VG catering to advisors, that's funny! Reprise

[FinanceDude]

Vanguard is Catering to Advisors? That's funny.......

Investment News article:

Vanguard bolsters efforts to woo financial advisers - InvestmentNews

Quite honestly, Vanguard has been weak on this issue........I got some calls a year ago asking me to do ETF business with Vanguard, but their support is terrible.

Seems interesting that the "DIY and fire your advisor" folks now want our help..........

And I think that's funny.........

 

[Rich_by_the_Bay]

Seems interesting that the "DIY and fire your advisor" folks now want our help..........

And I think that's funny.........

Do they want your "help" or do they want your business?

 

[FinanceDude]

Do they want your "help" or do they want your business?

They want my business selling their ETF's........

Seems they have a "need" for advisors after all.............

 

[FUEGO]

Vanguard would love to have more assets under management. That would knock their expense ratios even lower. They have a strong history of lowering expense ratios as assets grow (unlike most other fund companies). In other words, it doesn't cost them twice as much to manage 2x the assets in a fund.

 

[FinanceDude]

Vanguard would love to have more assets under management. That would knock their expense ratios even lower. They have a strong history of lowering expense ratios as assets grow (unlike most other fund companies). In other words, it doesn't cost them twice as much to manage 2x the assets in a fund.

They're not the only fund family that does that.........

Besides, their business model is that people should do it themselves, they are set up under that infrastructure.....

Now that they see how big ETF's have gotten, they WANT financial advisors to use their ETF's.......

I'll pass..........

 

[FUEGO]

They're not the only fund family that does that.........

I'll pass..........

I'm just curious - what other fund companies typically significantly reduce their expenses as their assets increase?

Does your passing on Vanguard ETF's have to do with your general disdain for vanguard (if you'll allow me to characterize your feelings towards them as such) or is there a particular reason you prefer other fund company's ETF's over vanguard's? Just curious if you see added value in paying higher expense ratios for certain ETF's, given your experience in the industry?

 

[FinanceDude]

I'm just curious - what other fund companies typically significantly reduce their expenses as their assets increase?

American Funds, among others.

Does your passing on Vanguard ETF's have to do with your general disdain for vanguard (if you'll allow me to characterize your feelings towards them as such) or is there a particular reason you prefer other fund company's ETF's over vanguard's? Just curious if you see added value in paying higher expense ratios for certain ETF's, given your experience in the industry?

FWIW, there's a couple reasons:

1)As admitted in the article and true, I might add, the support from Vanguard has been lacking, to be nice about it. Other than "you should use us because we're cheaper", I can't get anything out of them. ETF's are an important part of my business, but I get better support from the other ETF folks than Vanguard. Sounds like they are working on that...time will tell.

2)It's not like the other ETF's are so much more expensive than Vanguard that they're a no-brainer....

3)It's not all about expense ratios with ETF's, although most on here (but not in general society) would disagree. The ETF investor is a different investor than the index fund investor, at least in my world.........

 

[LOL!]

I'm curious what kind of "support" you need for the general type of ETFs that Vanguard offers. You just need some prospectuses online somewhere, right? I am only looking at asset class, expense ratios, trading volume, expected dividend? Do I really need anything else, like "factor loading"? Do I need to know some secret that makes me valuable to my clients?

 

[Maurice]

I was going to ask the same question re support. I suppose some companies make it easy for the independent FA by offering systems - sort of a retail prime brokerage business. But other than that, what would you really need from Vanguard? Or by 'support' do you really mean 'sales load'?

 

[FinanceDude]

I was going to ask the same question re support. I suppose some companies make it easy for the independent FA by offering systems - sort of a retail prime brokerage business. But other than that, what would you really need from Vanguard? Or by 'support' do you really mean 'sales load'?

EFT's don't have a sales load......... I don't charge loads anyways.........I work on a fee basis.

When I talk about support, I mean talking to someone who knows their product better than I do, which did not happen in this case.

Bottom line, if you want to sell me on your product, you should know more about it than I do........

 

[FinanceDude]

I'm curious what kind of "support" you need for the general type of ETFs that Vanguard offers. You just need some prospectuses online somewhere, right? I am only looking at asset class, expense ratios, trading volume, expected dividend? Do I really need anything else, like "factor loading"? Do I need to know some secret that makes me valuable to my clients?

nm...........

 

[FUEGO]

... or 12b-1's like american funds.

 

[FUEGO]

I'm still not clear on what else is needed to know beyond publicly available information in prospectuses/annual reports/SEC filings plus the VG website.

Is the complaint that there isn't a dedicated adviser hotline you can call in to ask questions about funds? As a vanguard customer, I can call in and talk to very knowledgeable folks. Is a similar service not available to advisers?

 

[FinanceDude]

I'm still not clear on what else is needed to know beyond publicly available information in prospectuses/annual reports/SEC filings plus the VG website.

Is the complaint that there isn't a dedicated adviser hotline you can call in to ask questions about funds? As a vanguard customer, I can call in and talk to very knowledgeable folks. Is a similar service not available to advisers?

I'm closing this thread.........I don't see the point of you and I going back and forth when you don't understand how my business works. I think the article speaks to what's going on..........

 

[FUEGO]

um, ok? We're just asking questions... Iron fists of ER forums, untie!

 

[LOL!]

Well, since the other thread is closed, we have to start a new one.

I read the article again and I see that at least one advisor seems to like the fact that Barclay's gives them more phone calls than Vanguard. Probably also invites them to free meetings in Barbados and Aruba as well, but that was not mentioned in the article.

