vanguard personal financial planning service
DESCRIPTION
TRANSCRIPT
Online Kit Contents
Click the links below to move quickly through this document.
Vanguard® Personal Financial Planning Service
• Overview Letter
• Service Features Brochure
• Your Personal Profile (To request the assistance of a Vanguardfinancial planner, complete and send us Your Personal Profile.Please send your completed profile to TThhee VVaanngguuaarrdd GGrroouupp,, PP..OO..BBooxx 770099,, VVaalllleeyy FFoorrggee,, PPAA 1199448822--00770099..)
• Service Agreement and Disclosure Statement(Please read and keep for your records.)
To print this kit:
You can print selected pages by clicking your browser’s printer icon and entering theappropriate PDF page numbers. You can also print this kit in its entirety by clicking the printer icon and selecting “All.”
Dear Investor:
Thank you for considering Vanguard Personal Financial Planning Service to help you reach yourfinancial goals. You will find that our advisory service operates with the same integrity, candor, andclient focus that have made Vanguard a leader in the investment management industry for morethan a quarter century.
When you consult a Vanguard® financial planner, you will receive practical solutions, customized toyour financial concerns. Your dedicated planner will develop an investment strategy that will serveas the foundation for your financial plan. Your planner also may address retirement plans, educationsavings, and estate planning, based on your priorities and objectives. Once you are comfortable withour recommendations, you can count on us to help you put them into action.
We think you will agree that Vanguard Personal Financial Planning Service is an unmatchablevalue, especially when Vanguard’s high-quality service and low-cost investment products are addedto the customized solutions provided by your experienced financial planner.
It is easy to get started. Complete Your Personal Profile, which is located in the back pocket of the enclosed brochure. Or—if you are currently a Vanguard shareholder—you can visit www. vanguard.com/visit/financialplan to complete the profile online. Please read the ServiceAgreement and Disclosure Statement and keep it for your records.
If you have questions, call us at 1-800-567-5162, Monday to Friday, 8:30 a.m. to 6 p.m., Easterntime. We welcome the opportunity to help you plan your financial future.
Sincerely,
Duane D. CabreraPrincipal
Vanguard Personal FinancialPlanning Service
Vanguard® Personal Financial Planning ServicePost Office Box 709, Valley Forge, Pennsylvania 19482-0709www.vanguard.com
© 2004 The Vanguard Group, Inc. All rights reserved. LCPF2 082004
Vanguard Personal Financial Planning Service is provided by Vanguard Advisers, Inc., a registered investment advisor.
Vanguard® Personal Financial Planning Service
The right
M A K E S A L L T H E D I F F E R E N C E
approach
“I could use some help with
my investments from someone
I can trust.”
1 Every day, we hear from investors who have all sorts of financial concerns that don’t haveeasy answers:
• What strategy can I follow that doesn’t involve performance-chasing or market-timing?
• How can I find a mix of investments that will help me reach my goals without takingon more risk than I’m comfortable with?
• How should I reposition my investments as I approach retirement?
• What steps can I take to help ensure that my savings last for a lifetime?
There’s no need to go it alone
In addressing these kinds of questions, you and your family have so much to lose if youmake the wrong decisions—or fail to make any decisions at all. That’s why it’s importantto consider getting professional assistance.
When it comes to financial advice, you likely know what you don’t want. You don’t wanthigh-pressured sales pitches. You don’t want superficial advice. And you don’t want tospend a lot of money.
But you know you could benefit by talking to an expert who is trustworthy andexperienced . . . someone who knows the right questions to ask and listens to youranswers. And you want the advice at a reasonable price.
At Vanguard, you can get just the help you need.
What’s standing between you and financial peace of mind?
2 You want at least these three things when you seek financial guidance: proven solutions,personal attention, and peace of mind knowing that you can completely trust the adviceyou’re receiving. You can count on us to provide you with all three.
Using a time-tested approach
There’s no lack of “advice” about how you can get in on the next hot trend orinvestment. The noise from the media, salespeople, and friends can be deafening.
But here’s what really works: disciplined, long-term strategies; prudent risk control;diversity of thought; and consistent cost efficiency. And these are what Vanguard excelsin. Every day, people come to us looking for sensible solutions to their financial needs…and that’s exactly what they find at Vanguard. Over the years, this proven approach toinvesting has earned the loyalty of millions of investors.
Providing personal attention
When you come to us for help, you’ll discover that key to our service is the dedicatedattention you’ll receive from a Vanguard® financial planner, who will learn about you andyour concerns. Your planner will take the time to discuss your priorities, whether youneed assistance with a specific situation or a comprehensive evaluation of your entirefinancial picture.
Whatever your needs, your Vanguard planner will carefully apply our time-testedprinciples to your specific situation and develop solutions that will address exactly whatyou need to do, and why. These recommendations will give you a personalized andvaluable road map to follow in seeking financial security.
Serving only your interests
You’ll naturally want to be sure the advice you get is trustworthy. We prize the long-standing reputation we’ve earned for consistently putting investors’ interests first.One way we ensure that the focus remains solely on you is by employing salaried, notcommissioned, financial planners. That means our planners do not derive any benefitfrom their recommendations—they have only your best interests at heart.
A proven approach you can trust
3 Your planner’s first order of business is getting to know you and your specific needs, anddiscussing the particular concerns that are on your mind. You’ll be asked to share detailedinformation about your current assets, including your assets invested outside Vanguard,to give your planner an accurate picture of your financial situation. You and your plannerwill also discuss assumptions about important factors such as investment performance,expenses, and inflation.
Developing and implementing your plan
Only after thoroughly understanding and analyzing your situation will your planner beginto develop a plan specifically tailored to your circumstances and goals. You and yourplanner will discuss the recommendations in detail, spending as much time as you needto make sure you have a good understanding of the course of action that will follow.
Next, your financial planner will help you carry out the recommendations. After all, thesuccess of a good plan depends not just on how skillfully it’s designed, but how faithfullyit’s carried out. And you’ll find that our recommendations will be not only immediatelyuseful, but a valuable resource as you weigh future investment decisions.
Providing experience you can count on
Of course, you want to be sure the people helping you knowwhat they’re talking about. Vanguard financial planners haveconsiderable practical experience, backed by years of training.In addition, they are licensed under federal and stateregulatory authorities and maintain various professionaldesignations.
