Russell Investments Canada Limited (Russell Investments) has released its seventh-annual Value of an Advisor study, which aims to quantify an advisor’s broadening role to holistically serve their clients. The firm’s 2022 analysis found the value added to a client’s portfolio by a full-service Canadian advisor who delivers comprehensive wealth management is 3.85%.
“Our research reveals the total benefit of an engaged financial advisor is substantially higher than the typical advisory fee,” said Brad Jung, head of North America Advisor & Intermediary Solutions at Russell Investments. “Based on our objective calculations, financial advisors who worked with their clients to remain invested, prepare for an uncertain future and determine their post-pandemic goals should feel a sense of deep satisfaction for having added true value.”
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Russell Investments developed its Value of an Advisor formula based on decades of research and experience to help advisors understand and communicate the full value of their services. The formula (A+B+C+T = value of an advisor), which is reassessed each year to assure it accurately quantifies the tangible benefits of working with an advisor, was recalibrated for 2022 to reflect the industry’s march toward holistic family wealth planning.
According to this year’s objective formula, Canadian advisors added value to their client accounts as follows:
- A is for active rebalancing of investment portfolios. Value added: 0.20%
- B is for behavioral coaching. Value added: 1.93%
- C is for customized client experience & family wealth planning. Value added: 1.04%
- T is for tax-smart planning & investing. Value added: 0.68%
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“We believe in the value of financial advisors, and the numbers from our research consistently support this view,” said Sophie Antal-Gilbert, head of Portfolio & Business Consulting for Russell Investments’ North America Advisor and Intermediary Solutions business. “As we emerge into a post-pandemic world full of unknowns, financial advisors should take pride in knowing they’ve helped their clients navigate a tumultuous period and their value is clear.”
Antal-Gilbert added she hopes the firm’s annual study helps dedicated advisors articulate that the value they deliver to clients goes far beyond selecting and managing investments, particularly as investors continue to confront challenges from market volatility and reassess their personal and investment goals, needs and circumstances.
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