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Allan Roth: 'I Embrace Dumb Beta'

The hourly financial planner and columnist on navigating clients' behavioral biases and the virtues of plain-vanilla index funds.

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Our guest on the podcast today is Allan Roth, one of the pre-eminent hourly financial advisors in the United States. After a career in corporate finance and as a consultant for McKinsey and Company, Roth started the holistic financial advisory firm Wealth Logic in 2003. Wealth Logic focuses on financial planning and ultra-low-cost simplified investing; his firm's motto is "Dare to be Dull." In addition to working directly with clients, Roth is a prolific writer: He's the author of How a Second Grader Beats Wall Street, which was published in 2009 with the second edition in 2011, and he's also a regular contributor to Financial Planning magazine, Advisor Perspectives, ETF.com, and AARP.

Background Information
Allan Roth bio 
How a Second Grader Beats Wall Street 
Allan Roth's archive for Financial Planning  
Allan Roth’s archive for Advisor Perspectives 
Allan Roth's archive for ETF.com 
Allan Roth's blog on AARP.org 

Advice Business/Choosing an Advisor
• "Save $52,000 on Financial Advice," by William Baldwin (Forbes, May 10, 2016)
Vanguard Personal Advisor Services 
• "The CFP Board 'Inexcusably' Protects Certificants," by Allan Roth (Financial Planning, Aug. 2, 2019)
• "Does the CFP Board Choose Advertising Over Enforcement?" by Allan Roth (Financial Planning, Sept. 24, 2018)
• "Looking for a Financial Planner? The Go-To Website Often Omits Red Flags," by Jason Zweig and Andrea Fuller (The Wall Street Journal, July 30, 2019) 
• "CFP Board to Create Tax Force to 'Strengthen and Modernize' Enforcement," by Brian Anderson (401(k) Specialist, July 31, 2019)
• "CFP Board Responds to The Wall Street Journal" (cfp.net, July 29, 2019) 
• "How to Choose a Financial Planner," by Allan Roth (AARP Magazine)
Finra BrokerCheck 

Asset Allocation
• "William Bernstein: If You've Won the Game, Stop Playing" (The Long View podcast, May 7, 2019)
•"How to Set Your Asset Allocation," by Allan Roth (The Wall Street Journal, Dec. 2, 2016) 
• "The Risk of Taking a Risk-Profile Questionnaire," by Allan Roth (CBS News.com, Aug. 21, 2009) 
• "Financial Advisor Exposes His Own Portfolio," by Allan Roth (AARP.org, June 15, 2015)
• "Mind the Gap 2019" by Russ Kinnel (Morningstar.com, Aug. 15, 2019) 

Investment Selection and Portfolio Management
• "Why CDs Can Still Be Better Than Bonds by Allan Roth," by Allan Roth (CBS News.com, Aug. 20, 2013)
• "Municipal Bonds and the Industry's Dirty Little Secret," by Allan Roth (CBSNews.com, June 20, 2010) 
• "4 Reasons Not to Load Up on Muni Bonds," by Allan Roth (aarp.org, July 14, 2015)
• "At Last, a Tool Muni Investors Sorely Needed," by Allan Roth (CBSNews.com, July 8, 2014) 
Municipal Bond Price Discovery Tool 
• "A Seer on Banks Raises a Furor on Bonds," by Nelson D. Schwartz (New York Times, Feb. 10, 2011) 
• "Low-Risk Inflation Protection from Uncle Sam," by Allan Roth (aarp.org, Feb. 24, 2017) 
•"When Will Smart Beta Be Smart?" by Allan Roth (ETF.com, July 9, 2019)
•  "Boosting Returns with Rebalancing" by Allan Roth (ETF.com, March 19, 2018)
• "Give Due Care to Your Cost Basis Elections," by Christine Benz (Morningstar.com, Feb. 27, 2013)
• "Advanced Strategies for Investment Taxation" by Allan Roth (Advisor Perspectives, May 6, 2019)
Smart Beta (Research Affiliates)
• "How Can Smart Beta Go Horribly Wrong" by Rob Arnott, Noah Bech, Vitali Kalesnik, John West (Research Affiliates, Feb. 2016)
• "The Arithmetic of Active Management," by William Sharpe (Financial Analysts Journal, January-February 1991)
• "Fidelity Zero vs. Vanguard: Which Index Fund Is Better?" by Allan Roth (Financial Planning, Aug. 14, 2018)
• "At Vanguard, Customer Complaints Rise Along with Assets," by John Waggoner, (InvestmentNews, Feb. 16, 2017) 

Retirement Planning
• "Is the 4% Rule Still Safe for Retirement Planning?" by Allan Roth (Financial Planning, May 8, 2019)
• “Estimating the True Cost of Retirement” by David Blanchett (Retirement Insight and Trends, June 30, 2015) 
• "Why So Critical of Annuities?" by Allan Roth (CBSNews.com, Sept. 17, 2009) 
• "My 3 Most-Often Recommended Annuities," by Allan Roth, aarp.org, Dec. 20, 2016 
• "Reducing Retirement Risk with a Rising Equity Glide Path," by Michael E. Kitces and Wade D. Pfau (Journal of Financial Planning) 

Influences
Prospect Theory 
• Predictably Irrational by Dan Ariely 
• "What I, and Millions of Others, Owe Jack Bogle" by Allan Roth (Financial Planning, Jan. 16, 2019)
A Random Walk Down Wall Street by Burton Malkiel 
Bogle on Mutual Funds by John C. Bogle 

About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver.

About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research for Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas.

To Share Feedback or a Guest Idea: Write us at TheLongView@morningstar.com

(Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording. Such opinions are subject to change. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates. Morningstar and its affiliates are not affiliated with this guest or his or her business affiliates unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. Jeff Ptak is an employee of Morningstar Research Services LLC. Morningstar Research Services is a subsidiary of Morningstar, Inc. and is registered with and governed by the U.S. Securities and Exchange Commission. Morningstar Research Services shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data analysis or opinions or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decisions.)