Barclays provides advisers with much better "support" than Vanguard, Mr. Romey said. He regularly receives calls from Barclays.

In my business, I help support the sales and marketing rainmakers. I create technical reports that the sales reps pass onto to potential clients. Those clients get to schmooze with me (the article talked about advisors being able to schmooze with Gus Sauter as one way to support advisors).

Anyways, I see that "support" is mostly making advisors feel good about themselves and giving them ego and other trips. It appears to have little, if any, benefit for the clients in my opinion.

 

[FinanceDude]

I've reopened the thread.

 

[FUEGO]

Thanks, Financedude.

It seems like financial advisers have pretty good support from vanguard - including the advisors.vanguard.com homepage designed exclusively for advisers. Plus they have products that virtually sell themselves like hotcakes.

The news article posted in the original post indicates that vanguard is increasing its outreach to financial advisers however some financial advisers feel that they are still lacking in certain respects. Particularly, some advisers enjoy receiving weekly newsletters or other promotional material from other fund sponsors such as SSgA and Barclay's.

I guess I may not understand the financial advising industry (although I think I have a pretty good under$tanding, if you know what I mean). However, it seems like money spent flooding advisers with glossy brochures and newsletters to better hawk their goods might be better spent on more research or saved to reduce fund expenses for the advisers' clients. Ultimately, reducing fund expenses increases investor returns. From my point of view, I think vanguard has figured this out pretty well and has taken cost effective measures to solicit advisers' patronage.

However it is possible that they are hampering adviser's access to information and promotional material. I would guess this could negatively impact other fund shareholders (like myself) by reducing the potential assets under management and not allowing VG to reduce expenses to the extent possible. I'd like to know if this were the case. Hopefully any financial advisers can give their input on this issue.

 

[youbet]

I've reopened the thread.

Ohhhh....... thank you! You are so kind to us.......

You know, after reading the thread, I went back and actually read the article, formed some opinions, and was about to post. But what I have to say may not 100% agree with the tone you expressed in your initial post. Will it be allowed, or am I just wasting my time?

 

[haha]

Financial advisors operate in a competitive business. The FP's client won't care about a few bp of cost, but he will care about the level of service. If a fund company/ETF marketer can make that more seamless for the FP, the FP would be nuts not to use the company that delivers what he needs.

The members here often had careers far away from the customer and tend to be a little bit pure about what actually happens at the customer interface- particularly when the product itself is commodity like. Don't forget, in this part of a brokerage’s business, the FP is the client. He may live somewhere snowy and awful; maybe his wife or girlfriend would like a trip to the Caribbean? Wouldn't you as an individual investor rather work with a well rested, tanned FP with a happy home life?

Ha

 

[FinanceDude]

Thanks, Financedude.
It seems like financial advisers have pretty good support from vanguard - including the advisors.vanguard.com homepage designed exclusively for advisers. Plus they have products that virtually sell themselves like hotcakes.

I recently did a seminar on using ETF's to help diversify stock portfolios. A lot of the folks there had limited knowledge to say the least. So, as BIG as the market is, a lot of investors don't use them.

The news article posted in the original post indicates that vanguard is increasing its outreach to financial advisers however some financial advisers feel that they are still lacking in certain respects. Particularly, some advisers enjoy receiving weekly newsletters or other promotional material from other fund sponsors such as SSgA and Barclay's.

I didn't think email was an expensive medium to use........

I guess I may not understand the financial advising industry (although I think I have a pretty good under$tanding, if you know what I mean). However, it seems like money spent flooding advisers with glossy brochures and newsletters to better hawk their goods might be better spent on more research or saved to reduce fund expenses for the advisers' clients. Ultimately, reducing fund expenses increases investor returns. From my point of view, I think vanguard has figured this out pretty well and has taken cost effective measures to solicit advisers' patronage.

What Vanguard has figured out is that the average DIY doesn't do a lot of Vanguard ETF's for whatever reason. They are now trying to cater to advisors, which is the antithesis of their business model of DIY........seems ironic to me.............

[quote[However it is possible that they are hampering adviser's access to information and promotional material. I would guess this could negatively impact other fund shareholders (like myself) by reducing the potential assets under management and not allowing VG to reduce expenses to the extent possible. I'd like to know if this were the case. Hopefully any financial advisers can give their input on this issue.[/quote]

Well, the difference between .14% and .24% to my clients or myself is not a big deal. It's not like 5.75% and 1.25% every year versus .18% a year on funds...............

I'm sure Vanguard has plenty of folks out there doing direct ETF business with them, but apparently not enough...........

 

[FinanceDude]

Ohhhh....... thank you! You are so kind to us.......

No, I just believe in freedom of speech..........

You know, after reading the thread, I went back and actually read the article, formed some opinions, and was about to post. But what I have to say may not 100% agree with the tone you expressed in your initial post. Will it be allowed, or am I just wasting my time?

You could always use "ignore posts", and then you wouldn't have to deal with me at all..........

 

[youbet]

You could always use "ignore posts", and then you wouldn't have to deal with me at all..........

I wasn't talking about wanting to ignore what you had to say because I don't agree with it. I was talking about bothering to post my opinion because, as a moderator, you choose to close a thread when you and another poster disagreed.

 

[FinanceDude]

I wasn't talking about wanting to ignore what you had to say because I don't agree with it. I was talking about bothering to post my opinion because, as a moderator, you choose to close a thread when you and another poster disagreed.

Which was wrong, and that's why I opened the thread.

 

[FinanceDude]

I'm merging this with the other thread, for convenience sake... Once I figure out how, that is..........