Russell Investments’ “Value of an Adviser” report showed that for investors who started 2020 with a portfolio worth $250,000, the impact of staying into the market until 31 May this year – rather than switch to cash in March 2020 at the beginning of the pandemic – was as large as $40,000.
It also estimates that advisers added more than 5.2 per cent p.a., in value to their clients’ portfolios.
“Investors that have been educated by a financial adviser understand there will be ups and downs along their financial journey, so they feel comfortable in staying the course,” Russell Investments director, head of business solutions, Bronwyn Yates, said.
“However, non-advised investors struggle to make the correct decision when markets are volatile, and often attempt to time the market. This is an issue which plagues both those with loss aversion, and those convinced they can beat the market.
“It’s also a timely consideration for the growing ranks of millennials and Gen Z turning to fin-fluencers as their source for financial advice.”
Ms Yates added that the extended lockdowns happening throughout Australia currently should encourage investors to “renew their interest” in the markets and engage with financial advisers.
“While it’s positive that investors across generations are becoming more engaged with their finances, and that they have more guidance options than ever before, the value of professional advice clearly speaks for itself in our report findings,” she said.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
