Unlocking the Value of High-Quality Financial Advice: With guest Maria Quinn from Vanguard

In this episode, Josh Nelson, CFP®, has an insightful conversation with Maria Quinn, a senior advice strategist at Vanguard's Investment Advisory Research Center. Vanguard, one of the largest and most respected financial institutions globally, has conducted extensive studies on the value of high-quality financial advice. 

 The discussion focused on Vanguard's advisor study, which has quantified the benefits of high-quality financial advice. Emphasizing that not all advice is created equal, the conversation covered wealth management, investments, behavioral coaching, and thought leadership in the financial advisory industry. At Keystone Financial Services, as fiduciaries and Certified Financial Planners, we believe this conversation offers valuable insights into achieving better financial outcomes. Enjoy the podcast and we hope you gain a deeper understanding of the importance of expert financial guidance. 

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Podcast Editing: Tim Leaman/info.primegen@gmail.com

Transcript

Wiser Financial Advisor – Maria Quinn Vanguard Interview

Hi everyone, welcome to the Wiser Financial advisor show with Josh Nelson, where we get real, we get honest and we get clear about the financial world and your money. This is Josh Nelson, founder and CEO of Keystone Financial Services. Let the financial fun begin!

 Recently I had the opportunity to sit down with Maria Quinn. Maria is a senior advice strategist with the Investment Advisory Research Center at Vanguard. Vanguard is one of the largest and most respected financial institutions in the world. We had a great conversation about their advisor study, which has quantified over the years the value of high-quality advice--and I'll emphasize high-quality advice, because not all advice is created equal.

At Keystone Financial Services, we are a fiduciary, and our advisors are all Certified Financial Planners, which is the gold standard in the financial industry. I think you're going to find our conversation very interesting as we talk about wealth management investments, behavioral coaching and thought leadership in the financial advisory industry. Enjoy and God bless. 

Josh: Welcome, Maria.

Maria: Thank you so much for having me. I'm delighted to be here. 

Josh: You work on the research side of Vanguard, so maybe a good starting point would be to give us a little background. How did you get interested in the financial industry and end up in Vanguard Research?

Maria: I grew up in the nonprofit sector and then came to Vanguard about 11 years ago. Originally, I was in-house in our personal investor division. We have an ultra-high net worth segment. When I came in, I was brand new to the industry. I'd been in nonprofits for years, so I needed to get licensed and do all the regulatory things. After about six months or so, our Financial Advisor Services Division—which is our intermediary division that works exclusively with external advisors and financial institutions—found me and asked me to come over into a sales function, which I'd never really done before. I was game, and it was a great way to learn product very quickly. And since then, I've held a variety of jobs, always client facing, working with our external financial advisor client base. Then two years ago, I was approached by my now boss, Fran Kinniry, about taking a step out of sales but still in the organization, looking at research. Historically at Vanguard, our research approach has been centralized. So we had one central entity that would create content that all of our business lines would then determine how to use and how to distribute. So you would take economic thought leadership, portfolio construction thought leadership, and then it would be up to our international business, our institutional business, our financial advisor services business and our retail business, to determine how they would use it. 

Two years ago, we decided to bring research in-house to our Financial Advisor Services division because our financial advisor services community is very different in terms of their needs. I knew the business inside and out and I had an interest in getting back into research type work, writing and articulation of our thoughts. So it worked well to come into this team. Even though our team is new, we've been around for two years and we feel like we've continued this evolution of vanguard research and meaningful thought leadership in the advice space. Now we're just making it more actionable and more customized for the financial advisor services community.

Josh: Which is great. Thank you for that background. And again, Vanguard is one of the largest and most respected financial institutions in the world. The investment managers are known for different divisions. There's the financial advisor; the high net worth division; and the individual retail investor side of things as well. So, a lot of people come to Vanguard because they want to open up individual investments. There are lots of different areas, but as far as Vanguard Advisory Alpha, that study's been around for a while. We can start unpacking some of the key findings because it's pretty compelling.

