What a financial planner does to help.
Updated research from Vanguard confirms what previous research found concerning the average value added to clients’ long-term wealth by a financial planner.
The original Vanguard research covered a 16 year period and looked at how a financial planner adds value to a client’s wealth. We reported on this in September last year, article replicated below. Now, six months later, March 2019, further research has confirmed the original findings.
Put simply, the use of professional financial planning expertise can add, in the long-term, around 3% to a client’s wealth. Extra that not only adds value but also provides the funds to pay for a financial planner’s services, assistance with tax issues, an expert in retirement planning and often a friend. All helping you make decisions that are, otherwise, complex and difficult.
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What a financial adviser can add to your portfolio’s returns (September 2018)
A 16-year study by Vanguard (latest report from July 2018) has found that this figure is about 3% net.
This is over and above what might be generated by non-planner assisted investment activity. This means that even for small investors, a financial planner will not only pay for themselves but provide the professionalism to navigate the confusion, performance and peace of mind you might not get elsewhere or if you were doing the job yourself.
A recent example: An investor was using three stock brokers and each one thought the others were managing issues such as tax. When a financial planner was engaged it was realised this investor had lost around $200,000 over a number of years. This investor only has a modest portfolio.
Peter Graham
PlannerWeb
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Heathmont Financial Services Pty Ltd (ABN 68 106 250 104) trading as Heathmont Financial Services is a Corporate Authorised Representative (No. 262098) of Knox Wealth Management Pty Ltd (ABN 74 630 256 227), Australian Financial Services Licence Number (AFSL) 513763.
Julian McGoldrick is an Authorised Representative (No. 262098) of Knox Wealth Management Pty Ltd AFSL 513763.