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Maria: Hi. I’m Maria Bruno, head of U.S. Wealth Planning Research here at Vanguard.

Joel: And I’m Joel Dickson, global head of Advice Methodology at Vanguard. Welcome to our podcast series, The Planner and the Geek, in which we’ll discuss topics that are important to individual investors.

Maria: And have some fun along the way.

Joel Dickson: So, Maria, now we’re entering the summertime as we’re recording this. Finally, here in Pennsylvania we’ve been able to get outside a little bit after a few snowstorms there in that March/April time frame.

Maria Bruno: Time to play in the dirt.

Joel Dickson: Yeah, exactly. I know one of your favorite hobbies is outside.

Maria Bruno: Yes, actually the gardens are quite good this year so far.

Joel Dickson: Yeah.

Maria Bruno:  It’s been a cold start, but the rain’s been good. I haven’t had to do a lot of watering, but the vegetables have a little bit of a late start.

Joel Dickson: Anything new this year that you’re experimenting with gardening-wise?

Maria Bruno: No, and I have not had any critters wreak havoc yet, so I’m awaiting that.

Joel Dickson: Oh, now, you do all your own gardening, correct?

Maria Bruno: I do.

Joel Dickson: Yeah, cut your own grass too, right?

Maria Bruno: I do cut my own grass. I’m the daughter of a retired landscaper, so I have my John Deere. I do it on my own.

Joel Dickson: You better or dad will have some words with you, right?

Maria Bruno: Got my John Deere. I get some good looks on that John Deere sometimes. What about you?

Joel Dickson: That’s what I have a homeowners association for.

Maria Bruno: Oh, it’s so boring.

Joel Dickson: It is, but it frees up other things which actually—even though I don’t really have an option here, I like that I’m paying for, those services because I tend to have a black thumb rather than a green thumb.

Maria Bruno: So, you don’t clean your own snow?

Joel Dickson: If I need to get out in the morning before they come and plow it, no.

Maria Bruno: Wow.

Joel Dickson: I don’t even have to worry about that.

Maria Bruno: Look at you.

Joel Dickson: I know, well, and that’s definitely something I’m willing to pay for.

Maria Bruno: Yeah, I think this goes to the whole question of: Do you pay with money or do you pay with your time, right?

Joel Dickson: Exactly.

Maria Bruno: And I think we all go through different thought processes with different things in life.

Joel Dickson: Right, whereas I’m, you know, happy to hang a ceiling fan or something in my house on my own.

Maria Bruno: Do you do electrical work?

Joel Dickson: I do some electrical work, yes. I haven’t had a bad experience yet where I ended up flailing on the ground.

Maria Bruno: You remember to, you remember to turn off the—

Joel Dickson: Exactly, I remember to turn off the breaker.

Maria Bruno: Well, there’s two things generally that I don’t do: plumbing and electric.

Joel Dickson: Yeah?

Maria Bruno: Minor plumbing but nothing more than that because, usually, it ends up to be more costly than it’s worth if I start doing stuff.

Joel Dickson: I’m thinking of that commercial that’s been running right now about, one partner says to the other that, you know, he can fix it, and she said, “No. No.” I think that’s the way I feel about any kind of even moderate plumbing thing, you know, it’s like, “Let’s get to the phone real fast.”

Maria Bruno: Yeah, so I think this is an interesting discussion and probably segues into what we’re talking about today.

Joel Dickson: Yeah.

Maria Bruno: Right, around personal finances and money management and paying for advice.

Joel Dickson: When do you need help and when do you think you need professional help?

Maria Bruno: Does it make sense; what’s the, the criteria?

Joel Dickson: Yeah, exactly.

Maria Bruno: You know, I think there’s a lot of similarities there as there are with what we talked about in terms of, certain things, can you do it yourself? In many cases, yeah. The question is do you have the willingness to do it? Do you have the interest to do it? And I think with advice and financial planning, for instance, and finances, it’s not just once and done, right? So, do you have the time and the willingness to continue to do it? Much like cutting grass, for instance.

Joel Dickson: Right, time, willingness, and then that third piece is kind of, the ability to do it. You know, recognize, you know, are there things that maybe you’re not an expert in, or you do have some knowledge, and then so you’re willing to take that. Of course, I always find it interesting this time, willingness, ability argument around lots of different components of advice, not just investment or financial advice. But, you know, the, the TWA acronym of, you know, “Hey let’s use a bankrupt airline to decide whether or not you should pay for advice or not.” I mean it seems, it seems a little strange. But the short end of the straw, if you will, for almost everyone with any discussion is time. You know, how do you prioritize the time element? And, for things like the gardening or the snow shoveling, I am much happier having someone else do that because it frees up that time that I otherwise would devote to those things.

Maria Bruno: But I think time bleeds into the willingness or the interest of it. Or you might have the time, but you may have absolutely no interest in doing this, and would be perfectly comfortable having somebody else who is an expert in that or a professional handle that aspect of whatever it is, whether it’s finances or electrical work, or whatever the case may be.

Joel Dickson: Right.

Maria Bruno: I mean there’s a lot of professional services that have crept up over the years.

Joel Dickson: Right.

Maria Bruno: And people just, you know, they’ll outsource things because either they don’t have an interest or don’t feel that they can.

Joel Dickson: Yeah, whereas I love researching like new purchases of whatever it might be. You know, need a new dishwasher or I need a whatever. And I’m just like, I love researching those things online and, you know, doing that myself and figuring it out. Now I may use, you know, some information of people that have kind of ranked those things in terms of reviews and so forth.

Maria Bruno: Yeah.

Joel Dickson: I’ll spend lots of hours doing that, or planning my own travel. That’s another one I actually love doing and just, hey, how many different ways can I get from point A to point B and kind of what’s the cheapest, what’s the most efficient, or so forth.

Maria Bruno: Versus old school walking into the travel agent and saying, “Here, where do I want to go and how do I get there?”

Joel Dickson: Exactly. I have never walked into a travel agency or used one online, for example—

Maria Bruno: Never?

Joel Dickson: No.

Maria Bruno: Hmm, interesting.

Joel Dickson: Never. That’s all, something I’ve just always loved doing myself.

Maria Bruno: You know, I think this also gets to the question of, well when do you need advice, right? So, what were we talking about, a dishwasher?

Joel Dickson: Yeah.

Maria Bruno:  A new dishwasher?

Joel Dickson: What, you were listening that time. You were listening to me that time. Wow!

Maria Bruno: So, if something breaks, yes, you have to fix it. But if something’s on the fritz, you’re like, “Oh, no. I’ll deal with it later,” right?

Joel Dickson: Yup.

Maria Bruno: So, I have this joke, and I’m not sure if I used it before with our listeners, but some of my colleagues don’t really care about what I do until something happens in their life. So, guaranteed, if somebody has a child, they come on over and ask about 529 plans. Or if I know anything about insurance. Or they might have a question, their parents might have a question around Social Security or RMDs or something like that. So, guaranteed, when something hits them personally, that then leads them to go and ask questions around what to do or how to do it.

