Is Financial Advice worth it?

Is Financial Advice worth it?

If you ask Reddit if financial advice is worth the money spent then you will be inundated with hate mail about financial advisers. As a financial adviser myself, I know what I do for clients but I have been looking for hard data on how much value we really do add to people. You will see all of the anecdotal horror stories about how I am basically the devil.

Finally, I can prove to the keyboard warriors that my life isn’t a worthless waste of time.

Who has come to rescue my self worth? Funnily enough, there are actually two juggernaut investment managers who have looked at this area for the last couple of decades. Vanguard and Russell Investments.

Most recently (2022) Russell Investments calculated the value of a Financial Adviser. This cost was calculated to be at least an extra 5.8% per year. Most advice costs are between 1 and 2% each year which means the value added is around 3-6 times the cost.

This report really confirms what I know already… The reality is that financial advice is worth it for people who don’t have the skills, time or diligence to figure out how to navigate and utilise our very complex financial, tax and legal system to their best advantage.

Most of the people we work with know that there is a better way that they can run their finances than they can achieve themselves.

Here are a couple of highlights from the report, it was calculated and value categorised under 5 different parts with three of those with definable value adds:

  1. Appropriate asset allocation – Extra 1.6%
  2. Behavioural coaching – Extra 2.9%
  3. Choices and trade-offs – Variable benefits
  4. Expertise technical and emotional – Undefinable but considered priceless
  5. Tech savvy planning and investing – Extra 1.3%

This report is only taking into consideration benefits on a lump sum of money. Russel equated it to being $5,800 per $100,000 invested.

If I factor in strategies like our debt domino, automated savings system, parachute plan and passive income pathway. I am pretty confident we can blow even those numbers out of the water.

If you are wondering if financial advice is right for you, and you want to chat with one that can show you the value add before you make any major decisions. Then you need to click the link here and book in for a 15 minute phone call directly with me.

P.S Don’t get me wrong, I get that some people have had some bad experiences with advisers. I am not saying that there hasn’t been some bad eggs. That isn’t the norm anymore and most of those buggers aren’t advisers now. We threw them out 😉

Also, don’t think I have pulled this info from nowhere. I am not going to regurgitate the 14 page report. You can download it here:

If you liked this article and want more content from us, check out our tax savings through super blog here.

Information on this site may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.

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