In case you missed it, a chart making the rounds in financial circles puts a fine point on what happens when a $3 trillion gorilla walks into a room.

That’s the level of assets under management at Vanguard, the low-cost fund giant created by the legendary John Bogle. In short, when Bogle’s crew comes into a space, costs drop dramatically.

Exchange-traded funds already are cheap, well below the 1% to 2% found among actively managed funds. But even half of 1 percent is too much to pay for a fund, in Vanguard’s view.

As it turns out, investors pay several times more money to invest in parts of the market where Vanguard doesn’t yet operate. That’s why falling fund fees has been called the “Vanguard effect.”

For instance, a broad bond ETF these days costs just 0.05%, vs. 0.30% for high-yield bond ETFs. The cheapest emerging markets ETF costs 0.14%, vs. 0.51% for a China-only ETF.

You can buy a U.S. large-cap index ETF for just 0.04%, yet a micro-cap ETF runs 0.50%. Leaving aside the wisdom of investing in micro-caps at all, that’s a staggering price difference.

We’ve seen this happen in our own portfolios at Rebalance. The average cost of the ETFs we use is down by more than 17%. It’s not a huge number in terms of basis points (our portfolios were already low-cost) but every penny counts!

We believe strongly in lowering cost but also in providing value for the money spent. Again and again, we meet clients who have brokerage relationships lasting decades who nevertheless receive no actual advice in all that time. Literally zero guidance.

That’s because stock brokers are simply not in the advice business. Their one and only job — the sole metric that matters to their bosses and, ultimately, their investor-owners — is growth.

If you are being measured on asset gathering, you focus on gathering those assets! Providing client feedback, developing a rational retirement plan, doing follow-up and relationship-building — that’s virtually the opposite of asset gathering.

The “Vanguard effect” on the cost of financial advising is coming from a small band of advisors, including Rebalance, who have decided to focus on the side of the business that matters to clients, answering the real challenges they face.

Do they understand what a retirement plan can do for them? Do they see results in a concrete, understandable way that supports their decisions? Are costs accounted for and explained in plain English?

Do they even know their advisor’s name and phone number? You’d be amazed how many people we meet who pay extraordinarily high fees and yet can’t name their financial advisor. Their doctor, yes. Their accountant, probably. But not the person in charge of their retirement plan.

Better model

Worse, perhaps they can, but the only reason they know a name is because that person is a stock broker, not an advisor, and the broker’s primary motivation is to collect commissions by encouraging buying and selling. It’s churn-by-permission. Not necessarily illegal, but definitely not good advice.

The outlook for real financial advisors is bright. Modern online tools and better financial education has increased acceptance of a business model that cuts the cost of financial advice while increasing its quality across the board. Lower cost plus actual advice is how you retire with more.

If better, cheaper advice along with falling prices for funds is a “race to the bottom,” bring it on!

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