Joel Dickson: Oh, yeah.

Maria Bruno: So, is it life event driven?

Joel Dickson: Well, is it life event driven or, yeah, I mean as, as the Geek, I love figuring that stuff out. I have interest in figuring that stuff out, and I go and, you know, when I have that, oh, should I do 529 or should I do Roth IRA contribution or conversion or so on. You know, it’s like, oh, I’m at that point in my life where I need to think about that question and go and model it myself and look at it and think about it and so forth.

Maria Bruno: Well, because you, I mean this is what you do for a living.

Joel Dickson: Exactly, right.

Maria Bruno: Right. But for someone, you know, for a lot of individuals, they don’t know, maybe, what the opportunities are to go and realize that they may need help or want help.

Joel Dickson: We’ve had this discussion before here. Yeah, I think a lot of times those of us here at Vanguard will kind of scratch our heads or, you know, do a heavy sigh along, when we hear about somebody that hasn’t saved enough for retirement or that they don’t know that the contribution limits for the Roth or a traditional IRA are $5,500 a year if you’re, you know, under age 50. And, huh, this is second nature to us! You know, why, why don’t people know this? And, you know, I always make the comment that at the same time, there’s probably a group of cardiologists having a conference, sitting around going, “Why doesn’t everyone know that if they just lower their cholesterol by, you know, 20%, that their risk of heart disease will decline dramatically?” That’s because people are living their lives. It’s that time and that interest piece of it. You can’t be, don’t want to be, an expert in everything. And so, then it’s that choice set of, where do you find the expertise for those things that are important in your life but that you may not have, as you said, either the time or the willingness to deal with.

Maria Bruno: Um-hmm. So, let’s talk a little bit more around advice. So we recognize the fact that, yes, some individuals can benefit from advice. But there’s different definitions of advice and different models of advice. Right, so there’s investment advice, so understanding how to build the diversified portfolio, for instance, asset allocation and how to set up a tax-efficient, globally diversified portfolio, for instance. For some individuals, that’s what they’re looking for. But then, as you think about other things and broadening out, you can get into more holistic financial planning, for instance, getting into wealth planning, getting into the interplay of different types of goals, how to invest monies across account types, how and when to draw down from account types.

Joel Dickson: Yeah, I think it’s very much what question are you hoping to get an answer to, or what’s important to you? Is it “How do I invest?” or is it “How do I meet my goals or my long-term objectives?” You know, at this point too, from an invest standpoint, you mentioned globally diversified, low-cost investment portfolios. In many ways, that’s been commoditized in a lot of the areas. You can get from any number of different places, they may differ a little bit on the margin. But you can go to web calculators. You can go and talk to brokers. You can talk to financial professionals. You can go to robo-advisors, and you can very quickly get a low-cost, broadly diversified portfolio.

Maria Bruno: Well, I would argue you wouldn’t even have to do that. You could just go—

Joel Dickson: Do it yourself!

Maria Bruno: For instance, go to and look at our mutual fund holdings and look at diversified all-in-one fund options, right? They abound in the industry, not just Vanguard.

Joel Dickson: Oh, yeah, target-date funds, LifeStrategy® funds.

Maria Bruno: Absolutely, balanced funds.

Joel Dickson: Exactly.

Maria Bruno: So, you can get globally diversified index funds, for instance, at very low cost.

Joel Dickson: Right. But historically, that’s been an evolution.

Maria Bruno: Yeah, absolutely.

Joel Dickson: Because if you go back 10, 15, 20 years; oftentimes, when people would be talking about advice, it’s like, “I want help outperforming the market or selecting securities or funds to do well.” And I don’t know about you, I think that the conversation has shifted, in part because there’s been a lot of value-added in just getting people to think about, “Hey, let’s focus on asset allocation as the most important component of the investing piece.” And then if you can implement that low-cost, broadly diversified as we’ve been talking about, you’re a lot of the way there. And I think it’s evolved to, “How do I meet my goals in what I’m trying to achieve?” Do you get that sense?

Maria Bruno: I do and as I was preparing for this topic, I reflected a bit, too, over the years in working with clients. As I think back 20 years ago, for instance, a lot of it was around asset allocation, sub-asset allocation, and the building blocks of the funds. But, again, target-date funds and other similar type products may not have existed back then. Balanced funds did though.

Joel Dickson: Right.

Maria Bruno: The cost to invest was probably a little bit greater in some of these areas as well, so that’s come down over the years. But even if you were to think about the different pockets—be it investment planning or retirement planning or estate planning—I mean you can look at these compartmentalized, but, really, they all blend together because many people, when you think about investing, it’s for retirement, for instance. And estate planning, everyone needs some level of estate planning. I think some individuals think of that’s just for the wealthy, but there’s a certain baseline of financial wellness documents that all of us need as individuals to make sure that our goals are met.

Joel Dickson: Oh, needing a will.

Maria Bruno: Yeah, a will. A power of attorney.

Joel Dickson: Health care surrogate. Yeah.

Maria Bruno: Yes, yes, absolutely. I was just having this conversation with one of my colleagues the other day. Small children and didn’t necessarily have all their documents in order, so he got an earful.

Joel Dickson: Yeah. Oh, you could probably give me an earful. I haven’t updated mine recently. So, yeah, it needs to be updated. Now that my kids are actually of age, it definitely needs to be updated. Oh, now, see, you gave me something to do. Shoot, now I’ve got homework.

Maria Bruno: Okay, good. So, I have a question for you. I have an opinion, but I want to get your thoughts. Do you think the complexities are based on how much money you have as an investor?

Joel Dickson: As a professional economist, the answer to every question, I have to answer as “It depends.”

Maria Bruno: It depends. All right, well I’ll just start with my opinion. I don’t necessarily think that that is the case, because regardless of the asset level that you have, the complexities may still be there because you have limited means and you have to think about resource allocation and multiple goals. So, I don’t necessarily think that it’s tied into wealth exclusively. I do think though that at certain points in your life or maybe it is in terms of wealth and the distribution of that wealth adds some level of complexities, but I would argue that it’s not on asset base only.

Joel Dickson: And that’s where the complexity comes in is trading off those priorities and goals.

Maria Bruno: And I do think the complexities lead to having to go to specialists, much like when you think about doctors, right? You have general practitioners, but then you have specialists, so the ones that are expert in certain diagnoses of medical conditions and treatment of those conditions. I think it’s the same thing with financial planning. You know, there may be, estate planning experts, for instance, or Medicare experts, for instance, or elder care planning experts or even college planning experts. Right, so depending upon the need, and I think many advisors actually partner with some specialists as well to make sure that their clients get their needs met in the most appropriate way.

