New research recently released by Professor Claude Montmarquette and Nathalie Viennot-Briot of the Montreal-based Centre for Interuniversity Research and Analysis on Organizations (CIRANO) offers the strongest evidence to date of the link between the presence of financial advice and the accumulation of financial wealth.
The value proposition for advisors has always been easier to describe than to define. As the financial advice industry continues to gravitate toward fee-based advice, there is a great temptation to define an advisor’s value-add as an annualized number. Again, this may seem appropriate, as fees deducted annually for the advisory relationship could be justified by the “annual value-add.” However, although some of the strategies we describe here could be expected to yield an annual benefit—such as reducing expected investment costs or taxes—the most significant opportunities to add value do not present themselves consistently, but intermittently over the years, and often during periods of either market duress or euphoria.
This study, based on a new Canadian survey and adjusting for the causality issue, reconfirms the positive value of having financial advice. As in our earlier paper, the discipline imposed by a financial advisor on households’ financial behaviour and increased savings of advised households are key to improving asset values of households relative to comparable households without an advisor. Benefitting from a subset of participants in both surveys, dropping an advisor between 2010 and 2014 was costly: those households lost a significant percentage of their asset values while the households who kept their advisor have gained in asset values.
FundEX is excited to present FundEX Wealthview, a revamped client portal which replaces WebCONNECT. With its intuitive interface and modern look, Wealthview is entirely secure and compatible with mobile devices. It will provide you with 24/7 access to your investment values, price history of your portfolio funds, online access to your FundEX documents, and more.