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Adviser’s Alpha

I sometimes get asked whether someone can successfully invest their own money, and if you know how to build the right portfolio and you have the right mind set then it’s possible. 

But a study from Vanguard looked at returns from DIY investors vs those with advisors and those with an advisor can possible get up to to 3% better returns than doing it themselves.  Vanguard call it ‘Advisor Alpha’. Why do you think that is?

There are several reasons, but the main one, is in the investor staying the course, and not going in and out of the market. And the studies concluded that clients who are properly advised and recommended suitable portfolios, and who are risk coached to stay the course when markets are volatile, are better able to achieve the fund returns.

This is where our financial planning process of understanding your goals and risk profile, recommending a portfolio that gives you adequate returns (to achieve your goals) but at a roller coaster ride that you can take, using cost-effective instruments and meeting and risk-coaching you regularly, will provide the highest probability of you getting the returns to achieve your goals.