Maria: The original Vanguard Advisors Alpha actually came out in 2001. As you mentioned, we're a diverse business. We have a lot of different business lines, but we were founded in 1975 as a direct do-it-yourself shop for a retail investor. They go direct to their investments without an intermediary, the broker of the era. And in 2001, my former colleagues Scott Donaldson and Don Benny Hoff sat down and ideated on some research content. They said, “We want to write a paper on how clients are better off being advised than they are doing it on their own.” Which, 25 years after our founding, was a significant departure from how we had done this before, but one that was reflective of looking at the changing demographics of participants.  

The single objective of retirement was becoming more complex, and managing money over the course of 20 to 40 years in retirement had started to become daunting for a number of individuals. We've really looked at this idea of advice as being beneficial and additive to the end client. The original paper, in 13 pages, more or less said clients are better off being advised than they are doing it on their own. I think it paved the way to our greater partnership with financial advisors, to  try for better client outcomes. Who better to do that than the financial advisors that our clients are working with?

Josh: Yeah, though in some circumstances, especially with the new clients who join us, sometimes they've had a bad experience with an advisor or broker. But, so the overall findings of the study basically were that people were better off with an advisor, but there are some caveats to that. There were some specific deliverables. The advisors needed to be on their game to doing things the way that the study impacts showed. One of the key things is behavior driven by emotional things. Oftentimes, even though it doesn't make any sense, people want to instead of buying low and selling high, do the opposite and get pretty rolled when the markets get crazy. So, bottom line, it's about 3%. That's what the study found to be how much the advisor potentially could add. Could you unpack that a little as far as what you found and continue to find, that the study has continued to hold.

Maria: Yes. So the original 2001 paper looked at advice, taking into consideration portfolio construction at the time, willingness and ability of the client to run their own money. So, what the service model looks like for aspects of wealth management as we think through taxes, as we think through spending from a portfolio, aspects of estate planning and everything that factors into that as well as coaching. The original 2001 paper looked at this as a good hallmark of a service to receive from a financial advisor. Fast forward to 2014. My boss Fran Kinniry, got into the mix and said, “You know, it's all fine and well to say that clients are better off being advised, but we're in the numbers business, so how much better off are clients being advised?” And that's where that 3% number comes in—or about 3%, we should emphasize, because compliance is comfortable with me saying about 3% rate, because it could be more or less depending on your unique client situations.  

In our 2014 update, we looked at breaking down the best practices and advice when it comes to building a client’s portfolio. So being mindful of what we can control—cost, and we want to be mindful of diversification in that portfolio like getting that suitable asset allocation. We know from the studies, that asset allocation is one of the primary drivers of a client success. There are a lot of other things that go along with it, such as being sensitive to taxes, being sensitive to how we're spending from that portfolio, and how we rebalance that portfolio. Sometimes behavior is going to affect how we think about rebalancing. That buying high, selling low mentality you mentioned may call for  behavioral coaching. 

In the original paper, which we've continued to iterate every two years given market volatility, what we've observed is that the behavioral coaching number continues to go up. You know, Daniel Kahneman, over the course of his lifetime and the body of work that he was involved with for looking at behavioral finance, said that he was no better off 30 years into his study at making decisions than he was when he first started out. So there's always going to be that need to coach—to talk clients off the ledge or serve as that emotional circuit breaker when the market is doing something we don't expect it to do, which unfortunately tends to be pretty often.

Josh: So, the behavioral component actually is the biggest contributor towards that 3%, if I'm correct?

Maria: Yes, you are. Somewhere between 1.5 to 2% of the overall 3% value is derived from being a good coach to clients in periods of volatility. One thing I love to point out is that behavioral coaching is something we can institute and practice all the time, but the most significant addition to value tends to be episodic, right? It’s when the market is doing something we don't expect or maybe something is going on in our personal lives or often a combination of the two, because they tend to happen at the same time. Talking to a client, having that 15-minute conversation to unpack what's going on, what they're reacting to, asking really thoughtful questions and demonstrating that we're there for them and we’ll listen and provide the best guidance to stay the course or if needs be make small changes. Not wholesale abandoning a plan, right? In those moments of volatility, 15 minutes with us can add significant value to a client over the long term because we're listening to them and keeping them invested as best we are able.

