You undoubtedly know someone who questions the need to work with a financial advisor. They use a website or app to manage their money and try to understand and follow the financial markets. They question why they should hire someone to do what they can do themselves.
The answer is, of course, different for every investor, but goes well beyond what you may be able to do yourself.
The immeasurable value of working with your financial advisor
Up your game
getting points on the board
Research shows the tangible benefits of working with a financial advisor in terms of added returns to your overall investment portfolio.
We believe the real value of a financial advisor isn’t measured solely by the numbers, but can be seen and felt during the moments that matter the most.
ask yourself
When the market experiences severe volatility?
Who will you turn to...
Coaching, guidance, and experience are the attributes of a financial advisor that may not be quantifiable but provide immeasurable value.
When an investment opportunity sounds too good to be true?
When a job is unexpectedly lost?
When an inheritance is unexpectedly received?
The $4.9 million dollar swing
Data shows that investors who work with an advisor see at least a 3% increase* in overall returns. Over 40 years, that could mean a difference of $4,965,711.
$10M
Growth of $100,000
$100,000
1980
40-Year Time Period
2020
With a Financial Advisor
Without a Financial Advisor
$7.47M
$2.51M
Total value of $100,000 in the S&P 500 Index over 40 years, assuming underperformance of 3% each year without an advisor*
$7.47M
with a financial advisor (8%)
$2.51M
without a financial advisor (5%)
up to bat
3 reasons to work with a financial advisor
Apps and websites can invest on your behalf, but if you go it alone without the help of a financial advisor coach, you may hit some strikes:
01
An advisor can protect you from your own worst enemy: Yourself
Your financial advisor can act as your coach to avoid making irrational investment decisions such as overtrading or reacting to short-term market fluctuations. This can help you to avoid some of the misses and stay in the game.
Over 10 years, timing the markets can lose you
3.65
%
of your investment returns.
02
/ 03
Advice beyond investment selection for life events
From changing jobs to purchasing a home, receiving an inheritance, having children, or retiring, we all experience life changes that impact our investments. An advisor considers financial goals and can help ensure that your financial plan strategies align with whatever life brings.
In 2020, there were over
15,000
mutual funds and ETFs.
How will you know which investments are right for you?
03
A lens into the future
We can’t make progress towards our goals if we don’t have visibility into our finances. Your financial advisor has access to powerful technology and data-visualization tools that can help you keep your eye on the ball. Your advisor can help you get your head around anything from your spending habits, progress to your goals, estimated tax savings on tax-managed investments and to your magic number – when you might be able to retire.
80
%
of financial advisors use planning software to help investors see their financial picture.
Your score card
6 questions to help you decide if working with a financial advisor is right for you
How you answer the following questions might help you know whether working with a financial advisor could be a powerful force in your financial future.
I have a clear, defined strategy for reaching each of my financial goals.
1.
YES
NO
You won’t get anywhere if you haven’t set a destination. A financial advisor will work with you to understand your goals and objectives and develop a long-term plan to help you get there. More importantly, they’ll help you stick to the plan.
You won’t get anywhere if you haven’t set a destination. A financial advisor will work with you to understand your goals and objectives and develop a long-term plan to help you get there. More importantly, they’ll help you stick to the plan.
I feel confident about choosing the appropriate selection of investments to correspond to my financial goals.
2.
YES
NO
With so many investment choices, it’s hard to know which are right for your specific needs. A financial advisor has comprehensive access to solutions along with the experience and guidance to help you make more informed choices.
With so many investment choices, it’s hard to know which are right for your specific needs. A financial advisor has comprehensive access to solutions along with the experience and guidance to help you make more informed choices.
If I had a major life event occur (i.e., job change, inheritance, wedding, baby, etc.), I feel confident that I could adjust my financial strategy accordingly.
3.
YES
NO
Life changes have a direct impact on your financial goals. Knowing which changes to make – and when – is essential to staying on track to reaching your goals. A financial advisor can help you navigate changes and shift your strategy to help you stay the course.
I stay informed and updated on market events and changing regulations that may impact my investment portfolio.
4.
YES
NO
A financial advisor can be the best resource to understand the financial markets as well as the impacts of economic and global events that could affect your investments and financial plan.
A financial advisor can be the best resource to understand the financial markets as well as the impacts of economic and global events that could affect your investments and financial plan.
Life changes have a direct impact on your financial goals. Knowing which changes to make – and when – is essential to staying on track to reaching your goals. A financial advisor can help you navigate changes and shift your strategy to help you stay the course.
When the markets are volatile, I sometimes feel panic about what to do about my investments.
5.
YES
NO
One of the most valuable aspects of working with a financial advisor is their influence on helping you to avoid making short-term and potentially damaging decisions around your investments.
I know the most effective investment strategies to manage my tax burden.
6.
YES
NO
A financial advisor can be an expert on helping you to implement a number of tax-smart strategies that can reduce your tax burden each year.
