The value of comprehensive financial and investment advice

December 4, 2020

As I meet with clients, I am often so gratified to be a part of their journey and see them living out their dreams. That might be three months of “tooling” around the southern states, purchasing that beautiful new lake home, or holding a big birthday celebration.

It is such a joy to share with clients, as suitable, that their financial plan is strong and they have the freedom to pursue their chosen goals.

When serving clients, I see the tangible benefits of our work together. I see how important tax reduction, risk management, and their investment returns are to their overall financial plan. I understand how to measure these results and what they mean, which makes me proud and excited to share these results with them.

Quantifying the value

If you are considering working with a financial advisor, you may wonder, “How do I know they will add value?” In addition to asking your potential financial advisor how they measure their value, there have been many studies of this area.

A Morningstar study projects the value of comprehensive financial and investment advice at 1.6% per year, after all fees. This can be a lot of incremental value. For example, if you have a $1 million portfolio, Morningstar projects additional potential value, after all fees, of $16,000 per year. For a $5 million portfolio, this additional potential value grows to $80,000 per year.

A second compelling study is from Vanguard, which has made a business of serving do-it-yourself investors. Despite that focus, Vanguard initiated a 14-year study of the potential value of comprehensive financial and investment advice. They concluded that it was 3% after all fees over time. On a $1 million portfolio that may be $30,000 of value after all fees; and on a $5 million portfolio, that may be $180,000.

Value for you

Can a financial advisor add value to your situation? Most financial advisors, including us, offer a complimentary consultation. This helps us get a sense of your needs and preferences and lets us talk through potential strategies that may add value. This meeting also helps you get a sense of whether the advisor’s style and approach are a good match with your expectations and preferences. To help you select a financial advisor, we’ve compiled this list of questions: Finding a Financial Advisor

Contact Us to learn more about the strategies and opportunities that may add value for you and that also allow you to achieve your financial goals.

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