Unless we are constantly vigilant, too many things in print pass without comment and are accepted as true. And so it is with a weary heart that I am compelled to offer a counterpoint to a recent argument that takes issue with Vanguard Group's business model.

Before we get into the details, a few disclosures: I am a fan of low-cost investing. The Vanguard Effect has been called by my Bloomberg Intelligence colleague Eric Balchunas "a private-sector wealth-transfer machine [that] has saved average investors $US1 trillion [$1.35 trillion]." I personally own a variety of Vanguard funds, as do my clients. I like Vanguard a lot.

Bloomberg