Advisor’s Alpha | Wisdom, Wealth, and Wellness

Jonathan Satovsky
CFP®, ChFC®, CIMA®, CPWA®, CDFA®, DACFP

Good morning, good afternoon, good evening. Depending on the part of the world you’re in. This is Jonathan Satovsky of Satovsky Asset Management and on today’s episode of “Seeking Wisdom, Wealth, and Wellness,” I want to talk about a concept called Vanguard’s Advisor’s Alpha.

Now, why is this important? Vanguard conducted a study on the value that an advisor provides to their clients—estimating it at three percent per year. And you don’t have to even make assumptions about the anxiety-provoking concept of, “What is the market going to do today, tomorrow, next week, next month, next year.” If you’re planning for a lifetime, you have to create a structure that can insulate someone for a long period of time and focus on controlling the controllable, according to the Vanguard Advisor’s Alpha study.

So the material areas which created value, 77 basis points, almost over three-quarters of a percent, just from tax lost harvesting alone, let me say that again, three-quarters of a percent a year from ongoing tax-loss harvesting alone. Another quarter of a percent of value is provided from rebalancing proactively—rebalancing into dislocated assets. And half a percent a year on asset location; making sure that tax-inefficient assets are in qualified tax-deferred accounts and others are in non-qualified or taxable accounts. Then lastly, a percent and a half, one and a half percent a year, by just convincing someone to stay on their path for not just days, but years, and decades.

So three percent a year can be attributed to behavior, tax-loss harvesting, rebalance, and asset location without making any assumptions about where the market’s going in the future.

Consider that on your path to Wisdom, Wealth, and Wellness, and execute your way to abundance.

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Video Recorded June 16, 2022
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Disclosures

This blog post is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation or offer to buy any securities or interests in any strategy offered by Satovsky Asset Management, LLC (“SAM”). SAM is a registered investment advisor with the Securities and Exchange Commission – for more information see www.adviserinfo.sec.gov. Please remember that different types of investments involve varying degrees of risk, and that past performance is not indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the strategies recommended or undertaken by SAM) will be profitable. Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of comparison. The market volatility, liquidity and other characteristics of SAM’s portfolio composition are materially different from the securities listed on public market indices. Market index information was compiled from sources that SAM believes to be reliable. No representation of guarantee is made hereby with respect of the accuracy or completeness or such data. Opinions are as of date of video and are subject to change. A copy of SAM’s current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request. SAM undertakes no duty to update information presented herein.

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