Advisor’s Alpha

Vanguard’s paper correctly outlines both the perceived and actual areas in which advisors add value or “alpha” for their clients.  Advisors tend to spend far too much time on the perceived value of market timing and investment selection, which more often than not detracts from performance.  The actual value-add, on the investment side, is in developing a customized asset allocation, rebalancing, tax-efficient investing, and ensuring that investors remain disciplined and informed through tumultuous periods in the market.  On the non-investment side, advisors can serve as an advocate to help individuals organize, document, and understand their entire financial situation.

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