Joel Dickson: Well, yeah. I mean we’re getting to that aspect. As you said, there are different models of advice, different ways to approach it. I mean we’ve talked about investment and financial advice, sort of that, “How do I invest, how do I meet my goals?” What we’re getting at here too, a big part of meeting your goals is also mitigating the risks of not meeting your goals, and how you think about that. I mean, you know, you’ve often told me that, the biggest risk of people not meeting let’s say, their retirement goal, is not necessarily saving enough. It’s disability or it’s something along the way that they, you don’t retire when you were planning to. You had to retire early. Now all of a sudden you have to fund the gap years between when you thought you were going to retire and when you actually did, as well as your normal retirement.

Maria Bruno: Oh, right.

Joel Dickson: You know, and so that loss of saving capacity and income and generation and so forth, puts it at risk much more for folks there. And so even that role of insurance and how that might play to help you meet your long-term goals, whether it’s disability insurance or you think about  house insurance, property insurance.

Maria Bruno: Yeah, property insurance, right, or even renter’s insurance. Yeah, absolutely. So, it’s interesting, when you think about advice and the different advice models, let’s talk about that for a bit, right?

Joel Dickson: Yup.

Maria Bruno: So, there are, you know, you can get advice on a consultative basis.

Joel Dickson: Kind of a one-time walk-in.

Maria Bruno: Oh, yeah,

Joel Dickson: Yeah.

Maria Bruno:  There’s advisors, planners that make a living off of that, right? Hourly-based advice.

Joel Dickson: Yup.

Maria Bruno: And then you can go all the way full-fledged to ongoing portfolio management, investment management.

Joel Dickson: Yeah.

Maria Bruno: And that’s an asset-based fee structure.

Joel Dickson: Yeah, that’s right. I think about the hourly advice, oftentimes you’ll get a checklist. Here’s a consult for a couple of hours or whatever maybe.

Maria Bruno: Like a checkup, right.

Joel Dickson: Yeah, and “Hey, here’s what I need to do. Let’s make sure I move this account. I opened this one…” and so forth, and down the line.

Maria Bruno: And that’s probably more—when you think about client types—it’s probably more of a validator, right? I want to have somebody validate my situation and give me an expert opinion. But maybe I’ll take care of it then going forward. I don’t need somebody to do that for me ongoing.

Joel Dickson: Right. And then beyond going, there’s even a couple of types within that. There’s often sort of nondiscretionary sort of approaches and then more discretionary, full discretionary management. I think in the nondiscretionary is, you’ve kind of got somebody on retainer, and they’ll tell you what to do and how to do it.

Maria Bruno: Right, but you still have ultimate control, right? You want to retain control.

Joel Dickson: Right, and the discretionary model being, you’ve essentially given over the decision-making on those parts of your portfolio or finances in whatever way, to someone. And usually that ongoing advice, as you said, is asset-based. Often is the sort of typical model or percentage of assets each year. But it could be either discretionary or nondiscretionary, depending on how you get it set up. And even there, there’s a choice of how to think about, which model is right for me.

Maria Bruno: Yeah, I think that’s a good point to distinguish between those two, absolutely.

Joel Dickson: So, Maria, I think it’s important, you know, for our listeners to understand that even though we might talk about one-time advice or, you know there are times—those can happen at any and very different life stages. There may be life events that you say, “Hey, I think I need some help here.” But whether you’re 20 or you’re 45 or 75—

Maria Bruno: Or 50ish?

Joel Dickson: Or 50ish, yeah, don’t remind me. Hey, we’re going to be talking about your 50ish soon. You brought this up. That there are all sorts of different trade-offs and things to sort of try to deal with in financial journeys at those places.

Maria Bruno: Yeah, I would agree. I mean we talked about the complexities being, you know, potentially debated based upon how much wealth you have. But it could be life events. And the definition of complexity can vary by individual, right? So, a person’s situation may not be that complex, but he or she may feel that it is and want to get a professional opinion. And that’s perfectly fine.

Joel Dickson: I think of somebody like a millennial, let’s say just starting out, graduated from college, first job—how do you think about the spending versus the savings decision and then paying off debt—

Maria Bruno: And the liquidity.

Joel Dickson: And the liquidity versus paying down debt. You know, if there’s student loans or, if you’re starting out and you’ve got some credit card debt or something like that, you know, those decisions and those trade-offs can actually be reasonably complex in thinking about what sets me up for success down the road.

Maria Bruno: Right. And you can have that same discussion across the age spectrum, all the way up to people who are accumulating and nearing retirement versus retirees.

Joel Dickson: Oh, yeah, I mean, I think-

Maria Bruno: Oh, you think about your mom?

Joel Dickson: No, I was going to say—

Maria Bruno: Oh, go ahead, I thought you were going to—

Joel Dickson: I was going to say 50ish, right. You’re kind of—I’m thinking about my kids’ education, at the same time retirement, and, you know, my own sort of personal consumption and interests and so forth. And, you know, how do you trade those elements off in a relatively efficient way? Yeah, and then, you know, my mom, she kind of treats me like the homeowners association. “Hey, Joel, I have a problem. Just tell me what to do.”

Maria Bruno: She asks your opinion, but does she always take it? That’s the question, see?

Joel Dickson: No. That’s that discretionary model.

Maria Bruno: Exactly.

Joel Dickson: Yeah, she definitely retains discretion, values my input, but, yeah. No, it’s definitely, at the end of the day, a discretionary model. I’m sorry, a nondiscretionary model. See, after that, I screwed up the model. It’s a nondiscretionary.

Maria Bruno: You want it to be discretionary, but it’s not.

Joel Dickson: She wants to retain discretion on her part of the portfolio.

Maria Bruno: We got it.

Joel Dickson: Got it. Crystal clear as mud. And that’s also where the intersections might come into play between the type of model, if you feel you need advice, can come in. Somebody with very few assets, an asset-based model is probably not going to work for the provider of that advice. If they’re going to spend a bunch of time with somebody with no assets and get paid zero dollars, you know, that’s not a particularly…

Maria Bruno: It’s not a lucrative client for that advisor.

Joel Dickson: It’s not a particularly good business.

Maria Bruno: Right.

Joel Dickson: Yeah, exactly. But that’s where a subscription model or an hourly model may very work because, you know, somebody that’s trying to decide, “Do I pay off credit card debt or do I save in my 401(k) or I make an IRA contribution, how does set me up for my future goals?” may be very willing to pay for that advice. And it could be very valuable advice, just not necessarily an asset-based approach. Whereas that midcareer accumulator that’s already accumulated a decent amount of assets potentially, you know, the asset-based model may make sense for both them and for the provider of the advice.

Maria Bruno: So, let’s talk a little bit around how to find an advisor.

Joel Dickson: Okay.

Maria Bruno: That big question.

Joel Dickson: That big question.

Maria Bruno: Um-hmm.

Joel Dickson: And how to know if one’s right for you.

Maria Bruno: True.

Joel Dickson: Right?

Maria Bruno: Right.

