A Good Adviser Transcends Investment Returns

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Advisory services offered through Wealth Enhancement Advisory Services LLC, a registered investment adviser and affiliate of Wealth Enhancement Group.

Many people assume a financial adviser’s main job is to select investments or predict the market. In practice, however, those duties are only part of a much broader relationship. A capable adviser may help clients decide how much to save, when they can afford to retire, when to claim Social Security, how to draw income tax-efficiently, and what to do when markets decline.

Does Financial Advice Add Value?

It can, although the benefit is not automatic and will vary by investor. Research from Vanguard, the TIAA Institute and others has identified several potential sources of value, including disciplined investment behavior, appropriate asset allocation, tax-aware planning, retirement-income decisions and coordinated financial planning. Advisers can also provide confidence during uncertain markets and save clients time by handling complex work.

Vanguard has estimated that behavioral coaching may add approximately 1% to 2% annually for some investors by helping them avoid emotional mistakes. A 2026 TIAA Institute study found that advised participants reported stronger saving habits, greater financial confidence and higher wealth than comparable participants without advice. Its modeling estimated advice-related value equivalent to approximately 1.4% to 2.4% annually. Note: These figures should not be interpreted as guaranteed returns.

Common to both of these studies is the suggestion that competent advisers help prevent decisions that undermine a sound plan. Investors are often tempted to sell after markets have fallen, buy after an investment becomes popular, chase last year’s winners or wait until the market feels safe before investing. Even financially knowledgeable people can make emotional choices when their own savings are at stake.

Looking beyond the portfolio

An adviser can help build a portfolio suited to the client’s goals, time horizon and tolerance for risk. For example, a 32-year-old accumulating retirement savings and a 62-year-old preparing to retire should not automatically own the same investments simply because both consider themselves growth investors. Their income needs, ability to withstand losses and available recovery time are very different.

Ultimately, portfolio management is only one piece of a financial life. Comprehensive advice may address retirement spending, Social Security, Roth conversions in coordination with a tax professional, Medicare, insurance, charitable giving, required minimum distributions and estate-planning coordination with an attorney. It may also prepare a surviving spouse or help a business owner evaluate benefits and succession choices. The adviser’s value often comes from seeing the entire board rather than a single piece.

Confidence and clarity is another potential benefit, but it should not rest on promises that everything will be fine. Real confidence comes from understanding what you own, how much you spend, how your plan may respond to a long downturn and what adjustments are available if circumstances change.

Choosing The Right Adviser

Choosing an adviser begins with defining the help you want. That might be a one-time plan, advice about a specific decision, ongoing investment management, comprehensive planning or hourly guidance.

Honesty and integrity are essential. A trustworthy adviser should be willing to say, “I don’t know,” “That is outside my expertise” or “You do not need that product.” Empathy matters because a recommendation can be technically correct yet wrong for the person receiving it.

Good communication matters, too. The adviser should explain a recommendation’s purpose, risks, costs, tax consequences and alternatives in language you understand. Ask how often you will meet, who will answer your questions, and how the adviser will communicate during difficult markets.

Ask directly whether the adviser will act as a fiduciary at all times when providing advice and whether that commitment will be put in writing. Some professionals serve in an advisory capacity for one service and a brokerage or insurance capacity for another, meaning their obligations and compensation can change.

Credentials such as CFP, CPA or CFA can indicate relevant education and standards, but credentials do not replace experience, judgment, communication or integrity.

Understanding How Advisers Are Paid

Investors often resist working with an adviser because they think they cannot afford one. That’s why compensation deserves a clear conversation up front. Fee-only advisers may charge a percentage of assets under management, an hourly rate, a flat project fee, a retainer or a subscription. A 1% annual fee on $500,000 is about $5,000 before additional investment expenses.

Fee-based professionals may receive both advisory fees and commissions. Other advisers are compensated through commissions, salaries or bonuses.

No structure is free of potential conflicts. A commission can encourage a sale, an asset-based fee can encourage gathering and retaining assets, and a salary or bonus may reflect company goals. Ask what you will pay in dollars, what services are included, how the adviser and firm are compensated and what potential incentives or conflicts their model creates.

Measuring The Relationship’s Value

The least expensive adviser is not necessarily the best, nor is any single payment method right for everyone. The central question is whether the relationship delivers value greater than its total cost.

Are you making better decisions? Is your financial life more organized? Do you understand what you own and pay? Are you better prepared for the risks ahead? Is your family better prepared? Are you making measurable progress toward the life you want?

The original article was published in Pioneer Press. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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