Morningstar Advisor - August/September 2011 - 46

Morningstar Conversation
It's the Destination, Not the Vehicle
By Dan Culloton
Vanguard's Bill McNabb and Invesco's Marty Flanagan discuss the
future of advisory services, their stances on new products, and
their strategies for meeting client needs
To say that the business of giving financial
advice to people has changed dramatically over
the past several years is a dramatic understatement.
Not only are the ranks of fee-only
advisors swelling, but so is the array of
products and providers seeking to serve them.
To explore these changes, we invited two
executives who are addressing the advisor
market from different vantage points. Marty
Flanagan has dealt with advisors of all stripes
his entire career, first at Franklin Templeton
and now as CEO of Invesco. Vanguard, primarily
46 Morningstar Advisor August/September 2011
seen as a shop for do-it-yourself investors, has
taken increasing interest in fee-only advisors
under Bill McNabb and his predecessor.
Both firms have broad mutual fund lineups, but
they also are fighting for market share in the
exchange-traded fund space-Vanguard with a
stable of broad-based index ETFs and Invesco
PowerShares with a lineup that has pushed the
boundaries of passive investing. What follows
is an edited transcript of Flanagan and
McNabb's discussion on June 25 on the best
way to serve advisors and their clients.
Dan Culloton: Given the changes in the
advisor market, what are the challenges of
reaching advisors in this environment?
Marty Flanagan: I think a lot of the changes in
the advice channel have been positive ones.
The movement away from commission-based
compensation to asset-based compensation is
very, very good for investors. There's been
obviously quite an emergence of independent
financial advisors. Our focus is a pretty
simple one: All we do is manage money. And
so, first and foremost, our focus is making

Morningstar Advisor - August/September 2011

Table of Contents for the Digital Edition of Morningstar Advisor - August/September 2011

