The True Value of Good Advice

Receiving advice from a trusted financial adviser gives you the opportunity to make you more money than going it alone. With a net return of 3% generally made through receiving advice[1], even when you factor in a fee of 1.1%, you could be still ahead of the game by 3%.

There are more online calculators, financial quizzes and general online advice today than we often know what to do with. However, having advice tailored to your own specific needs and goals is so valuable and simply can’t be replaced. They say that no one is so wise that they can afford to ignore good advice. Nothing could be more true, especially when concerning your own finances. Let’s look at some key reasons for a financial advisor:

Save yourself time (and money)

Inaction is one of the biggest costs to your own prosperity. Having the freedom to call your trusted advisor to ask questions and receive tailored answers will empower you to make decisions on your finances, rather than the case of apathy caused by uncertainty.

Based on an analysis by Vanguard, financial advisors can add a return of 3%[2] on net returns, which would in turn mean that it actually costs you not to have an advisor.  The AFA also explains that financial advice equals better financial decisions[3]. This means saving on your tax and interest, reducing and managing your debt and retiring comfortably, amongst many other benefits. The energy and effort that goes into managing your investment portfolio is something that many of us just don’t have the time to do. The knowledge that a good financial advisor carries is so valuable when taking this task off your plate. You can also check in regularly to ensure everything is managed well and make adjustments, based on advice where necessary.

The value of solid advice with industry knowledge

In an AFA study, almost 80% of research participants conveyed notable emotional and behavioural benefits such as peace of mind, after having the experience of good financial advice[4]. Over 80% of those respondents confirmed that having a financial planner relationship gave them the confidence to handle future financial decisions.

Financial planners have trained and worked in the industry to acquire sound knowledge, and have the network of other professionals who can assist you in your tailored financial goals.

The financial experience and expertise of a good financial advisor should be a given. The real value though, at least from a client’s perspective is in the personal approach. A valuable financial advisor acts as coach, mentor, project manager, counsellor and so much more for an individual that is needing financial guidance. The benefits of receiving financial advice and strategy from a professional is vast. Financial advice that is tailored to your own situation can give you assurance in handling your finances, as well as the feeling of security that comes with knowing your financial future is steady.

Talk about your goals and achieve them together

The AFA reported more than 54% of those surveyed admit that as a result of receiving financial advice, they save more. 60% of those respondents also agreed that they felt prepared and equipped for unexpected costs[5]. When life is changing and big decisions need to be made, the assurance that a professional who knows your situation and is there to walk you through, is absolutely invaluable.

David Hainz explains that the goal of a conversation between financial planner and client should be to encourage a ‘deeper conversation’ within the clients own mind, in order to go beyond finances and work out what is truly important to them, such as a life purpose and family[6]. More often than not, clients will often seek out financial advice during a life transition like retirement, business development, or planning a family for example. A good financial advisor will work out goals and needs with you and work to help you achieve them, identifying the right strategy for your situation.

Good financial advice can also train you to take control of your finances long term and change money habits for the better, with advised individuals reportedly saving more and being better prepared for life events.

Life is full of changes and challenges. It can be difficult enough navigating the transitions and events of life, let alone handling the substantial financial decisions that come with it. Good financial advice will benefit you greatly, both in the short and long term.

Call 02 4038 1623 and make an appointment to speak to a financial adviser to guide you to a better tomorrow.

[1] Putting a value on your value: Quantifying Vanguard Adviser’s Alpha March 2019, Vanguard Research – Francis M. Kinniry Jr., CFA; Colleen M. Jaconetti, CPA, CFP®; Michael A. DiJoseph, CFA; Yan Zilbering; and Donald G. Bennyhoff, CFA
[2] https://static.vgcontent.info/crp/intl/auw/docs/literature/research/quantifying-advisers-alpha.pdf?20200619|163000
[3] https://www.afa.asn.au/news/whitepapers/value-of-advice
[4] https://www.afa.asn.au/news/whitepapers/value-of-advice
[5] https://www.afa.asn.au/news/whitepapers/value-of-advice
[6] https://www.professionalplanner.com.au/2019/07/where-advisers-really-add-value

The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser.

The views expressed in this publication are solely those of the author; they are not reflective or indicative of licensee’s position and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author.

Elliot Watson Financial Planning Pty Ltd is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.