When Vanguard asked investors what attributes contributed most to the value they put on their relationship with their financial adviser, the most important were:
• plan monitoring;
• investment expertise;
• time delegation;
• expert access;
• guaranteed income;
• freedom; and
Cyndy Pagliaro, a senior research analyst at Vanguard Investment Strategy group, says the list is a good illustration that investors are looking for emotional value as well financial value.
Vanguard then asked investors to say how well their planner matched the attributes they said contributed to value.
Pagliaro says respondents, most of whom were advised clients, rated the financial advice they received highly, with 57 per cent saying it was very valuable and 31 per cent saying it was valuable.
“These were good responses but it still leaves lots of opportunity,” she says.
“What we learned was that emotion is a critical component of value, making up about 40 per cent of perceived value,” she says.
Pagliaro says advice needs to take a more holistic approach to include emotional value, but she concedes it is hard to do.
“We know it is there but we are not sure what drives it. That is what prompted our research.