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What is the value of financial advice?

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How does Tribeca Financial prove value?

When weighing up the value of financial advice, it really comes down to two questions. One, does your advisor place the same value on what’s most important to you. Things like family, connectedness, having great life experiences, feeling safe and secure, getting the most out of what life has to offer. And two, is the advice going to be financially beneficial – will the value of advice be significantly more than the fee.

Our answer was to create a tool that clearly and accurately captures the overall value we can provide our clients. We call it The Value Factor. Our Chairman Brad Fox explains.

Tribeca Chairman Brad Fox talks about The Value Factor

The Value Factor

The Value Factor was created by our senior financial advisors so our clients can understand the value we provide each of them, and their families. We’ve drawn on the 60+ years of experience between our senior team members – their industry knowledge, technical expertise, professional qualifications, and approach to helping clients achieve financial goals and future plans. 

So how do we prove our value to you?

Forecasting the numbers is one part. Like many advisors, we use modelling tools to help predict returns made on investments, asset growth and cashflow.

We also consider the intangible benefits, such as the peace of mind knowing that your finances are protected in a crisis, or the sense of freedom that comes with being in control of your choices.

Our solution was to provide our clients with the quantitative aspects of advice (financial) and just as importantly, the qualitative aspects of advice (emotional). Both aspects are drawn from proven research and our own experience and expertise.

Here’s how it works.

Quantitative benefits from:

Plus qualitative benefits from:

Expert advice

Clear planning

Informed choices

Reducing stress

Ongoing Support

Achieving goals

We then take all these factors into account, applying the latest research and studies with our own experience to clearly define the value we can provide you annually and the estimated improvement in net asset position over 10 years.

Value in action

So how does The Value Factor work in real-life? At Tribeca,

our benchmark is to return four to seven times the value of a client’s ongoing advice fee.

This equates to anywhere from $24,000 to $42,000+ of advice value per annum. Here’s how we arrive at the calculations.

Quantitative

Findings have shown financial advisors can add up to 14.1% monetary value per annum to clients, determined like this:

Qualitative

This is the value derived from achieving a high level of financial wellbeing:

When the quantitative and qualitative variables are combined, you have The Value Factor.

When we apply this to an actual client’s situation, this is what The Value Factor can look like:

When value really counts

Trust and support.

As the case study indicates, an important aspect of The Value Factor is achieving a high level of financial wellbeing. In the example above, this was improving the client’s sense of security from a 5.5/10 to an 8/10, and their feeling of freedom from 2.5/10 to 9/10.

That kind of value is priceless, especially when faced with challenging times like we have all experienced in recent years.

This is backed up by an ongoing study by Griffith Business School titled The value of professional financial advice for consumers in a crisis, which found that existing advice clients were able to cope better during a crisis due to the comfort of having a financial advisor “provide reassurance and strategic advice to support better decision-making”.

With the pandemic as the backdrop, the research revealed that “advised clients were reported to be in a better financial and behavioural position to buffer stress or to take advantage of the adverse event”. Tellingly, the study also highlighted long-term advice clients were less impacted as compared to non-advised clients because “they were prepared to avoid emotionally driven decisions and to stay on track to achieve their financial and lifestyle goals”.

What is the common thread? Trust.

Trust in the knowledge. Trust in the results. And trust in the relationship.

For trust to be earned we must be accountable and transparent.

The Value Factor is one of the many ways we deliver on this promise to our clients.

If you would like to learn more about The Value Factor or would like to discuss any aspect of your financial situation, we’re always ready to chat. Talk to your advisor at any time or contact one our Tribeca Tribe.

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