Vanguard Advisor’s Alpha (2025): What It Means for Your Financial Plan

The Latest Vanguard Advisor’s Alpha Study

Vanguard’s most recent Advisor’s Alpha publication highlights how advisors can add value beyond investment selection—especially through planning, behavioral coaching, cost-aware implementation, and tax-smart decisions.

Latest report: Celebrating Vanguard Advisor’s Alpha: Clients and their advisors thriving together for 25 years (Vanguard, 2025).

View Vanguard’s Overview Download PDF

What is “Advisor’s Alpha”?

Advisor’s Alpha is Vanguard’s research-based framework describing the ways a financial advisor may improve client outcomes by focusing on what can be controlled: sound portfolio construction, cost efficiency, disciplined rebalancing, tax-aware decisions, and—often most importantly—behavioral coaching.

Key Takeaways from the 2025 Report

✓ Advice has evolved: Modern practice is shaped by changes in technology and regulation.
✓ Value isn’t just performance: Guidance and behavioral coaching outperform market timing.
✓ Tax and implementation: Meaningful drivers of net outcomes.

Quantifying the Value: "About 3%"

Implementing the Advisor’s Alpha framework can add up to, or even exceed, ~3% in net returns over time in certain circumstances. This value is not expected to occur evenly each year and varies by client situation.

Read the Quantification Paper (PDF)

How We Apply These Principles

At Heritage Financial Strategies, we align our planning and portfolio process with these core decisions:

1. Portfolio Construction Evidence-based allocation, risk alignment, and disciplined rebalancing.

2. Behavioral Coaching Clear decision rules during volatility to reduce emotionally driven changes.

3. Tax-Smart Planning Withdrawal sequencing and coordination with your CPA and estate attorney.

4. Adaptive Relationship Retirement income, risk management, and legacy planning coordination.

Vanguard Advisor’s Alpha (2025):
What It Means for Your Financial Plan