The Vanguard Group has long been considered a company squarely in the investor’s corner in part because of its ground-breaking research into low cost index funds done back in the 1970’s by its founder John C. Bogle. Vanguard has produced research since 2001 pointing out how an advisor using Vanguard Advisor’s Alpha Strategy can add about 3% value in net returns to clients’ portfolios and in some circumstances the advisor may have the opportunity to add tens of percentage points of value — although this opportunity happens intermittently over the years of a relationship if at all.

I am not going to use space here to attempt a replication of Vanguard’s research but I recommend you read it here or call our office for a hardcopy. (360) 671-1621

But just how is a good advisor adding value to you and how would you measure it? As the only outcome that gets measured is the one that you and your advisor “get done” versus “coulda”, “woulda”, and “shoulda done it” behooves us to look carefully at the factors that we believe you can control. Vanguard Research and thousands of good advisors across the country believe the factors below add value to their client’s accounts:

1. Suitable asset allocation using broadly diversified portfolio of Funds and or Exchange Traded Funds
2. Cost-effective implementation (expense ratios and trading costs)
3. Rebalancing the portfolio at intervals
4. Behavioral Coaching (talking to the client off the ledge or from being too greedy)
5. Asset Location (having taxable and nontaxable accounts and appropriate investments in each)
6. Spending Strategy (withdrawal order)

Many advisor’s employers and broker dealers do not allow them to fully use Vanguard Mutual Funds in part because Vanguard refuses to pay broker dealers shelf space fees for the ability to sell Vanguard’s funds on their platform. Therefore, you may need to find an Independent Registered Investment Advisor if you desire help in your advised account regarding Vanguard Mutual Funds and would like help maximizing your net returns. If you choose to work directly with Vanguard they have good over-the-phone and internet service and three offices in the US.

Certified Financial Planners® strongly believe preparing a financial plan at the beginning of a relationship — before a portfolio is built — is the best way for clients to express to their advisor what is important to them like: family, life goals, estate plans and charitable interests. Our team of five advisors includes three Certified Financial Planners® who prepare plans for our clients. A directory of CFP® planners is available, including several Certified Financial Planners in Bellingham®.

This commentary on this website reflects the personal opinions, viewpoints and analyses of the Skyline Advisors, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Skyline Advisors, Inc. or performance returns of any Skyline Advisors, Inc. Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Skyline Advisors, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.