How does a financial adviser add value to you?

When I say I’m a financial adviser, the most common question I get from friends and acquaintances is: “what is it that you actually do?” And it’s a great question!

In short: I take a client’s entire personal and financial situation into consideration, and then look to develop a well-structured plan that will deliver an outcome to meet their specific objectives. Not ambiguous at all, right?
Realistically, what I do for you depends on your objectives and the outcome that you’re looking to achieve. A lot of people only want to come in and talk about wealth creation planning, and how they can start investing in shares or property. Others have recently married or purchased a home and want to discuss how to protect themselves and their family with insurances. And some just need help structuring their budget and having a party outside of themselves helping to keep nudging them in the right direction financially. I’m here for all of this and a lot more!

In most circumstances, when we start discussing one topic, we end up exploring a number of areas that are also connected. We may end up discovering how you could benefit majorly from making some relatively minor adjustments.
So what is the value in working with an adviser? The value of an adviser is often significantly more than what can be measured financially. It comes from in-depth knowledge of legislation and the ability to adapt and apply this to your own personal situation. Value is actually frequently derived from strategic advice over any product recommendations; and the understanding you gain through the process.

However, in looking to apply an actual figure, Russell Investments began producing an annual research report in 2018, titled Value of an Adviser. This research looks holistically at the real value that advisers deliver for their clients and quantifies it. While the full report can be requested here, I’ve identified some of the main areas which it analyses “A+B+C+E+T”:

Appropriate Asset Allocation

This is where we take the time to understand who you are as an investor, and your capacity for risk, and apply an appropriate balance of investments accordingly. If you can’t sleep at night because you’re worried about your investments, it might mean that you either don’t fully understand them, or that you are invested outside your comfort level. Appropriate allocation is keeping within your ‘Risk Budget’, and quality advice will ensure you comprehend your portfolio.

Behavioural Mistakes

It is not uncommon for retail investors to ‘buy high and sell low’, which is the opposite of what investors are trying to achieve. Often we see investors jumping in late on trends, only to sell a short time later on a market pullback. This was actually reversed during the 2020 COVID market decline: investors were selling on March 20th to 27th because they were scared of the market falling further; only to see it rise significantly in the following days. It is often underestimated how quickly a market can recover, and not being invested during that recovery means missing out on significant return to balance. Being able to call your adviser and discuss your concerns will often lead to reassurance and assist you in avoiding critical behavioural mistakes that would otherwise only come naturally.

Cost of Cash

This is a combination of the above points. It looks at the real cost of not utilising your available cash if you have a tolerance for risk and investment. It also looks at the real cost of mistiming market entry and exit.

Expertise in Additional Wealth Management Services

As I’ve mentioned above, financial planning is not only about measurable investment returns, but about the wealth of knowledge that you’re able to draw upon when accessing a professional adviser. By taking the time to understand you, we access different areas of advice to look to achieve an outcome that is in your best interests.

Tax-Effective (Investing)

Russell notes tax-effective investing, however, I believe there is also being more tax-effective in your overall situation, as opposed to investment specifically. There are strategies available which can assist with tax-effective savings for first home buyers, and those looking to boost their retirement savings. There is also tax-effective ownership structures available for a number of situations in life. Where tax-savings can be achieved, there is additional capital available for wealth creation and to reduce the timeframe to meeting your objectives.

According to Russell’s 2019 Value of an Adviser report, advisers add at least 4.4% per annum in measurable value to their client’s lives. In 2020, this was increased to 5.2% per annum where the importance of points A, B, and C above were further highlighted by mistakes made where a professional was not involved through the initial stages of the COVID-crisis.

The financial landscape is becoming increasingly complex, and so the right financial advice can help you navigate the system and make the most out of your situation. I think there is great value in having an adviser in your corner, both in a financial sense, and with the knowledge that you can trust that we have your best interests in mind. Enquire with us today, and find out how we can add value to your life now!

As a final note: it’s important to remember that real financial advisers are the ONLY persons qualified and authorised to provide you with financial strategy and financial product advice. This is why it is extremely important to confirm that a person claiming to be an adviser is actually authorised on ASIC’s register. You can search for an “Australian Financial Services Authorised Representative” here.



This article was written by Lochlan Stuhne-Scott, Authorised Representative (AR) of Leo Wealth, which is a Corporate Authorised Representative (CAR) of HNW Planning.