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At Virtus Wealth Management, your Southlake independent financial advisors, we help our clients prepare for a financially-secure future by developing long-term strategies that focus on the “big picture” versus short-term gain, thereby managing risk.

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Today’s economic conditions and uncertain financial markets require the savvy investor to go beyond traditional boundaries.

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Virtus Wealth Management is the product of a 2016 merger between two well-established Texas wealth management firms.

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Wealth management is more than just investment advice – it includes all aspects of a client’s financial life.

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Wealth management is more than just investment advice – it includes all aspects of a client’s financial life.

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At Virtus Wealth Management, we believe we can help you no matter what age you are, what life stage you are in, or how much money you are working with. We want you to feel educated, empowered, and involved in the planning of your financial future.

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There is no predetermined benchmark or criteria that you must reach to let you know it’s time to partner with a financial advisor.

What is a Financial Planner Worth?

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  • What is a Financial Planner Worth?

by | Oct 30, 2020

Quantifying the value of a financial planner may seem difficult to many consumers. That value will vary depending on what advice the consumer is wanting. Advice may be offered for investing their assets, protecting themselves with insurance products, transitioning to retirement, college funding, estate planning, tax planning, etc.  These are all singular concerns and the advice offered certainly has some value. Financial planning is typically defined by a process of six steps. These steps include:

  1. Establishing a relationship
  2. Collecting financial data and client concerns
  3. Analyzing the data relative to the client concerns
  4. Making observations and developing a plan
  5. Implementing the plan
  6. Reviewing and monitoring the plan for changes in lifestyle, financial status, economy, and tax law changes.

A few years ago, The Vanguard Group’ Research did a study to quantify an advisor’s value. Their findings, reflecting the value-add relative to “average” client experience (in basis points of return) are as follows:

  1. Suitable asset allocation using funds/ETFs: +0 bps
  2. Cost-effective implementation (expenses): 45 bps
  3. Rebalancing: 35 bps
  4. Behavioral coaching: 150 bps
  5. Asset allocation: 0 to75 bps
  6. Spending strategy (withdrawal order): 0 to 70 bps
  7. Total return versus income investing: 0 bps

In conclusion, the approximate Potential Value Added is about 3%.

Interestingly enough, the strategy providing the largest value is behavioral coaching – 1.50% per year for a client. Helping clients avoid a major financial mistake could be worth a financial planner’s fee for a lifetime. Articles are written in which critics suggest a 1% fee is excessive. This may be the case if only investing advice is being provided, but if the financial planning process is being incorporated, maybe not.

 

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