Why Vanguard’s Advisor’s Alpha Matters — and How It Could Change Your Financial Future

You’ve done the hard work. You’ve built your career, your savings, and your future — or at least started to.

But here’s the problem: building wealth and compounding it are two different games.

And the truth is, many smart, successful people are unknowingly leaving millions of dollars on the table — not because they’re reckless… but because they’re trying to go it alone, or working with the wrong advisor.

Vanguard calls this missing piece Advisor’s Alpha.
We call it doing the job the right way.

What Is Advisor’s Alpha?

Vanguard — one of the largest investment firms in the world — estimates that a skilled advisor can add approximately 3% per year in net value through:

• Behavioral coaching during market volatility

• Tax-efficient withdrawal and asset location planning

• Low-cost portfolio construction

• Rebalancing and risk control

• Coordination across accounts and timelines

That 3% might not sound like much — until you see how it compounds.

Three Paths, Three Outcomes

And Why 3%–5% Could Mean Millions More Over Time

Most investors fall into one of three camps:

1. The DIY Investor

You’re smart, disciplined, and capable — managing your portfolio with index funds or a robo-advisor. Maybe you’re hitting market returns. But:

• There’s no coordinated tax strategy

• Roth opportunities are missed

• You sell low in downturns or hoard cash when you should be investing

• Your plan is reactive, not strategic

You’re not doing it wrong — but you may be missing big opportunities.

2. The “Average” Advisor

You’re working with someone. They provide a diversified portfolio and check in occasionally. But:

• They don’t model your taxes

• You’ve got high-fee products and one-size-fits-all planning

• Little coordination with estate or business decisions

• Most of the advice sounds like something you could Google

You’re paying for service — but not getting strategy.

3. A Strategic Advisory Partner (Like Compound Advisory)

This is what we do. We work with clients who’ve built something meaningful — and help them make decisions that protect and grow it. Our process includes:

• Tax-forward planning (multi-year Roth conversion modeling, tax-loss harvesting, withdrawal sequencing)

• Dynamic harvesting strategies based on market and tax conditions

• Planning for transitions (business sales, retirement, liquidity events)

• Behavioral coaching to avoid costly mistakes

• Coordinated advice across investments, estate plans, insurance, and real life

This isn’t portfolio babysitting. It’s strategic planning for long-term compounding.

Comparison Table: What You Get at Each Level

The Numbers Don’t Lie

Let’s say you’re 45 years old with $1,000,000 invested.
No new contributions — just growth.

Real People. Real Planning. Real Impact.

Case Study 1: The Builders (Wealth Builders in Their 40s)

Jason and Maria were high earners saving aggressively — but with no coordination.

We helped them:

• Align accounts across tax buckets

• Implement a backdoor Roth strategy

• Fund a real estate investment

• Maintain lifestyle while planning for early retirement

“We were doing all the right things — we just didn’t know how to connect them.”
Curious what your version would look like? Book a free Clarity Call

Case Study 2: The Transitioners (Pre-Retirees)

Angela and Tom, both 59, had saved $2.5M — but were flying blind on taxes.

We helped them:

• Model multi-year Roth conversions

• Reduce RMD exposure

• Optimize drawdown and Social Security timing

• Integrate Medicare and tax bracket strategy

“Our previous advisor just talked about the market. Compound gave us a plan.”
Want to know how tax efficiency could extend your retirement? Book a Clarity Call

Case Study 3: The Seller (Business Exit)

Owner A sold fast — and paid nearly $3M in unnecessary taxes.
Owner B came to us three years before her sale.

We helped her:

• Structure the deal to reduce taxes

• Create a donor-advised fund

• Allocate post-sale assets tax-efficiently

• Build a long-term income and legacy plan

“The sale was life-changing — and we actually kept what we built.”
Thinking of selling? Let's talk before you sign. Book your Clarity Call

The Bottom Line

Markets change. Taxes change. Life changes.

But your plan should always stay a step ahead.

At Compound Advisory, we help people make better decisions with the wealth they’ve worked hard to build — and we do it every day.

Special Offer: Free Clarity Call + Personalized Gap Snapshot

We’ll identify the biggest planning opportunities you're likely missing, and walk through how our strategic approach could apply to your situation.

No pressure. No jargon. Just clarity.

Book Your Free Clarity Call

Disclosures

This material is for informational and educational purposes only. It should not be considered investment, tax, or legal advice. Past performance does not guarantee future results. All investing involves risk, including the potential loss of principal. Hypothetical returns are for illustrative purposes only and do not reflect actual client accounts or outcomes. Individual results will vary based on strategy, timing, risk, taxes, and market conditions.