Investors do not evaluate the value of advice or financial success through a single framework, according to Stephen Weber, a Vanguard investment strategist and co-author of a research paper released this month.
The value of advice is much more complex, the research showed, delivering peace of mind, personalized planning and time savings along with portfolio returns.
A survey conducted in July among some 13,000 Vanguard investors found that their top reason for seeking financial advice is peace of mind. Eighty-six percent of advised clients reported that they feel more at ease, and 76% said they spend less time worrying about their finances.
Investment returns and financial planning remain important, but the respondents valued having a trusted financial professional on their side. Time savings and ongoing support also ranked highly among investors’ priorities.
“Advisors should personalize how they communicate about value, use multiple relevant success metrics for each client and situation, and favor simple, clear measures over complex ones,” Weber said in a statement.
The survey results suggest best practices for demonstrating how advice can support investor success and refine advisor-client interactions.
1. Every interaction builds peace of mind.
Advice is not only about making adjustments to a client’s investment portfolio, but also about being present when clients need help. Proactive monitoring and communication help clients feel supported and confident. Even behind-the-scenes tasks such as portfolio reviews or tax optimization add value when advisors share these efforts with clients.
2. Personalize advice and how you communicate its value.
The most valuable advice is tailored not just to a client’s financial situation, but also to how each client thinks about progress and what matters most. The strongest advisory relationships begin with a conversation about the client’s goals and preferences. This enables advisors to select metrics and explanations that resonate, which helps clients feel confident and in control.
3. Use clear, relevant metrics and explain them clearly.
Clients appreciate straightforward measures, but no single metric fits everyone. Most clients prefer to see multiple ways of measuring progress, such as projected income, performance and probability of success. Advisors should start with simple, intuitive metrics and introduce more complex ones only as needed.
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