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December 03, 2020

Research Reveals Clients who engage a Financial Advisor are 5.2% a Year Better Off

Research Reveals Clients who engage a Financial Advisor are 5.2% a Year Better Off

While those who have experienced the value of a wealth professional could speak for hours on the benefits they receive, many are sadly yet to experience the impact financial security has on their lifestyle possibilities. But now the value is official. Russell Investments have conducted research which reveals some very interesting statistics.

We hear so many new clients talk about how they thought advice from a Financial Advisor was all about how to invest money. And now, the Value of an Advisor report reveals value beyond investment advice, asset allocation, correcting behavioral mistakes, adequately managing clients’ cash holdings, settings and monitoring goals and tax structuring.

The report reveals that Financial Advisors generate an average 2.2 per cent per year for clients by ensuring assets are bought and sold are certain times in the market cycle. The percentage may sound small for some, but compound that year on year, and the long-term impact is staggering. It is normal human behavior to speculate, as opposed to invest for the future. Click here to read more about speculation vs investing. And here to learn more about impact emotional investment decision making can have.

Another 1.5 per cent is generated through ensuring investments made in tax efficient structures such as super. Such an important point this one. There are 4 structures that assets can be held in. Personal assets, in a company, within superannuation, within a family trust. Each one has their pros and cons and interestingly, each structure has a different tax rate that is applied. Do you know which structure best suits your circumstances and will support you to achieve your goals?

Asset allocation basics such as the correct investment option in the client’s super fund generates 0.9 per cent and a further 0.6 per cent is generated through diversifying a client’s cash and fixed income holdings. From defensive to growth to accelerated growth and a combination of them all, the options are a plenty. And knowing which one best suit you can be outrageously difficult. But get this part right, and you are well on your way to achieving financial milestones you may not have dreamt possible. Again, the question is… do you know which one best suits your circumstances and will support you to achieve your goals?

From these figures, around 3.1 per cent is gained through asset allocation and adviser coaching the client through investing behaviors, timing, and decisions. People in general are emotional about their money. And for good reason, like without it is extremely difficult. So making well-informed financial decisions during all marketing conditions and personal circumstances is where the most value is from. So having a financial experts remaining by your side throughout your journey has value far beyond the 3.1 percent quoted. You can’t quantify the emotional value that good financial advice provides. Peace of mind, lifestyle choice and the confidence that comes with financial success.

Wealth advice may be largely based on numbers; however, the true value of advice can be felt in the personal aspect of the client – financial advisor relationship.

When working with a Financial Advisor on a long-term strategy to achieve lifestyle goals, and with frequent review appointments to ensure the strategy stays in the best interest of the client long term, your lifestyle is just the beginning.

If you would like some help, invite us along on your financial journey, we are confident of just how far our expert guidance can take you. Get in touch with us today.

Below are some resources that may interest you:

IMPORTANT INFORMATION: This blog has been prepared by Modoras Pty. Ltd. ABN 86 068 034 908 an Australian Financial Services and Credit Licences (Number 233209). The information and opinions contained in this presentation is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. Any individual making any investment or borrowing decisions should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to borrow funds or purchase, sell or hold any particular investment. Modoras Pty Ltd recommends that no financial product or financial service be acquired or disposed of, credit contract entered into or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog may change without notice. Modoras Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.

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