From the beginning, we’ve set out to serve the needs of those looking to build a better financial future. Our mission—to take a stand for all investors, to treat them fairly, and to give them the best chance for investment success—guides every action we take and every decision we make. Aligned with that mission is ensuring that every one of the 30 million investors we serve directly, through a 401(k) plan, or through an outside advisor has the support needed to reach that investor’s goals.
Now more than ever, we see investors’ long-term success tied not only to the funds they use but also to the advice they receive. For more than 40 years, we’ve been champions in the mutual fund industry for accessibility, affordability, and alignment with clients’ interests. This has enabled investors to keep more of what they earn and to more easily reach their financial goals. We aim to do the same for financial advice.
With technology as our tailwind, opportunities abound to improve the ease of use, quality, and affordability of advice. Activities that once required time and effort from investors can now be automated and simplified. Rebalancing a portfolio, executing a tax-efficient spending strategy, or determining an optimal cash position can be done using algorithms and artificial intelligence. Technology has automated the common portfolio management tasks (the blue and the orange in the chart below). These core advice building blocks are more accurately and easily implemented than ever before, and technology allows us to provide them for less than 20 basis points. Even the most experienced and disciplined investor can benefit from advisory services at that price.
Tailoring advice to investor needs
Yet technology cannot guide every investment decision. Advisors still play a critical role in coaching investors to stay on track during choppy markets. Panicking and chasing returns are surefire ways for investors to undermine their long-term returns. There also are plenty of times that require advisors to have personal conversations with investors about what they hope to achieve beyond their own financial security. Talking to a Certified Financial Planner™ or an experienced advisor can make a big difference as an investor wrestles with complex topics like estate planning and charitable giving (the tasks in purple).
Our vision for advice
Vanguard has offered advice since 1996, and we know there isn’t a one-size-fits-all approach. But as we strengthen and expand our advisory services and deepen our commitment to helping traditional advisors with their practices, we stand firm in our belief that all investors deserve advice that puts their interests first.
Whether advice comes from an app or an advisor, it must let investors keep more of their returns. Too often we’ve seen investors hurt by high advisory fees or advice services that wave a low-cost banner while steering clients to low-yielding cash options or underperforming high-cost actively managed products. We know there’s a better way.
We’ll offer robust, easy-to-implement, low-cost advice built on our experience of serving individual investors for 44 years. And we’ll support advisors looking to do the same.