top of page

WHAT VALUE DOES A FINANCIAL ADVISOR ADD? "ABOUT 3%"

  • Writer: Michael Livian
    Michael Livian
  • Apr 9, 2014
  • 1 min read

As professional money managers we are often faced with the question: what is your added value? In March 2014 Vanguard released a research report titled: "Putting a value on your value."

In this study Vanguard attempts to quantify the benefits that advisors can add to the non professional investors. Vanguard calculated that professional advice can add up to 3% a year in net of fees and taxes returns. The sources of this "alpha" or "value add" are not, however, market outperformance. In fact, they are:

1) Behavioral coaching: teaching investors not to panic during crashes and not to get too excited during rallies.

2) Asset location: more efficient use of tax deferred accounts, tax-advantaged financial instruments and the efficient use of realized gains and losses.

3) Cost-effective implementation: reduction in the expense ratios (transaction costs, fund fee, etc.).

4) Asset allocation and rebalancing policies.

To read the original Vanguard research report please click here.

 
 
 

Comentarios


Featured Posts
Recent Posts
Please Click Here For Important Disclosures and a Customer Relationship Summary:
- FORM CRS (Customer Relationship Summary)
- FORM ADV (Firm Brochure)

This site has some hyperlinks to other websites and blogs. Such external Internet addresses contain information created, published, maintained, or otherwise posted by institutions or organizations independent of us. Lehmann Livian Fridson Advisors LLC (LLFA) does not endorse, approve, certify, or control third party content and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, timeliness, or correct sequencing of information located at such addresses. Use of any information obtained from such addresses is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference therein to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by LLFA.

 

© 2020 by Lehmann Livian Fridson Advisors, LLC  |   PRIVACY NOTICE  |  IMPORTANT DISCLAIMER  |

 

bottom of page