Josh: Some of the listeners may be thinking, “Well, I would never do that. Why would I ever buy when the market’s really high or buy NVIDIA after it's skyrocketed or sell Bitcoin after it's gone into the basement? Of course I wouldn't do that!” But the reality is that on average, people do, if left to their own devices. So, having another voice besides the one in your head is important, right?

Maria: Exactly right. I always say that we are financially and emotionally invested in our investments, and we tend to hold on. “But I want to hold on to this. It's doing extremely well, and I'll know when to sell. I'll know. I'll know. There will be a sign in the market that will tell me when it's the right time to sell.” Unfortunately, we tend to see those signs too late or we can look back and confirm there may have been a sign, but never in that moment, or if you're buying Bitcoin and it's gone down in value, you want to hold on to it because it'll come back up again, right? So we do fall into these things and it's very normal. 

Josh: We use these as extreme examples, but the reality is that you can build the most beautiful, diversified asset allocated portfolio in the world—but then when the world's melting down, like in in the spring of 2020 or in the financial crisis of ‘08 and ‘09 or the dotcom crash, or 9/11—all of which I’ve been through—people kind of lose their minds for a little while because the media is just bombarding them with fear, fear, fear. It's not to say that bad things don't happen in the world. Of course they do. That's just a part of life and business. But how we react to that, can make all the difference. You could have held on to a beautiful portfolio of Vanguard funds for decades and had great returns and then just kill your returns in one day by one bad decision.

Maria: The perspective that we can provide is invaluable. You mentioned what you've lived through in the last 20 years of providing advice and service to clients. I find when I'm talking to financial advisors, particularly on the coaching topic, that there's always going to be a crisis. There's going to be something that goes on in the marketplace, things we remember that we feel so much in the moment. So, March of 2020, the investors’ mindset going into what they were observing in March of 2020, right? We were just watching entire sectors of the global economy shut down, and the natural response is to want to protect. So I want to move to cash and real estate. That's kind of the knee jerk reaction: “I want to go into cash. I know cash is fine.” Or “I want to take some risk off the table and go to something more defensive. Let's increase our fixed income allocation.” And while that would have been fine for a year or year and a half, we go into 2022 and our most conservative investors are looking at a market that's down both in equity and in fixed income. And it's something they've never lived through before, something we hadn't seen. So there's always going to be something that will be unforeseen that we cannot plan for in that moment. We can't plan for every event, but how can we set ourselves up to be successful over the long term? And that's where coaching really comes into play because it comes from a very positive place, a positive intention for best outcome. You’re listening to a client, asking questions, being present in that moment and making decisions with less emotion present as best you can. I think that's where advisors add up to 200 basis points of value, because you can be that emotional circuit breaker in that conversation. Not to say that you're not present with emotion, right? We always want to have emotion in our conversations with clients. But how can we make decisions taking some of the emotion out of the equation?

Josh: And asset allocation is a huge part of that—to get the asset allocation right to begin with. So we have a portfolio that we can live with when stuff hits the fan. When things get really crazy, you've got a portfolio they can live with and it was well-intentioned. It was designed for a purpose. Not that anything is guaranteed. That's just the nature of being an investor. But most people have no idea how much risk they're actually taking in their portfolio. Certainly when you have a big run-up in the market as we did before 2020, we basically went through a 10-year plus expansion in the economy and hadn't seen a lot of downs. Then 2020 happened. So all of a sudden, a lot of people who had great investments and good returns were faced with this massive decision about something that had never happened before in any of our lives. So, that behavioral component is huge. In fact, we saw a study that one of the best performing categories of investors is dead people—because they can't go in and mess with it when things look rough.

Throughout my career, I've seen a lot of people who have made great decisions and of course, a lot of the other, but let's unpack some other areas because for people who have been used to self-directing, which is the case for most of our new clients—we’re not working with them from another advisor. They've been doing their thing, they've been great savers, they've made good investments and financial decisions. Then they're faced with getting close to retirement, where maybe things have gotten more complex, and they realize they may need somebody to work alongside. But if you're doing anything by yourself, it probably costs less than paying somebody. And a lot of people are trying to figure out if it’s going to be worth it. I think that's the crux of the study. So, what are some of the areas that do add value that Vanguard has found measurably added value.

