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 up to or even exceed 3% value in net returns to your portfolios. The latest July 2022 version of this research adds new information, updates to charts, and a new section on total return investing. 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 the significantly updated July 2022 version here or call our office for a hardcopy at (360) 671-1621.

How is a good advisor adding value to you and how would you measure it? As always in life it behooves us to look carefully at the factors. Vanguard Research tells us the factors below add value to their clients’ 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 fearful investors off the ledge when markets move down or from being too greedy when markets move up).
5. Asset Location (taxable and nontaxable accounts and appropriate investments in each).
6. Spending Strategy (withdrawal order).
7. Total return versus income investing. (Vanguard has a new section in the report to clear up investor confusion)

Certified Financial Planners® strongly believe preparing a financial plan at the beginning of a relationship is the best way for clients to express to their advisor what is important to them. In the report Vanguard states it this way, “Beginning the client relationship with a financial plan is so essential. Not only does it promote complete disclosure about investments, but more importantly, it provides a perfect way for clients to share what is of most concern to them: their goals, feelings about risk, family, and charitable interests. All this information is emotionally based, and a client’s willingness to share it is crucial in building trust.”  Our team of four advisors includes three Certified Financial Planners^® who prepare financial plans for our clients.

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.