Your Vanguard planner’s invaluable assistance
“I want an expert
opinion on how I’m
investing my
savings.”
A plan built on a secure foundation
4 Regardless of how broad or narrow your financial concerns are today, you need to be sure you have the right foundation in place for tomorrow. That’s why we first undertake acareful review of your current investments.
Once your planner has finished this step, he or she will help you prepare and then carryout a personalized investment plan based on your goals, financial circumstances, timeframe, risk tolerance, and tax situation.
Taking the right approach
When investing, people tend to use a “bottom-up” approach. This means that they firstchoose their investments and consider the resulting mix of assets only after the fact, if atall. At Vanguard, we employ a “top-down” approach, which research has shown is thebest way to build a successful long-term investment program. That’s why your plannerwill focus first on developing the best overall allocation of stock, bond, and short-termreserves to meet your needs.
Your planner will then determine the best mix of investments within that allocation byrecommending specific Vanguard funds. Our impressive roster of more than 100 funds—
which covers a complete array of investmentstrategies—allows us to build a comprehensive,diversified, and personalized investmentprogram for each of our clients.
An indexing leader, Vanguard offers one of thebroadest selections of indexed stock and bondmutual funds available. And Vanguard’sactively managed funds, highly regarded aswell, are run either by our experienced internalmanagers or by leading investment advisorsfrom around the world. This arrangementoffers one-stop access to an exceptionally widerange of investment viewpoints—and preventsthe overlap of investment themes and holdingsin our clients’ portfolios.
What should I
do with my
employer-
sponsored plan
when I retire?
Can I reduce
the taxes
on my
investments?
Am I saving
enough for
retirement?
What’s the
best way to
transfer assets
to my heirs?
Key Questions We Can Answer
5 Minimizing your taxes
Minimizing taxes on your investment returns is one of the cornerstones of ourinvestment approach. Your planner will tailor strategies to the tax status of your differentaccounts, including tax-advantaged assets such as IRAs and 401(k) plans. More goodnews for you: Your planner will be choosing from one of the largest selections of tax-advantaged and tax-managed mutual funds available anywhere.
Answering more complicated questions
Beyond the specific holdings in your portfolio, there may be other aspects of yourinvestment program that you’d like assistance with. After all, sound financial planning isnot just about what you invest in, but the additional strategies that can be applied to giveyou an added level of financial security.
Your planner can guide you through a variety of financial planning issues to addressspecific retirement, education, or estate-planning issues. Depending on your needs,you’ll be able to:
• Evaluate the suitability of different types of accounts, such as comparing Roth andtraditional IRAs, or determining which education savings program is best for you.
• Determine the most appropriate method for taking distributions from your retirement plans.
• Compare your spending habits to your saving needs to make sure you’re on track to reach your goals.
• Consider how beneficiary designations can help you better position your estate to minimize transfer taxes.
Your planner’s focus will be on designing solutions that address your specific financialconcerns. In the end, you’ll walk away with sensible recommendations that are bothobjective and easy to implement—and that are based on a proven philosophy that’s made Vanguard one of the premier providers of investment services.
6 Vanguard has never been a typical investment company. Since 1975, we have led the way in serving investors’ long-term interests, and we take pride in our reputation for candor,integrity, and cost efficiency. When you receive financial guidance from us, you’ll enjoythe many aspects of the Vanguard Difference.
A powerful combination. With more than 17 million shareholder accounts and some$650 billion in assets under management, Vanguard is one of the world’s leadinginvestment management companies. So many clients entrust their financial future to usbecause they believe they receive the best combination of investment performance,service, and value in the industry.
No conflicts of interest. The Vanguard Group is owned completely by its member funds,each of which is owned entirely by its shareholders. Because Vanguard’s investors are, in
essence, our owners, you’ll receive an extraordinary level ofpersonalized attention. We put our clients’ interests first ineverything we do.
Continuity. Another benefit of our corporate structure is that weare immune to the ownership changes common in the financialservices industry today. You don’t have to worry about a takeoveror merger leaving your assets in the hands of a company that nolonger seems familiar.
Low costs. Since we have no obligation to generate profits for outside owners, we’veconsistently kept our fund expenses among the lowest in the industry.* That means ourclients have been able to keep more of their investment returns, year after year.
Take advantage of the Vanguard Difference®
“I need advice
that won’t be
quickly outdated.”
*Source: Lipper Inc.
7 While the value of your overall experience with your Vanguard financial planner may be immeasurable, what is measurable is the very real effect our low costs have on yourbottom line. Consider the following example of the cost of our services versus what you’d pay other types of professionals (based on a $1 million portfolio).
When you add to these savings the expertise and level of personal attention you’ll getfrom your Vanguard financial planner, you can see why we’re convinced that we offer an unmatchable value.
Outstanding service at an outstanding value
*.The cost for clients who have at least one Vanguard mutual fund account. Substantial discounts apply for clients who maintaincertain asset levels at Vanguard.
**.Sales charge for a $1 million purchase of Class A or C shares.
***.Vanguard fund average expense ratio in 2003.
†.Includes mutual fund industry average expense ratio for 2002 (according to Lipper Inc.) and typical advisory fees.
††.Source: Morningstar, Inc.
Savings Too Large to Ignore
An example based on a $1 million portfolio
Initial cost for advice
Typical cost to implementrecommendations
Typical ongoing management expenses
Vanguard
$1,000*
$0
$2,500 a year(0.25%)***
Traditional Planner
$1,500–$4,500
$0
$5,000–$20,000a year (0.5%–2%)†
Traditional Broker
$0
$10,000–$20,000(1%–2%)**
$13,200 a year(1.32%)††
8 After reading about the scope of our services, you’re probably already thinkingabout the many ways we can help you. It’s easy to get started. Simply complete Your Personal Profile, and return it in the enclosed postage-paid envelope. Yourplanner will then contact you to discuss your situation in detail.
Of course, if you’d like more information, you can call us at 1-800-567-5162 on business days from 8:30 a.m. to 6 p.m.,Eastern time. We’d be happy to discuss our services with you.
Take the first step
“I need some
reassurance that
I’m doing the right
things.”
1-800-567-5162
To request the assistance of a Vanguard
financial planner, complete and send
us Your Personal Profile. (The Service
Agreement and Disclosure Statement
is yours to keep.)