Joel Dickson: I mean there’s kind of like a “get to know you” phase to an advisor relationship. You want to be able to click with them and be able to be open and honest and trusting—

Maria Bruno: Right, so I think when you go through what the important criteria is, I mean, one would be, you know, cost. The other is philosophy.

Joel Dickson: Yup.

Maria Bruno: How does the advisor—what is his or her approach?

Joel Dickson: And does it align with your needs?

Maria Bruno: Absolutely, yes.

Maria Bruno: Anybody can call themselves an advisor. You could go out there and say, you know, “Joel Dickson, Advisor.” But does that necessarily qualify you to be an advisor?

Joel Dickson: Yeah. There are a lot of people who would say, “No.”

Maria Bruno: And no, but seriously, I mean one thing to look for— a watermark is the CFP® designation, Certified Financial Planner™ designation. In order to achieve that, an individual has to meet work experience, educational requirements as well, pass a national exam, and then continuing education, including ethics I might add. So, there’s an ongoing curriculum there with the CFP designation.

Joel Dickson: And is there like a Hippocratic Oath type thing with the CFP, you know that doctors have, do no harm and best interest of the, of the patient?

Maria Bruno: Okay. Well the CFP designation really—it’s a professional designation that supports the financial planning profession, for instance. There’s also the fiduciary role of an advisor. And the other thing would be the regulatory exam. So, for instance, you need to be a registered investment advisor within the state where you live. So, there are other licensing exams. And that’s where I think combined you get the technical professional experience with the fiduciary level of care to be able to provide advice.

Joel Dickson: So, in that fiduciary level of care, there’s often a difference of people may think about they’re getting advice or so forth, but there may be different elements of that. You know, I think about the idea of suitability versus best interest, right. And suitability I think, you know, a friend, Michael Kitces, has said that—I’ll probably get this just off a bit—but suitability is that you go and buy a suit and the person that’s helping you has the suit, makes sure that the suit fits you. Best interest means that the suit actually looks good on you.

Maria Bruno: Does he use that analogy, or did you just make that up?

Joel Dickson: No, he did. He does.

Maria Bruno: He does, okay.

Joel Dickson: Yeah.

Maria Bruno: All right.

Joel Dickson:  I’ll do it with a Christmas sweater. You know, when grandma knits a Christmas sweater, fits you versus actually looks good on you, but…

Maria Bruno: Yeah, no, I mean, it’s an okay analogy. It’s a good analogy. But you’re putting the clients’ interests first.

Joel Dickson: Um-hmm.

Maria Bruno: So, I think when you think about what to look for in an advisor, those would be criteria to look for. Certainly cost, philosophy, what their compensation model is.

Joel Dickson: Yeah, all of that that can matter. And, and then, ultimately, what you’re comfortable with and the interaction that you have.

Maria Bruno: Oh, you have to feel comfortable. Some individuals feel most comfortable meeting face-to-face. Others are quite comfortable in a virtual-type environment and having that dialogue either over the phone or through the computer or whatnot. So, it’s much easier to have that access versus the old days where you actually had to physically go in the office and bring all your paperwork.

Joel Dickson: Yeah, and I actually think it’s great that today we’re going to be joined by a registered investment advisor, he has his own firm, he’s a well-known financial commentator, observer of the financial markets, Barry Ritholtz. He’s the cofounder and chief investment officer of Ritholtz Wealth Management, a financial planning and asset management firm. And he, as I mentioned, is known within the industry for sort of commenting and having great knowledge and expertise in the financial services business. He’s the creator and host, for example of Masters in Business, a popular podcast on Bloomberg radio, as well as, you know, in the financial media. And, matter of fact, I know him from reading for years his blog The Big Picture, where you get all sorts of what’s happening today in sort of the market and the financial services realm. So, it’ll be interesting to get sort of Barry’s take on some of these same questions, about thinking about an advisory relationship and how you go about looking at that and evaluating it.

Maria Bruno: Barry, thank you for joining us today. We’re really excited to have you in the studio.

Barry Ritholtz: My pleasure. Thank you for having me.

Maria Bruno: We are talking advice today, so we thought it would be great to have you in the studio. So, we really want to have a good discussion today around advice in general, when it makes sense to seek advice as an individual investor.

Barry Ritholtz: Um-hmm.

Maria Bruno: What are the things to look for? What are potentially pitfalls? And any, anywhere else we go today.

Barry Ritholtz: So that, that’s a fascinating topic. Where do you want to begin with that?

Maria Bruno: Well, let’s just start with a little bit about you.

Barry Ritholtz: Um-hmm.

Maria Bruno: Tell our listeners a little bit about you and your firm, and your philosophy.

Barry Ritholtz: Sure. My name is Barry Ritholtz. I’m the founder, chairman, and chief investment officer of Ritholtz Wealth Management. We run about $900 million. Our headquarters are in New York. We have offices in New Orleans, Portland, Oregon, Newport Beach, California. But, really, we’re sort of a virtual company. We exist anywhere and everywhere there’s an internet connection. Our philosophy has been—well, there’s a lot of different pieces to it. It really starts with, “this shouldn’t be complicated.” Complexity is a feature not a bug. It’s by design. The more complex and intimidating something sounds, well, the easier it is to sell you an expensive solution that resolves it. The idea of investing is that markets will generate a better return net of inflation than any other asset class, reliably over time. And if you own a broadly diversified global portfolio of low-cost indices and you rebalance every year, that’s really all you need to do. And I think many people can do that themselves. If they don’t have the time, the interest, the discipline, and the emotional fortitude to—all the studies we’ve read have told us most investors’ biggest problem is themselves. If they cannot get in their own way, they could do pretty well. So, you know, I always get a question on Twitter, “Why can’t I do this myself?” You can! You know, you can own a handful. With three or four holdings, you can have a domestic, you can have an international, you can have bond funds. If you want to get a little fancy, you can have a REIT fund. If you need tax-free income, you can have municipal bond funds. But, basically, you know, there’s a dozen books on portfolio management. Go buy a book on asset allocation. Don’t buy the 500 page one. Get a small, little paperback. Portfolio models aren’t that complicated. So that’s the easy part. The hard part is everything that happens after that. Every day is a torrent of distractions, a torrent of flows. There is a reason to liquidate your portfolio and hide in cash every single day.

Joel Dickson: And, Barry, you said that it was, you know, this is what investors could do.

Barry Ritholtz: Right.

Joel Dickson: But they won’t do is what I’m hearing you say.

Barry Ritholtz: There are some people who are disciplined and structured and organized and are capable of keeping their emotions in check. And, you know, the answer to the question, “Why can’t I do this myself?” Well, if you have those characteristics, you can do this. You don’t need to pay me 75 basis points to do this for you. You could do this yourself. On the other hand, if you read a lot of media, if you watch financial television, if you’re enthusiastic and excited about speculation, if you’re curious about Bitcoin—then you probably need somebody to hold your hand and prevent you from doing the sorts of stupid things that human beings do every day. I used to give a presentation on risk. And part of the explanation of the human brain is, it evolved over the millennia to keep you safe on the Savannah, to adapt to an ever-changing world. That has nothing to do with capital markets or risk or what’s the proper duration for the bond portion of my portfolio? None of that. We’re not built for that. And, I’m fond of describing what we do as off-label usage. Your brain is supposed to keep you alive to procreate to the next—

Joel Dickson: Oh, I love to say that.

