My understanding is your total fees per holding for using this service will come out to about 0.20%, which includes the fund fees plus the digital advisor service fee. Basically they charge you the 0.20% for the service, and then subtract out what they also charge for the fund fees. So for the 4 holdings and fees you listed the advisor fees would be:
- VTI: .20 - .03 = 0.17%
- VXUS: .20 - .08 = 0.12 %
- BND: .20 - .04 = 0.16%
- BNDX: .20 - .09 = 0.11%
I think they are claiming that on average, the fee for this service would be about 0.15%, which I assume means the average holding fee is 0.05%. I'm basing this off of this link which states:
**Vanguard Digital Advisor is an all-digital service that targets an annual net advisory fee of 0.15% across your enrolled accounts, although your actual fee will vary depending on the specific holdings in each enrolled account. To reach this target, Vanguard Digital Advisor starts with a 0.20% annual gross advisory fee to manage Vanguard Brokerage Accounts. However, we'll credit you for the revenues that The Vanguard Group, Inc. ("VGI"), or its affiliates receive from the securities in your managed portfolio by Digital Advisor (i.e., at least that portion of the expense ratios of the Vanguard funds held in your portfolio that VGI or its affiliates receive). Your net advisory fee can also vary by enrolled account type. The combined annual cost of Vanguard Digital Advisor's annual net advisory fee plus the expense ratios charged by the Vanguard funds in your managed portfolio will be 0.20% for Vanguard Brokerage Accounts. For more information, please review the Vanguard Digital Advisor brochure.
Side note 1: This pricing model makes me wonder what happens if a holding has a fee greater than 0.20%. Maybe they simply don't let you use this service with them, or perhaps the service would then be "free". The model also seems like it would make you more inclined to lean towards allowed holdings with higher expenses (but less than 0.20%), simply because they are essentially the same price to you as those with lower expenses. That's a horrible way to choose funds, but I could see it happening because it's psychologically a "better deal".
Side note 2: you made a statement where you added up the 4 fees to get 0.24%. That doesn't have any meaning in regards to fees. For example, suppose you split your money into 100 different funds, all of which had a 1% fee. You wouldn't add those up and claim your fee is 100%. It's still just 1% for all of your money.