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The Vanguard Group Study of the Value of an Advisor

A study conducted by The Vanguard Group found that advisers can add over 3 percentage points to clients’ net returns. This has been labeled the Advisor Alpha. Alpha (α) is a term used in investing to describe an investment strategy’s return measured against the performance of a benchmark or index. Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over some period. 

Here’s a summary of where those percentage points came from:

Behavioral Finance (Thought Partner) – 1.5%

Asset Allocation & Tax Strategies 0.75%

Investment Analysis & Properly allocating risk 0.80% 

Learn more about The Vanguard Group’s study: Investment News Article & Vanguard Advisor’s Alpha® White Paper