The Value of a Coach

February 2, 2018

Leading up to the Super Bowl there has been an exhaustive discussion on the success of Patriot's coach Bill Belichick (appearing in his 8th Super Bowl as head coach & 10th overall. He's won 5 as a head coach & 2 more as an assistant). One side of the argument has been that the success of Belichick is due to his star quarterback Tom Brady, who has been the starting QB in all of his Super Bowl appearances as head coach. Others have argued Brady's success is entirely owed to his head coach being Belichick. [My take is both are individually skilled in their given roles. They have used those skills to their advantage and have been able to pull everyone around them to a higher level.]   

 

What does this have to do with investing? At this stage in the bull market we are hearing many people asking what value their advisor brings to the relationship. The longer stocks go up, the more investors say they do not need assistance with their portfolios. Vanguard has been one of the most vocal proponents of warning investors to watch the fees they are paying and to utilize a passive, "buy & hold" approach. Over the weekend I read an article that said, "Vanguard CEO says Advisors' Jobs are in Jeopardy.

 

You may be surprised to hear I agree with his assessment. One of the major contributors in our re-branding the last two years has been a shift to a "Behavioral Approach to Investing". I firmly believe finding ways to overcome both individual clients and their advisors' behavioral biases is critical to the long-term success of any financial plan. Vanguard went as far as quantifying the value an advisor brings to the client relationship on an annualized basis. 

As you can see, the largest value an advisor brings is in "behavioral coaching". SEM's platform at Trust Company of America is designed to provide this in an easy to use fashion. We can adapt every portfolio to a specific client's risk tolerance, objectives, & personal behavioral biases. At SEM we work with the advisors to implement a spending strategy in the most appropriate mix of models. The other items in Vanguard's list above are all included in our TCA platform.  

 

All told, Vanguard estimates the value of a full-service Advisor at 4.1% per year.  Over a 30 year investment horizon, that can add $233,827 on an initial $100,000 investment! Even just the "behavioral coaching" value adds an additional $56,000 on a $100,000, 30 year investment. SEM's behavioral approach to investing gives both our clients and advisors an opportunity to achieve significantly higher returns.

Please reload

Web and Internet news concept with rss f
Featured Posts

Investment Grade Junk

September 11, 2019

1/10
Please reload

Recent Posts

January 29, 2020

December 10, 2019

Please reload

Connect
  • LinkedIn Social Icon
  • Twitter Social Icon
  • Facebook Social Icon
  • RSS Social Icon

Related Posts

Please reload

© 2016-20 Strategic Equity Management, Inc. dba SEM Wealth Management. Site created by Courtney Hybiak.

This site is for INFORMATIONAL PURPOSES ONLY.  The comments and posts published in the SEM Trader's Blog ARE NOT investment recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.  CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute

Investing in the stock or bond markets involves risk and may not be suitable for all investors. Before making any investment decisions you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists you could sustain a loss of some or all of your initial investment and therefore you should not invest money you cannot afford to lose. You should be aware of all the risks associated with your investments and seek advice from an independent financial advisor if you have any doubts. All investments involve risk including those managed by SEM Wealth Management.

Opinions expressed at www.stratequity.com, www.semwealth.com and semtradersblog.com or the previous Trader's Blog site are those of the individual authors and do not necessarily represent the opinion of SEM Wealth Management or its management. Any opinions, news, research, analysis, prices or other information contained on this website, by SEM, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. SEM will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

 

The use of this website constitutes acceptance of our user agreement. Past performance is NOT indicative of future results.

***Anywhere performance of SEM's Investment Models is used, please refer to our Performance Snapshot  which contains details of the performance calculations for each of our investment models.***

 

There is no representation made as to the future results of SEM’s programs or if they will be profitable.

For additional information on the author and SEM Wealth Management, please see our DISCLOSURE DOCUMENT (ADV Part 2).