Maria Bruno: Joel, I thought you made that up.

Joel Dickson: Yeah, you know.

Barry Ritholtz: So think about any of the over-the-counter sleep aids. Those are just antihistamines and allergy meds—it’s off label. It’s used for something different than the original intention. And I think modern society is completely an off-label usage of the human brain from what it was for the past million years.

Maria Bruno: This leads me to where I wanted to go a little bit. I completely agree with everything that you’ve said so far. If you haven’t figured out I’m the planner in the duo here.

Barry Ritholtz: Um-hmm.

Maria Bruno: Joel’s the geek. But I also think, in addition to that, is also the value of advice in terms of how do I navigate some of the other financial decisions in my life in terms of, well, how do I direct my cash flows in different types of accounts? How do I draw down? How much can I spend? When should I claim Social Security, for instance?

Barry Ritholtz: Um-hmm.

Maria Bruno: So, I think as we—and I wanted to get your thoughts on this, too, as you see industry trends and maybe the role of the advisor changing. These are things often that we talk about because, I agree with you, building a globally diversified low-cost portfolio is fairly simple, but there’s other factors that come into the picture when you think about long-term investment success.

Barry Ritholtz: For sure. And, and the idea of just of having goals—what are your financial goals? The planning process begins with prospective clients before they become clients: Tell us what you’re looking for. What do you want? What would you like to accomplish, etc. And when someone says, “Look, I want a Sharpe ratio of this and I’m looking for this much leverage because I want to outperform by this much,” there’s always a moment—aside from the fact that we don’t do that—there’s always a moment where you have to ask the person, “Why? Why do you care about whether or not this portion of your portfolio gets what the market gives you, gets a little above or a little below? What, what’s the net significance?” Especially with people who are substantially wealthy. Well I’ll make a little more. Dude, you already have, fill in the blank, X tens of millions of dollars. It’s not going to matter! If you’re talking about generational wealth transfer, if you’re talking about a philanthropic event, or if you’re just talking about retirement—like one of the things we have to twist people’s arms about is getting them to spend money.

We have a client who wants to buy a sailboat. He cannot pull the trigger on it. And it’s like, “Dude, you could buy four sailboats and your grandkids’ college is still paid for. Stop stressing about it.” Now if you have a more modest portfolio and you’re legitimately concerned about am I going to outlive my portfolio?

Maria Bruno: Um-hmm.

Barry Ritholtz: Am I going to not? That’s a very different conversation.

Maria Bruno: Um-hmm.

Barry Ritholtz: And especially if someone’s a little younger, you have the ability to adjust the amount of risk you’re willing to take, we can try and ratchet up how much your contributions are. We could change the input so that you become more comfortable—hey, there’s a high probability that I will hit my targets 20, 25 years. Hence, people have a very hard time looking at that process objectively themselves.

Maria Bruno: Um-hmm.

Barry Ritholtz: Having a third party say, “Let’s figure out what you really want and let’s figure out the best way for you to get there.”

Joel Dickson: Well, and that’s where I think the evolution but also the perspective that I think people have been attuned to, which is they see the quarterly statement. Yeah, here’s the dollar amount of the portfolio.

Maria Bruno: They focus on the number.

Joel Dickson: They focus on the number as opposed to the success metric. Do I have enough?-

Maria Bruno: Or the meaning of the number. Whatever, right.

Joel Dickson: You know, and what’s the right success metric to get people to think about rather than, oh, I have more, or I have less than I did three months ago?

Barry Ritholtz: So, technology solved that problem. It’s kind of interesting. Go back in time 10 years. Each quarter is a big deal. Quarter’s over, let’s look at the returns, let’s generate our quarterly update. And it all got folded and put in envelopes and was sent back and, bang, here’s a number, and it’s a big deal! Today the technology is there. So we use—through Orion—we use an app. Everybody, you guys, have an app.

Maria Bruno: Um-hmm.

Barry Ritholtz: Everybody has an ability to do this. And we tell clients, “You could look at the value of your portfolio. Forget quarter by quarter, month by month. You could look at it, look at it tick by tick. You can know exactly how well you’ve done relative to yourself, relative to the benchmark, relative to comparable portfolios second by second. But please don’t, because there’s no reason to look at that minute by minute.” And the fascinating thing—and this is where technology is changing the way we do business—once people realize they have that 24/7 access to it, where it’s not a big quarterly event, they stop looking. It astonishing because you see all the backend metrics. You can tell how often people are clicking. Technology has made the process so much—not just less expensive—but smarter and better tuned to how humans work in the real world. And some of the big issues that used to come up all the time, technology has helped to solve. The quarterly obsession is just one example.

Maria Bruno: Um-hmm.

Joel Dickson: Which still seems to be there though many times in earnings reports and, yeah.

Barry Ritholtz: So that’s a different issue.

Joel Dickson: Yeah.

Barry Ritholtz: On the corporate side, on the earnings side, that’s a really big issue. So here’s where data helps. We’ve had this conversation. “I’m concerned that markets have peaked in terms of profits,” says a client. All right, so you’re concerned about it: (A) do you think you can pick when the markets have peaked? Because Google stock market profits peaked and over the past ten years, you’ll see 1,000 articles every quarter saying, “This is the—No, wait, this is the peak. Oh, no, not last, but this quarter is the peak.” And markets just have kept going up for ten years. And if you would’ve listened to these markets are peaking and gotten out, you would’ve left a lot of money on the table. I remember having conversations with people in March, “Wait, didn’t you tell me equities were too expensive three years ago?” “They’re cheap now.” “Oh, I’m not buying stocks now. The Dow’s going to 2000.” “Really? Okay.” That’s very typical of how humans behave. We’re really bad at forecasting our own emotional state in the future.

So, if you think you can buy stocks because this is the optimal time relative to whatever it is, most people just lack the fortitude and they’ll get swept away with the emotional currents.

Joel Dickson: Well, you know, Barry,  this sort of—Sometimes we see here at, at Vanguard, because we have a very similar philosophy around, you know, low-cost portfolio construction, sort of the “set it and forget it,” but do the things around the edges that keep you on the path.

Barry Ritholtz: That’s right.

Joel Dickson: Right? But oftentimes you’ll get the comment—and I’d be interested in how you handle this—the comment about, “Well, you’re not really doing anything. What am I paying you for?” And, you know, as you kind of alluded to, well, you’re kind of paying for the discipline that you may not have on your own.

Barry Ritholtz: That’s part of it.

Joel Dickson: But how do you talk about what you’re doing in terms of that value to the, to the client?