Maria: So, when we take a look at that 2014 study, the one thing I'd love to point out about the seven modules in that White Paper is that it really is value beyond the statement. If we think about our advice experience solely as our performance relative to a benchmark or a performance relative to the market, we take away from what a lot of that advice experience is. So when I think about the modules themselves, there's no secret sauce to them. It is portfolio construction; it is wealth management; it is behavioral coaching. But as you mentioned earlier, that asset allocation conversation and getting that right is critically important. And that's something that is going to evolve and change over the course of the client’s lifetime because our clients’ lives will change, and their goals will change. And when I think about asset allocation , I think about how we get to that conversation. How we have that conversation with clients is how we start to establish trust with them. We talk about risk so much, but what does risk even mean? I want to find out what they’re comfortable with, and that might be different depending on the various members of the household that we work with. One thing that advisors don't get enough credit for is the fact that you have a lot of tough conversations with family members at the same time. You are bringing 2 spouses together to get them to agree to an investment approach and philosophy, and how we're spending, and what our goals are.

I usually say it's like marriage counseling, it's family therapy sessions, but a great differentiator. You can get to that from an asset allocation conversation. As to cost-effective implementation, I don't say this because I'm from Vanguard and we're synonymous with low cost, but being mindful of cost is something we can control in the portfolio as we design and build that portfolio. And I think that clients are much more cognizant of it now. A lot of the language that was coming out in 2016 and 2017 with regards to the DOL and regulatory reform didn't come to fruition, but you started hearing things like best interest. You hear that echoed back in TV and in every publication now—advisors acting in your best interest. So, in the framework itself, we do go to these best practices in advice. 

The reason I mentioned that it's value beyond the statement is because I think so much of advice conversations come down to “How am I doing with respect to the market?” If all we're doing is basing our service model on a quarterly review document that's placed in front of a client that shows relative performance, I think we're detracting from what we are providing. It is so much more than the investment. It's learning about our clients, it's aligning resources and services appropriately. It's maybe having tough conversations that clients don't want to have with their children who inherit and they don't like behaviors. We do so much on behalf of our clients, things that don't immediately pop if all we're thinking about is, “What is my 60-40 portfolio doing today compared to the market?” Or, “How is my target retirement fund doing relative to the market today?” The advice experience is much more. If we're just slowly looking at an investment portfolio, that's ultimately not why our clients come to us. It's not why they stay with us. It's because we continue to deliver above and beyond that for them every single day. 

Josh: You're right. Getting to know the client specifically and really digging deeper instead of just assuming that we know what risk means to that person.  For some people, risk isn't about the market going up or down. Their biggest risk is that they run out of money sometime during their retirement. They're more concerned about inflation risk or planning for a long term care event. Or trying to minimize taxes so as to pass things on tax efficiently. Everybody has different priorities, right? Everybody's situation is different. So, sometimes we’re the amateur psychologist, but it is our job to poke and prod and ask questions just so there's a full understanding of what the situation is so we can advise people appropriately.

Maria: That's so true. I have a minor in psychology and I think it's maybe the one portion of the degree that I use all the time. It allows me to better relate to a person. Coming back to the coaching conversation, the biggest differentiator I see in the advisor space is that ability to be uniquely human to your clients and meet them where they are. Being thoughtful and deliberate and mindful of that is really important. 

Josh: And that's the component that everything is about. AI, artificial intelligence will be able to do everything, including fold our laundry someday. But you know, it isn't going to replace that human element of somebody who actually cares. Most modern airliners right now could probably take off and land themselves and fly themselves. But I don't know many people who would actually get on that aircraft if there were no pilots in the cockpit. I like to think that people are still going to care about relationships and want someone who cares looking after their most important stuff. 

The reality is, there's gonna be a lot of bad stuff that happens along the way. And a lot of good stuff, too. But when bad stuff happens in individual circumstances, a lot of times we end up shining with the advice side of things. When there's an unexpected death in the family or a divorce or something happening with a kid, those things make money seem pretty unimportant. When there's a high level of intensity in an emotional situation, we’re helping people work through that and what that means with their finances. That doesn't mean we're therapists. There's a place for everybody in the professional community. A lot of times we are working in conjunction with other professionals. Maybe a therapist, an attorney or tax advisor. Maybe other investment professionals, people at Vanguard, we're really trying to build a team around this person to help them get where they want to be.

