08 July 2022

---

It is a mistake to expect outperformance from a financial advisor and consultant

Author: Luigi Campopiano

---

On the customer's side, expectations can sometimes become unrealistic, especially when it comes to the increase in investment performance. For consultants, it is clear that the most important added value brought by one's services does not concern returns (according to a recent survey conducted by SmartAsset on 160 consultants registered on the SmartAdvisor platform): the real benefits that consultancy can offer to customers are much more.

The increase in returns on investments is the second reason that most frequently pushes the saver into the arms of a professional while, in the first place, pension planning dominates. Too bad, however, that only a few savers are looking for an advisor to make use of other services, although some of these are considered among the most important by the consultants themselves: inheritance planning, tax planning, savings for specific objectives (eg. house purchase).

Taken together, all the other services provided by financial advice do not reach the perceived value of the increase in returns. Financial consultants, however, do not consider the effect on performance as one of their greatest strengths: the first benefit of their work is the ability to develop a personal and holistic financial plan; the second most important service is the possibility of evaluating step by step the path towards the financial objectives set by the client; then we have the minimization of the tax burden and the general provision of advice on financial matters; the increase in performance is only fifth.