You would think that a fund firm would generate applause for firing an underperforming advisor. But when Vanguard fired AllianceBernstein as co-subadviser of its U.S. Growth Fund, it sparked cries of "what took so long." No less than John Bogle took up the cause, telling Investment News , "I have no idea why it took them so long. I am not sure who there said, 'Let's stick with Alliance.'"

The firing came after the fund underperformed its category benchmarks short-term and long-term. The delayed firing was "the worst case of fund stewardship ever seen at Vanguard. Where were Vanguard's directors?" wrote Dan Wiener, editor of the Independent Adviser for Vanguard Investors.

This may not be fair to Vanguard, which has instituted some tweaks at the subadvisor level to get things working. Vanguard added a new subadvisor and required some changes on the AllianceBernstein team. Some of those tweaks, unfortunately, generated controversy over the way the changes were communicated.

Now people are continuing with the old questions about whether Vanguard should be in active management at all. This is an old fashioned media drubbing. The answer of course is obvious: better performance. But that's easier said than done.

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