Having worked in the Financial Planning profession for over 20 years, I have seen and heard many reasons why people seek the services of a Financial Planner. Quite often it is prompted by a major life event such as retirement, receiving an inheritance, a business sale, selling a property or repaying a home loan.  

However, new research from Morningstar, has highlighted that handling specific financial issues is not the only value that Financial Advisers provide to their clients. Not surprisingly this correlates with what I have experienced with my client relationships for many years. 

It’s often not just investment returns that my clients comment on as being the reason why they continue to engage us. 

Remarkably only 21% of respondents to the Morningstar research currently worked with an Adviser, yet 62% reported needing to improve their financial planning. The numbers demonstrate that there are many people that would benefit from working with a Financial Planner but do not yet do so, this points to the importance of understanding what factors compel people to hire an Adviser.   

Most people (around 60%) reported hiring an Adviser based on an emotional reason, like their discomfort handling finances themselves, the need for behavioural coaching, and the quality of the relationship with the Adviser.  An Adviser was often hired because they could provide sufficient support to help the client act in a way that was beneficial to their finances such as explaining their financial plan, motivating the client to stick to the plan, or providing guidance on what not to do in certain financial situations. It was often the case that the individual simply felt more secure having a different view on their finances and didn’t like making financial decisions themselves. 

The remaining 40% engaged an Adviser for a specific financial reason including better income management, investment planning, and to assess if they were on track to meet their objectives. 

This survey provides a great insight to those people who do not currently have Advisers. There can be a preconceived perception that an Adviser is limited to providing transactional investment advice. However, for those who have an Adviser they will attest it is a far deeper relationship.  

Although many people may not acknowledge it, it is their need for emotional support from a Financial Adviser that is the greatest value. As an Adviser, my clients often highlight how they now have peace of mind about their finances by working with me, this is a source of great pride for me.  

In closing I would encourage those who do not yet have an Adviser to think more broadly about what value an Adviser could bring to their lives. Do not limit your expectation to investment returns. A good Adviser will be able to deliver value far beyond that.