Man walking a tightrope with a safety net — Image by © Alberto Ruggieri/Illustration Works/Corbis
On 3 March 2021 we posted a Blog titled ‘The Value of Advice’ https://www.incomesolutions.com.au/the-value-of-advice/ highlighted in this article was the fact that a professional Financial Adviser will inform, guide and provide options and choices for people to control with greater clarity their financial future, and today this has never been more evident than in a pandemic.
In a recent article appearing in ‘Professional Planner’(1), The 2021 Russell Investments Value of an Adviser Report states that Financial planners who applied a long-term strategy to investing have achieved an increased value to their clients Portfolio of approximately 5.2% during these recent COVID induced turbulent times.
By guiding clients to not pull out of their investments in March 2020, financial advisers have assisted their clients in avoiding poor investment calls that would have been simply a short-term response to a volatile market that has since forged a strong recovery. The COVID market has been one of dislocation and recovery, and during this period many investors sold out of key shareholdings following dramatic falls and then faced financial barriers to re-enter the market when it sprung to life.
Financial advisers were largely responsible for ensuring their clients were not among those who pulled approximately 40.6 billion out of their investments and superannuation.
The above 5.2% figure is made up of several elements:
– Preventing behavioral mistakes
– Advising on appropriate asset allocation
– Optimizing cash holdings
– Tax-effective investing and planning
The wealth management provided by an Adviser reflects a longevity of market experience.
The difference is some investors can be tempted to ‘market correct’, often making decisions when the markets are volatile, trying to time the market. While investors who are educated by their Financial Planner to know that the market will always have its ups and downs will stay the course, and evidence has shown this is what will pay off over time.
