The Value of Working with a Financial Advisor
Seeking help with managing 401(k) investments has been shown to be beneficial. A study by Financial Engines and AON Hewitt found that participants who sought help, either through a pre-constructed portfolio, an advisor managed portfolio, or online advice had more positive performance than participants who did not seek help.
The annual investment performance gap between Help Participants and Non-Help Participants was 3.32%, net of fees. For a 45-year old, this could translate to 79% more wealth at age 65.
“Help in Defined Contribution Plans: 2006 to 2012” Financial Engines and AON Hewitt (2014)
Vanguard’s research** found that independent financial advisors provided greater than 3% average additional portfolio return. There study dissected the components of the value added as follows: