Plus, you don't need $250,000 or more to hire a fee-only fiduciary advisor. All you need is $5,000 with Vestarter. 


Fee Recovery Device


But, we want to sweeten the deal by helping you recover some of your fees with our exclusive "Vestarter Fee Recovery Device." As we mentioned above, our annual advisory fee on a $10,000 portfolio is less than the cost of two bottled waters.

To help you skip those expensive bottles of fancy tap water, we will send everyone who sets up and funds a Vestarter account this insulated, stainless-steel water bottle free (yes, we'll pick up shipping, too). Not only will you be helping yourself, but you can keep dozens of plastic bottles out of the environment. What a deal! So, why don't you quit procrastinating and...

It is not easy to get rich in Las Vegas, at Churchill Downs or at the local Merrill Lynch office.
— Professor Paul Samuelson, Nobel Laureate

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