The Value of a Financial Advisor

A few weeks ago, I read an interesting article titled, “The Value of a Financial Advisor: What’s It Really Worth?” Every few years there is a new study that quantifies the value of working with an advisor. The value of an advisor is interesting but what I find more compelling is how the value is added and here’s a spoiler: it’s not simply investment performance.

To begin, here is the quantitative value of having a financial advisor on your team:

• Working with a financial advisor increases rates of return by 2.39% to 2.78% net of fees compared to those without an advisor.
• Future net worth grows by 36% to 212% depending on the starting age of the client and the starting net worth. For example, a 55-year-old with a starting net worth of $1.5M will see a $1.3M increase in net worth by working with an advisor.

Behavioral Finance is one of the largest reasons for the value add of an advisor. By helping clients make decisions, not based on emotions, but on math and facts, it can reduce a lot of bad decisions. Emotional decision making happens to all of us. We’re presented with an opportunity that requires a quick decision. Everything seems to be in order, and suddenly it doesn’t work out like we expected. That emotional decision could be setting you back to the extent that it affects your long-term financial security.  By working through these decisions together and taking the time to plan for different outcomes, the emotion can be taken out of the decision which generally leads to better outcomes.

Comprehensive financial planning was listed as another way your advisor can add value. By focusing on planning in all areas of a client’s life, an advisor can help clients make better decisions, short-term and long-term. For most, the ultimate goal is growing long-term net worth and planning for how those assets will flow to their intended family members and/or institutions. I think too often people are worried about rates of return in their portfolio without realizing the true planning component, and value derived from the advisor relationship. Don’t get me wrong, investment performance is important, but it’s just one piece of the value that a good advisor adds to your success.

Tax Planning is the next reason that a financial advisor adds value. For OmniStar, this is one of our 10 Elements of Wealth Management and it’s one of the many important items that we consider for every client. It’s important to have the right CPA to help with tax planning, but it’s equally, if not more important, to be prepared for taxes in retirement. By having the right team of professionals working together, you can save money on taxes now, and over the long-term Technical Finance is certainly a value added from the advisor. Portfolio management is critical, and returns are about 2.5% higher by working with an advisor. At OmniStar, our proprietary portfolios are managed using a rules-based approach that have been developed over decades of research. We believe this gives our clients the best opportunity for long-term growth

Many clients experienced this in 2022 when the S&P 500 was down 18.1%. Our managed accounts were down, but only a fraction of the major index. 2025 has been a volatile year so far and as of the writing of this article (03/17/2025) the S&P 500 index is down 3.5% YTD and OmniStar’s Growth and Income portfolio is up 4.7% YTD*  Navigating the markets and helping our clients see through the challenges can provide them the confidence to stay invested long-term, which provides investors  the best chance for success.

If you know someone who isn’t receiving this type of value from their advisor relationship, we’d be honored to meet them to explore how OmniStar might be able to deliver greater value. As always, don’t hesitate to reach out with questions or feedback. Delivering value to our clients never gets old and we look forward to continuing this tradition. The Value of a Financial Advisor: What’s It Really Worth?

*Growth and Income Portfolio 80/20 2025 performance 01/01/2025 – 03/17/2025