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Identifying Where the True Value of Financial Advice Lies

Olemera offers financial advice in Johannesburg which is built on the foundation of adding value to your portfolio while providing ongoing financial planning, advice and support.

Where is the True Value of Financial Advice?

There is a strange pattern that repeats itself in the world of finance and it shows that a large number of investors tend to shy away from paying for financial advice.

This reluctance is driven by the idea that it isn’t necessary to pay someone else to do something that can be done independently.

However, the question we need to be asking is whether, as an investor who is using a financial advisor, are you generally better off than those who are without an advisor?

The only way to really answer this question is to look at what a financial advisor should be doing in order to add genuine value to the you and your investments.

What the advisor is offering you should completely justify their service fees.

Financial advice - financial advisors Johannesburg

Personal Financial Planning

Morningstar Independent Investment Research released the results of a recent study at its latest Investment Conference which took place in London.

The research focused on what investors value in an advisor as well as what advisors think is most valuable to an investor.

Each group was given a list of 15 attributes and were asked to rank each one from most important to least important.

The results showed a significant amount of misalignment between the two groups’ responses. In fact, the only attribute which both groups considered to be most important was that an advisor should help their client achieve their financial goals.

Furthermore, investors decided that the 4th most important thing an advisor should be able to do is to help them maximise their returns while advisors ranked that as second to last in level of importance.

This can be an extremely detrimental misunderstanding. Reaching financial goals does not automatically equal maximum return.

In the past, financial advisors have notoriously made promises to deliver maximum return for investors simply by choosing top performing funds or products.

If this is all an advisor is offering an investor, then it’s easy to question the true value of such advice. With a fair amount of research and self-education, investors are able to make a well-informed decision on their own, without paying someone to do it for them.

Value of Financial Planning – Why work with a financial advisor

The above study further demonstrated that investors considered “helping me stay in control of my emotions” as the least valuable contribution that an advisor can make.

Advisors considered this attribute as 4th from the bottom of the list, which means both groups are not clear on how much value an advisor can actually add in this area.

There is a lot of information that suggests that financial advisors who help their investors keep their emotions in check can yield significant results and improved return.

This goes for advising them against cashing out when the numbers are looking good, as well as providing reassurance when the markets plummet.

This emotional support is extremely valuable as it offers an objective point of view which may not be clear to the investor at the time.

Perhaps this was not considered important in the eye of investors because they are unaware that financial advisors offer this as part of their services.

Therefore, it’s important for any financial advisor to make it clear why this dimension of financial advice can add enormous value to investments.

Ultimately, there are many things that determine the value of a financial advisor such as emotional support, ongoing advice, one-on-one relationships among many more.

These are the characteristics of a financial advisor that will lead you towards financial well-being.

Olemera Financial Advisors Add Value – Financial Advice Johannesburg

Studies show that careful and professional financial planning that reaches beyond investment only advice can contribute up to an estimated value of 4.08%. 

At Olemera, our aim is to add the most value possible by providing comprehensive, personalised and ongoing financial advice in Johannesburg.

We work towards designing a solution which is specific to your individual circumstances and financial goals. We help you define your goals as well as identify key steps to take along your financial journey.

For more information about our comprehensive, value adding financial planning services in Johannesburg, contact us.

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