Barry Ritholtz: So, there’s two really interesting lines of thought on that. And the first is—you know, just, my wife and I were just discussing this on the ride down the other day. We talk about survivorship bias when we look at mutual funds and everything; it skews everything. But look around the world. Everything you see is the product of survivorship bias. Why does this mug made out of ceramic exist? Well, we tried it out of paper, it leaked. We tried it out of 1,000 other things. This table, these electric, everything you see is the succeeding products against the thousand competitors that all died. So, it turns out that our decision-making process and the things we do are really, really bad. Most of the stuff that humans make fail. Sometimes catastrophically, sometimes hilariously, but typically they don’t work. The good thing is we get to learn from those; we learn from our mistakes. So, a big part of what we do is a teaching people to understand that less is more. Don’t just do something, sit there. If we keep our clients focused on reality, understanding the real world as it is, that’s a huge advantage in capital markets. It may not matter as much in other things. You could root for whatever sports team you want. You could be politically active in whatever dogma you want. The penalty for being wrong there is all right, you’re wrong. Who cares? Your team lost. The penalty for not understanding reality when it comes to investing is expensive. So that’s the second thing. And then the last thing is the people who are very active, the people who are doing stuff for good optics for the portfolios, they tend to be selling people products, services, whatever—that don’t seem to be very necessary. But just engaging in doing something for something’s sake doesn’t seem to make any sense. You have to contextualize this over a 30-year period. Like, you don’t need to go in and mess about with the portfolio every day, every week, every month. It doesn’t, it doesn’t need that. So as long as you’re thinking about what you can do to make the portfolio better—make it more efficient, make it less expensive, but not acting unless there really is a compelling reason to do something—most of the time you should be doing very, very little, other than informing and educating your clients.

Maria Bruno: So, Barry, I just want to pivot off of that a bit because what you were just discussing made me want to have the discussion around, as an investor, what are the things that you should look for when you’re thinking about an advisor and how to select an advisor?

Barry Ritholtz: So that is really, a very challenging question because it’s so subjective. For some people, they know exactly what they want and they’re very comfortable saying, “I have a generational wealth transfer, I’m selling a business, I have some tax issues, I need someone who can help me with all those.” That person, you know, ask around, ask a few of your friends, look online, do a Google search, and you’ll come up with a short list of questions that you should ask these potential advisors. But you’re looking for somebody who has an expertise in that space. That’s easy. The harder one is someone who is not sure. “I’m not sure what I should be doing, I’m not sure who I should be speaking to, I’m not sure if I even need an advisor.” So, there it’s a matter of finding somebody that’s a good fit. My advice to people is always: make sure you understand their philosophy and how responsive they are. You send them a question; you want an answer in a relatively short period of time. How important is financial planning to you? I’m speaking to the planner and the geek. We think planning is important. If an investor is of the same mind, well, then you want to go to a firm that specializes in that. It really requires the individual to have that epiphany of, “What is the value of money? What am I going to do with this?” The other thing is the rest of the tools that the advisor has—can they give you advice about trust and estates, about insurance? Long-term healthcare is the other thing that keeps coming up. You know, “I get great insurance through my job, but when I retire, what am I going to do? How do I deal with that or catastrophic sort of thing?” So there’s a lot of issues that come up that people need assistance with. If you can figure out what you need, then you speak to a handful of advisors and see if there’s a fit. I think that’s easier than just kind of flailing about and talking to a bunch of people.

Joel Dickson: Or getting the recommendation from your brother or your cousin.

Barry Ritholtz: Right

Joel Dickson: I have a guy.

Barry Ritholtz: Everybody has a guy.

Maria Bruno: Or a gal.

Joel Dickson: Or a gal.

Barry Ritholtz: Right, but just going to your cousin’s person, well, are your needs the same as your cousin? So, I’ve told people, “Hey, if you have some buddies who are financially similarly situated to yourself, see if anybody can make a recommendation.” But, you know, typically that’s folks who are, you know, it often comes up with professionals—bunch of lawyers, bunch of doctors, bunch of accountants. They kind of are dealing with the same, “I got partnership issues. I have to figure out what our succession plan is. I have this. I have that.” So you want someone who can tap into a network and answer those questions.

Joel Dickson: You’re a, a very well-recognized observer and commentator on the markets, the sort of state of the financial industry business in general, whether it’s through your blog, The Big Picture or whether it’s through your Masters in Business podcast series on Bloomberg. What do, you know, kind of just state of the financial industry from your perspective and, and observation over the years, where are we now? How’s it kind of changed, and what do you see the future holding?

Barry Ritholtz: So, you know, we were just talking about this earlier. Think about the companies that didn’t exist ten years ago versus today. So, when you think out the future, what is ten years from now like? Well ten years ago there was no Uber. I think Netflix was sending DVDs through the mail.

Maria Bruno: Um-hmm.

Barry Ritholtz: And Facebook was still a glint in Mark Zuckerberg’s eye. So, ten years is like, wow, ten years is a really long time. What we know that’s been taking place that I don’t see any reason that it’s going to change is fee compression is going to continue. I expect everything to continue to cost less. Technology is going to continue making all of us more efficient, more productive, capable of doing more with the same amount of staff, which could be why it’s been so long coming for the wages to go up, because technology is really keeping a lid on that sort of thing. I was looking at a firm not too long ago, and we have a pretty simple suite of offerings. Here’s our conservative, moderate, aggressive portfolio. I’m kind of a space geek so we’ve named them after various NASA missions. Our robo-advisor is called Lift Off. So, the idea is Pioneer, Mariner. Some of them have gone further, and Voyager has gone the furthest, so it’s conservative, moderate, aggressive that way.

Joel Dickson: My elementary school, I actually went to the Virgil I. Grissom Elementary School in Rochester, New York.

Barry Ritholtz: Gus Grissom, absolutely.

Joel Dickson: So, yeah. Love that space thing.

Barry Ritholtz: But the idea of you don’t need a million portfolios. I still think it’s a person-to-person business and there are advantages of scale of when we went from four people to 15 people to 25 people and from 100 million to 400 million to 900. You’re capable of doing more stuff because you can throw more and more resources at it, but, you know, you don’t need to be 1,000-person RIA to deliver that suite of services to people. I think 5 or 10 people that are dedicated to client needs and understand the benefits of the fiduciary rule and putting clients first, can offer a nice suite of services without having to participate in that sort of outside funded rollup. So the fiduciary side of it, the technology, the cost structure. You know, we keep seeing some interesting new products come along like ESG and smart beta and ETFs. We’re always late adopters of that sort of stuff. ESG’s been around for 25 years.

Maria Bruno: Um-hmm.

Joel Dickson: Yeah.

