What is the true value of financial advice? While investment returns often dominate the conversation, the benefits of working with a financial adviser go far beyond simple performance metrics.
A Steady Hand in Volatile MarketsOne of the key advantages of having a financial adviser is having a steady, experienced hand guiding investment decisions—particularly when markets are in flux. Market downturns can trigger emotional reactions, leading to rash decisions that may be detrimental in the long run. Advised investors are better prepared to endure market volatility with confidence and a clear strategy, ensuring their portfolios remain aligned with their long-term financial planning goals.
Access to a Broader Investment UniverseAnother significant benefit is access to asset classes that might otherwise be out of reach for the average investor. Research from Investment Trends, compiled for The Weekend Australian, highlights the differences between advised and unadvised self-managed super fund (SMSF) investors. The findings reveal that advised investors have a more diversified investment portfolio, with greater exposure to managed funds, hybrids, and alternative investments—assets that individual investors may struggle to access on their own.
Investment Goals and Asset AllocationAdvised investors also tend to approach their investment decisions with a more structured wealth management strategy. When asked about their primary investment objectives for the coming year, they were more likely to prioritize sustainable income streams or a balance between capital growth and risk management. In contrast, unadvised investors were split between maximizing capital growth and generating passive income, often with a lower proportion focusing on risk management.
Unadvised investors also tend to have a higher allocation to direct shares, while advised clients benefit from broader portfolio diversification. This aligns with findings from BT Financial, which indicate that advised superannuation members maintain more consistent asset allocations during market volatility—unlike unadvised investors, who are more prone to shifting their investments in reaction to short-term market movements.
The Rise of Private MarketsLooking ahead, the trend towards private market investments is gaining momentum. A report by global investment manager Hamilton Lane found that a third of financial advisers plan to allocate at least 20% of client portfolios to private markets in 2025. Scott Thomas, Hamilton Lane’s head of private wealth in Australia, confirms that Australian financial advisers are embracing this shift, recognizing the diversification and long-term wealth management potential of private assets.
Prepared for Market CyclesMarket downturns are inevitable, and advised investors tend to be better prepared for them. Research from Colonial First State found that 38% of advised superannuation members in growth funds expect to experience a loss every three to five years—compared to just 26% of unadvised members. This suggests that advised investors have a more realistic and informed perspective on market cycles, which helps them avoid panic-driven investment decisions.
Does Advice Lead to Better Investment Returns?While investment returns fluctuate, financial advice helps investors stay disciplined and aligned with their financial strategy. In 2024, when equities performed exceptionally well, unadvised SMSF investors achieved slightly higher average returns (10%) compared to advised investors (9%). However, in 2023—a more challenging market—advised investors outperformed, with an average return of 3.7% versus 3% for the unadvised. These short-term variations highlight that while raw returns may fluctuate, the value of financial planning and wealth management extends beyond year-to-year performance.
The Bottom LineThe role of a financial adviser is not just about picking winning investments—it’s about providing structure, discipline, and access to broader investment opportunities. Advised investors benefit from a well-rounded approach that includes risk management, diversification, superannuation planning, and strategic financial decision-making. In times of uncertainty, the ability to stay the course and make informed, rational choices can make all the difference.
At TRL Financial Solutions, we work with clients to build tailored financial planning strategies that align with their long-term wealth creation goals. If you're looking for guidance on navigating market volatility, diversifying your investment portfolio, or preparing for retirement, get in touch today to see how we can help.