The fourth Russell Investments ‘Value of an adviser‘ report found preventing behavioural mistakes, advising on asset allocation, optimising cash holdings, tax-effective investing and planning, and expert knowledge were the key benefits of using an adviser.
The report found investors during the pandemic market volatility of 2020 have seen an extra 5.2%pa in returns in Australia and an extra 4.9% in the US as the result of using a financial adviser.
From the start of 2020 to the 31 May 2021, investors who had a portfolio with a value of $250,000 gained as much as $40,000 by staying in the market instead of switching to cash.
Bronwyn Yates, director and head of business solutions at Russell Investments said: “non-advised investors struggle to make the correct decision when markets are volatile, and often attempt to time the market. This is an issue which plagues both those with loss aversion, and those convinced they can beat the market. It’s also a timely consideration for the growing ranks of millennials and Gen Z turning to fin-fluencers as their source for financial advice”.
For more information see previous article where we detail where the overall added value is coming from “The Value of a Financial Adviser”.