Researchers have looked at this issue and quantified the contribution of financial advice to investing. They have shown that investors who work with an advisor accumulate 1.7 times more net worth after four years, and four times more after 15 years¹. 

The secret behind this? Simply put, these investors made smarter, more profitable financial decisions with guidance from their advisor, and also developed better savings and investment habits.

According to the same study, adopting financial discipline leads to increased savings, which is the key to improving the value of your assets and staying on track with your goals. In fact, the savings rate for investors who retain the services of an advisor climbs to 10.8 per cent, while the rate sits at 6.7 per cent for those who do not². 

Looking beyond the numbers

These findings show that financial advice is really about empowering people to acquire knowledge and skills, mentoring them through behavioural coaching, and providing them with the support they need along the way. As you may have guessed, the benefits of financial advice go far beyond choosing the right investment vehicle for your situation. In fact, you can also expect to:

• Learn to save more, and more regularly;
• Make informed choices, avoid costly mistakes and even fraudulent traps;
• Improve your financial literacy;
• Overcome rumours and misconceptions;
• Reduce your tax burden;

• Achieve a sense of peace in knowing that you are prepared to deal with life’s ups and downs, and more.

  
   

Keeping a level head in difficult times

As emotional management is often the Achilles’ heel for most investors, financial advice takes on a particular importance during times of crisis and uncertainty.

Consider the recent stock market meltdown in the spring of 2020. Despite the panic, financial advisory professionals knew that the best strategy in most cases was to remain invested in the market and then ride the rebound that was sure to come. They suggested this to their clients, who took full advantage of it a few months later. However, they also curbed the temptation of those who sought out risky strategies.

The takeaway: never hesitate to share your anxieties and doubts with your advisor. Helping you keep a level head is part of his or her job!

_{1 The Gamma Factor and the Value of Financial Advice, Claude Montmarquette et Nathalie Viennot-Briot, CIRANO, 2016.
2 Idem}