Barry Ritholtz: I wouldn’t be surprised to see the industry move a little more aggressively in that direction. And the other RIA factor that’s so fascinating is, we are becoming a very old industry. At one point in time, there was a constant feed of young advisors. And now you have this weird barbell of I think the average advisor’s age is 59. And then there’s this big channel and then there’s another little bump in the 30s. And how that gets resolved I can’t guess, but it would be nice if there were some more young advisors coming into the industry. Otherwise, we’re just going to be all a bunch of gray hairs and no kids in it.

Joel Dickson: Yeah, and maybe not a lot of perspective for the clients that, you know, may be looking for that, that perspective.

Barry Ritholtz: You know, if you’re 25 or 30 years old, you have a very different perspective on money and debt and saving than somebody who’s 65 years old.

Maria Bruno: Um-hmm. All right, so, Barry, as we wind down, Joel had mentioned your Masters in Business podcast.

Barry Ritholtz: Yes.

Maria Bruno: And we would be remiss if we didn’t have more fun with you today and turn the tables on you a bit and ask some of Barry’s favorite questions.

Barry Ritholtz: Sure.

Maria Bruno: Now we may not be this original. You may have gone through this before, but we might have a few tricks up our sleeves.

Barry Ritholtz: People always warn me, threaten me they’re going to do this, but nobody has done it yet.

Maria Bruno: Okay. So, we’ll have to do a little bit of a lightning round here. So, first question, what is it that you know about investing in markets today that you wish you knew 30 years ago?

Barry Ritholtz: You know, I discovered behavioral finance when I was a young trader, and it had become a field of study slowly over time. I wish I would’ve jumped into that with both feet sooner. I mean I’ve been researching and writing about it for the better part of 25 years. But, really, it’s only since the mid-2000s that it’s become an obsession. And I wish I would’ve a decade earlier had, had gotten as enthusiastic about it.

Joel Dickson: So, let me try to jump in then too, which is, Barry, as you see it, your biggest failure and what you may have learned from it?

Barry Ritholtz: That’s a good one.

Maria Bruno: Joel stumps Barry.

Barry Ritholtz: So, the problem is there, there’s too many. You know, I started as a trader and I really, really liked it way too much. When I left trading and went into research, I thought I could actually help people—it’s picking stocks, but really isn’t.  I worked with this senior researcher who was just this brilliant technologist, and I thought I could take his crazy—He was the, a former software writer at Bell Labs in the ‘50s and ‘60s. I thought I could take his kind of crazy, deep technical research and turn it into plain English for brokers. The thought that I had any influence over these guys who—now that the stock was $86, and they had paid $2—it was their genius. I had nothing to do with it. That was like shocking to realize, “Oh so nobody is objective about anything.” Everybody thinks that the great ideas are theirs, the terrible ideas are everybody else. That was like a shocking failure of recognizing how stock picking, stock selling, stock brokerage, how that whole side worked suddenly was like, “Oh I don’t understand any of this.” No, that was a giant failure, but at least it led to an a-ha moment.

Maria Bruno: Um-hmm! As many do.

Barry Ritholtz: Yes.

Maria Bruno: Okay. So, a recent college graduate if he or she came to you and was interested in a career in finance, what sort of advice would you give him or her?

Barry Ritholtz: So, first, I would tell them, “This is an industry that’s in the process of reducing its headcount; it’s shrinking. So, if this is something that you really want to do, be aware, it’s not as easy as it once was and it’s not as lucrative as it once was, and it’s still competitive. So, I don’t want to discourage you from doing that, but very much be aware of the challenges that are facing you. But, if you have a skill and an interest and maybe perhaps a gift for it, develop an expertise in an area that is going to be around for a while. Make it so that your boss can’t operate without you. Make yourself indispensable to them, and that’ll go a long way to helping your career.

Joel Dickson: Barry, you’re a classic car aficionado.

Barry Ritholtz: Uh-oh.

Maria Bruno: Yes, he is, Joel.

Joel Dickson: Yes, he is.

Maria Bruno: You ready to go there?

Joel Dickson: Yeah. You can only have one car.

Barry Ritholtz: Um-hmm.

Joel Dickson: What, what is it?

Barry Ritholtz: One, only one car. So, you mean for like daily use, so I can’t have a separate Jeep, or I can’t have a separate—

Joel Dickson: No, daily use.

Barry Ritholtz: That’s a car question that nobody has asked me. So, it can’t be a classic car because if it’s only one car, you’re not going to drive it every day. So, it has to be something new. I like to shift my own gears, so it has to be a stick shift.

Maria Bruno: Um-hmm.

Barry Ritholtz: Which eliminates a bunch of cars.

Joel Dickson: Now, are paddle shifters okay?

Barry Ritholtz: No.

Maria Bruno: No.

Joel Dickson: Okay.

Barry Ritholtz: Now, paddle shifters are, are good if you care about being .02 faster on a track, but 99% of your driving isn’t that. So, if I want a stick and because of where I live, I need all-wheel drive, the list is getting…

Joel Dickson: Oh yeah, it’s narrowing fast.

Barry Ritholtz: The list is getting smaller and smaller. And I enjoy a convertible during this time of the year. So—

Joel Dickson: Hard top or soft top?

Barry Ritholtz: It could go either way. I mean, Porsche makes a retractable hard top targa that comes in a four-wheel drive. I, I think it’s a wildly overpriced car, but it’s lovely. So that’s one way to go. Something a little more practical for everyday use, the Audi S5 convertible, but they just stopped making that in a stick shift, so that’s going to be a problem. You’re basically putting me in a 911 all, 4S, the four-wheel drive S. I can get them in the stick shift, I can get them in a convertible, and I can get that all-wheel drive. I am not a Porsche guy is the funny thing. But that’s pretty much the only car that checks all my boxes these days. And I don’t have one, and I have no interest in one.

Maria Bruno: So next question, and probably our last one. You’re having a dinner party and can invite three people, living or deceased, who would they be?

Barry Ritholtz: So-

Maria Bruno: And, and it doesn’t have to be Joel or myself because that would be kind of cheesy to say that.-

Barry Ritholtz: See I find deceased people make terrible conversationalists at dinner.

Maria Bruno: Oh, come on, Barry.

Joel Dickson: Yeah!

Barry Ritholtz: I don’t know why—

Joel Dickson: It is tough.

Barry Ritholtz: I would want to prop up a bunch of corpses at a table.

Maria Bruno: Fine, then leave it to three living people. Well, maybe if they had the opportunity, they’d have a lot more to say.

Barry Ritholtz: All right, so if they were living or dead, if they were alive.

Maria Bruno: Or you could say living, whatever.

Barry Ritholtz: So, Leonardo da Vinci is a fascinating character.

Maria Bruno: Oh, interesting!

Barry Ritholtz: I just finished a book called A World Lit Only by Fire all about the history of the Reformation and the Renaissance era, what a horrible thousand years preceded that. It’s just amazing. So, da Vinci would certainly be a person who I would imagine would be endlessly, endlessly fascinating. The other two people like, I’m looking for people who are really capable in a variety of different areas. You see, I take these questions very seriously. Frank Lloyd Wright is somebody I found fascinating. He’s an interesting person. I would like to have a conversation with him. And I’m going to go back to Mark Twain as a person who’s lived an amazing life. Terrible investor. Every Bitcoin speculative South Sea bubble that came along he was a debacle. He was terrible. So let’s go with, Twain, da Vinci, and I’m going to substitute for Frank Lloyd Wright, I’m going to substitute Kurt Vonnegut.

