April 22, 2013
The traditional value proposition for many advisors has been based on their investment acumen and their prospects for delivering better returns than those of the markets. No matter how skilled the advisor, the path to better investment results may not lie with the ability to pick investments or strategies. In an updated Vanguard research paper, the authors state that it may be useful for advisors to change their performance benchmark from the markets' return to the returns that investors might achieve on their own without professional guidance. As part of this new value proposition, advisors would serve as wealth managers and behavioral coaches and would inhibit investors from making undisciplined and emotional decisions based on headlines and ads and short-term market actions.
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