Use the enclosed postage-paid envelope
to return these items, or mail them to
The Vanguard Group, P.O. Box 709,
Valley Forge, PA 19482-0709. Call us at
1-800-567-5162 if you have any questions.
World Wide Web
www.vanguard.com
Toll-Free Information
1-800-567-5162
Vanguard Personal Financial PlanningService is provided by VanguardAdvisers, Inc., a registered investmentadvisor.
Vanguard Personal FinancialPlanning Service
Post Office Box 709 Valley Forge, PA 19482-0709
© 2004 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor. FPFP 112003
For more information about Vanguard funds, visit www.vanguard.com, or call 800-567-5162, to obtain a prospectus. Investmentobjectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read it carefullybefore investing.
Your Personal Profile
Vanguard ® Personal Financial Planning Service
We look forward to working with you as you take
this important step in securing your financial future.
Throughout the planning process, we will ask you a
number of questions to learn about your personal circumstances. Many of these questions
are in this Profile, which you can complete and return to us in the enclosed business reply
envelope. Or, if you are a Vanguard shareholder, you can easily complete Your Personal
Profile at www.vanguard.com/visit/financialplan.
Answering these initial questions will be time well spent because it helps us to begin
developing a financial plan tailored to your specific needs. If you don’t know how to answer
particular questions in Your Personal Profile, you will have ample opportunity to review
those issues in further detail with your planner.
You can be assured, of course, that we hold the information you share with us throughout
the planning process in strict confidence.
If you have any questions as you’re completing each section, call us at 800-567-5162.
A Vanguard representative will be happy to discuss the service with you in further detail.
Thank you for your
interest in Vanguard’s
Personal Financial
Planning Service.
Overview
A four-step financial planning process
Our goal is to learn about you, your specific needs, and your concerns. It’s this understanding that is the cornerstone of a sound,
practical, effective financial plan. That’s why your thoughtful completion of this Personal Profile, while a critical starting point,
is only the beginning step.
Step 1. You complete and mail your Profile to us along with any requested documentation and payment. Based on your needs
and your financial situation, Vanguard assigns a planner with the appropriate level of expertise. Your planner carefully reviews your
materials in preparation for future conversations. You can expect this assignment and review process to take several business
days. (Also, please allow additional time for your Profile to arrive in the mail.)
Step 2. Your planner calls you to begin a series of more detailed conversations about your current financial situation, goals, and
concerns. Together, you weigh alternative courses of action. Depending on the complexity of your financial situation, this step
may be completed quickly in one or two telephone conversations or may require additional discussions over several weeks.
Step 3. You receive an in-depth report explaining your planner’s recommendations. You and your planner review those
recommendations together, address any remaining issues, and agree on the next steps to take.
Step 4. In this final step, your planner will help you complete any paperwork required to make the transition to your new
financial strategy. Your planner remains involved until the agreed-upon recommendations are carried out and all of your questions
are answered.
The enrollment section
of this form—including
the signatures required
on page 2—must be
completed in its entirety
before we can proceed
with your recommendations.
Any information left blank
or incomplete will result in
a delayed start for your plan.
2
Payment Method
1
3
The standard fee for this service is $1,500. Depending on your existing relationship with
Vanguard and the total amount of the retirement and nonretirement assets you have invested
(or plan to invest) at Vanguard, you may be eligible for one of the following discounts.
Please select the option that best applies to your current situation:
■■ $1,500—Full payment if you are not a Vanguard shareholder.
■■ $1,000—Reflects an automatic 33% discount for all Vanguard shareholders, including
retirement plan participants.
■■ $500—Reflects an additional 50% discount for clients with at least $250,000 invested
with Vanguard.
■■ $250—Reflects an additional 75% discount for clients with at least $1 million invested with
Vanguard.
■■ $0—One complimentary plan for any investor who brings an additional $250,000 or more
in new assets to Vanguard mutual funds. (Skip to Step 4 on the next page.)
■■ I have enclosed a check made payable to The Vanguard Group, Inc.
■■ Please deduct my payment from the Vanguard nonretirement account listed below:
Fund Name Fund Number
Account Number
Name of Account Owner
Name of Joint Account Owner
If the account owner(s) listed above are not the same as Client A or Client B, please indicate the
relationship between each account owner and Client A and Client B and obtain their signatures
for approval to process the fee deduction as instructed above.
Signature of Account Owner Relationship to Clients A and B
Signature of Joint Account Owner Relationship to Clients A and B
Page 1
Name
Fees
Section 1: Enrollment
DO
NO
TD
ETA
CH
Please print all information clearly, preferably in black ink.
Your Name (hereafter referred to as “Client A”)
Name of Your Spouse / Domestic Partner (hereafter referred to as “Client B”)
Signature of Client A Date
Signature of Client B Date
Page 2
By signing below, I agree that I have received and read—and will be bound by the provisions of—
the accompanying Service Agreement and Disclosure Statement (VPFSA2 052005). I represent
that I have full legal authority and capacity to retain Vanguard Personal Financial Planning Service
(VPFPS). I understand that I can terminate this contract for any reason and without penalty within
five business days of the date indicated below and receive a full refund for any fees paid.
If I have chosen the fee deduction option, I authorize Vanguard to deduct a fee in the amount—
and from the fund—indicated on page 1 of the form. I verify that the account is not an IRA or
other type of retirement plan account. I understand that this authorization is a one-time allowance
and that subsequent requests for planning services will require a new enrollment form and
applicable payment for service. If the fund I have indicated is not a money market fund, I
acknowledge that I may realize a capital gain or loss as the result of the redemption.
I understand that if, through Vanguard, I have invested $250,000 or more of new assets in
Vanguard mutual funds in the past six months, or agree to do so within one year of the date on
this form, I qualify for this service at no cost. If I have not invested new assets of $250,000 or
more in the past six months, or if I do not invest an additional $250,000 or more within a one-
year period of the date on this form, I agree that Vanguard Personal Financial Planning Service
may deduct the appropriate fee from any nonretirement assets I currently own through Vanguard,
including a redemption of mutual fund shares. If the redemption is made from a fund that is not a
money market fund, I acknowledge that I may realize a capital gain or loss as a result of the
redemption.
Signatures:
REQUIRED
Authorization4
5
Section 1: Enrollment (cont.)