Maria: Exactly. I love the mention of AI. You can imagine as a researcher and a writer, I think about AI a lot right now.

Josh: And you probably use it, right? 

Maria: We do to a certain extent. Ten years ago, if we were chatting, all the headlines were about building a robo device platform, a full digital stream platform for clients where you would pull up your phone and create a username, password and log in,  Then do a risk tolerance questionnaire. And my advice role was going to take all your clients away. But a robo platform isn't talking to you when things are going on in your personal life. It isn’t providing you with very relevant market commentary in case you are concerned about what's going on in the inflationary environment. It won’t talk through that in your longevity of your portfolio, right? It's an algorithm. 

Now, AI is getting all the attention. AI is going to come for you. AI is coming for my job. I think we can leverage AI; it's great at computing data. It can mine tons of text. It can make us more pithy emails that are very tailored for people. There are positive things that we can leverage and embrace in practice, but AI still isn't going to sit down across the table from you and talk to you. I had a conversation last week at a conference about AI. One gentleman said, “It doesn't have judgment. And sometimes I need to talk to someone and I need them to hear about what's going on in my personal life, how I think that might impact my portfolio and then have someone help me come to a decision. AI is not able to do that.” When we have more opportunity to remain uniquely human to our clients, it is not only good for them but also good for us. I don't think a client at the end of the day wants to look down into their phone and ask, “Am I going to have enough money in retirement?” And then get a Monte Carlo simulation about what those probabilities might look like.

Josh: So, it’s a great tool that we should continue to embrace, yes—but does it replace all of us? I sure hope not.  Well, what's some really bad advice that you hear, in your industry? It could just be that you're hearing from others, but what are some things that just make you shudder?

Maria: Oh, my goodness. Well, as a woman in the industry, I like to talk about the advice experiences of a lot of women. Maybe they're not as involved in the stereotypical scene where the patriarch of the household group is in charge of making the investment decisions and the matriarch of the household group is the chief operating officer and the chief financial officer of the home where she's making all the big purchase decisions and the like. I personally received advice before I was in Vanguard that I should want to go and do it. I'd never invested before, but go do it myself, and supposedly, when I grew my assets to a certain threshold, I would be a better fit for their service model. Immediately, that didn't feel good. Maybe that's just general guidance, but that didn't feel good. Then I've heard from women, things like: “You don't need to worry about that,” or  “What does your husband think?” rather than asking her in that moment, which is cringy. 

Sometimes, it's not necessarily bad advice, it's just a bad service experience on behalf of the clients. And there are all these stories out there about how women have experienced advice and have felt condescended to. Mackenzie did a study a few years ago, and they reported that overwhelmingly the women they surveyed felt condescended to by a financial advisor.  Not overt condescension. It's not letting her finish telling a story, or not letting her get a question out. I don't think it comes from malicious intent on the part of the advice practitioner. I feel like it's me. We know the solution and so we’re excited to share that solution. We're in this business to help people and we jump in. Then we've cut her off and so she feels like what she has to say is unimportant. So, we need to be mindful of things like that. 

You know, we hear about things like “I'm just being sold an insurance product; the advisor is not doing comprehensive wealth management on behalf of the client.”  But I like to think that a lot of the advisors that I've had the fortune of working with over the last decade are doing the right thing on behalf of clients. You’ve had clients that come to you because they've had a bad advice experience and we don't want them to have their view of our industry tarnished.

Josh: Yeah. Advice is not created equal, that's for sure. I think the Advisor Alpha study is a great framework for advisors. It's a good model for all of us to make sure we are really delivering this because that’s what adds quantifiable value. It’s what is going to make the difference in the long run. But you're right, making sure that people have a chance to be heard is important. In this industry, people think it's just math and investor products. But none of that matters until somebody really feels heard and we completely get where they're coming from before we start talking about advice and strategies. It’s funny, you know, I've seen that evolve through my career—the old model where maybe the husband was in charge of the money. That's an outdated model. Now, I see more of a coin flip when people come in. It’s 50-50 the wife or the husband. Usually, it’s somebody. That's my observation: At least one person tends to be more interested and takes the lead. And the other person still needs to be involved in the conversation and at least know about things from the 30,000 foot view on where we're going. They need to have input. That was one thing I learned early on—to never, never just meet with one when there’s a couple. They can say, ”He's not interested,” or “She's not interested,” but it's their money and their future too, so they do need to be somewhat involved.

