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Vanguard's new CEO Tim Buckley hints the next move for his firm's RIA's 30-basis-point fee may be down, down, down

As the Malvern, Pa. fund giant's VPAS passes the $100-billion mark it doesn't rule out automated advice or greater robo-ization to follow asset management fee play where cost savings get passed along

Author Lisa Shidler January 8, 2018 at 10:22 PM
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Tim Buckley: Our clients should expect change. They should expect significant change.

Stephen Winks

Stephen Winks

January 11, 2018 — 6:35 PM
Fee for very specifically delineated expert financial services continues to be a challenge for transactions focused conventional brokerae because ; (1) brokers will not acknowledge they render advice for fear of fiduciary liability, (2) brokerage cost structure is way out of line when 40% of the investors earning on their retirement savings is lost to brokerage fees, commissions and administrative cost, (3) "retail investors" (you and me) are not accorded the same consumer protections afforded to all other investors, (4) the brokerage industry thwarts technological innovation whivh greatly elevates the level of investment and administrative counsel rendered by the broker, (5) the broker has no ongoing accountability for their recommendations as it would imply fiduciary liability, (6) brokerage compliance protocol is designed to assure no advice is rendered. Thus, when Vanguard provides a far higher level of counsel not possible within a b/d at far lower cost, you would think in a free market that brokerage firms would either respond or lose market share. The brokerage/insurance industry has put the broker in an untenable position of offering inferior counsel at far higher cost. Independent advisors have none of the conflicts of a brokerage firm and will find far superior advisory services support from Vanguard than is possible with in a brokerage firm which will not even acknowledge their brokers render advice. The brokerage format is not the only means of support for advisory services available. Hopefully, the brokerage industry will wake up before it loses the fastest growing segment of the financial services business. The industry is being reordered around advisory services and requires innovation. Harvard;s Clayton Christensen tells us the most common mistake made by firms facting industry redefining innovation is to look at innovation in the context of their existing business model when a new business model is in order. SCS,

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