Value of an Advisor 10th Anniversary Edition: The Importance of an Experienced Guide June

Key Takeaways:

An advisor’s value to the investors who work with them is a lot like a guide taking travelers through an unfamiliar environment
Advisors can help investors remain on the right path to their chosen destination and ensure they have everything they need for the journey
An advisor’s guidance can ensure investors remain in the market through volatile times, can ensure the right asset mix for their goals and risk tolerance, and can help them minimize the tax bite, among other valuable services

There are certain items you should take with you when going for a hike in a forest: a flashlight, good boots and a GPS. But when you are venturing out on unfamiliar terrain, then it’s a good idea to make sure you take a trusted and knowledgeable guide as well.

When navigating the unknown, an experienced guide can ensure you don’t veer off the path to your chosen destination, can prevent you from stumbling over hazards, and ensure you have the tools you need to finish the journey safely and soundly.

If you are traveling through an unknown environment, you don’t really know exactly what may be around the corner. This goes for the financial markets as well as that hypothetical forest. In our view, a financial advisor can serve as a trusted and knowledgeable guide and can help investors be prepared for a variety of potential obstacles.

This is one of the many reasons why Russell Investments believes in the value of financial advisors. Their role as a guide through the investing journey—turbulent market environments, major life changes, evolving needs and goals—has significant value since it is that guidance which often allows investors to arrive safely at their chosen destination.

Every year we take a closer look at that value using the simple formula we developed 12 years ago and update annually:

Our formula has been refined over the years as the role of an advisor has evolved. Initially, an advisor was essentially a stockbroker. Now, many not only create and continually review an individualized financial plan, they can spearhead a network of experts to provide customized wealth management services for entire families. We believe the value of an advisor has increased as the various roles they play have broadened and deepened.

Our 2025 Value of an Advisor formula consists of four key elements in an advisor’s total value proposition: asset allocation to ensure the investor’s portfolio is designed to meet their financial goals while remaining aligned to their risk profile, their role as a behavioral coach to keep clients invested through thick and thin, customized wealth planning to guide their clients and families through the many stages of their financial life, and tax-smart planning and investing to help investors keep more of what they earn.

Asset Allocation

An advisor will work with their clients to determine the optimal mix of assets to help them reach their financial goals at an appropriate level of risk. They will work to keep their clients fully invested in order to take advantage of market opportunities, and ensure they diversify their risk and return.

Behavioral Coach

An advisor will ensure that clients stick to their chosen path even when the trail appears treacherous. They’ll keep an investor’s impulses in check, especially when markets are volatile. Left on their own, many investors may try to time the market, which could lead to missing out on rebounds.

Customized Family Wealth Planning

An advisor can build an individualized investment plan, then regularly update it to align to an investor’s changing needs. They can make adjustments to that plan when you go through one of life’s big moments. And they don’t just consider your personal goals and needs, but also those of your spouse and children and perhaps even those of future generations.

Tax-Smart Planning and Investing

An advisor can help investors navigate the complex world of taxable and non-taxable accounts and how they fit in an investment portfolio. Advisors can play the important role of choosing tax-conscious investments, meant to reduce or potentially eliminate the impact taxes can have on their clients’ investments.

The Bottom Line

Much of the work an advisor does is complex and happens behind the scenes, making it more difficult for clients to quantify and appreciate. Our Value of an Advisor study is designed to help advisors bring the results of that work to the forefront so they can demonstrate the full value of the services they provide.

At Russell Investments, we believe in the value of advisors. We see the potential advantages you create for your clients. We know the commitment you bring to your relationships. Our annual study confirms and quantifies that dedication.

A message from Advisor Perspectives and VettaFi: To learn more about this and othe topics, check out some of our webcasts.

These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.

This material is not an offer, solicitation or recommendation to purchase any security.

Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.

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Diversification and strategic asset allocation do not assure a profit or guarantee against loss in declining markets.

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