I have thought for some time that people that use a good financial planner on an ongoing basis will end up wealthier than if they were not to use a financial planner.
Vanguard, the low cost fund management provider, articulate this point quite nicely. They see the adviser’s role as one of providing Alpha to their client.
In fund management, Alpha is a concept that relates to over-delivery. If a fund manager delivers higher returns having taken the same level of risk than their peers, then they have delivered Alpha. The more Alpha you can deliver the better you are at your job. It is a good way of measuring which fund manager is really performing for you and which are just trudging along with the markets and not getting you any extra benefit.
When talking to my clients I always say to them that my job is to help them accumulate wealth. I’m the guy that makes sure you have something to show for your efforts when it is so easy to do something else with the money.
So for the same level of work and the same amount of earnings my aim would be to deliver Alpha by ensuring you have more money saved and invested when working with an adviser than were you not to.
If you end up with more money that is better structured to support your lifestyle you can quickly see why the Alpha Adviser is one that can lead you down a path to a more fulfilling life.