Make a difference to client outcomes with low-cost investments
July 5, 2023
July 5, 2023
Markets are unpredictable. Costs are forever. The lower the costs of investing, the greater share of an investment’s return your clients can enjoy. It’s a simple and effective strategy. The less your clients pay in fees, the more they have invested, which gives them more opportunity for growth. At Vanguard, you’ll find the average mutual fund and ETF (exchange-traded fund) expense ratio is 82% less than the industry average.1 That’s a significant cost difference that can make a notable impact on a client’s portfolio. Figure 1 compares Vanguard’s asset-weighted average to the industry.
Clients don't get a bill explaining how much they’ve paid in fund expenses since those costs are paid directly out of each fund's returns. However, in figure 2, you can see how the difference in basis points potentially translates into dollars and cents for clients. For example, with an initial investment of $250,000, a client could save almost $150,000 over 30 years, an amount of money that could be a game changer in retirement.
This hypothetical illustration assumes a 6% return for all examples. Rate is not guaranteed. If the rate of return were altered, results would vary from those shown. The final balance shown is after costs. This example doesn't represent any particular investment and doesn't account for inflation. There may be other material differences between investment products that must be considered prior to investing. All averages are asset-weighted. Industry averages exclude Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2022.
You work hard every day to help your clients successfully reach their goals. That's why we're committed to helping you, your clients, and your practice succeed over the long term. It's how our mission is aligned with yours. As part of our commitment to you and your clients, Vanguard was built to make sure we stay focused on keeping costs low.
Please don't hesitate to contact your Vanguard Financial Advisor Services™ sales team at 800-997-2798.
1 Sources: Vanguard and Morningstar, Inc., as of December 31, 2022.
Our total-return models and objective-based models are foundational investments to match your clients' needs.
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