Cogent Research LLC recently completed a survey of 1,700 financial advisers that asked how likely they are to increase or decrease assets with 24 different mutual fund companies, and once again, Dimensional Fund Advisors (DFA) scored the highest. DFA also scored the highest on similar surveys conducted in 2010 and 2011. Based on a metric known as “investment momentum score,” DFA scored 25% higher than the next highest company, PIMCO. One important parameter of that score is investment philosophy satisfaction, and DFA is quite well known for its clear and consistent investment philosophy which is summarized here. DFA will only work with investment advisers that have been thoroughly screened to determine that their approach to wealth management is completely consistent with DFA’s investment philosophy. As the chart below shows, DFA has repeatedly ranked as the top mutual fund company among financial advisers, based on surveys conducted by three different companies.
See the chart below
As we pointed out in this article, DFA’s approach of working primarily with institutional investors and individual investors who are guided by approved investment advisers has paid off in minimizing the impact of poor investor behavior. This became apparent in June 2013 when Vanguard and PIMCO suffered net outflows of $9.7 and $14.5 billion from their bond funds while DFA had an inflow of $136 million.
As fiduciaries for wealth, we at Index Fund Advisors are obligated to act in the best interests of our clients. Since we accept no payments from any investment providers, our advice in selecting funds is unbiased. From our inception in 1999, we have advised the use of passively managed funds provided by DFA. While we don’t need a survey to tell us that we are doing the right thing for our clients, it is helpful to know that in the investment adviser community which includes some very talented and accomplished people, there is a group of like-minded individuals who see the value in using the only fund company that offers low-cost, style pure, highly diversified funds and completely excludes actively managed funds.
Index Fund Advisors, Inc. (IFA) is a fee-only advisory and wealth management firm that provides risk-appropriate, returns-optimized,
globally-diversified and tax-managed investment strategies with a fiduciary standard of care.
Founded in 1999, IFA is a Registered Investment Adviser with the U.S. Securities and Exchange Commission that provides investment
advice to individuals, trusts, corporations, non-profits, and public and private institutions. Based in Irvine, California, IFA manages
individual and institutional accounts, including IRA, 401(k), 403(b), profit sharing, pensions, endowments and all other investment accounts.
IFA also facilitates IRA rollovers from 401(k)s and 403(b)s.
To find out more about the value of IFA
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About the Authors
Mark Hebner and additional IFA employees contributed to this article
Founder and President of Index Fund Advisors, Inc., and author of Index Funds: The 12-Step Recovery Program for Active Investors. He is a Wealth Advisor, with an MBA from the University of California at Irvine and a BS in Pharmacy from the University of New Mexico with a specialization in Nuclear Pharmacy.