Advisers should not act as simply investment managers selecting investments on behalf of their clients but should instead focus more on adding value, these were the findings of the second annual Value of an Adviser Report by Russell Investments.
The report outlined five key elements that were the main contributors of the value of advice. The key elements identified in the report were:
- Annual rebalancing of the portfolio
- Preventing from behavioural mistakes
- Cost of getting it wrong
- Planning and additional wealth management services
- Tax-smart planning and investing
“This report reinforces the value of advisers, which goes beyond investment-only advice and is derived from both the technical and emotional guidance they provide,” Russell Investments, managing director, Australia, Jodie Hampshire, said.
“The overwhelming majority of clients in Australia do benefit from quality advice.”
According to the report, quality financial advice in 2019 contributed, at a minimum, 4.4 per cent per annum of value to clients’ portfolios.
The study also considered the full equation of an adviser’s services, overriding the common misconception that advisers are simply investment managers selecting investments for clients with the aim of achieving a certain level of return.