Advisor’s Alpha: 3% Is Good. 143% Is Better

We’ve written before about the often-cited Vanguard “Advisor’s Alpha” study. That research documents the data showing that a good financial advisor can add on average a full 3% in incremental return to a client’s investment portfolio annually. The study then breaks that 3% down into its component parts, showing that the biggest gains–a full 150 basis points–come from effective behavioral coaching that serves to prevent clients from engaging in detrimental investing behaviors (think buying high and[…]

Value Above Technology: Advisors as Coaches

Executive coaching is estimated to be a $1 billion industry. These counselors, psychologists, and former “C-level” executives coach leaders to build competencies and skills required to be effective and successful at their high-level, high-stakes job. While coaches use technologies and numerous methodologies to assist in their practices, personal interaction is at the heart of the business. Like a C-level role, the job of household money management is multi-faceted, and includes many complex tasks: budgeting, creating long-term goals, investing, estate[…]

Consumption: Full Speed Ahead?

If part of your work involves educating others on how consumption can affect their ability to build and maintain wealth, looking for outside patterns of data and trends might be a way to bring an “ah-ha” moment to clients, children, friends, or family members. A string of articles in yesterday’s Wall Street Journal wove an interesting pattern for me, and the interpretation might prove educational for consumers and clients. First, this: Holiday Shoppers Were in[…]

Rewards

Race through your work, and loudly proclaim you are finished. Such is the pattern of some elementary school students (and adults, by the way). You’ll undoubtedly see this tonight: kids racing up to a door, quickly getting their reward (and hopefully saying thank you…or at the least, “trick or treat”), and then they are off to the next task, the next house. A wise teacher in one of my children’s classes is teaching that in writing,[…]