DO
NO
TD
ETA
CH
My signature below represents my authorization for VPFPS to begin my financial plan. I
understand that VPFPS may provide advice regarding all accounts held at Vanguard (or at any
other financial institution) of which I am an owner or a joint owner, or on which I have been
authorized by Vanguard to transact (collectively, an “Authorized Person”).
I also understand that Vanguard requires the signature(s) of the Authorized Person(s) of
additional accounts to be considered in this financial plan, but of which I am not an Authorized
Person. For example, in order for VPFPS to include my spouse’s or partner’s IRA in this financial
plan, I must obtain my spouse’s or partner’s signature, since I am not an owner of that IRA and
thus cannot authorize the inclusion of that IRA in the plan.
Page 3
Please provide the following information for the person who will be considered the primary
contact as we develop your recommendations.
Name
Street Address
Apartment or Suite Number
City State Zip
Primary Phone Number ■■ Home ■■ Work
Secondary Phone Number ■■ Home ■■ Work
Best Time to Call ■■ Morning ■■ Midday ■■ Afternoon
E-Mail Address
Please provide the following information for both you and your immediate family members,
including your spouse or domestic partner, all minor and adult children, and anyone else who is
financially dependent on you.
U.S. LegalSocial Security Date of Gender Citizen State of
Name (first, middle, last) Number Birth (M/F) (Y/N) Residence Relationship
Client A
Client B
Please list all other tax identification numbers under which you have additional Vanguard
accounts registered (e.g., trust accounts, etc.).
Other Tax Identification
Numbers
Your Family
Primary Contact1
2
3
Section 2: Your Personal Information
The primary contact may
engage in discussions with
a Vanguard financial planner
regarding the plan and the
various accounts identified to
receive advice, and will receive
the Personal Financial Report at
the end of the planning process.
However, the primary contact
will not be permitted to
implement the financial plan
recommendations, or to
otherwise transact on any
account identified in the plan,
unless the primary contact is
an Authorized Person.
Page 4
Please provide the following employment information:
Employer’s Name Occupation Projected Retirement Date
Client A
Client B
Are you—or anyone else in your household—an
officer or director of a publicly traded company? ■■ No ■■ Yes
If yes, provide the name of the family member and the name and ticker symbol of the company
with which he or she is affiliated:
Please provide the following information from your most recent returns for federal, state, and local
income tax (please select one):
■■ I have enclosed photocopies of my most recent tax returns.
■■ Details provided below are for tax year _________:
Adjusted Gross Income (AGI) $
Taxable Income $
Federal Income Tax Liability $
State Income Tax Liability $
Local Income Tax Liability $
Do you have any carryover losses from prior tax years? ■■ No ■■ Yes
If yes, indicate the amount: $
Current Income Tax
Status
Employment Information5
6
Section 2: Your Personal Information (cont.)
■■ Single (or widowed) ■■ Married ■■ Domestic PartnersMarital Status4
Page 5
Your financial planner will tailor his or her recommendations to your unique concerns and
financial objectives. While the centerpiece of your financial plan will involve asset allocation and
the selection of specific investments, you may have other concerns that may be as specific as
whether to invest in a 529 savings plan or as broad as an evaluation of your retirement outlook.
For example, many of our clients have asked questions such as:
• Will I have enough money to maintain my lifestyle after retirement?
• What’s the best way for me to take distributions from my retirement plan?
• How would an unexpected expense or loss of income affect my financial situation?
• Are my accounts set up to minimize the impact of estate transfer taxes?
Please take a moment to write down the issues that are of most concern to you. The information
you provide here will give your planner a starting point for further discussion.
Your Financial Planning
Concerns
Section 3: Your Financial Planning Concerns
Page 6
■■ 1 to 2 years ■■ 3 to 4 years ■■ 5 to 6 years ■■ 7 to 8 years ■■ 9 years or longer
The following questions are designed to help your planner select the most appropriate allocation
for you based on your personal circumstances.
Please do not include objectives that will be covered by your normal salary, pension, or Social
Security income; only include those that will require assets from your investment portfolio.
How Much Is NeededFrom Investments How Many Years How Long Will
Description of Each Year Before Withdrawals Withdrawals NeedObjective (before taxes)? Will Begin? to Last?
Example: Retirement $15,000 5 years 15+ years
Objective #1
Objective #2
Objective #3
If you owned stocks during this period, check the answer that corresponds to your actual behavior.
■■ Sell all of the remaining investment ■■ Hold the investment and sell nothing
■■ Sell a portion of the remaining investment ■■ Buy more of the investment
When making a long-term
investment, I plan to hold
the investment for. . .
From August 31, 2000,
through March 31, 2001,
stocks lost more than
25%. If I owned a stock
investment that fell more
than 25% in seven
months, I would. . .
My primary objectives are
(for example, retirement,
education, wedding,
etc.). . .
Risk Tolerance Profile1
2
3
Generally, I prefer
investments with little
or no fluctuation in value,
and I am willing to accept
the lower returns
associated with these
investments.
4
Section 4: Your Investment Objectives and Experience
■■ Strongly disagree ■■ Disagree ■■ Somewhat agree ■■ Agree ■■ Strongly agree
■■ Fund A ■■ Fund B ■■ Fund C
If you owned bonds during this period, check the answer that corresponds to your actual
behavior.
■■ Sell all of the remaining investment ■■ Hold the investment and sell nothing
■■ Sell a portion of the remaining investment ■■ Buy more of the investment
This chart shows the
greatest one-year loss
and the highest one-year
gain on three different
hypothetical investments
of $10,000.* Given the
potential gain or loss in
any one year, I would
invest my money in. . .
From January 31, 1999,
through December 31,
1999, some bonds lost
almost 9%. If I owned a
bond investment that lost
9% in 11 months,
I would. . .
10
11
$1,921
–$1,020
–$3,639
$4,229
$593
–$164
Page 7
■■ Strongly disagree ■■ Disagree ■■ Somewhat agree ■■ Agree ■■ Strongly agree
*The maximum gain or loss on an investment is impossible to predict. The ranges shown in this chart are hypothetical and are designed solely to gauge aninvestor’s risk tolerance.
I would invest in a mutual
fund based solely on a
brief conversation with a
friend, coworker, or
relative.
6
7
8
Section 4: Your Investment Objectives and Experience (cont.)
When the market goes
down, I tend to sell some
of my riskier assets and
put the money in safer
assets.
