Russell Investments recently published an interesting article on the value of an advisor. This is something, that many people who are considering going to a financial advisor for the first time contemplate.
It is firstly important to remember what services a financial advisor can offer.
A financial advisor can offer a wide range of services, all of which can provide great value to the client. They can help build personalised portfolios, provide support when market conditions change and provide many additional wealth management services, such as insurance and tax advice, superannuation and estate planning.
With such services, in mind Russell Investments believed that an advisor delivers value of at least 4.4% every year to their clients. This means that with the assistance of an advisor clients are seeing over 4% better returns on their investment each year. This return far out ways the cost of any upfront or ongoing advisor fees and can make a huge difference to someone’s overall financial position in the long term.
To emphasis the value of an advisor further, as a case study, Russell Investment looked at a number of younger investors who had invested their super conservatively rather than in growth options based off their own knowledge. Based off this study, they found that these younger investors were set to miss out on 1.6% return every year for 20 years. On a $100,000 investment, this would make a significant difference to their return of almost $200,000. Again, highlighting the overall value of professional advice.