The Value of a Financial Adviser: More Than Just Investments

When people think of financial advisers, they often picture someone picking stocks or recommending investment funds. However, as discussed in the recent episode of the Retire Right podcast, the role of a financial adviser goes far beyond investment selection. Neil Rogan from Russell Investments joined host Martin McGrath to explore their annual Value of an Adviser report, which quantifies the tangible and intangible benefits of working with a financial professional.

Asset Allocation: The Foundation of Smart Investing

One of the key areas highlighted in the report is asset allocation—how your investments are structured across different asset classes like shares, bonds, property, and cash. While many people leave their superannuation or investments in a default option without a second thought, this could mean missing out on potential growth or taking on unnecessary risk.

According to the report, proper asset allocation may contribute to improved investment outcomes over time. A financial adviser helps align your investments with your risk tolerance and long-term goals. For instance, some people assume they are in a conservative option when they’re actually heavily invested in shares, while others hold excessive cash, missing potential returns. Advisers ensure your portfolio is structured appropriately for your life stage and risk comfort level.

Behavioural Coaching: Helping You Avoid Costly Mistakes

Investing isn’t just about numbers—it’s also about emotions. One of the most valuable roles of an adviser is behavioural coaching, which helps clients make rational financial decisions, particularly in times of market volatility.

The Value of an Adviser report suggests that behavioural coaching may help prevent common investor mistakes, such as selling in a downturn or chasing short-term market trends. While individual results vary, having a trusted adviser to provide reassurance and guidance during uncertain times can help clients stay committed to their financial plan.

Disclaimer: Past performance is not an indicator of future returns. Investment outcomes depend on various factors, including market conditions and individual risk profiles.

Making Choices and Trade-offs: The Bigger Financial Picture

Financial planning isn’t just about growing wealth—it’s about making informed decisions that align with your lifestyle goals. A good adviser helps you navigate the trade-offs between different financial choices. For example, should you use your savings to fund travel in retirement, gift money to grandchildren, or keep a buffer for future healthcare expenses?

Advisers help clients balance these priorities while ensuring they maintain financial security. This ongoing guidance can be invaluable, especially as unexpected life events occur. A structured plan that adapts to your evolving needs provides peace of mind and clarity.

Expertise and Advocacy: More Than Just Numbers

Another key takeaway from the Value of an Adviser report is the expertise financial professionals bring to the table. Advisers serve as guides, educators, and advocates when needed. They provide critical knowledge on financial regulations, tax strategies, and retirement planning, helping clients navigate complex financial landscapes.

In some cases, advisers also act as advocates, whether assisting clients in dealing with Centrelink, navigating aged care options, or ensuring that insurance claims are handled correctly. These areas require specialist knowledge that most people don’t have, making professional guidance invaluable.

Tax Efficiency: Keeping More of What You Earn

Tax planning is another important aspect of financial advice. The report indicates that strategic tax planning may help individuals optimise their financial outcomes by using available concessions and deductions.

For example, many retirees are unaware that they may be eligible for a Commonwealth Seniors Health Card, which provides discounts on healthcare and medication. Advisers help clients structure their assets and income to qualify for these benefits where possible, reducing overall expenses in retirement.

Disclaimer: Tax outcomes depend on personal circumstances and are subject to change. Individuals should seek advice from a registered tax (financial) adviser before making tax-related decisions.

The Bottom Line: Is the Cost of Advice Worth It?

The Value of an Adviser report attempts to quantify the financial benefits of advice, estimating its potential value for clients. However, it is important to note that financial outcomes depend on a variety of factors, including individual circumstances, investment choices, and market conditions.

Beyond the numbers, the peace of mind that comes from having a trusted professional overseeing your financial future is invaluable. If you’ve never worked with a financial adviser before, or if you’ve only thought of advice in terms of investment selection, this podcast episode provides a compelling case for the broader value advisers offer. Whether it’s structuring your portfolio, helping you make major financial decisions, or providing guidance during challenging times, a good adviser is a long-term partner in financial well-being.

Disclaimer

The information provided in this article is general in nature and has been prepared without considering your personal objectives, financial situation, or needs. It does not constitute financial advice. Before making any financial decisions, you should assess its appropriateness and seek professional financial advice tailored to your circumstances. Additionally, ensure you review the relevant Product Disclosure Statement (PDS) before deciding on any financial product. Tax and investment outcomes are not guaranteed and depend on various external factors.