We preach that it is paramount to focus on what we can control (i.e. how much we save) and not get bogged down by things out of our control (i.e. the direction of the markets). This is a simple concept but simple does not always mean easy.

The smartest thing to do with your money might be different than the smartest thing for your neighbor to do with their money. Everybody's financial life is so unique that each situation requires its own distinctive plan. Creating a "one-of-a-kind" plan is the centerpiece of your relationship with a financial advisor.

One of the big challenges for us as fee-based fiduciary advisors is demonstrating to clients the value of our work. In recent years, researchers took on the task of quantifying the dollar value of comprehensive financial planning integrated with investment management. Last month Vanguard published a report entitled Putting a value on your value: Quantifying Vanguard Advisor's Alphaby Francis M. Kinniry Jr., CFA, Colleen M. Jaconetti, CPA, CFP®, Michael A. DiJoseph, CFA, and Yan Zilbering and concluded that advisors have the ability to improve client's net returns by "about 3%".

You can find a full copy of the report on our blog at denvermoneymanager.com/blog with their specific findings and methodologies. However, we wanted to highlight the areas where the research found that advisors can make significant differences for clients and what DMM is already doing in these areas to capture the benefit for clients.

Cost-Effective Implementation: According to Morningstar, the average actively managed mutual fund expense ratio is 1.3%. This means that for every $100,000 you have invested in the average actively managed mutual fund, you pay $1,300 per year to the fund company in exchange for no advice nor service from them. In contrast, DMM prefers to use low-cost funds with expense ratios in the neighborhood of 0.3%. Do the math. +1%

Rebalancing: Vanguard examined a typical 60% stock and 40% bond portfolio and measured the results of ongoing rebalancing over the past 50 years. They found an extra 0.35% per year of risk-adjusted return when compared to a portfolio without rebalancing. Rebalancing allows us to take advantage of market volatility rather than be afraid of it. We are constantly selling high and buying low which both limits risk and enhances long-term performance. +0.35%

Behavior Coaching: We know that humans are pre-wired to be bad investors during turbulent times. Behavioral Finance research studies have shown that the part of our brain that is triggered during financial stress is our "fight or flight" instinct. Our body chemistry is literally telling us that we must take action to survive. While this is a handy response when we come across a bear in the woods, the "fight or flight" instinct almost always has "Do It Yourself" investors selling out of the market at the wrong time and sitting on the sidelines during the recovery. DMM writes Investment Policy Statements for clients that take into consideration ugly financial markets and script a planned response in advance of the turmoil (rebalance not sell out). Having an objective plan on paper with an expectation and a game plan for down markets allows us to provide you the emotional support you need to stick with the discipline and achieve the best long-term results. Vanguard found the impact of this support added 1.5% of return per year when comparing the performance results of advisor's client accounts to "Do It Yourself" investor accounts. +1.5%

Asset Location: Not all investments are taxed equally by the IRS. DMM applies tax intelligence when deciding which investments to locate in what accounts. By simply holding tax inefficient investments (bonds, REITs, etc...) in tax deferred accounts like IRAs and holding tax favored investments (stocks) in taxable accounts, Vanguard found that advisors can add an additional 0.75% per year in after tax return. +0.75