Advisers deliver clients 5.7% value in 2024

Russell Investments’ seventh annual Value of an Adviser Report revealed that Australian financial advisers added approximately 5.7 per cent in value to their clients over the past year, down slightly from 5.9 per cent in 2023.

This benefit is a result of advisers’ guidance on asset allocation (1.1 per cent), behavioural coaching (3.3 per cent), and tax planning (1.3 per cent).

The firm noted that more than half of this value was due to advisers preventing “knee-jerk decisions amid market volatility and economic uncertainty”.

Russell Investments’ managing director, head of distribution in Australia and New Zealand, Neil Rogan, said advisers are “much more than investment experts” as they also play a crucial role in helping clients “cope with the emotional roller-coaster of both investing and life itself”.

Referring to the value added by advisers, the report said: “This is substantially higher than the typical fee charged by advisers and a validation of the holistic service they provide to clients.”

To help existing and prospective clients better grasp the value they provide, the report suggested advisers clearly illustrate their service model and the service they provide, as well as their advice philosophy.

Additionally, it said advisers should use client case studies to demonstrate prior successes and highlight some of the intangible benefits of their services, as well as developing a clear understanding of the different motivators that drive clients to seek financial advice.

Rogan added: “It’s important advisers continue to communicate their value to clients. This report shows that if an adviser can help clients avoid common behavioural mistakes, they likely provide value above and beyond their fees.”

Russell Investments’ managing director, Australia and New Zealand, Tim Furlan, said the report illustrates the value of advisers and the benefits they can deliver to their clients.

“This year’s findings highlight the real role advisers play in securing the future of their clients. It is a role closely aligned to Russell Investments’ own purpose of providing investment solutions that help more people retire with dignity,” Furlan said.