Amex and Vanguard Expand Financial Advice Service

American Express and Vanguard are opening their financial advice service to more consumers.

Launched last year, INVEST for Amex by Vanguard gives American Express customers digital financial planning and investment management guidance.

The program was previously open to users who funded an account with $10,000, but that threshold has been lowered to $3,000, the companies said in a Wednesday (Feb. 22) news release provided to PYMNTS.

Members can also get access to consultations with Vanguard advisors if they maintain $50,000 in INVEST, down from the previous $100,000 minimum.

“American Express members know investing is important to building a strong financial future, and with many consumers making financial plans for the year ahead, it’s a great time for members to start investing,” the release said.

The company says its in-house research found that 60% of consumers wanted more guidance to drive their financial decisions. The program offers that guidance, the company says, via Vanguard’s digital advisory platform and unlimited consultations for users who maintain the minimum investment amount.

The program’s expansion is happening at a moment when even wealthier Americans are feeling increased financial pressure, as recent PYMNTS research has found.

Joint data from PYMNTS and LendingClub shows that more than half of high-income individuals — people who earn more than $100,000 per year — live paycheck to paycheck.

“And the reason it’s happening is pretty simple. It’s inflation,” Anuj Nayar, financial health officer at LendingClub, told PYMNTS.

The average U.S. household, he said, has seen monthly bills jump by $400 since last year. As that $400 comes off the top line of their paycheck, so to speak, there’s less left to go around.

As a result, consumers are scaling back their spending. Some areas are already being affected, Nayar said. For example, during the great snapback in holiday travel last year, many consumers chose to drive rather than fly.

The struggle to meet obligations is also evidenced by the fact that consumers are starting to dip into 401(k) plans to cover emergency expenses. Nearly 3% of the 5 million people who have 401(k) plans offered by Vanguard tapped into those accounts last year to pay medical bills or avoid foreclosures or evictions.

“This is one of the worst decisions you can make,” said Nayar, “because you are taking away future income you are going to need for retirement. You’ll look back on that with massive regret as you get to retirement age.”

Aside from the emergencies, Nayar noted that treating 401(k) plans as an extra source of cash has extended to everyday expenses. “People are not doing it because they want to splurge. They are doing it because eggs are $6, and everyone’s got to feed their family.”