Maria: I agree with that from the perspective also of divorce statistics, an end of the marriage, be it by way of a divorce or by becoming a widow or a widower. You still don't want surprises in that portfolio. You want to know what's going on. I think just the plan for that up front allows our clients to grieve faster because it's one less burden they have to worry about. And so, I'm just always mindful of the experience of the client. It’s such a major differential if you're taking the time to listen to your clients and tailoring your investment solutions in accordance to what their goals are and what they value most.  Clients are then going to feel like they're being taken care of, and that experience is going to be better overall for them and for you. And clearly, you're very thoughtful in how you're approaching clients as well.

Josh: And certainly, dispersed listeners can look at the Certified Financial Planner (CFP) designation. That's the gold standard in our industry, One benefit is that if you're a CFP, we're automatically a fiduciary. That's a good thing. So, it's a filtering mechanism. Not that it guarantees success, but it's better. It's kind of like working with a a surgeon that's been board certified versus not. It would be better to have the board certification.

Maria: We use that example in our research, and as I present our behavioral coaching content to advisors, I often say that you want to go to the top-ranked surgeon for your cardiothoracic procedures; you don't want to go to the bottom-ranked surgeon. And we are mindful of that when we're selecting the professionals we want to be working with.

Josh: Yeah, exactly. The other thing I wanted to throw out is a couple of areas that the study doesn't seem to address or addresses too lightly, which is the level of tax planning and also estate planning. It's hard to quantify that, but sometimes those areas you talked about, when maybe somebody is suddenly a widow or widower, but some good questions didn’t get asked before, so there may not be planning involved to make sure that everything passes efficiently, not only from a legal standpoint, but also from a tax standpoint. And though as CFPs we're not attorneys or tax advisors, we still want those professionals to be involved in the situation. Often, because we are the quarterback, we're in a good position to start asking some questions that people can take to their professional tax advisor. Maybe it's as simple as a beneficiary designation, or how something is titled. I've seen a number of situations where there's a potentially big tax mistake or estate planning mistake that can dwarf investment rates of return.  So if you can speak to that, how does the study explore that or attempt to address estate planning and tax planning?

Maria: It's by no means exhaustive. We looked at the study from the advice service level versus the individual experience, right? If we sat down and went through one of your own client scenarios, you know they've been with you for years. We can look at how their portfolios evolved because we have all of that data. We can be mindful of taxes, and we could probably get to a number for that individual of all of the value that you've added, in terms of tax value and portfolio value and peace of mind. After the original research paper, the quantification piece from 2014 was when we were coming up with the framework. Some of these things are too unique to the individual to quantify, because for example, if I'm an ultra-high net worth investor with you and we have a comprehensive tax approach or solution that we've done in concert with my estate attorney, my tax attorney etcetera, that might add tremendous value for me. But if I am a less affluent investor who's just beginning their investing process and doesn't have a complex tax scenario, tax planning has less value to me, so it's difficult to quantify. That’s not to say it's not important, right? It is incredibly important that we're mindful of tax, estate planning, legacy planning, etcetera. But for the purpose of the original framework, it’s kind of beyond that. That being said, we are in the 10-year anniversary of the quantification of Vanguard Advisors. We are looking at potential added modules. We have been looking at where we can land with taxes that might not be fully exhaustive of all of the tax planning one could do or tax management one could do, but we are thinking about being mindful of concentrated stockholdings and being mindful of how we're investing from a portfolio and maximizing the after-tax return. Are there ways we can quantify that value and incorporate that into the framework? So it’s in very early stages, but we're looking at that for a 10-year update. More to come.

