Build your portfolio with low-cost funds. Our research suggests that lower-cost investments have tended to outperform higher-cost alternatives. That's why an advisor will build a portfolio with low-cost funds. This time-tested financial planning practice can help an investor potentially add about 0.45% annually in net portfolio returns.
Rebalance your portfolio. An advisor can help an investor maintain the right mix of stock and bond funds by periodically rebalancing the portfolio. Our research has shown that rebalancing can potentially add about 0.35% in net portfolio returns over time.
Serve as your investing coach. During times when the market rises or falls, it's easy to be tempted to abandon a well-thought-out plan. An advisor acts as an investing coach during these times to help an investor stick to the plan and stay on course. This kind of investing guidance can potentially add about 1.50% in net portfolio returns over time.
Minimize your taxes. The less you pay in taxes, the more money you keep. According to our research, an advisor can help minimize an investor's tax burden in two ways: first, by efficiently allocating assets between taxable and tax-advantaged accounts; and second, when the time comes to withdraw money, such as for retirement, by developing a tax-smart distribution plan. These tax-planning strategies can potentially add up to 1.45% in net portfolio returns over time.