Unlocking the True Value of Financial Advice in New Zealand

At Central Financial Planning, we understand that in an increasingly complex financial world, the role of a trusted financial adviser is more important than ever. A recent study by Russell Investments has quantified the true value that advisers bring to their clients in New Zealand, revealing a compelling case for professional advice. Here, we summarise the findings of the 2024 Value of an Adviser Report and how they apply to New Zealanders.

The Value Framework

Russell Investments’ analysis places the total annual value of an adviser in New Zealand at approximately 4.7%, well above the fees typically charged. This value is broken down into four key areas:

1. Appropriate Asset Allocation (1.4%)

Personalised investment strategies tailored to your goals, age, and financial circumstances are crucial. Many Kiwis default to standardised KiwiSaver options, which might not align with their retirement goals. By working with an adviser, investors can optimise asset allocation, potentially gaining significantly higher returns over time.

For example, the study illustrates how a 40-year-old investor moved from a default KiwiSaver fund to a more aggressive strategy, leading to a potential additional return of $96,000 over 25 years.

2. Behavioural Coaching (3.3%)

Investment success isn’t just about picking the right assets; it’s about avoiding emotional pitfalls. During volatile markets, fear can drive poor decisions, such as selling at the wrong time. Similarly, in booming markets, overconfidence can lead to unnecessary risks. A professional adviser helps you stay the course, ensuring long-term financial plans remain on track.

The report highlights how missing just a few of the market’s best-performing days can significantly reduce investment outcomes. Advisers ensure you remain invested for the long haul, capturing the benefits of market growth.

3. Choices and Trade-offs (Variable)

Life is full of financial decisions, from buying a first home to planning for retirement. An adviser’s guidance helps you navigate these trade-offs, whether it’s balancing the cost of supporting children with your own retirement savings or structuring an estate plan that preserves family harmony. The value of advice in this area is unique to each client, as it depends on individual circumstances.

4. Expertise (Priceless)

An adviser’s technical and emotional expertise is invaluable. Beyond investment advice, they guide you through regulatory changes, social security options, and major life events like redundancy or retirement. Their ability to combine technical knowledge with empathy creates lasting trust and better financial outcomes.

Why Now?

In 2024, challenges such as rising living costs and evolving markets make professional advice even more critical. The report highlights how advisers help clients navigate both opportunities and risks, whether it’s understanding new asset classes like private debt or managing KiwiSaver strategies in a high-inflation environment.

Communicating Adviser Value

One of the key takeaways from the study is the importance of ensuring clients understand the breadth of services advisers provide. At Central Financial Planning, we pride ourselves on delivering not just financial advice but peace of mind and a clear pathway to achieving your goals.

Our value isn’t just in managing portfolios; it’s in helping you make informed decisions, avoid costly mistakes, and plan for a secure future.

Ready to Unlock Your Financial Potential?

If you’re ready to experience the difference a trusted adviser can make, contact us today. Together, we’ll create a financial strategy that supports your unique goals and circumstances, ensuring you’re well-positioned for the future.

Read Full Report below.