5 ■■ Strongly disagree ■■ Disagree ■■ Somewhat agree ■■ Agree ■■ Strongly agree
Page 8
Short-term securities(cash / money market)
High-grade U.S. bonds (government /corporate / municipal)
Lower-grade U.S. bonds (high-yield /junk)
Large-cap U.S. stocks
Mid- / small-cap U.S. stocks
International stocks /bonds
Investment Type(both individual securitiesand mutual funds investedin these categories)
Level of Experience With the Investment
Level of Satisfaction With the Investment
Low
■■
■■
■■
■■
■■
■■
Medium
■■
■■
■■
■■
■■
■■
High
■■
■■
■■
■■
■■
■■
None
■■
■■
■■
■■
■■
■■
VeryLow
■■
■■
■■
■■
■■
■■
Low
■■
■■
■■
■■
■■
■■
Medium
■■
■■
■■
■■
■■
■■
High
■■
■■
■■
■■
■■
■■
VeryHigh
■■
■■
■■
■■
■■
■■
NA
■■
■■
■■
■■
■■
■■
Please provide us with
a snapshot of your
experience and level of
satisfaction with various
types of investments.
10
Section 4: Your Investment Objectives and Experience (cont.)
■■ Very unstable ■■ Unstable ■■ Somewhat stable ■■ Stable ■■ Very stableMy current and future
income sources (such as
salary, Social Security,
and pension plans) are. . .
9
Page 9
List and provide information for all investment accounts that you currently hold outside Vanguard.
Be sure to include information for all types of retirement and nonretirement accounts, such as
brokerage accounts, mutual fund accounts, IRAs, annuities, company retirement plans, and bank
accounts. When possible, please enclose copies of your most recent account statements
that you’ve received from your other financial provider(s). Do not send spreadsheets or other
personal recordkeeping documents.
You do not need to enclose copies of your Vanguard account statements. Your planner will obtain
that information using the Social Security and other tax identification numbers you provided in
Section 2 for you and other members of your household.
Approximate Additional StatementAccount Type Owner (Name) Account Balance Annual Savings Enclosed?
Ex. Brokerage Account Joe $ 145,000 $ 2,500 ■■
1 $ $ ■■
2 $ $ ■■
3 $ $ ■■
4 $ $ ■■
5 $ $ ■■
6 $ $ ■■
7 $ $ ■■
8 $ $ ■■
9 $ $ ■■
10 $ $ ■■
11 $ $ ■■
12 $ $ ■■
13 $ $ ■■
14 $ $ ■■
15 $ $ ■■
16 $ $ ■■
Your Current Investment
Accounts
A special note about
cost basis
If cost-basis information
is not displayed on the
statements you provide,
please begin gathering
those details from the other
financial institutions. Cost
basis—that is, the original
price paid for each
investment, including
any reinvested dividends—
is a key component of
the data you provide for
assets you hold outside
of Vanguard.
1
Section 5: Your Financial Information
✔
Page 10
■■ Check here if you have been granted stock options (that is, a formal written offer from your
employer to buy or sell company stock at a specified price within a stated time period) or if
you currently own restricted stock (that is, company stock that you own but that is subject to
conditions regarding sale, forfeiture, and transferability). Please provide a copy of the offer
and be prepared to discuss this in more detail with your planner.
Please provide information on the income you are receiving now and expect to receive in future years.
In addition to the sources we’ve identified, be sure to include others such as bonuses, alimony,
and income from trusts. Report the information separately for Client A and Client B.
Client A:Annual Starting Ending Annual % Continued
Source of Income Amount Year Year Increase Beneficiaries at Death
Salary $ % NA NA
Part-time income $ % NA NA
Social Security $ NA NA
Current pension $ % %
Future pension $ % %
Net rental income $ % %
Other $ % %
Client B:Annual Starting Ending Annual % Continued
Source of Income Amount Year Year Increase Beneficiaries at Death
Salary $ % NA NA
Part-time income $ % NA NA
Social Security $ NA NA
Current pension $ % %
Future pension $ % %
Net rental income $ % %
Other $ % %
Income
Stock Options2
3
Section 5: Your Financial Information (cont.)
(wecalculate)
(wecalculate)
Page 11
Please provide an estimate for the total amount that you spend annually on your everyday living
expenses, such as food, clothing, utilities, entertainment, and charitable giving.
You should exclude the following items, which are covered elsewhere within this Profile:
• Income tax payments (previously supplied on page 4).
• Mortgage payments (to be supplied below).
• Liability payments, such as student loans, home equity loans, personal loans, or credit card
debt (to be supplied on page 13).
• Life, long-term care, and disability insurance premiums (to be supplied on pages 12 and 13).
• Future expenses, such as the purchase of a home or car, an extended vacation, or education
expenses (to be supplied on page 14).
• Savings directed into your investment and retirement accounts (previously supplied on page 9).
Estimated Total Annual Living Expenses $
Please provide information on your primary residence, vacation homes, rental properties, and
the like.
Current Original BeginningMarket Mortgage Mortgage Mortgage Monthly Current Interest
Property Description Owner Value Amount Date Term Payment Balance Rate
$ $ P&I: $ $ %
Ins.: $
Tax: $
Total: $
$ $ P&I: $ $ %
Ins.: $
Tax: $
Total: $
$ $ P&I: $ $ %
Ins.: $
Tax: $
Total: $
Current Real Estate
Expenses
Current Living Expenses4
5
Section 5: Your Financial Information (cont.)
P&I = Principal and interest; Ins. = Insurance (for example, homeowners or mortgage)
Ex.: Primary Residence Joint 120,000 100,000 1/1990 30 yrs 805 55,000 9
40
130
975
Page 12
Please indicate current education expenses—including private school or other tuition or
expenses—that are a significant part of your typical expenses but will be ending at a specific time.
Any student loans that you carry will be addressed in Current Liability Expenses on page 13.
Payment FrequencyStudent’s Name Payment Amount (Monthly / Quarterly / Annually) Ending Date (MM / YY)
$
$
$
$
$
In the “Benefit Amount” column, provide the amount the beneficiary or insured will receive.
If you have a whole life (permanent) policy, provide the current cash value in the “Total Cash /
Investment Value” column without taking any outstanding loans into consideration. If you have
a variable life policy, enter the investment value in that column and—in the “Additional Personal
Commentary” section on page 15—provide us with information on the investment options
offered by the policy.