Josh: It will be interesting as the study evolves. I think that's one of the biggest values—that it isn’t just a static study done one time. I appreciate that you're spending a lot of time on it and you're one of the writers and researchers taking the time to really dig deep into these areas. Any last words of advice for somebody who's trying to explore the question of whether to work with an advisor? Vanguard has both sides, which is great. It's great that people have choices, but if somebody is trying to figure out, do I do it myself or do I go to some kind of an AI platform or do I hire a CFP fiduciary? Any words of advice as far as what they should do first to explore that?

Maria: I think there is an advice solution for pretty much any type of client that is seeking advice. For some, maybe self-direct makes the most sense because they don't have the complexity of wealth; they don't have to deal with taxes, inheritance, special considerations. Then you do have the middle solutions, right? The robo platform where a person is self-directed, but doesn’t really have the stomach, will let a robot do it for them, or use hybrid solutions. There's an entire spectrum of advice available. What's really important to clients as they're thinking through this, is time, willingness and ability. 

Do you have the right amount of time to do this? If you're in accumulation and you're sitting in a pretty basic portfolio, the self-directed account solution makes sense, but if it doesn't feel right and you want accountability, someone  to keep eyes on this, find a trusted professional.  If it’s just asset allocation, maybe that's a robo solution. If you’re going to inherit assets, you may want to start preparing for that and planning for that now. Maybe if your parents aren't working with an advisor, you come to an advice solution together. So, ask what your future situation is going to look like. What is the degree to which you want someone’s professional eyes on your financial situation, on your portfolio, on your tax situation? That may determine the type of advisor you want to work with. But I really think it is: Do you have the time? Do you have the willingness? Do you have the ability?

If one of those is a question mark, maybe start asking around for what advice solution might make sense for you. But don't be rigid about it, because especially as wealth becomes more complicated or as the time aspect of managing things becomes more complicated, you're probably going to want to work closer with someone who's providing a more extensive service that aligns with your unique situation.

Josh: That's well said. And regarding our conversation about when it’s a couple situation, there's probably one person who's more interested than the other. Often, what we'll find is that people that have self-directed forever then come to us and start working with us. Sometimes one spouse has been the lead in this and says, “It's not just about me anymore; I need to make sure that he or she is taken care of and that there's a plan.” Sometimes it’s the kids who end up being the reason why they want to work with somebody, to make sure there's a continuity plan with the kids, so they can sort all this stuff out if something happens to them.

Maria: And it always comes down to the emotional, right? What's going to resonate emotionally in that moment. And as you said, having more of those conversations with clients during the onboarding process will allow you to offer  peace of mind to that client who wants to know, “If I predecease my spouse, I've got a team that's going to be taking care of my spouse. We’ll be ready. We're planning for this. Everything's going to be OK.” There can be many concerns for clients who maybe don't have the language to articulate that it is a concern just yet. They need to feel like they're more comfortable with the individuals they're working with to realize that this is going to be OK, we can manage this.

Josh: Great. We work with a lot of engineers and doctors and people who really like to dig into this stuff, right? What's the best way for people to find the Vanguard Advisor Alpha Study if they want to read through it and dig into the details?

Maria: It is available on our advisors website www.advisors.vanguard.com . The paper itself is called “Putting a Value on Your Value, Quantifying Vanguard’s Advisors Alpha.” Please, by all means, read it. We have a couple of different iterations on the Advisors Alpha Behavioral Coaching paper that I put out last year as well, which goes much more into how we make decisions, why we make decisions, and why the mindset that gets us through every single decision we make in our lives does not apply well to the capital markets. So we say, “It's the right mindset, the wrong market.” There is tons of research out there.

Josh: Great. Sounds good. And for anybody who wants that, you can contact us. We'll make sure you get a copy of it. Best e-mail is justcommunications@keystonefinancial.com . And of course you will find us on www.keystonefinancial.com . Thank you, Maria. Thank you for the time today. It was an interesting conversation that I think our listeners should find valuable.

Maria: Thank you so much. I had a great time. 

Josh: And thank you for the partnership with Vanguard, which has been a great partner over the years and served many of our clients well. 

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This episode has been prepared for informational purposes only and is not intended to provide or should not be relied upon for tax, legal or accounting advice. You should consult your own tax, legal, or accounting advisors. Investment advisory services offered through Keystone Financial Services, an SEC registered investment advisor.