Financial advice is worth more than four-times the average fee paid by NZ clients, a new analysis estimates.
The fifth annual NZ ‘Value of an adviser’ report produced by Russell Investments found the benefits of financial advice “materially exceeds the 1% fee” typically charged for the services.
“In 2025, we believe the value of an adviser in New Zealand is approximately 4.52%,” the Russell study says.
The latest estimate represents a slight fall from the 4.7 per cent value-of-advice in the 2024 version but still a hefty premium on the non-advised.
Neil Rogan, Russell head of distribution for Australia and NZ, said in a release: “Our report shows that professional guidance delivers both measurable returns and immeasurable peace of mind, both of which matter deeply to investors”.
As per previous editions, the 2025 analysis breaks down the advice value-add into four components with ‘behavioural coaching’ – or helping clients stay invested through volatility – worth almost 3.6 per cent of the total.
“… investors who remained invested in the NZ Shares throughout the past 10 years built significantly more capital, and outperformed than those who missed just the 10 best days’ performance by an annualised rate of 3.57%,” the report says.
“And those who missed the best 40 days wound up 60% worse off than if they had remained invested for the full decade.”
Establishing a risk-appropriate asset allocation adds a further 0.2 per cent to the value-of-advice but the Russell report says advisers bring even more – 0.75 per cent – to the table by providing ‘customised’ family wealth planning solutions.
“We believe that providing a customised wealth management experience holds significant value for investors. And personalising services, education, appreciation, and investment recommendations allows for a more holistic and client-centered approach.”
But while Russell doesn’t put a number on it, experienced financial advisers also improve client outcomes by applying “emotional and technical expertise” to a range of life events.
“The value of working with an experienced adviser is about tapping into the accumulated expertise they’ve developed over their career,” the report says. “Together with ongoing education, this insight grants clients problem-solving skills that can be leveraged at all stages of their lives.”
The latest iteration of the long-running Russell study comes, too, after a value-of-advice whitepaper published by a coalition of national advisory industry bodies earlier this month found consumers were willing to pay advisers for tailored, holistic services.
“[Financial advisers] must now clearly demonstrate how their ongoing value justifies their fees, not just through investment performance, but through consistent client engagement, proactive communication, and personalised service,” the paper says.