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What is the “value of an adviser” formula?
At the heart of Russell Investments’ annual study is a simple but powerful formula that quantifies the real value financial advisers bring to their clients:
A + B + C + T ≈ VALUE
Each letter represents a core area where advisers make a measurable difference:
- A = Asset Allocation: Ensuring your investments are diversified and aligned with your goals and risk tolerance.
- B = Behavioural Coaching: Helping you stay disciplined during market volatility and avoid emotional decisions.
- C = Customized Wealth Planning: Tailoring strategies to your unique life circumstances, family goals, and legacy aspirations.
- T = Tax-Smart Planning & Investing: Structuring your finances to retain more wealth and improve after-tax outcomes.
In 2025, Russell Investments estimates that advisers deliver up to 4.87% in added value annually, far exceeding the typical 1% advice fee.
Why this matters to you
1. Asset allocation (~0.30%)
Most self-directed investors hold too much cash, often 20% or more, which can drag down long-term returns. Advisers help clients stay fully invested in diversified portfolios that are designed to grow and weather market cycles.
2. Behavioural coaching (~2.47%)
Market volatility can trigger fear and impulsive decisions. Advisers act as a steady hand, helping clients avoid common mistakes like selling low or chasing performance. Staying invested through turbulent times is often the key to long-term success.
3. Customised planning
No two clients are the same. Advisers provide tailored advice that reflects your life stage, family needs, retirement goals, and estate planning. This personalisation is something robo-advisers simply can’t replicate.
4. Tax-smart strategies
From superannuation contributions to capital gains management, advisers help clients keep more of what they earn. This can significantly improve outcomes over time.
What clients say they value most
Russell Investments’ Value of an Adviser Index also measures how strongly each component influences client satisfaction. In 2025, the top drivers were:
- Technical and emotional expertise (Index score: 118)
- Goal alignment and clarity
- Confidence and control over financial decisions
Final thought: advice that goes beyond the numbers
Financial advice isn’t just about beating the market, it’s about helping you make confident decisions, stay on track, and achieve peace of mind. Whether it’s guiding you through a market downturn or helping you plan for retirement, the value of advice is both measurable and meaningful.