Do not include accidental death policies, travel insurance benefits, or business insurance.
Life Insurance
Total Cash /Benefit Investment Loan Annual
Policy Type Owner Insured Beneficiaries Amount Value Balance Premium
$ $ $ $
$ $ $ $
$ $ $ $
$ $ $ $
Current Insurance
Expenses
Current Education
Expenses6
7
Section 5: Your Financial Information (cont.)
Ex.: Term Insurance Trust Client A Client B 250,000 NA NA 800
Section 5: Your Financial Information (cont.)
Include items such as student loans, home equity loans, personal loans, and credit card debt that
you carry on an ongoing basis.
Current Current Loan Monthly Interest Loan LoanLiability Description Owner Market Value Balance Payment Rate Start Date End Date
$ $ $ %
$ $ $ %
$ $ $ %
$ $ $ %
Current Liability Expenses8
Ex.: Car Loan Client A&B 20,000 18,000 396 7 1 / 2004 12 / 2009
Long-Term Care Insurance
Daily Maximum MaximumAnnual Benefit Coverage Benefit Inflation
Policy Name Insured Premium Amount Period Amount Adjustment
$ $ $ %
$ $ $ %
$ $ $ %
Disability Insurance
Annual Maximum MaximumPre-Tax or Annual Benefit Coverage Benefit
Policy Type After-Tax Insured Premium (% of Salary) Period Amount
$ % $
$ % $
$ % $
Page 13
Ex.: ABC Co. Client A 800 100/day 4 years unlimited 5
Ex.: Employer-Provided After-Tax Client A 800 60 5 years 250,000
Page 14Section 5: Your Financial Information (cont.)
Give your planner an indication of what types of estate planning strategies you’ve considered to
this point (check the appropriate boxes):
Client A Client B
Yes No Yes No
Have you ever met with an estate planning attorney or other estate specialist? ■■ ■■ ■■ ■■
Do you have a will? ■■ ■■ ■■ ■■
Do you have a revocable living trust? ■■ ■■ ■■ ■■
Does your will or revocable living trust attempt to take advantage of applicable credits? ■■ ■■ ■■ ■■
Do you have any of the following documents:
Power-of-attorney for assets? ■■ ■■ ■■ ■■
Letter of direction? ■■ ■■ ■■ ■■
Living will? ■■ ■■ ■■ ■■
Estate Planning
Considerations 10
List any expenses that you expect to incur that aren’t part of your ordinary living expenses
(for example, the purchase of a car or home, an extended vacation, a wedding, or educational
expenses). If you will incur the expense over multiple years, indicate what you’ll be spending
each year in the “Annual Amount in Today’s Dollars” column.
Annual Amount in Starting Ending How Often Will theExpense Description Today’s Dollars Year Year Expense Occur?
$
$
$
$
$
$
$
$
Future Expenses9
Ex.: New Car 25,000 2007 2037 Every 5 years
Ex.: Janie’s College 20,000 2009 2012 Annually
Page 15
Please use the space
provided on the next
two pages to continue
a response to a previous
question or to provide
us with additional
information that would
help your planner better
understand your
objectives, situation,
or concerns.
Section 6: Additional Personal Commentary
Page 16
The information you have provided here will be valuable in the development of your personal
financial plan. You will hear from your planner shortly after Vanguard receives this information.
Thank you for the
time you have taken
to complete this profile.
Section 6: Additional Personal Commentary (cont.)
World Wide Webwww.vanguard.com
Toll-Free Information800-567-5162
Vanguard Personal Financial Planning Service is provided byVanguard Advisers, Inc., a registered investment advisor.
Vanguard PersonalFinancial Planning ServicePost Office Box 709Valley Forge, PA 19482-0709
© 2005 The Vanguard Group, Inc. All rights reserved.
PFPPP 052005
Service Agreement and Disclosure Statement
Vanguard® Personal Financial Planning Service
Read this Service
Agreement and
Disclosure
Statement
carefully, and keep
it for your records.
Page 2Service Agreement and Disclosure Statement
Vanguard Advisers, Inc. (VAI), a Pennsylvania corporation and a registered investment advisor,
through its Vanguard Personal Financial Planning Service (VPFPS) division, will provide financial
planning services to you as described below, according to the terms of this Agreement. None
of the fees for such services are commission-based.
VPFPS will assign a financial planner to work with you throughout the financial planning process.
Your financial planner will discuss your financial goals with you and provide advice designed to
help you meet your goals. Your planner will prepare a detailed, written explanation of the advice
and the steps you’ll need to take to act on that advice.
The investment advice VPFPS provides to you will be based on an asset allocation strategy that
is appropriate for your financial circumstances at the time the planning process is conducted.
We will recommend the allocation of your financial assets across different asset classes (stocks,
bonds, short-term reserves) and, within a particular asset class, across different market sectors
(e.g., growth versus value stocks, domestic versus international stocks, long-term versus short-
term bonds).
Once we have determined an asset allocation for you, we will recommend a combination of
mutual funds that is appropriate for your situation. After you’ve reviewed the recommendations,
you and your planner will discuss them in detail. VPFPS will then assist with activities required to
put the approved recommendations into place and to ensure that all remaining questions are
answered to your satisfaction.
The following are key features of this service:
• Goals-based methodology. All of VPFPS’s investment and asset allocation strategies are
driven by your long-term financial goals, not by short-term investment performance. The
advice that you receive is customized for you based on our evaluation of your objectives,
risk tolerance, time horizon, tax status, and other factors.
• Broad diversification of assets. Rather than attempting to predict which investments will
provide superior performance at any given time, VPFPS seeks to control risk by maintaining
broad diversification among investments from a variety of market sectors and asset classes.
• Flexible planning approach. VPFPS will take your entire portfolio into account with a top-
down approach that focuses on the best allocation of stocks, bonds, and short-term reserves
for you. This approach will help ensure that our advice meshes with your overall investment
strategy—even if you ask your financial planner to focus on just a segment of your assets.
Overview1
Services2
Page 3
In addition to specific asset allocation strategies, your planner will also help you prioritize issues
related to retirement, education, or estate planning. The advice you receive could encompass any
of the following issues:
• Identifying available financial resources and projecting your financial situation in retirement.
• Evaluating your savings and spending habits as they relate to your financial objectives.
