BY USING VANGUARD FUNDS, I think my clients will have a higher likelihood of having more money in their accounts in the future than if they use comparable investments from other mutual fund companies. Sounds like something Captain Obvious might say.
OF COURSE NO ORGANIZATION IS PERFECT. Within Vanguard I am sure there are large and small disagreements on company direction. However, there are specific long-term aspects of the Vanguard approach which should help my clients achieve the best results. The following are the top four reasons, in no particular order, that Vanguard helps me help my clients:
PROMOTION OF LOW-COST INDEXING. Behind the legendary efforts of John Bogle, Vanguard has been the major driver in promoting the benefits of low-cost indexing, also known as passive investing, as the smartest way for people to invest. They are not the sole provider of index funds, and there are many other champions, however they are clearly the leading proponents of this approach.
CONSISTENT MESSAGING. By and large, the Vanguard message has been the same throughout the years. Set-up a well diversified portfolio of low-cost investments and, thru the ups and downs, let the markets work for you. Sure, they offer active funds and ETF’s. However, their active funds are significantly less expensive than most and this has not diminished their advocacy of indexing.
VANGUARD DOESN’T PAY ADVISERS. In an industry full of conflicts of interest, this is critical. I receive no compensation or commissions from Vanguard to promote their investments. Nothing. Zero. Zip. Nor do they assist my firm by sponsoring events or paying for our marketing efforts. It has been liberating to provide my services to clients in a direct way. My clients know exactly how much I make and who pays me (they pay us on a flat fee basis). The guidance that I provide is no longer compromised by how I am compensated.
NO HYPE. In all of my dealings with Vanguard, they have never hyped returns or products or “new” angles on investing. This is very refreshing. In my experience, I have come to believe that the more an investment is hyped by the financial services industry, the less good it is for the investor. Of course education and guidance are important and part of the process in helping people become better investors and aware of their options. But hype is something entirely different. And I don’t get hype when I interact with Vanguard.
IT’S QUITE SIMPLE. With my 20 years of experience, when I consider the factors important to investor success, I am confident that recommending Vanguard will give my clients the best chance to get the most return on their investment.