Value of a Financial Advisor

May 13, 2022

A professional advisor can provide the guidance needed to develop and implement a personalized plan that puts your lifetime goals within reach.

UNDERSTANDING THE BENEFITS OF PROFESSIONAL ADVICE

Today’s investors have access to more financial and investment information than ever before. But making the right financial decisions requires significant time and experience. An advisor can apply a 360-degree view of your financial situation to develop and implement a personalized plan that puts your lifetime goals within reach.

Working with an advisor can add about 3% in net portfolio return over time.1

WEALTH MANAGEMENT TO GUIDE YOU THROUGH EVERY LIFE STAGE

An advisor’s value extends beyond investing and money management advice. Drawing on industry experience, an advisor can work one-on-one with you to help build a financial plan that’s centered around your objectives for wealth accumulation, asset protection, and multigenerational wealth transfer. An advisor can also serve as a resource to guide you through different life stages such as buying a house, funding college education expenses, creating a charitable giving plan, or structuring a retirement income strategy. This long-term partnership helps you pursue multiple goals through an integrated and dynamic financial plan that reflects where you are and where you are going.

CUSTOMIZED INVESTMENT MANAGEMENT AND PORTFOLIO DESIGN

Implementing a plan with the appropriate mix of investments and managing those assets based on changing markets and objectives requires a deep understanding of the industry, and an ability to apply unbiased analysis over time. Effective portfolio construction applies different strategies to support diversification, tax efficiency, and growth. Professional guidance that leverages research, historical trends, and industry best practices can help individuals make decisions that add long-term value. This expertise includes the ability to:

  • Develop a well-constructed asset allocation strategy to manage volatility, generate more consistent returns, and offer the flexibility to adapt to longer-term market trends.
  • Minimize the impact of taxes on returns using tax-efficient funds, tax-aware trading techniques, tax loss harvesting, and other advanced strategies.
  • Provide appropriate access to alternative investments like private equity, private credit, and real estate for investors looking to diversify beyond traditional asset categories like stocks and bonds.
  • Identify and access lower-cost investment products.
  • Evaluate the need for life insurance to build, protect, and transfer wealth.
  • Coordinate with tax and legal professionals to support individual goals.

PORTFOLIO REVIEW AND MONITORING

A financial advisor can also play an integral role in keeping your investment plan on track. Over time, portfolio assets tend to shift from their original, intended allocation putting your goals in jeopardy (Figure 1). An advisor will periodically review and rebalance assets to maintain those proportions in light of your financial situation, evolving objectives, and prevailing market conditions. Your professional can add significant value by providing active, disciplined oversight of your investment strategy throughout your financial journey.

Data sources: Strategic Capital Investment Advisors. Stocks are represented by the Russell 3000 Index. Bonds are represented by the Bloomberg Barclays US Aggregate Bond Index. An investment cannot be made directly in an index. The data assumes reinvestment of income and does not account for taxes or transaction costs. This is for illustrative purposes only and not indicative of any investment. Past performance is no guarantee of future results. This information has been taken from sources, which we believe to be reliable, but there is no guarantee as to its accuracy. For index definitions please visit https://mfinwealth.com/index-and-statistics-definitions

HELPING YOU STAY FOCUSED ON THE LONG TERM

Downturns are a normal part of the market cycle, yet even the most experienced investors are prone to panic selling when the market declines. However, moving your portfolio to the sidelines—even briefly—can be extremely costly over the long term (Figure 2). One of the most important benefits of working with an advisor may be the ongoing support you receive during periods of market volatility—helping you avoid mistakes and adhere to an agreed-upon, long-term investment strategy. Conversely, an advisor can help position your portfolio to take advantage of opportunities before the markets recover. Much like a good coach, advisors add value by helping individuals remain disciplined.

Data sources: Strategic Capital Investment Advisors. Stocks are represented by the Russell 3000 Index. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. This information has been taken from sources, which we believe to be reliable, but there is no guarantee as to its accuracy. For index definitions please visit https://mfinwealth.com/index-and-statistics-definitions

WORKING WITH YOUR FINANCIAL ADVISOR

Professional advice plays a key role in instilling confidence and financial peace of mind. An experienced financial advisor can:

  • Analyze your situation and help you identify your financial goals
  • Work collaboratively to develop a plan to pursue multiple objectives
  • Provide customized portfolio construction
  • Perform ongoing monitoring and management of your assets
  • Offer support and guidance to navigate market uncertainty
  • Plan for efficient transfer of your assets

In a world marked by uncertainty and change, financial advisors offer more value than ever. Your investment strategy needs to adapt to geopolitical risks, rising inflation, and changing tax laws. A knowledgeable advisor can work proactively with you to make wise financial decisions while pursuing your goals.

76% of investors who use a financial advisor report a positive sense of well-being.2

1 Quantifying Vanguard Advisors Alpha, February 2019
2 BlackRock Global Investor Pulse, 2019

Contributors

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This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. It has been prepared without regard to the financial circumstances and objectives of individual investors. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. To determine what is appropriate for you, please contact your M Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed. Diversification does not ensure a profit or protect against loss in a declining market. M Financial Asset Management, Inc., (M Wealth) is a registered investment advisor, and a division of M Financial Group. ©Copyright 2022 M Financial Group. All rights reserved. #4718501.1 Expires 4/2024