John Bogle's advice to advisers
Jun 21, 2013 @ 12:00 am
The Vanguard founder offers some simple suggestions on how investment advisers can do a better job for clients.
INTV on location at Morningstar Investment Conference, June 12-14, 2013.
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Make sure that you're working on a reasonable, middle of the road winning strategy. And as sure as you can, stay on the middle of the road, use index funds when you can because you know they're gonna give you a fair share at the market return. And you know that they're costs are so low that when added to your cost, which you're entitled to charge to the investment adviser, but you'll still be lowering [unk] cost than many of the fund firms that want you to do business with them. You know, they have a 1-1/2 or 1 and a quarter, 1-1/10, 1.1 expense ratio. If you're charging 1 percent and the index fund is charging 0.6, you're at 1 points 0.6 all in. So think about indexing, think about investing for the long term rather than speculating, think about putting the client first no matter what the temptation is and think about behaving. And this is a really simple rule, we ought to think about it all the time, at least far more than we do. Think about treating your clients as you would like to be treated if you are a client. And everybody knows what that means. And a lot of people would do it very differently. So, nice simple rules- likes and just about everything else in the investment business and all my ideas are simple, but not easy to do.