For the best customer experience, human touch plus technology

For the best customer experience, human touch plus technology

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June 08, 2016
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When Vanguard launched its new proprietary financial advice solution, Personal Advisor Services, in May of 2015, we did something a little different than our competitors. Vanguard has offered financial planning for nearly three decades. However, the demand for advice was only increasing, and Vanguard – like many others – needed to find a way to serve more investors at a low cost. Our solution? Rather than introducing a pure, algorithm-driven robo-advisor solution, we enhanced the customer experience of traditional automated investment products by marrying it with a much-needed human touch.

At its core, Personal Advisor is still very much a technology-driven product. It leverages the Vanguard Capital Markets Model (VCMM), our proprietary financial-simulation engine. VCMM uses a regression-based Monte Carlo model to generate over 10,000 market simulations in sub-second time. These market simulations are used to automatically rebalance a client’s portfolio based on their unique financial situation and personal goals.

This engine was originally developed to serve as the foundation of Vanguard’s investment thought leadership, but by re-architecting it for individual investors, we’re now able to give our clients access to technology that was once only reserved for large research initiatives.

Above and beyond the sophistication of its internal engine, what truly differentiates the service is the customer experience. Rather than offering a web-only experience, Personal Advisor partners investors with experienced financial advisors.

When new clients onboard or existing clients experience a transitional life event like marriage or retirement, they can connect directly with their advisor by phone or even video chat. This has several advantages for our investors.

First, we have found that our advisors can ask the right questions and get clients to think about important steps that they might have missed if they only had a digital-based experience. Secondly, we know that just being able to talk to a person gives investors peace of mind when they’re going through life events that are already clouded with uncertainty and apprehension. Finally, we know that financial advisors can safeguard clients from emotionally charged decisions that are not in their best interest. Although user interfaces have gotten more sophisticated over time, it still sometimes takes a human to walk investors back from the proverbial ledge – particularly when they’re going to make decisions that could harm their chances of long term financial success.

Personal Advisor has been massively successful for us. By leveraging technology, we’ve been able to offer a service that’s less than a quarter of the cost of our competition (0.30 percent annually) while still maintaining the human element of investing. Our clients have taken note. In less than a year, we have already seen total assets under management climb to over $31 Billion.

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John T. Marcante is Vanguard’s chief information officer and managing director of Vanguard’s Information Technology Division. Vanguard is one of the world’s largest investment management companies. As of October 31, 2015, Vanguard managed more than $3.4 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers more than 300 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com. Marcante oversees all aspects of Vanguard’s worldwide technology agenda to serve clients and manage investments. Mr.

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