Joel Dickson: Oh!

Barry Ritholtz: I’ve always been a huge fan.

Joel Dickson: Very interesting.

Barry Ritholtz: So that’s the dinner table.

Maria Bruno: Okay. All right.

Joel Dickson: Very interesting dinner.

Barry Ritholtz: Yeah, I think so. It’s amazing how hard it is to answer that question when I was unprepared for it. And, and I’m going to get emails why no women. And it’s so—

Joel Dickson: Yeah, I almost asked you that.

Barry Ritholtz: So, we’re a paternalistic society. Chrissie Hynde from The Pretenders I would get her at a dinner table in a second. I know she can tell unbelievably frightful stories about the early days of punk rock. She would make for a fascinating dinner guest.

Joel Dickson: Yeah.

Maria Bruno: Well, I was actually waiting to see how many write-ins you get that you didn’t include your wife.

Barry Ritholtz: But I have dinner with her every night!

Maria Bruno: Oh. Oh, okay.

Barry Ritholtz: That’s easy. It’s people I haven’t had dinner with.

Joel Dickson: See that, that’s a trap question. Okay.

Maria Bruno: All right. All right.

Joel Dickson: That is not fair.

Maria Bruno: Barry, thank you for joining us today.

Barry Ritholtz: My pleasure.

Maria Bruno: And we really enjoyed it. Thank you very, very much.

Barry Ritholtz: Thank you for having me.

Joel Dickson: I thought that was a great discussion, you know, good perspective by Barry on a number of topics, but I guess what stuck really with me is that concept of knowing why you’re seeking advice. Not just that my friend has a guy or a gal to provide it.

Maria Bruno: And I think I need one too. Right, yes.

Joel Dickson: Yeah.

Maria Bruno: Yeah, why?

Joel Dickson: Yeah. But what is the why to it? And your why may be very different from even a close relative’s why. You know, different goals, different perspectives, different needs. That’s the starting point. It’s not oh, I need some kind of generic help and I’m going to go find somebody just because. But what is it you’re trying to achieve, and then being able to know that and to investigate.

Maria Bruno: Right, I mean that’s the fundamental start of any financial plan, right, is well, “What is your objective, the why?” And then you start building the whole plan around that and say, “Okay, well, here are the things that we would need to consider to get you there.”

Joel Dickson: Yeah.

Maria Bruno: Yeah, no. I thought that was great. The other thing that I thought was interesting was the technology discussion that we had. And I reflected a bit over the years in terms of how I worked with clients. And, you know, in the older days—

Joel Dickson: Pen and paper?

Maria Bruno: No, we had computers.

Joel Dickson: Oh, okay. Stone tablets and chisels?

Maria Bruno: We had computers. Let’s just move on. But it did take a lot more time to assemble the plan. And then, if a client came in and wanted to make changes, we’d have to go back and rerun the analysis. And that took time. Technology has been a great enabler for us to actually spend more time with clients, right, cause we can run today—we can get information more quickly from clients, we can process that information more quickly for clients, we can present it more quickly. And then, as we want to show—we talked about the tradeoffs. And, as we want to show the impact of maybe making some changes, we can do it real time. So, it’s actually, we can do more due to technology and actually spend more time with clients and have a better experience for both us and the clients.

Joel Dickson: And that’s where technology has led to an increase in the number of different types of advice or models of advice as we’ve talked.

Maria Bruno: Absolutely.

Joel Dickson: Robo-advice, an all-digital approach, you know is leveraging technology to essentially take out human advisors at points. Now, a lot of people do not like that model and it can’t deal with the emotional components, and the behavioral at times.

Maria Bruno: Agreed, but it’s one model. Right.

Joel Dickson: But it is one model.

Maria Bruno: Right, right.

Joel Dickson: Or you think about at Vanguard, we’d mentioned earlier PAS or Personal Advisor Services, which is an advice component or advice offer here, here within Vanguard, and that’s a technology-enabled hybrid.

Maria Bruno: Hybrid model, right.

Joel Dickson: Yeah, which has a human advisor at the center of it, but that the technology allows for much more efficiency, much more sort of automation of those administrative tasks that you were talking about.

Maria Bruno: Um-hmm.

Joel Dickson: Just makes everything much more efficient, much more effective.

Maria Bruno: Yeah, absolutely. I thought that was good. And I think we’ll see more of that as the industry further evolves and technology—I mean it’s increasing very quickly in terms of the abilities to be able to use technology in order to provide advice and access clients.

Joel Dickson: Absolutely. You know, for those that are interested in learning a little bit more about advisors, you know, Maria, you had mentioned the CFP designation. And there’s certainly a lot of resources available on the web around CFP-designated advisors. And then, you know, the Personal Advisor Services tool or advice at Vanguard, we do have a PAS resource tool at where, you know, at least that specific model is discussed. And, certainly listeners could learn more if they desired.

Maria Bruno: All right, well, Joel, I think that was a great topic today. I think we had a good discussion and then, bringing Barry into it was, I think, fun and very informative as a different lens. So, we thank Barry for his time. We hope everyone enjoyed listening to us today as much as we enjoyed talking about the topic. We would encourage you if—as you listen to our podcast series—to not only rate us but provide reviews. The reviews help us understand what you, our listeners, want to hear more of. So, we would encourage you to, to give us your feedback as well. So, thank you.

Joel Dickson: Yeah, and, Maria, are you going to go hire a gardener now or are you still going to do that yourself?

Maria Bruno: No, I’m good.

Joel Dickson: You’re good. Yeah. Still interested in it?

Maria Bruno: I enjoy it. It’s very therapeutic. Most days.

Joel Dickson: Till next time. Thank you.

Maria: We hope you enjoyed this episode of The Planner and the Geek. Just a reminder that you can find more episodes of The Planner and the Geek on iTunes and on

Joel Dickson: Or, simply subscribe to our series and you won’t miss an episode. And please don’t forget to rate us on iTunes. Your ratings will make it easier for others to find us when they’re looking for investing podcasts. Please join us next time for another episode of The Planner and the Geek. 


Please remember that all investments involve some risk. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Diversification does not ensure a profit or protect against a loss.

Mutual funds, like all investments, are subject to risks. Each LifeStrategy Fund invests in four broadly diversified Vanguard funds and is subject to the risks associated with those underlying funds. 

Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the work force. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in target date funds is not guaranteed at any time, including on or after the target date. 

Advisory services are provided by Vanguard Advisers, Inc. (VAI), a registered investment advisor.

For more information about Vanguard funds, visit or call 877-662-7447 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

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