Advisor’s Alpha
Vanguard recently published a white paper on “advisor’s alpha,” in which they discuss and attempt to quantify the value an investment advisor can provide for his or her clients.1 They concluded that an advisor who dispenses sound advice in six specific areas adds about 3% per year in client returns. Vanguard arrived at this figure by calculating value added in the following areas: 1) asset allocation; 2) cost-effective implementation; 3) rebalancing; 4) behavioral coaching; 5