Tangible benefits of working with an advisor add 3.95%, surpassing the typical 1% fee
TORONTO, June 3, 2021 — Russell Investments Canada Limited (Russell Investments) has released its sixth-annual Value of an Advisor study, which aims to quantify an advisor’s broadening role to holistically serve their clients. The 2021 study found the value added by a Canadian advisor who delivers comprehensive wealth management is 3.95%.
“The data clearly shows an advisor can add significantly greater value than the typical advisory fee. This was particularly evident in the past year as investors and advisors were rocked by pandemic-related market turbulence, economic hardships and drastic change in business and personal routines,” said Brad Jung, head of North America Advisor & Intermediary Solutions. “Our annual assessment, which analyzes the tangible value that financial advisors deliver to their clients in portfolio outcomes, indicates the most significant value-add this year was delivered by helping investors avoid behavioral mistakes amid market and personal distress. Coaching clients to stay the course through a very turbulent year wasn’t easy, but it helped clients achieve a more desired outcome.”
Jung added he hopes Russell Investments’ assessment helps dedicated advisors articulate the value they deliver to clients goes far beyond selecting and managing investments, particularly as investors continue to confront challenges from the markets and pandemic-related business and personal stress.
Russell Investments developed the following formula based on research and decades of experience to help advisors understand and communicate the full value of their services: A+B+C+P+T = value of an advisor. The formula, which was reassessed this year to assure it closely reflects the tangible benefits of working with an advisor, concluded that Canadian advisors generally added 3.95% in value to their clients as follows:
- A is for active rebalancing of investment portfolios. Value-add: 0.04%
- B is for behavioral coaching. Value-add: 2.0%
- C is for customized client experience & planning. Value-add: 0.63%
- P is for product alignment. Value-add: 0.62%
- T is for tax-smart planning & investing. Value-add: 0.66%
Each of these five value-add components is quantified and explained in an interactive web experience.
"We believe in the value of advisors, and our annual study confirms once again that their dedication to clients goes above and beyond their typical fee,” said Sophie Antal-Gilbert, head of Business Solutions for Russell Investments’ North America Advisor and Intermediary Solutions business. “Our formula shows that the value advisors can deliver is significant, particularly when you objectively account for every aspect of the service provided."
Russell Investments Canada Limited is a wholly owned subsidiary of Russell Investments Group, Ltd. Established in 1985, Russell Investments Canada Limited has its head office in Toronto.
About Russell Investments
Russell Investments is a leading outsourced CIO (OCIO) partner and global investment solutions firm providing a wide range of investment capabilities to institutional investors, financial intermediaries, and individual investors around the world. Building on an 85-year legacy of continuous innovation to deliver exceptional value to clients, Russell Investments works every day to improve the financial security of its clients. The firm is the world’s fifth-largest investment adviser, with CA$3.4 trillion in assets under advisement (as of 6/30/2020) and CA$410.9 billion in assets under management (as of 3/31/2021) for clients in 32 countries. Headquartered in Seattle, Washington, Russell Investments has offices in 19 cities around the world, including in New York, London, Tokyo, Toronto and Shanghai. For more information, please visit www.russellinvestments.com.
Steve Claiborne, 206-505-1858, firstname.lastname@example.org