Adviser’s Alpha: Putting a value on your value

The value proposition of advice is changing. The nature of what investors expect from advisers is changing. And, fortunately, the tools available to advisers are evolving as well.
In creating the Vanguard Adviser’s Alpha™ concept in 2001, we outlined how advisers could add value, or alpha, through relationship-oriented services such as providing cogent wealth management via financial planning, discipline and guidance, rather than by trying to outperform the market.
Since then, our work in support of the concept has continued. This paper takes the Adviser’s Alpha framework further by attempting to quantify the benefits that advisers can add relative to others who are not using such strategies. Each of these can be used individually or in combination, depending on the strategy.
We believe implementing the Vanguard Adviser’s Alpha framework can add about 3% in net returns for your clients and also allow you to differentiate your skills and practice. Like any approximation, the actual amount of value added may vary significantly, depending on clients’ circumstances.

Vanguard's Adviser's Alpha identifies the seven critical benefits that advisers offer clients and attributes to each a quantitative value.

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