Morningstar Advisor - August/September 2011
Contents
Contributors
Letter From the Editor
Simplicity and Design Matter
Do You Use ETFs Strategically or Tactically?
The Institutional Way
How to Analyze an ETF
Eyeing ETFs’ Next Chapter
Small-Cap/Large-Cap Flip-Flop?
Four Picks for the Present
Investment Briefs
Morningstar Investment Conference
Pitfalls of Peer Groups
A REIT Recovery, With a Catch
Turning Fund Distribution on Its Head
Here Come ETF Managed Portfolios
Circle These Picks Amid the Crop of New ETFs
ETF Analyst Favorites
Beware, the Accidental Portfolio Manager
It’s the Destination, Not the Vehicle
New Growth, Rooted in Experience
Better Ways to Look at ETFs
How to Better Manage Your Clients’ Future(s)
More Bargain Than Bubble
Cheap, Local, and On a Roll
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
First-Quarter Assets Hit an All-Time High
You Say You Want a Revolution?
Morningstar Advisor - August/September 2011 - Intro
Morningstar Advisor - August/September 2011 - Morningstar Advisor - August/September 2011
Morningstar Advisor - August/September 2011 - Cover2
Morningstar Advisor - August/September 2011 - 1
Morningstar Advisor - August/September 2011 - 2
Morningstar Advisor - August/September 2011 - Contents
Morningstar Advisor - August/September 2011 - 4
Morningstar Advisor - August/September 2011 - 5
Morningstar Advisor - August/September 2011 - Contributors
Morningstar Advisor - August/September 2011 - Letter From the Editor
Morningstar Advisor - August/September 2011 - Simplicity and Design Matter
Morningstar Advisor - August/September 2011 - 9
Morningstar Advisor - August/September 2011 - Do You Use ETFs Strategically or Tactically?
Morningstar Advisor - August/September 2011 - 11
Morningstar Advisor - August/September 2011 - The Institutional Way
Morningstar Advisor - August/September 2011 - 13
Morningstar Advisor - August/September 2011 - How to Analyze an ETF
Morningstar Advisor - August/September 2011 - 15
Morningstar Advisor - August/September 2011 - Eyeing ETFs’ Next Chapter
Morningstar Advisor - August/September 2011 - 17
Morningstar Advisor - August/September 2011 - Small-Cap/Large-Cap Flip-Flop?
Morningstar Advisor - August/September 2011 - 19
Morningstar Advisor - August/September 2011 - Four Picks for the Present
Morningstar Advisor - August/September 2011 - 21
Morningstar Advisor - August/September 2011 - Investment Briefs
Morningstar Advisor - August/September 2011 - 23
Morningstar Advisor - August/September 2011 - 24
Morningstar Advisor - August/September 2011 - 25
Morningstar Advisor - August/September 2011 - Morningstar Investment Conference
Morningstar Advisor - August/September 2011 - 27
Morningstar Advisor - August/September 2011 - Pitfalls of Peer Groups
Morningstar Advisor - August/September 2011 - 29
Morningstar Advisor - August/September 2011 - 30
Morningstar Advisor - August/September 2011 - 31
Morningstar Advisor - August/September 2011 - A REIT Recovery, With a Catch
Morningstar Advisor - August/September 2011 - 33
Morningstar Advisor - August/September 2011 - 34
Morningstar Advisor - August/September 2011 - 35
Morningstar Advisor - August/September 2011 - 36
Morningstar Advisor - August/September 2011 - 37
Morningstar Advisor - August/September 2011 - Turning Fund Distribution on Its Head
Morningstar Advisor - August/September 2011 - 39
Morningstar Advisor - August/September 2011 - Here Come ETF Managed Portfolios
Morningstar Advisor - August/September 2011 - 41
Morningstar Advisor - August/September 2011 - Circle These Picks Amid the Crop of New ETFs
Morningstar Advisor - August/September 2011 - ETF Analyst Favorites
Morningstar Advisor - August/September 2011 - Beware, the Accidental Portfolio Manager
Morningstar Advisor - August/September 2011 - 45
Morningstar Advisor - August/September 2011 - It’s the Destination, Not the Vehicle
Morningstar Advisor - August/September 2011 - 47
Morningstar Advisor - August/September 2011 - 48
Morningstar Advisor - August/September 2011 - 49
Morningstar Advisor - August/September 2011 - 50
Morningstar Advisor - August/September 2011 - 51
Morningstar Advisor - August/September 2011 - 52
Morningstar Advisor - August/September 2011 - 53
Morningstar Advisor - August/September 2011 - New Growth, Rooted in Experience
Morningstar Advisor - August/September 2011 - 55
Morningstar Advisor - August/September 2011 - 56
Morningstar Advisor - August/September 2011 - 57
Morningstar Advisor - August/September 2011 - Better Ways to Look at ETFs
Morningstar Advisor - August/September 2011 - 59
Morningstar Advisor - August/September 2011 - 60
Morningstar Advisor - August/September 2011 - 61
Morningstar Advisor - August/September 2011 - How to Better Manage Your Clients’ Future(s)
Morningstar Advisor - August/September 2011 - 63
Morningstar Advisor - August/September 2011 - 64
Morningstar Advisor - August/September 2011 - 65
Morningstar Advisor - August/September 2011 - More Bargain Than Bubble
Morningstar Advisor - August/September 2011 - 67
Morningstar Advisor - August/September 2011 - Cheap, Local, and On a Roll
Morningstar Advisor - August/September 2011 - 69
Morningstar Advisor - August/September 2011 - Mutual Fund Analyst Picks
Morningstar Advisor - August/September 2011 - 71
Morningstar Advisor - August/September 2011 - 72
Morningstar Advisor - August/September 2011 - 73
Morningstar Advisor - August/September 2011 - 50 Most Popular ETFs
Morningstar Advisor - August/September 2011 - 75
Morningstar Advisor - August/September 2011 - Undervalued Stocks With Wide Moats
Morningstar Advisor - August/September 2011 - 77
Morningstar Advisor - August/September 2011 - First-Quarter Assets Hit an All-Time High
Morningstar Advisor - August/September 2011 - 79
Morningstar Advisor - August/September 2011 - You Say You Want a Revolution?
Morningstar Advisor - August/September 2011 - Cover3
Morningstar Advisor - August/September 2011 - Cover4
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