OPINION | The value of financial advice

GOAL: A holistic financial adviser will seek to first understand a client’s objectives and their dreams, not just financially but for their family, work, retirement goals and the like.

GOAL: A holistic financial adviser will seek to first understand a client’s objectives and their dreams, not just financially but for their family, work, retirement goals and the like.

What is ‘value’ and how do you measure it?

Value is often defined by a person’s individual perception, and this is influenced by their unique circumstances, beliefs and needs.

Given that value is perceived, how do you then measure or quantify the value of financial advice to different individuals?

A good financial adviser will seek to establish a true partnership with their clients.

Alex Myers

If people think of financial advisers as investment managers whose only job is to select investments and achieve a certain level of return, then an accurate measure of financial advice may simply be the return achieved after the costs of the advice have been deducted.

Good financial advice, however, is so much more than this and will add significant value not only to a client’s financial position but to their life as a whole.

It is important to understand that the value of good financial advice will take the form of both tangible and intangible outcomes and can’t simply be defined by an investment return.

A holistic financial adviser will seek to first understand a client’s objectives and their dreams, not just financially but for their family, work, retirement goals and the like.  What does the client want their life to look like both now and in the future? At PKF we describe this as your Future of Choice.

In seeking to achieve a Future of Choice for a client, creating an investment strategy will only be one component of the value that a financial adviser provides. They will give a client clarity around which of their goals and objectives are priorities, provide realistic expectations and financial education. The adviser will also address areas such as legislative change, estate planning, and insurance needs while coordinating with the other specialists that a client requires. This will assist to simplify a client’s life, provide peace of mind and save them time.

In times of investment market volatility, a financial adviser will provide discipline and guidance, while reinforcing the importance of retaining the long-term strategy. This can assist a client to avoid the common pitfalls of selling when markets are low, buying when they are high and chasing the latest trend. In these circumstances it may be easier to assess the value that an adviser provides over the long-term, but what is the value of the emotional support that a client is provided by their adviser in making these decisions and remaining calm and focused in times of extreme volatility?

A good financial adviser will seek to establish a true partnership with their clients and, as is the case with any successful relationship, it will grow stronger over time.

Financial advisers that provide a comprehensive, holistic approach will add an enormous amount of value, in both tangible and intangible ways, by guiding you through the many complicated challenges and changes that you will face over a lifetime. 

Alex Myers, PKF Wealth Financial Adviser