One of the most valuable aspects of working with a financial advisor is their influence on helping you to avoid making short-term and potentially damaging decisions around your investments.
A financial advisor can be an expert on helping you to implement a number of tax-smart strategies that can reduce your tax burden each year.
If you answered “no” to any of these questions, a financial advisor can help you get to “yes.”
A financial advisor can be the key to a better financial future.
Today, we have more technology, information, and power at our fingertips than ever before. Paradoxically, that means that there has never been a more important time to work with a financial advisor to help you determine a strategy to help you reach your goals, navigate an endless number of financial decisions, manage your investments, and keep your emotions in check. Reach out to your advisor today to begin the journey towards a better financial future.
Reach out to an independent financial advisor today to begin the journey towards a better financial future.
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Independent Advisor Solutions by SEI
Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company (SEI).
Investing involves risk including possible loss of principal.
You financial advisor is not affiliated with SEI or its subsidiaries. Integration services provided by SEI Global Services, Inc., a wholly owned subsidiary of SEI.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice. This information is for educational purposes only and should not be interpreted as legal opinion or advice.
Some information contained herein has been provided to SEI by unaffiliated third parties. SEI cannot guarantee the accuracy or completeness of the information and assumes no responsibility or liability for its incompleteness or inaccuracy.
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1 Source: Bloomberg. Data spans 1/1/1981-12/31/2020. This assumes the actual (total) return of a $100,000 investment in the S&P 500 annualized over the last 40 years, and then factors in a 3% underperformance each year without an advisor.
2 Source: 2021 “Dalbar 2021 Quantitative Analytics of Investor Behavior (QAIB) Report,” DALBAR, Inc. www.dalbar.com. DALBAR Methodology: Average stock investor performance results are based on a DALBAR study, “Quantitative Analysis of Investor Behavior (QAIB), 2021” DALBAR is an independent, Boston-based financial research firm. Using monthly fund data supplied by the Investment Company Institute, QAIB calculates investor returns as the change in assets after excluding sales, redemptions and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses and any other costs. After calculating investor returns in dollar terms, two percentages are calculated for the period examined: Total investor return rate and annualized investor return rate. Total return rate is determined by calculating the investor return dollars as a percentage of the net of the sales, redemptions, and exchanges for the period. The Average Equity Fund Investor is comprised of a universe of both domestic and world equity mutual funds. It includes growth, sector, alternative strategy, value, blend, emerging markets, global equity, international equity, and regional equity funds.
3 Source: Tech Survey, Financial-Planning.com, May 2020
Glossary:
Basis points (BPS) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument.
The S&P 500 Index is an unmanaged, market-weighted Index that consists of the 500 largest publicly traded U.S. companies and Is considered representative of the broad U.S. stock market. Indexes do not take into account the fees and expenses associated with investing, and individuals cannot invest directly in any index. Index returns are for illustrative purposes only and do not represent actual investment performance. Index returns do not reflect any management fees, transaction costs, or expenses. Indexes are unmanaged, and one cannot invest directly in an index. Performance quoted is past performance. Past performance cannot guarantee future results.
* Source: Francis M. Kinniry Jr., Colleen M. Jaconetti, Michael A. DiJoseph, Yan Zibering, and Donald G. Bennyhoff, 2016. Putting a Value on Your Value: Quantifying Vanguard Advisor’s Alpha. Valley Forge, PA.: The Vanguard Group.
Source: Bloomberg 1/1/1981-12/31/2020. Index returns are for illustrative purposes only and do not represent actual investment performance. Index returns do not reflect any management fees, transaction costs, or expenses. Indexes are unmanaged, and one cannot invest directly in an index. Performance quoted is past performance. Past performance cannot guarantee future results.
Source: Dalbar 2021 Quantitative Analysis of Investor Behavior
© sei july 2021
Source: Statista 2021
Source: Tech Survey, Financial-Planning.com, May 2020
Source: Dalbar 2021 Quantitative Analysis of Investor Behavior
Source: Forbes, Spoilt Rotten, Are There Too Many Mutual Funds and ETFs, May 2018
You won’t get anywhere if you haven’t set a destination. A financial advisor will work with you to understand your goals and objectives and develop a long-term plan to help you get there. More importantly, they’ll help you stick to the plan.
With so many investment choices, it’s hard to know which are right for your specific needs. A financial advisor has comprehensive access to solutions along with the experience and guidance to help you make more informed choices.
Life changes have a direct impact on your financial goals. Knowing which changes to make – and when – is essential to staying on track to reaching your goals. A financial advisor can help you navigate changes and shift your strategy to help you stay the course.
A financial advisor can be the best resource to understand the financial markets as well as the impacts of economic and global events that could affect your investments and financial plan.
A financial advisor can be an expert on helping you to implement a number of tax-smart strategies that can reduce your tax burden each year.
Independent Advisor Solutions by SEI
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Building brave futures.
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