Many investors believe the value of seeing an Investment Advisor or Financial Planner is in the investment advice, such as choosing which funds to use or shares to buy.
Whilst this advice can make a difference and is an important part of the process, the greatest value is in planning to achieve core lifestyle goals and objectives.
An advisor can help by integrating a considered investment plan with a well thought out superannuation, tax, estate, and risk management plan, and adapting the plan to the constant changing circumstances that cause the assumptions upon which the plan is based.
As life events occur and things change (children, divorce, inheritance, death, change of career), plans need to be modified and advice is required.
Traditionally, achieving a tangible monetary goal or an above average performance is the ‘be all and end all’ of planning. However,when I listen to my clients they are rarely as focused on the performance as I am. Their underlying words talk about their investments being able to sustain a level of income over their lifetime.
A 2014 QUT School of Business study has findings that still hold true today in the post Banking Royal Commission era. The study uncovered significant benefits experienced by those who receive professional ongoing financial planning advice compared to those who do not.
Key findings discovered that participation in the financial planning process and financial advice have positive effects on clients’financial and general well-being, particularly for longer-term clients (Ref: The Value of Financial Planning Advice: Process and Outcome Effects on Consumer Wellbeing, QUT Business School, 2014).
Holding realistic financial aspirations and positive appraisals of one’s financial resources are linked to both financial and life satisfaction. Advisers who assist clients to better align their aspirations and resources may encourage higher levels of financial and, in turn, life satisfaction (well-being). The more satisfied clients were with their financial situation, the more likely they were to report positive impacts on their lives.
It is humbling and satisfying to see that advice can achieve both a monetary outcome for and increase the overall wellbeing of my clients.
Contact arcinvest at firstname.lastname@example.org for valuable investment advice.