Citations: Commonly Referenced Data

Professionally Managed Accounts Generate 3-4% Higher Returns Per Year

This range comes from the conclusions of multiple studies:

• Vanguard released the whitepaper “Putting a value on your value: Quantifying Vanguard Advisor’s Alpha” in July 2022.  Based on several factors, the whitepaper concludes that “advisors can potentially add up to, or even exceed, 3% in net returns” on an annual basis. The largest contributing factors they identified were behavioral coaching (up to 2+% alpha), spending strategy (up to 1.2% alpha), asset location (up to 60 basis points), cost-effective implementation (expense ratios; 30 basis points), and rebalancing (14 basis points). When combined with other value-adds, the whitepaper concludes that the effect is likely to exceed 3% of annual additional gains, net of fees.
• In their 2024 Value of an Advisor paper (available upon request - contact us), Russell Investments concludes that “the value of an advisor in the U.S. is approximately 5%” on an annual basis. The paper indicates that the contributing factors were behavioral coaching (2.82%), customization and holistic wealth management (1.13%), tax-smart planning and investing (0.94%), and rebalancing (11 basis points). Subtracting a general fee basis of 1% results in 4% alpha annually, net of fees.

75% Additional Growth Over 20 Years

This percentage is a selected figure within the range provided or calculated from the following sources:

• Per Vanguard’s whitepaper “Putting a value on your value: Quantifying Vanguard Advisor’s Alpha” (July 2022), “advisors can potentially add up to, or even exceed, 3% in net returns” annually. If we apply this additional net return to a 20 year term, this boost yields at least 75% additional wealth for any baseline return of less than 5.7% per year. Even at a self-managed baseline of 10% account growth every year, the value of management would be an additional 71.28% over 20 years.  
• Per the 2024 Value of an Advisor paper by Russell Investments, the value of an advisor in the U.S. is approximately 4%, net of a 1% management fee. Compounded over a term of 20 years, this would yield more than 100% in additional returns against any baseline performance of less than 16% annual return.

62% of Retirement Savers Want Help

J.P. Morgan’s 2021 Defined Contribution Plan Participant Survey found in a result they called “The rise of ‘do it for me’” that 62% of their survey respondents “wish they could completely hand over retirement planning.”

More Than Half of Retirement Savers Struggle with Information Overload

J.P. Morgan’s 2021 Defined Contribution Plan Participant Survey found that 52% of Defined Contribution Plan Participants “Feel they are presented with more plan information than they can absorb;” 51% “Do not take time to read all the investment information provided by the plan;” and 66% think employers should provide access to financial professionals/coaching to help."  Meanwhile, 51% of respondents “are willing to spend time planning for retirement but don’t know where to start.”

The Median American Holds Nearly Half of their Net Worth in Their Retirement Plan

The most recent data available from the Federal Reserve’s Survey of Consumer Finances is for 2022. In that year, the median American family had a net worth of $192,700.  During that same year, the median American family had $87,000 in their combined retirement accounts. The median ratio of retirement plan savings to net worth is ~45%.

Over $7 trillion Dollars are Held in 401(k) Assets 

This number comes from the Investment Company Institute's 401(k) Resource Center, which notes that "401(k) plans hold $7.3 trillion in assets as of September 30, 2021, in about 600,000 plans, on behalf of about 60 million active participants and millions of former employees and retirees."

Up to 90% of Eligible Clients Adopt Pontera

A 2021 survey of advisors using the Pontera platform, conducted by Pontera, showed that 88% of retirement savers who were presented with Pontera by their advisor eventually chose to connect an account via Pontera. Recent case studies have cited 90%.

Over one third of Americans have a financial advisor

Northwestern Mutual's 2022 Planning & Progress Study explored U.S. adults post-Covid sentiments regarding their financial habits. The study 73% of US adults feel they have adopted better financial habits since the pandemic. Of the respondents, over one third said they get help from a financial advisor.