• Considering the most appropriate retirement and education savings vehicles.
• Determining the best way to withdraw assets from your investment portfolio.
• Identifying opportunities to minimize estate transfer taxes.
• Discussing how life, long-term care, and disability insurance can help you protect your family
from an unexpected loss of income.
Services (cont.)2
Service Agreement and Disclosure Statement
Financial Planners3
Enrollment and Online Accessibility
4 You may enroll for this service by completing Your Personal Profile in writing or online at
www.vanguard.com/visit/financialplan. You must be an existing Vanguard client and a
registered user of Vanguard.com® to access the online Profile. When completing the Profile
online, any information that you save before final submission will remain stored for 90 days,
after which it will be deleted from our system.
Once you submit your completed Profile online, you will be able to view a copy of that Profile
through the Statements page of your individually designated, password-protected Vanguard.com
account. You will also be given the option to access your completed Personal Financial Plan on
our website through your Statements page. Each Personal Profile and Personal Financial Plan
stored on your Statements page will be accessible to you for seven years from the date it was
originally posted.
VPFPS assigns a financial planner to provide advice to you. Your financial planner will:
• Have a minimum of two years of work experience with investments and/or the Vanguard funds.
• Have an undergraduate college degree and will have completed or will be pursuing a
program of related graduate education and/or a professional designation such as Certified
Financial Planner™.
• Be registered as a general securities representative (Series 7), a state securities representative
(Series 63), and an investment advisor representative (Series 65 or 66).
All VPFPS financial planners have completed an internal training program covering retirement,
education, and estate planning; investment and asset allocation principles; VPFPS’s investment
advisory methodology; client communications; ethics; and compliance issues. In addition, all
financial planners are required to participate in ongoing seminars and training programs
conducted by Vanguard and by external organizations.
Page 4Service Agreement and Disclosure Statement
Fees5 The fee for our planning service described in Section 2 of this Agreement is $1,500. Discounts
are available based on assets held at Vanguard, and one complimentary planning service is
available to clients who invest new assets of $250,000 or more in Vanguard mutual funds.
Additional discounts and fee waivers may also apply.
Vanguard’s advice is based on our own fundamental research as well as research obtained from
a wide variety of external sources, both public and private. All our investment recommendations
are based on methodology that is approved and periodically reviewed by a committee composed
of the following members.
• John J. Brennan. Mr. Brennan is a director and the president of Vanguard Advisers, Inc.
Mr. Brennan also serves as director and chairman of the board of The Vanguard Group, Inc.
Associated with Vanguard since 1982, he holds an A.B. degree from Dartmouth College and
an M.B.A. from Harvard Business School.
• R. Gregory Barton. Mr. Barton is a director and the secretary of Vanguard Advisers, Inc., and
is a managing director of The Vanguard Group, Inc. He holds a B.A. from Colgate University,
a J.D. from Marshall-Wythe School of Law, and an L.L.M. from Temple University Law School.
• James H. Gately. Mr. Gately is a director of Vanguard Advisers, Inc., and is a managing
director of The Vanguard Group, Inc. He holds an A.B. degree from Wesleyan University and
an M.B.A. from Harvard Business School.
• F. William McNabb, III. Mr. McNabb is a director of Vanguard Advisers, Inc., and is a
managing director of The Vanguard Group, Inc. He holds an A.B. from Dartmouth College and
an M.B.A. from The Wharton School, University of Pennsylvania.
• Michael S. Miller. Mr. Miller is a director of Vanguard Advisers, Inc., and is a managing
director of The Vanguard Group, Inc. He holds a B.A. from the University of Virginia and a J.D.
from the University of Virginia School of Law.
• Ralph K. Packard. Mr. Packard is a director of Vanguard Advisers, Inc., and is chief financial
officer of The Vanguard Group, Inc. He holds a B.A. from Holy Cross College and an M.B.A.
from Cornell University.
• George U. Sauter. Mr. Sauter is a director of Vanguard Advisers, Inc., and is chief investment
officer of The Vanguard Group, Inc. He holds an A.B. from Dartmouth College and an M.B.A.
from the University of Chicago.
Methodology andLeadership
6
Other ImportantDisclosures
8
Page 5Service Agreement and Disclosure Statement
Your Responsibilities 7 You are responsible for providing VPFPS with all necessary information about your financial
circumstances and with any other facts or information that might affect the manner in which the
services described in this Agreement are provided to you. Also, since this process requires open
communication between you and your financial planner, you are responsible for being available
for conversations with your planner. VPFPS strategies and recommendations will be made based
on these conversations and the information that you provide. If VPFPS receives incomplete or
inaccurate information, or if you are unable to fully participate in the financial planning process,
VPFPS will not be responsible for the completeness or accuracy of the recommendations.
It is your responsibility to decide whether to act on the advice provided by VPFPS. It is also up to
you to determine that the recommendations you take action on, with or without the assistance of
VPFPS, have been carried out correctly. If you transfer assets from another financial institution to
Vanguard, it is your responsibility to notify VPFPS when the assets have arrived at Vanguard. It is
also your responsibility to subsequently initiate any remaining transactions.
VPFPS reserves the right to terminate this Agreement if, in the opinion of VPFPS, you fail to
provide complete and accurate information within a reasonable period of time, or if the services
provided by VPFPS do not appear to be suitable for your particular situation.
Financial Planning Recommendations
During the financial planning process, you and your planner may discuss a variety of financial
strategies, and your planner will present you with documentation of his or her recommendations.
Within this document, your planner will suggest strategies that are specifically designed to help
you achieve your financial goals. Any financial statements that may be included in the Report are
unaudited and may not follow generally accepted accounting principles. Accordingly, they should
not be relied upon by third parties to evaluate your creditworthiness and should not be used for
any purpose other than to assist you in developing your financial strategy.
In developing your recommendations, VPFPS will make certain assumptions, such as rates of
return on investments, inflation rates, etc. All assumptions are estimates based on historical data
that, in our opinion, serve as a useful and reasonable basis on which to develop financial
strategies. Please keep in mind that past performance is not a guarantee of future results.
Standard of Care
VPFPS and its representatives will perform the services described in this Agreement in good faith
and in accordance with applicable law. However, except for gross negligence, willful malfeasance,
or bad faith, neither VPFPS nor any Vanguard affiliate will be held liable for any action performed
or omitted, or for errors of judgment made within the scope of the performance of such services.
