In January 2017 my wife, our two children (a 10-year-old daughter and a 7-year-old son), and I arrived in Malvern, Pennsylvania—a journey of approximately 10,000 miles from our home in Melbourne, Australia. When we left Melbourne, it was 105°F, and when we touched down, it was a frosty 18°F. The kids couldn’t wait to see snow for the first time; I couldn’t wait to start my assignment as head of the Registered Investment Advisor Group in Vanguard Financial Advisor Services™.

In the short time I’ve been here, I’ve visited clients in Philadelphia; Washington, D.C.; Seattle; and San Francisco, and I’ve visited others in the chilly cities of Denver and Chicago. It has been a great experience! The most common question I’ve gotten (other than “How many dangerous animals live in Australia?”—a lot) is, “What’s the difference between the advisor industry in the United States and that in Australia?”


Regulations, regulations, regulations

So far the two biggest differences I’ve observed are the regulatory environment and the enormous scale of the U.S. advice industry. On the regulatory front, Australia introduced the Future of Financial Advice Act in July 2013, and it has brought significant change.

It introduced a fiduciary standard for all advisors and banned all commissions, in addition to other regulations. The act was met with a lot of commentary leading up to its implementation, but the industry has adapted remarkably. The changes the U.S. Department of Labor fiduciary rule is bringing to the U.S. advice industry are a lighter version of those made in Australia.

Meanwhile, the scale of the U.S. advice industry leads to more zeros on almost everything I’ve seen. What does this mean for advisors? Fees tend to be lower in the United States, and advisor businesses have more specialized roles (that is, CEOs, CIOs, heads of marketing) than those in Australia do.


We do have something in common

It’s not all differences. There are many similarities too:

  • The growth of indexing and by extension the growth of ETFs.
  • Fees are under pressure at all points along the value chain, and they will continue to be for a long time.
  • Robo-advice is the most discussed topic, yet flows haven’t taken off for that sector just yet.


What sets top advisors apart?

In visiting advisors across the industry, I’ve noticed four key areas in which the top advisors set themselves apart.


1. Develop a defined value proposition.

This has never been more important. Robo-advisors have set the benchmark for fees and services. You need to differentiate your services to allow you to continue to charge fees above what the robos charge. According to Cerulli Research,1 an attribute of the fastest-growing advisors is the ability to communicate their value proposition in a concise and compelling manner.

2. Lower fees.

Look to scale your operations by leveraging technology, people, and processes to more effectively support clients while driving down cost.

3. Develop specific services for targeted clients.

Don’t try to be all things to all people. The top advisors have told me they focus on serving one segment of the market (for example, high-net-worth clients). Without client segmentation, advisors tend to overserve clients on the lower end and underserve clients on the higher end. By focusing on one type of client, you’ll help drive down your costs.

4. Get to know your clients and their families.

Spend time early and often with clients and their families to build trust and lasting relationships. By getting to know your clients’ goals, you’ll increase your ability to retain their assets and generate business through referrals.


The Vanguard Advisor’s Alpha® concept continues to resonate more and more, here and in Australia. Advisors have realized the importance of articulating their value to clients. That the services you provide go far beyond selecting stocks or bonds.


Just getting started

My family and I are loving the United States. My wife has fallen in love with the shopping, whether it be Wegmans, Amazon Prime, or the megamall in nearby King of Prussia, Pennsylvania. The kids love their new school and enjoy being the “different kids with an accent.” For me, I love traveling and have enjoyed chatting with and getting to know advisors across the country.

Though I’m just getting started in my new role, I look forward to continuing my conversations with advisors and learning how we can make your job easier. It’s our goal to arm you with the tools and information you need to give you and your clients the best chance for investing success.


1 Cerulli Associates, 2016. U.S. products and strategies 2016: Identifying opportunities for active management. Boston, Mass.: Cerulli Associates. (Cerulli Reports.)