We noted in yesterday's post that Vanguard credits advisors with the most points, as it were - or "advisor's alpha" to use the firm's nomenclature - for behavioral coaching. Much of the discussion in the popular media about the question of advisors and investor clients focuses on whether advisors can succeed at beating the market (and if not, who needs them) and how they can justify their fees (generally portrayed as subtracting returns).
I submit that this focus is mirrored in the population of investors. In other words, we hear about bad advisors all the time but rarely do we hear about bad clients. Among the foremost experts on investor behavior is Santa Clara University professor Meir Statman. I quote from a paper he wrote called, "What do investors want?"
I have $500,000 in my portfolio, says an investor. I don't mind paying a fee for the management