Federal and state securities laws impose liabilities under certain circumstances on persons even
when they act in good faith, and nothing contained in this Agreement shall constitute a waiver or
limitation of rights that you may have under federal or state securities laws.
Page 6
Taxes
Recommendations made by VPFPS may result in taxable gains or losses, or the generation of taxable
dividend income or tax-preference items for purposes of the alternative minimum tax. Although VPFPS
may advise you with respect to the tax consequences of its investment recommendations, you agree and
acknowledge that the payment of all taxes due on income or capital gains remains your sole obligation,
and neither VPFPS, VAI, nor any affiliated or related party or person shall have any responsibility with
respect to them. Nonresident aliens may be subject to withholding taxes on income or capital gains.
Transaction and Redemption Fees
Some Vanguard funds charge fees on the purchase of shares. These fees, designed to offset the cost
of buying and selling securities, are paid directly to the fund and are not sales charges. Additionally,
some Vanguard funds charge redemption fees in order to discourage short-term trading. VPFPS may
recommend Vanguard funds with either or both of these types of fees. Should you incur such fees as
a result of acting on VPFPS’s recommendations, you acknowledge that these fees will be assessed on
your purchase or deducted from your redemption proceeds in accordance with the conditions set
forth in the prospectus of the particular Vanguard fund you are buying or selling.
Additionally, other financial institutions may impose certain fees or other charges on assets that
you transfer to Vanguard. Be sure to consult your other financial providers to ensure your
understanding of all fees that may result from carrying out our recommendations.
Confidentiality
Your personal and financial information will be held in strict confidence and will not be disclosed to
any unaffiliated third party except as part of a regulatory examination or as set forth in the Vanguard
privacy policy.
Investment Results
There is no assurance that you will achieve positive investment results by following the advice
provided by VPFPS. Although VPFPS will recommend strategies that are designed to be prudent
and diversified, all investments are subject to risks, as described in the prospectuses of the funds
you invest in. As with any investment in stocks, bonds, or mutual funds, you could lose money.
Vanguard Advisers, Inc.
VPFPS is a division of VAI, which is a wholly owned subsidiary of The Vanguard Group, Inc.
(Vanguard). Vanguard is owned by The Vanguard Group of Mutual Funds. VPFPS recommends
Vanguard mutual funds and other Vanguard products and services.
Vanguard funds are distributed by Vanguard Marketing Corporation, a registered broker-dealer
affiliated with VAI and Vanguard. VAI has established and operates under a Code of Ethics that
complies with the requirements of the federal securities laws. VAI will provide a free copy of its
Code of Ethics to any client or prospective client upon request.
Other ImportantDisclosures (cont.)
8
Service Agreement and Disclosure Statement
Other ImportantDisclosures (cont.)
8
Page 7Service Agreement and Disclosure Statement
Arbitration
All controversies arising out of or relating to any services provided by VAI, VPFPS, Vanguard, or
any of their affiliates, directors, or employees with respect to transactions of any kind executed
pursuant to this Agreement, with respect to any accounts serviced according to this Agreement,
or which relate in any way to this Agreement will be resolved by arbitration and governed by the
laws of the Commonwealth of Pennsylvania without reference to its conflicts of laws rule.
Arbitration shall be conducted in accordance with and subject to the then-applicable Commercial
Dispute Resolution Procedures of the American Arbitration Association (the AAA Rules). Unless
otherwise mutually agreed upon by the parties, the arbitration hearings will be held in the City of
Philadelphia, Pennsylvania. A panel of three arbitrators will be selected in accordance with the AAA
Rules. The arbitrators will allow such discovery as is appropriate and consistent with the purposes of
arbitration in accomplishing a fair, speedy, and cost-effective resolution of disputes. The arbitrators will
reference the Federal Rules of Evidence and the Federal Rules of Civil Procedure then in effect in
setting the scope of discovery. Judgment upon the award rendered in any such arbitration may be
entered in any court having jurisdiction thereof, or application may be made to such court for a judicial
acceptance of the award and an enforcement, as the law of such jurisdiction may require or allow. You
consent to service of process by first-class mail to your addresses maintained on record at Vanguard.
You should know that: (1) arbitration awards will be final and binding on all parties; (2) by signing
the enrollment section of Your Personal Profile, all parties are waiving their right to seek remedies in
court, including the right to a jury trial; (3) prearbitration discovery is generally more limited than and
different from court proceedings; (4) the arbitrator’s decision is not required to include factual findings
or legal reasoning; and (5) any party’s right to appeal or to seek modification of rulings by arbitrators
is strictly limited.
Note that the arbitration clause may not constitute a waiver of any right under federal or state
securities laws, including the right to choose the forum in which to seek resolution of disputes.
The arbitration clause may not apply to residents of all states.
Effectiveness
This Agreement will take effect once Vanguard receives a fully executed copy of Your Personal
Profile and accepts it. All fees payable, as described in Your Personal Profile, must be submitted
by check or deducted from one of your Vanguard nonretirement accounts in order for us to
begin providing services. No services will be provided until such conditions have been met.
Assignment, Amendment, and Termination of Services
Neither party may assign or amend this Agreement without the consent of the other party. VPFPS
can terminate this Agreement at any time by notifying you in writing and refunding the fees you
paid. You can terminate this Agreement at any time by notifying Vanguard in writing. If you do so
within five business days of the date you sign Your Personal Profile, you will receive a full refund
of any fees paid. If you do so after the five days, the amount of your refund—if any—will depend
on the amount of work performed by, and expenses incurred by, VPFPS prior to receipt of your
termination notice. Written notice of termination should be sent to Vanguard Personal Financial
Planning Service, Post Office Box 709, Valley Forge, PA 19482-0709.
World Wide Web www.vanguard.com
Toll-Free Information 800-567-5162
Vanguard Personal Financial PlanningService is provided by VanguardAdvisers, Inc., a registered investmentadvisor.
Vanguard, The Vanguard Group, Vanguard.com, and the ship logo aretrademarks of The Vanguard Group,Inc. All other marks are the exclusiveproperty of their respective owners.
Vanguard Personal Financial Planning Service Post Office Box 709 Valley Forge, PA 19482-0709
© 2005 The Vanguard Group, Inc. All rights reserved.
VPFSA2 052005